China has asked India to allow duty-free import of 85% of its products into the country. During the countries' bilateral discussions, Indian officials were told that China was willing to give duty-free access to 92% of Indian exports, provided the bar was raised for Chinese products. India has offered to open up 74% of its market to Chinese goods in phases but China is not satisfied with the proposal, mentioned reports.
The demand from the Asian giant is putting pressure on the policymakers as they are looking to create the world's largest free-trade agreement under the Regional Comprehensive Economic Partnership (RCEP).
According to a report in Times of India, India offers lower concessions to China as compared to other countries where over 90% of imports can come duty-free. However, even the current arrangement deals with risk of Chinese goods dominating Indian markets, which would further impact the trade deficit estimated at $63 billion in the last financial year.
Officials also acknowledged that India has little option other than to open up the market gradually with a long tariff phase-out period so that Indian players have time to adjust to the competition, as mentioned in the daily.
During a RCEP meet last week, trade ministers from the 16 participating countries decided to intensify negotiations so that it can conclude over the next few months. A final decision of concessions across sectors is only expected after the new government comes to power this summer. Talks for RCEP have been underway for over six years now but India has been concerned over cheap imports that would enter the country and devastate certain sectors. Apart from India and China, ASEAN members, Japan, South Korea, Australia and New Zealand are in the process of negotiation with 2019 as the deadline.