Bangkok: India on Monday shut the doors to joining a China-led mega RCEP trade deal, with Prime Minister Narendra Modi saying the decision was guided by the impact it would have on the lives and livelihoods of all Indians, especially the vulnerable sections of society.
Modi conveyed the decision of India to opt out of the 16-nation Regional Comprehensive Economic Partnership (RCEP) agreement during the leaders' summit here.
"This reflects both our assessment of the current global situation, as well as of the fairness and balance of the agreement," Vijay Thakur Singh, Secretary East in the Ministry of External Affairs, said at a media briefing after the RCEP summit.
"India had significant issues of core interest that remained unresolved," she said.
India has seen massive protests against the proposed deal, from the farming sector, dairy sector and others and also political parties.
While conveying that India will not join the trade deal, Modi spoke of Mahatma Gandhi's "advice of recalling the face of the weakest and poorest and then ask if the steps are of any use to them".
Singh said that India has participated in "good faith in the RCEP discussions and negotiated hard with a cleared eyed view of our interests".
"In the given circumstances we believe that not joining the agreement is the right decision for India".
India will continue to "persevere in strengthening our trade investment and people to people relations with the region," she said.
Asked if India would join the deal at some later date, she reiterated that India has "conveyed that we will not be joining the RCEP".
"We have had a very clear and principled position for a fair and balanced outcome for RCEP, and when we did not see that.. We took the right decision in national interest," she added.
Earlier, Modi told the summit that Indian farmers, traders, professionals and industries have stakes in such decisions. Equally important are the workers and consumers, who make India a huge market and the third biggest economy in terms of purchasing power parity.
"When I measure the RCEP Agreement with respect to the interests of all Indians, I do not get a positive answer. Therefore, neither the talisman of Gandhiji nor my own conscience permit me to join RCEP."
He said that in the seven years since the negotiations over RCEP were begun, "many things, including the global economic and trade scenarios have changed. We cannot overlook these changes. The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP. It also does not address satisfactorily India's outstanding issues and concerns."
Sources said that India's decision not to join the China-led deal will greatly help India's farmers, MSMEs and the dairy sector.
They said that India's stand is a mixture of pragmatism, the urge to safeguard the interests of the poor and the effort to give an advantage to India's service sector.
Some issues on which India made its stance clear included the threat of circumvention of Rules of Origin due to Tariff Differential. India pushed for a fair agreement which addressed the issues of trade deficits and opening of services. India also asked for safeguard mechanisms to prevent against import surges and safeguard the interests of domestic industry.
India also raised the unviability of Most Favoured Nation obligations where India would be forced to give similar benefits to RCEP countries that it gave to others. There was also no credible assurance for India on market access and non-tariff barriers. India also had very valid concerns on keeping 2014 as the base year for tariff reductions.
The other 15 nations in a statement on Monday said they have concluded text-based negotiations for all the 20 chapters and all their market access issues. They have been tasked to do the legal scrubbing so that the deal can be signed in 2020.
RCEP is a proposed free trade agreement (FTA) between the 10 member states of the ASEAN -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam -- and its six FTA partners China, Japan, India, South Korea, Australia and New Zealand.
RCEP member states account for 3.4 billion people with a total Gross Domestic Product of $49.5 trillion, approximately 39 per cent of the world's GDP, with the combined GDPs of China and India making up more than half that amount.