India has reportedly decided to not join the Regional Comprehensive Economic Partnership (RCEP) agreement over its concerns not being addressed in the deal.
Sources said the RCEP agreement with China and ASEAN countries does not reflect "its original intent" and the outcome is "not fair or balanced".
“India has significant outstanding issues, which remain unresolved. All RCEP Participating Countries will work together to resolve these outstanding issues in a mutually satisfactory way. India’s final decision will depend on satisfactory resolution of these issues,” a joint statement by leaders issued on Monday said.
Fifteen out of 16 nations have concluded “text-based” negotiations for the trade deal, with formal signing now expected in 2020, the statement added.
In his speech at the ongoing RCEP summit in Bangkok, PM Modi said, "India stands for greater regional integration as well as for freer trade and adherence to a rule-based international order."
The Indian government raised concerns about its USD 50 billion trade deficit with China and that its small businesses would be hard hit by a flood of cheap Chinese goods.
Sources in Bangkok said China was forcefully pushing for inking the deal during the RCEP summit on Monday, which was seen as an attempt to counter-balance the impact of its lingering trade war with the US as well as to project the region's economic might to the West.
However, they added India has firmly stood its ground against signing up for the agreement. Sources said the decision to stay away from the trade pact was taken after key issues - inadequate protection against import surge, insufficient differential with China, possible circumvention of rules of origin, keeping the base year as 2014 and no credible assurances on market access and non-tariff barriers – could not be resolved during the talks over the weekend.
If finalised, the RCEP would have become the world's largest free trade area, comprising half of the world population and account for nearly 40 per cent of the global commerce and 35 per cent of the GDP.