Greater than six years after India withdrew from membership within the Regional Complete Financial Partnership (RCEP), the nation is able to reap the advantages that such grouping would convey with out exposing itself to the dangers.
On December 22, 2025, India and New Zealand introduced the conclusion of free commerce settlement (FTA) negotiations. As soon as this FTA comes into impact, India could have related FTAs with all RCEP member international locations besides China. Commerce specialists say the technique has given India entry to markets with out surrendering customs management to China.
RCEP member international locations are the ten ASEAN member international locations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam), Australia, China, Japan, South Korea, and New Zealand.
Withdrawal from RCEP
In November 2019, simply because the soon-to-be RCEP members have been finalizing an settlement, Prime Minister Narendra Modi introduced that India wouldn’t be a part of the group in its present type.
“The RCEP settlement in its present type doesn’t totally mirror the elemental spirit and agreed guiding rules of RCEP,” Modi mentioned on the time. “It additionally doesn’t adequately deal with India’s excellent points and issues. In these circumstances, it’s not attainable for India to hitch the RCEP settlement.”
Though Modi didn’t explicitly say so, authorities officers and commerce specialists have made it clear that India didn’t be a part of the group due to issues associated to the FTA with China. There have been issues that this is able to give China just about duty-free entry to the Indian market.
Pankaj Chadha, chairman of the Indian Know-how Export Promotion Council, instructed The Hindu that “an FTA with China was not attainable.” “The one purpose we can’t signal RCEP is China. Chinese language manufacturing is significantly better and extra aggressive. I do not assume we will do something apart from settle for the truth that we won’t have China in our sights with regards to these commerce offers.”
“RCEP minus China”
Chadha defined that India had already concluded FTAs with a number of RCEP member international locations on the time, however then strategically moved in the direction of concluding negotiations with the remaining member international locations.
“This RCEP minus China outcome was a part of the federal government’s technique,” he mentioned.
Ajay Srivastava, founding father of the World Commerce Analysis Initiative and former Director-Common of Overseas Commerce, mentioned this “RCEP minus China” technique is significantly better than becoming a member of RCEP itself.
“India’s resolution to not be a part of RCEP displays prudent threat administration. By signing bilateral FTAs with 14 of the 15 RCEP international locations and limiting China to the slim APTA framework, India has secured market entry with out giving up customs controls,” Srivastava mentioned.
India and China have at the moment signed the Asia-Pacific Commerce Settlement (APTA). APTA is a preferential commerce settlement that gives decrease tariffs on a small variety of objects, fairly than an FTA, which usually reduces most tariffs to zero.
In reality, Srivastava added that becoming a member of RCEP would have been even worse for India than getting into right into a direct FTA with China, as a bilateral settlement with China would enable India to get rid of delicate areas and velocity up the tempo of liberalization. However, he mentioned RCEP’s built-in construction would weaken safeguards and permit oblique entry of Chinese language merchandise via different member states.
“The present technique offers entry with out systemic vulnerabilities and is way superior to China-centric multilateral agreements,” Srivastava mentioned.
Transactions with different RCEP members
Most of India’s commerce agreements with RCEP international locations got here into drive earlier than the Modi authorities got here to energy in 2014. Nevertheless, some vital agreements have since been finalized.
The India-ASEAN FTA got here into impact in January 2010, as did the India-Korea Complete Financial Partnership Settlement (CEPA). Instantly thereafter, the Japan-India CEPA got here into impact in August 2011.
The India-Australia Financial Cooperation and Commerce Settlement (ECTA) will come into drive in December 2022, and the 2 international locations are at the moment negotiating methods to broaden the scope of the settlement.
Lastly, FTA negotiations with New Zealand, the final RCEP nation apart from China, ended on December 22, 2025.
issued – December 27, 2025 2:32 PM IST
