India is expected to cut the tariff concessions further at the 16-country trade bloc to prevent cheap China goods, flooding in Indian market.
The commerce department is working on ways to give minimum tariff concessions to Chinese goods and delay the concessions by a long number of years even as it allows imports from other member countries at lower duties.
As part of the Regional Comprehensive Economic Partnership (RCEP) trade negotiations, India is looking to treat Chinese products differently due to the burgeoning trade deficit it has with Beijing.
In 2015-16, India's exports to China were $9 billion while the imports were a staggering $61.7 billion leaving a trade deficit of $52.7 billion.
India hopes this longer phasing out of tariff concessions and differential treatment, called “deviations”, will become the basis for RCEP negotiations. New approach comes ahead of the next ministerial meeting on November 3-4 in the Philippines.
Moreover, since India had to do away with a three-tier structure of differential duty cuts as part of the negotiations, deviations are the last ray of hope to contain the trade deficit with China under a formal trade agreement.
In the earlier tiered structure, India had proposed to remove duties on 42.5% of the items traded with China, something that Beijing had termed as low.