India weighs RCEP return amid US tariff strain, improving ties with China
New Delhi: India is reconsidering rejoining the Regional Comprehensive Economic Partnership (RCEP) after tensions with the United States over tariffs and an upswing in relations with China, Mint reported on August 21.
The government is examining a “deeper embrace of the East” through a potential return to the trade bloc, the report noted.
New Delhi had withdrawn from RCEP negotiations in 2019 before the agreement was signed, citing concerns over limited market access, widening trade deficits, and risks to farmers and local manufacturers.
A major worry was that Chinese goods could be routed through other East Asian members, worsening India’s trade imbalance.
Officials are now reassessing the costs and benefits of rejoining as part of efforts to diversify export markets, particularly as US tariff measures bite.
President Donald Trump has imposed a 25 percent base tariff, along with a penalty tariff of another 25 percent on countries purchasing Russian crude oil.
Reports suggest the additional 25 percent, due to take effect after August 27, may be dropped following “positive” discussions between Trump and Russian President Vladimir Putin.
Meanwhile, relations with China have warmed in recent weeks.
Prime Minister Narendra Modi is expected to travel to China later this month, while Beijing has reportedly agreed to supply rare earth magnets, fertilizers and also resume direct flights with India.
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