Government Targets New Bilateral Deals After Exiting China-Backed RCEP

India is reviewing trade and goods agreements with its Southeast Asian neighbors to boost exports after opting out of a China-backed trade pact.

New Delhi is working to strengthen trade deals with the ASEAN group, as well as South Korea and Japan, Commerce Minister Piyush Goyal, told lawmakers in Parliament on Tuesday. "The government priority is also to correct the asymmetry in the existing agreements and maximize its export potential to benefit domestic industry and farmers," he said.

The administration of Prime Minister Narendra Modi withdrew from the Regional Comprehensive Economic Partnership in November, citing the deal's potential impact on the livelihoods of its farmers and job creation. China said that the other 15 countries decided to move ahead with the pact and New Delhi was welcome to join RCEP whenever it was ready. Japan has said it won't sign the trade pact without India.

"Modi government is also trying to mitigate some of the damage that was done to India's reputation with global investors and the economic costs of being outside RCEP by intensifying rhetoric on pursuing new or revamped bilateral trade deals," said Akhil Bery and Peter Mumford, analysts at risk consultancy Eurasia Group, in a statement on Monday. "The government is particularly eager to move ahead with trade negotiations with the US, European Union and Australia, while also looking to upgrade its existing FTAs with ASEAN and South Korea."

"As was the case in RCEP negotiations, there will also likely be reticence on the part of its counterparts to acquiesce to Indian demands for much greater liberalization of services markets and relaxation of immigration restrictions on skilled labor," they said.