Under the Regional Comprehensive Economic Partnership (RCEP), India may trim or remove tariffs on Chinese goods only in phases. Tariffs on the most sensitive items will be the last to go. India plans to reduce or abolish import duties on a total of 80 per cent of imports from China, against 86 per cent from New Zealand and Australia, and 90 per cent from Asean, Japan and South Korea.

While the RCEP will benefit India in better integrating with the global value chain and improving its trade competitiveness, several domestic industries — including steel and pharma — have strongly resisted any such deal on fears that cheap Chinese products, diverted from the US due to the ongoing trade war, will flood Indian markets. The dairy industry, in particular, is opposing any such deal with New Zealand, a major dairy producer and exporter.

RCEP is a proposed mega trade pact between the ten Asean members, India, Australia, China, Japan, South Korea and New Zealand. Of the 16-nation grouping, India currently doesn’t have any free trade agreement with China, Australia and New Zealand. The RCEP deal will be far more ambitious than any of its existing free trade agreements with Asean, Japan and South Korea.