(RCEP) agreement reflects its assessment on the current global situation as well as the fairness and balance of the agreement, the Ministry of External Affairs (MEA) said on Monday, adding that the country had "significant issues of core interest that remained unresolved".
"The Modi Government was pushing to sign RCEP without addressing genuine concerns and national interests", he said.
"There will be no compromise on core interests", a source said on the condition of anonymity. Commerce ministers are still discussing outstanding issues.
An advantage for the other countries of having relative heavyweight India in the trade pact would have been less domination by China, particularly at a time they see the United States as a less reliable trade and security partner.
"All RCEP Participating Countries will work together to resolve these outstanding issues in a mutually satisfactory way".
"RCEP has better strategic value if it includes India".
India warned on Monday that it could pull out of negotiations for a sprawling Asia-Pacific free trade agreement after leaders from 16 nations effectively gave up on finalizing the deal by year's end while singling out the South Asian country as a stumbling block.
One of the reason for India's decision to not join the trading bloc was the growing agitation against the pact not just from the Indian industry but also from farmer groups.
India will continue to "persevere in strengthening our trade investment and people to people relations with the region", she said. "India's final decision will depend on the satisfactory resolution of these issues", the statement said.
A Thai spokeswoman said the deal is unlikely to be signed until February 2020 at the earliest.
Diplomatic sources said India came to the last rounds of negotiations in Bangkok, hoping that the issues raised by it were addressed.
The sources also said that India's decision to not join the China-led deal will greatly help India's farmers, MSMEs and the dairy sector. India pushed for a fair agreement which addressed the issues of trade deficits and opening of services.
"From India's point of view this agreement can be a very big catalyst to attract a lot of multinationals to its shores because it then gives them access to markets in India as well as in China", added Panagariya.
The Regional Comprehensive Economic Partnership (RCEP) was meant to account for 30% of global GDP and loop in half of the world's people.
The member nations include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, and the FTA members include China, Japan, India, South Korea, Australia, and New Zealand.
But India dug in over concerns about market access, fearing its domestic industries would be hit hard if the country was flooded by cheap Made-in-China goods.