India was given 10 days to resolve its differences with other RCEP countries after a ministerial meeting in Bangkok on October 11-12 failed to arrive at a consensus on New Delhi's concerns. /Photo via Twitter @PiyushGoyal

India was given 10 days to resolve its differences with other RCEP countries after a ministerial meeting in Bangkok on October 11-12 failed to arrive at a consensus on New Delhi's concerns. /Photo via Twitter @PiyushGoyal

India has negotiated a nearly 10 percent relief over China in tariff elimination during the ongoing Regional Comprehensive Economic Partnership (RCEP) talks, according to local media reports, paving the way for New Delhi to resolve the sticking points ahead of the deadline to conclude the world's largest free trade pact involving 16 Asia-Pacific countries, which is expected to be officially announced on November 4 at the ASEAN Summit in Bangkok.

The reported breakthrough was reached after China and India – the proposed trading bloc's largest economies – recently signaled their readiness to thrash out their differences over the deal. Chinese President Xi Jinping assured Indian Prime Minister Narendra Modi during the Mamallapuram informal summit that New Delhi's concerns of trade imbalance with Beijing would be taken into account.

"The Chinese commitment to work with India for reducing the bilateral trade deficit – which is one of the biggest reservations India has on the RCEP – might have been just what India was looking for," noted Amitendu Palit, a senior research fellow and research lead (Trade and Economic Policy) at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore (NUS), in a recent piece.

The relief for India will mean that its exporters can access 10 percent more Chinese product lines without facing tariff barriers, the Hindustan Times reported citing three people familiar with the matter.

Indian negotiators and experts are stationed in Bangkok to fine-tune commercial and legal issues pertaining to the RCEP, an official with direct knowledge of the matter told Hindustan Times. They are expected to iron out key issues before the ASEAN Summit kicks off in the Thai capital on October 31.

India was given 10 days to resolve its differences with other RCEP countries after an earlier ministerial meeting in Bangkok on October 11-12 failed to arrive at a consensus on New Delhi's concerns. The key sticking point for India in RCEP has been its trade deficit with China, which New Delhi fears will increase once the pact is activated.

At Mamallapuram, Xi addressed India's concerns by stressing on the "need to explore the gradual expansion of the 'China-India Plus' cooperation to South Asia, Southeast Asia and Africa, create a more unobstructed regional connectivity network, and strike the RCEP agreement as early as possible."

"As the RCEP braces for a finish at the Bangkok ministerial, all eyes are on India. The Modi-Xi Summit might have assuaged Indian concerns over RCEP, perpetrating more imports and a wider trade deficit. But domestic opposition remains unabated," Palit remarked.

RCEP is a proposed free trade agreement between the ten member states of the Association of Southeast Asian Nations (ASEAN) and its six FTA partners – China, India, Japan, South Korea, Australia and New Zealand. The talks on finalizing RCEP began way back at the 2012 ASEAN summit in Cambodia.

These prospective RCEP countries are home to nearly 48 percent of the world's population and account for about 33 percent of the global GDP. Trade within the bloc comprises close to 30 percent of global trade, while the 16 countries collectively account for almost 33 percent of global investment.

"If India remains out of RCEP, we will be left isolated from this large trading bloc. The trade among RCEP countries is about 2.8 trillion U.S. dollars. If India sits outside RCEP, whether it is in our interest or against our interest, it is also the responsibility of the government to see. You will want us to engage to find solutions which are in national interest," India's Commerce Minister Piyush Goyal said earlier this month.

Challenges remain