Chief Economic Advisor V. Anantha Nageswaran during the Confederation of Indian Industry (CII) Annual Business Summit 2026, in New Delhi on May 12, 2026.
| Photo Credit: ANI

A little more than six years after India stepped away from joining the Regional Comprehensive Economic Partnership (RCEP), India is in a position to reap the benefits such a grouping would have provided it, without exposing itself to the risks. 

India and New Zealand on December 22, 2025, announced the conclusion of negotiations on a Free Trade Agreement (FTA). Once this FTA comes into effect, India would have such FTAs with all the countries in the RCEP except for China. Trade experts say this strategy has given India market access without surrendering tariff control to China. 

The RCEP countries are the 10 ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam), Australia, China, Japan, South Korea, and New Zealand. 

Backing out of RCEP

In November 2019, just as the soon-to-be members of RCEP were about to finalise their agreement, Prime Minister Narendra Modi announced that India would not be a part of the grouping in its current form. 

“The present form of the RCEP agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP,” Mr. Modi had said at the time. “It also does not address satisfactorily India’s outstanding issues and concerns. In such a situation, it is not possible for India to join the RCEP agreement.” 

While Mr. Modi did not expressly say it, government officials and trade experts were clear that the reason India did not join the grouping was because of the apprehensions related to entering into an FTA with China. The fear was that this would provide China virtually duty-free access to the Indian market. 

“We could not have had an FTA with China,” Pankaj Chadha, Chairman of the Engineering Exports Promotion Council of India told The Hindu. “The reason not to sign RCEP was only China. Chinese manufacturing is far superior and competitive. I don’t think it’s possible to do anything except accept the fact that we cannot have China in the picture when it comes to these trade deals.”

‘RCEP minus China’

While India already had FTAs with several RCEP members at the time, it then strategically went about concluding negotiations with the remaining members, Mr. Chadha explained. 

“This RCEP minus China outcome was part of the government’s strategy,” he said.

Ajay Srivastava, founder of the Global Trade Research Initiative and a former Director General of Foreign Trade, said that this ‘RCEP minus China’ strategy is a far superior one to joining RCEP itself.

“India’s decision to stay out of RCEP reflects smart risk management: by signing bilateral FTAs with 14 of the 15 RCEP members and keeping China limited to a narrow APTA framework, India secures market access without surrendering tariff control,” Mr. Srivastava said.

India and China are currently signatories to the Asia Pacific Trade Agreement (APTA), which is a preferential trade agreement that provides lower tariffs on a few items rather than an FTA, which typically lowers most tariffs to zero.

In fact, Mr. Srivastava added, joining RCEP would have even been worse for India than signing a direct FTA with China because a bilateral deal with China would allow India to exclude sensitive sectors and pace liberalisation. On the other hand, RCEP’s integrated structure would have diluted safeguards and enable indirect entry of Chinese goods via other members, he said.

“The current strategy delivers access without systemic vulnerability — and is far superior to a China-centric multilateral pact,” Mr. Srivastava said.

Dealings with other RCEP members

Most of India’s trade deals with the RCEP members came into effect before the Modi government came to power in 2014. However, a few key ones have been finalised since then. 

The India-ASEAN FTA came into effect in January 2010, as did the India-South Korea Comprehensive Economic Partnership Agreement (CEPA). Soon after, in August 2011, the India-Japan CEPA came into effect. 

The India-Australia Economic Cooperation and Trade Agreement (ECTA) came into effect in December 2022, with the two countries currently negotiating how to widen the scope of the deal. 

Finally, the negotiations on an FTA with New Zealand, the final non-China RCEP country, ended on December 22, 2025.

Published – December 27, 2025 02:32 pm IST

Union Minister of Commerce and Industry Piyush Goyal in the U.S.
| Photo Credit: PTI

 Currently, there are approximately 330 Swiss companies in India, creating more than 1,70,000 jobs. More than half of them manufacture in India and export from there worldwide.
| Photo Credit: Reuters, The Hindu

Four-nation bloc EFTA is looking at significant reduction in trade barriers on sectors such as machine tools, advanced chemicals, pharma, chocolates, Norwegian and Icelandic fish in the proposed free trade agreement with India, a Swiss minister said.

Swiss State Secretary for Economic Affairs Helene Budliger Artieda also said that with India, the EFTA grouping is aiming for an ambitious and comprehensive agreement in trade in goods, services and protection of intellectual property rights (IPRs).

India and European Free Trade Association (EFTA) states – Iceland, Liechtenstein, Norway, and Switzerland – are negotiating a Trade and Economic Partnership Agreement (TEPA) with a view to boosting economic ties between the two regions.

Negotiations on the agreement were officially launched in January 2008. 13 rounds of negotiations were held until autumn 2013 before the talks were put on hold. After talks were resumed in October 2016, a number of rounds have taken place.

“Regarding trade in goods, India applies high tariffs on many of the EFTA countries’ exports. We obviously look for a substantial reduction of trade barriers, particularly for such high-value-added products as machine tools, advanced chemicals and pharmaceuticals, Swiss chocolate, Norwegian and Icelandic fish, and so on. This is our main focus,” Artieda told PTI in an e-mailed interview.

EFTA has 29 free trade agreements (FTAs) with 40 partner countries including Canada, Chile, China, Mexico, and Korea.

Replying to a question whether Switzerland is seeking zero import duty on gold from India under TEPA, she said, “We understand that gold is a very sensitive topic for our Indian colleagues and the ultimate goal of each negotiation is to find a good balance respecting the key interests and sensitivities of both sides”.

Gold has a large footprint in the India-Switzerland bilateral trade, which stood at $17.14 billion in 2022-23. Out of this, imports stood at $15.8 billion in that fiscal.

On any deadline for concluding the talks, the Swiss minister said negotiations for TEPA have been going on for more than 15 years and a lot of effort from both sides has been made during the past few months in order to conclude these negotiations swiftly.

“We should seize this excellent momentum and continue to work constructively towards a successful conclusion of a mutually beneficial agreement in the coming weeks,” Artieda said.

She added that the agreement and a new bilateral investment treaty would send out a clear message to the Swiss and Indian businesses to further exploit the potential.

“The conclusion of these agreements is clearly the next important step for both our countries,” the minister said. Replying to a question about ways to increase Swiss investments into India, she said Swiss companies are determined to invest in India and governments can foster conducive conditions to enable it and the trade pact is the cornerstone of these efforts.

“At the moment, high customs duties are an impediment for trade and hence, for further investments. Swiss companies are known for being innovative. Therefore, an adequate protection of IPRs can play a major role in companies’ strategic long-term decisions to invest in India,” the minister added.

The Swiss companies, she said, interested in investing more in India come from different kinds of sectors like MEM (machinery, electrical and metal), pharmaceutical, finance, construction, sustainable technologies and cleantech industry and ICT services.

Currently, there are approximately 330 Swiss companies in India, creating more than 1,70,000 jobs. More than half of them manufacture in India and export from there worldwide.

“There is immense potential for collaboration in the development of infrastructures – notably railways, water/waste management and renewable energies – and areas such as clean technologies,” she said.

On India-Switzerland innovation platform, the Swiss minister said that the platform will be officially launched on October 30 during a three-day Indo-Swiss Dialogue on Antimicrobial Resistance (AMR) at the National Center for Biological Sciences.

“The goal of the innovation platform is to grow our collaboration in a more strategic way in areas that are of importance to both our countries, such as health, sustainability, and digital transformation,” she added.

A free trade agreement between the two regions is officially dubbed as TEPA. Under such pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.

EFTA countries are not part of the European Union (EU). It is an inter-governmental organisation for the promotion and intensification of free trade. It was founded as an alternative for states that did not wish to join the European Community.

India’s exports to EFTA countries during 2022-23 stood at $1.92 billion as against $1.74 billion in 2021-22. Imports aggregated at $16.74 billion during the last fiscal as compared to $25.5 billion in 2021-22.

The trade gap is in favour of the EFTA group, according to the data of the commerce ministry.