Narendra Modi’s RCEP dilemma

When he visited Japan late last month, Prime Minister Narendra Modi “reaffirmed the strategic importance of the early conclusion of the negotiations for…Regional Comprehensive Economic Partnership (RCEP) Agreement for realizing full benefits of a free and open Indo-Pacific region”.

But an early conclusion doesn’t seem to be on the cards as he heads to Singapore this week to lend his weight to RCEP negotiations along with other heads of state. Other RCEP participants have been pushing New Delhi to sign on the dotted line and aim to conclude the deal by the end of the year. But it isn’t quite that easy for the Modi government.

There are legitimate concerns in some sectors, such as steel and pharma, and wide-ranging tariff cuts could lead to higher imports. Manufacturing and agriculture could be vulnerable as well. The services liberalization that New Delhi wants has been the other sticking point. Protecting interests without veering into protectionism, or drifting to the fringes of the world’s largest free trade area, will not be easy.