China has asked India to allow duty-free import of 85% of its products into the country, a move that is putting pressure on policymakers as they grapple with the complex negotiations for Regional Comprehensive Economic Partnership (RCEP) to create the world’s largest free-trade agreement.
India has offered to open up 74% of its market to Chinese goods in a phased manner but Beijing is not satisfied with the proposal. During bilateral discussions with China, officials were told that the Asian giant was willing to give duty-free access to 92% of Indian exports, provided New Delhi raised the bar by opening up more.
Compared to other countries where over 90% of imports can come duty-free, India has offered lower concessions to China. Even the current offer is fraught with the risk of goods from across the border swamping Indian markets and further impacting the massive trade deficit, which was estimated at $63 billion during the last financial year.