situation report

China, India: New Delhi Considering Tariff Cuts That Would Facilitate Trade Deal

1 MIN READSep 30, 2019 | 20:45 GMT

What Happened: India might be willing to trim or remove tariffs on 80 percent of Chinese goods in five phases over 20 years, Financial Express reported Sept. 30, citing sources briefed on the latest Regional Comprehensive Economic Partnership (RCEP) negotiations. New Delhi reportedly also might be willing to cut duties on 86 percent of imports from Australia and New Zealand and on 90 percent of imports from Association of Southeast Asian Nations (ASEAN) member countries, plus Japan and South Korea. 

Why It Matters: India has been the main roadblock to RCEP, a trade initiative between ASEAN and its six free trade partners: India, China, Australia, Japan, South Korea and New Zealand. New Delhi's apparent openness to reducing tariffs on goods from China and other key countries improves the prospects for a deal by the end of 2019. 

Context: The Indian government fears that RCEP could threaten Prime Minister Narendra Modi's ambitious "Make in India" campaign, cost steel and pharmaceutical jobs, and further widen its $57 billion trade deficit with China. 

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