Yesterday, India’s Prime Minister, Narendra Modi announced India would not join the Regional Comprehensive Economic Partnership (RCEP).
The RSCEP is a proposed trade deal among 16 countries and has been discussed for the past 7 years and the subject of over 28 rounds of discussion. The RCEP was believed to be the “largest trade deal” because both China and India were expected to participate. China, India and 14-other nations in the RCEP would account for 40% of the world’s GDP.
In a public statement, the government of India cited several reasons to withdraw from the RCEP: (1) India wanted stronger wording on rules of origin, (2) change in the base year for the reduction of duties to be 2019 instead of 2014 and (3) for companies investing in India to procure a certain percentage of local input materials.
The remaining 15 countries have vowed to continue efforts to pass the RCEP with India’s involvement.