India will continue with negotiations on the Regional Comprehensive Economic Partnership (RCEP) and is satisfied with the latest round of talks, where it has made significant gains, top officials said.
"The RCEP negotiations will not end in 2018. It has been agreed at the level of leaders that it will go on in 2019 as well and we will have opportunity to work on all the issues," Commerce Minister Suresh Prabhu said on Tuesday.
The mega free trade agreement (FTA) is being negotiated among the 10 Asean member states and India, China, Australia, New Zealand, South Korea and Japan.
Trade ministers and officials from all 16 countries involved met last week in Singapore to push forward the complex negotiations that would create the world's largest trading bloc, covering one-third of its gross domestic product and a quarter of its exports.
Responding to queries on India's position, a spokesman for Singapore's Ministry of Trade and Industry told The Straits Times yesterday that at the ministerial meeting, "participating countries reaffirmed the shared goal of substantially concluding the RCEP by end-2018".
"This will send a positive signal for the global trade and economic environment. The ministers remain committed to working closely together and shouldering the common responsibility to step up momentum in the upcoming rounds of negotiations," the spokesman said.
RCEP negotiations have been going on for six years. Speculation was rife that India would leave the talks, following the setting up of a ministerial committee to look into reservations the country has amid opposition from sections within the government and industry.
The talks have also come into focus against the backdrop of growing protectionism in the United States, and global trade tensions.
Yet, Indian sensitivities in negotiations revolve around China. Indian industry is fearful that decreasing tariffs for China would lead to Chinese goods flooding the market and widening a trade deficit.
India's trade deficit with China was US$51 billion (S$70.1 billion) in 2016-17 in favour of China, which does not have an FTA with India.
Another concern is ensuring easier movement of Indian skilled workers in the RCEP countries and greater access to local job markets.
A commerce ministry official said much more ground must be covered on RCEP but noted progress had been made in Singapore. He said that India now has a lot of room to handle China. "It was agreed (during the talks) to give large flexibilities for countries," the official said.
These include an understanding that countries with no FTA with each other - such as India and China - could negotiate tariffs bilaterally within a certain range.
Mr Prabhu also said that there had been progress in India's efforts to push for linking of services and goods negotiations. "We have been emphasising the inevitable linkage between services and goods negotiations, because RCEP is not a goods agreement alone, and services must be an integral part of the agreement. The linkage has been finally accepted," said the minister.
India is weak in goods but strong in services, and has been arguing that talks on services, which mean movement of its professionals, should be given equal importance as goods negotiations.
Analysts said India would benefit from the RCEP but the signing of the final draft would take a political call. "RCEP is of considerable importance for the success of India's Act East policy," said former diplomat Rajiv Bhatia, distinguished fellow at think-tank Gateway House.
"There are serious concerns on a number of issues. One of the major things has been how to open up to China and others. I think uncertainty still remains (for India)."