India has chosen not to join the Regional Comprehensive Economic Partnership (RCEP) as the other 15 countries involved in negotiations for the mega trade pact said they are ready to sign the deal next year.
A statement released at the end of the RCEP Summit yesterday noted that 15 countries "have concluded text-based negotiations for all 20 chapters and essentially all their market access issues; and tasked legal scrubbing by them to commence for signing in 2020".
It said India had "significant outstanding issues, which remain unresolved".
According to Indian media outlet NDTV, Indian Prime Minister Narendra Modi said during the RCEP Summit yesterday that his "conscience" would not permit him to let India join the RCEP.
Ms Vijay Thakur Singh, a senior official from the Indian Ministry of External Affairs, said at a press conference in Bangkok: "India conveyed its decision at the summit not to join the RCEP agreement. This reflects both our assessment of the current global situation as well as of the fairness and balance of the agreement. India had significant issues of core interest that remained unresolved."
The decision has been widely welcomed in India, with Congress leader Randeep Singh Surjewala describing it as a "victory for all fighting for protecting national interests".
Mr Le Yucheng, China's vice-minister for foreign affairs, speaking before the RCEP Summit, said that "15 participating countries have decided to move forward first".
"There won't be any problem for the 15 parties to sign the RCEP next year," he said. "But we are also considering the concerns of India, so we are taking an open attitude. Whenever India is ready, it's welcome to get on board."
Even without India, RCEP will be the world's largest trade pact.
The proposed RCEP involves Asean's 10 member states, plus China, India, Japan, South Korea, Australia and New Zealand - which altogether contribute one-third of the world's gross domestic product. Negotiations have been taking place since 2013. This multilateral free trade agreement, if signed, is expected to give a fillip to economic prospects of a region battered by the US-China trade war.
New Delhi faces intense domestic opposition to the deal, out of concerns that an influx of cheap Chinese goods would decimate its infant industries. Ten central trade unions in India had called on the government to withdraw from negotiations.
The Confederation of Indian Industry, meanwhile, called attention to the long-term opportunities of joining RCEP. Confederation president Vikram Kirloskar said: "Any decision of joining an agreement of this size and magnitude must not be based on our concerns with regards to just one country."
He said in a statement: "(Free trade agreements) must be considered from their long-term impact, both on our domestic market and the access it provides.
"Some of our industry may be domestically focused today, but in 10 years, would want the access to this most vibrant region of 15 other countries that RCEP provides."
Meanwhile, some quarters have raised concerns that India's exclusion from RCEP will leave the grouping without a "counterweight" to China.
Dr Chen Lurong, an economist at the Jakarta-based Economic Research Institute for Asean and East Asia, told The Straits Times: "The real concern is how to keep China on the 'right' track - liberalising trade and investment, keeping the market open, playing rule-based games.
"It doesn't seem to me that a big Chinese economy with open-door policy and respect to the market disciplines will be a threat to the regional or global economy."