India on Monday shut the doors to joining a China-led mega-trade deal, with Prime Minister Narendra Modi deciding that there would be "no compromise" on the nation's core interests, as the deal would have impacted the lives and livelihoods of all Indians, especially the vulnerable sections of the society.
Modi conveyed India's decision to not join the 16-nation Regional Comprehensive Economic Partnership (RCEP) agreement during the leaders' summit here.
According to sources, the Prime Minister stood firm on India not joining the trade agreement, as the key concerns were not addressed. "There will be no compromise on core interests," it was decided.
The RCEP agreement does not reflect its original intent. The outcome is not fair or balanced, the sources added.
The four key issues involved were: Inadequate protection against import surge, insufficient differential with China, possible circumvention of rules of origin, keeping the base year as 2014, and no credible assurances on market access and non-tariff barriers, the sources said.
"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 as well as different 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."
Vijay Singh said that India has participated in "good faith in the RCEP discussions and negotiated hard with a clear eyed view of our interests."
"In the given circumstances, we believe that not joining the agreement is the right decision for India," she said.
However, 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, he said.
"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," Modi said.
He said that in the seven years since the negotiations over RCEP began, "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," Modi said.
The sources also said that India's decision to not join the China-led deal will greatly help India's farmers, MSMEs and the dairy sector.
The other 15 nations in a statement on Monday said that 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 (GDP) 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.