The third meeting of ministers from countries participating in the Regional Comprehensive Economic Partnership (RCEP) trade deal appears to have ended on a constructive note. There are still calls for a “swift conclusion” of negotiations, though there are “many challenging issues to resolve”.

One of these areas are concerns from India about the degree of tariff reductions, Reuters reports. That hinges on loss of tax revenues on tariffs, combined with concerns about competitiveness with China. That may partly reflect a recent resurgence in Chinese exports to India. These increased 25.0% in April after a 30.8% rise in March, as outlined in Panjiva research of May 15, leading the country’s trade deficit to a 30 month high. Currently China’s exports to India are led by consumer electronics, Panjiva data shows.

Calculations include data from Directorate General of Commercial Intelligence and Statistics and China General Customs Administration Source: Panjiva

It would seem unlikely that India would leave the negotiations, though a lot will depend on China’s willingness to accommodate its demands as the largest trade partner in the bloc. That in turn is a function of whether China genuinely wants to complete a deal before the National Congress due to be held in October. Panjiva analysis shows India accounted for 7.0% of RCEP total trade in April, compared to 36.2% for China.

Chart shows most recent month’s exports and imports for each country, based on government data. FIgures shown on logarithmic scale for clarity Source: Panjiva