GBP/INR advances in early trading on Wednesday. It’s recovering some losses after trading only in red since the start of the month. The Indian rupee looks weaker today as enthusiasm backed by hopes of a US-China interim trade deal faded. Markets are now waiting for any clue from representatives of both countries.

The INR is also under pressure after yesterday’s disappointing services sector data and amid an economic slowdown.

Currently, one British pound buys 91.378 as of 06:22, up 0.23% so far.

In mid-October, GBP/INR hit the highest level since March, and it might try to update this peak soon.

India Refuses Asia Trade Pact

Investors are weighing the impact of India’s refusal to enter the Regional Comprehensive Economic Partnership (RCEP). This is an Asian free trade agreement (FTA) backed by China. The proposed deal includes ten members of the Association of Southeast Asian Nations (ASEAN). Some of them are Japan, South Korea, Australia, and New Zealand.

On Monday, Indian Prime Minister Narendra Modi said that he couldn’t compromise the interests of local workers and farmers by joining the trade pact. The PM stated that it failed to address India’s worries about market access.

Local traders are afraid that the trade agreement could open the door to cheap imports from China. This would harm local manufacturers. The PM commented:

“When I measure the RCEP Agreement with respect to the interests of all Indians, I do not get a positive answer.”

Elsewhere, China said that India was welcomed to join the pact whenever it’s ready.

Indian business groups and trade negotiators, who favor the deal, noted that the local industry would have benefited from the agreement. The advantage would be joining global supply chains for high-end products like electronics and engineering. The increased access to overseas markets would have offset the economic slowdown, they said.

Vikram Kirloskar, president of the Confederation of Indian Industry, stated:

“The long term interest of industry in India is to get well integrated in global value chains and beneficial trade agreements could play important roles in realizing this interest.”

Shortly after refusing to join RCEP, Indian officials said that the country should consider the FTA with European Union instead.

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