Malaysia today said the 16 countries, including India, need to "work harder" to seal the RCEP deal by the year-end amid persisting differences over various issues such as tariff cuts and market access.
Malaysian Minister for Trade and Industry Mustapa Mohamed, who is currently on a visit to India, said countries involved in the negotiations need to "work harder" to achieve the year-end deadline for conclusion of the Regional Comprehensive Economic Partnership (RCEP).
Elaborating on hurdles being faced in the negotiations, he said there were issues related to scheduling of market access and a "higher level of ambition" in terms of some countries wanting steeper tariff cuts.
"It (RCEP) is going to be a historic agreement when it is completed hopefully by the end of 2016," Mohamed said while addressing business leaders at a meeting organised by Ficci.
Besides, the Minister told reporters he had a "good meeting" with Union Commerce and Industry Minister Nirmala Sitharaman where the two discussed issues including review of the free trade agreement between India and Malaysia.
The Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA), which came into force in 2011, was slated to be reviewed after five years.
Besides, Mohamed said he expects bilateral trade to touch USD 15 billion by 2017.
Bilateral trade between India and Malaysia stood at USD 13.84 billion in 2014, but came down to USD 12 billion in 2015.
Mohamed attributed the decline in bilateral trade to the sharp depreciation in Malaysia's currency Ringgit witnessed in 2015.
"We hope this year there will be some recovery in bilateral trade," he said.
RCEP is being negotiated amongst the ASEAN (Association of Southeast Asian Nations) trading bloc - Singapore, Vietnam, Indonesia, Malaysia, Laos, Cambodia, Brunei, Myanmar, Bangkok and Philippines with six of its partner countries - China, Japan, India, Australia, New Zealand and South Korea.
The mega trade deal aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights.
The pact has assumed greater significance post the Trans Pacific Partnership (TPP) accord led by the US. Indian industry is apprehensive that the TPP will adversely impact India's exports.
India has offered to open its market the most for ASEAN countries -- with which it has an FTA in place -- and has proposed to eliminate duties or tariffs on 80 per cent of items for the 10 nation bloc.
Besides, the Minister invited Indian businesses to invest in Malaysia, describing Malaysia as the gateway to the ASEAN market.
He said that Indian investments in Malaysia amount to only USD 1.3 billion, which is far less than the USD 4.1 worth of Malaysian investments into India.
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The Minister said Malaysia can act as the gateway to ASEAN market for India and the two nations can explore opportunities in smart manufacturing and explore the Principal Hub scheme for Indian companies with a global presence.
"Indian companies should look ahead for expansion in Malaysia to strengthen their presence in the region including mergers and acquisitions (M&As). An ecosystem approach must be adopted to strengthen complementarity between Malaysian and Indian companies," Mohamed said.
The Minister said that India was Malaysia's 11th biggest trading partner in 2015. To further deepen the relationship between the two countries, a Joint Statement Malaysia-India Strategic Partnership was issued in 2015.
Mohamed said there were opportunities in manufacturing such as chemicals & chemical products, textiles and textile products, pharmaceutical, and machinery and equipment, that could be explored and in services as well such as healthcare, education, centre of excellence and tourism.
