The Regional Comprehensive Economic Partnership (RCEP) is being negotiated by 16 countries, including 10 Asean members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam), India, China, Japan, South Korea, Australia and New Zealand, since November 2012.
Views of the steel sector, which is already under stress due to high imports, assumes significance as the domestic players have raised serious concerns over significant reduction of customs duties under the proposed pact.
The industry has also expressed concerns over presence of China in the grouping with which India has a huge trade deficit – USD 53 billion in 2018-19.
Steel makers are in fact demanding that steel products should be kept out of the purview of the RCEP as the mega trade pact could lead to flooding of products from nations like Japan, South Korea and China. India has implemented a separate free trade agreement with Japan and South Korea.
In this background, it is fundamental to take views of all concerned stakeholders of the sector.
“Steel Ministry will give its formal view to Commerce Ministry after meeting the stakeholders,” the official said.
RCEP negotiations, which started in Cambodian capital of Phnom Penh, aim to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights.
However, players of various domestic industries, including steel, have raised concerns with their respective ministries about the possible adverse impact that the deal could make on the local industry.
Another official said that the steel industry may get a major relief in this agreement but added that “discussions with the commerce ministry are still underway”.
Indian Steel Association (ISA) Assistant Secretary General Arnab Hazra said India is already having FTAs with some or the other country.
“Local steel has not benefitted from any of the existing FTAs and RCEP will open roads for China,” he said.
Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, Icra said last year, imports grew from countries with which India has FTA, like Korea and Japan.