India has secured the benefits of the Regional Comprehensive Economic Partnership (RCEP) without exposing itself to the risks associated with China, following the conclusion of a Free Trade Agreement (FTA) with New Zealand on December 22, 2025.
Once this FTA comes into effect, India will hold trade deals with all RCEP countries except China, giving Indian exporters broad market access while maintaining tariff control over sensitive sectors.
India had opted out of joining RCEP in November 2019. Prime Minister Narendra Modi said at the time that the agreement did not address India’s outstanding concerns and failed to reflect the “basic spirit and agreed guiding principles” of the pact. Officials and trade experts later clarified that apprehensions about a free trade arrangement with China, which could have provided Beijing near-duty-free access to Indian markets, were the principal reason for the decision.
“We could not have had an FTA with China,” Pankaj Chadha, Chairman of the Engineering Exports Promotion Council of India, told The Hindu. “Chinese manufacturing is far superior and competitive. We cannot have China in the picture when it comes to these trade deals.”
India already had FTAs with several RCEP members and then strategically pursued bilateral agreements with the remaining nations, leaving China out. “This RCEP minus China outcome was part of the government’s strategy,” Chadha said.
Also read: India not re-considering to join RCEP pact: Piyush Goyal
Ajay Srivastava, founder of the Global Trade Research Initiative, said the approach offered superior risk management. “By signing bilateral FTAs with 14 of the 15 RCEP members and keeping China limited to a narrow Asia Pacific Trade Agreement (APTA) framework, India secures market access without surrendering tariff control,” he noted.
Under APTA, India and China exchange preferential treatment on a limited number of items, unlike an FTA, which generally lowers tariffs on most goods. Srivastava added that joining RCEP could have exposed India to indirect Chinese imports through other members, whereas the current strategy provides access without systemic vulnerability.
India’s trade arrangements with other RCEP members span years. The India-ASEAN FTA came into effect in 2010, alongside the India-South Korea Comprehensive Economic Partnership Agreement (CEPA). India-Japan CEPA followed in 2011, and the India-Australia Economic Cooperation and Trade Agreement (ECTA) was implemented in December 2022. With the New Zealand FTA now concluded, India completes its coverage of the RCEP bloc, minus China.
Follow us
