The Regional Comprehensive Economic Partnership (RCEP) includes all 10 Southeast Asian countries plus China, Japan, South Korea, Australia and New Zealand.
Indian foreign ministry official Vijay Thakur Singh, on the other hand, said at a press conference, "India conveyed its decision at the summit not to join the RCEP agreement".
Sixteen leaders of the Regional Comprehensive Economic Partnership (RCEP) convened in a summit in Thailand to tackle the status of the China-backed trade proposal but the concerns of India have not yet been addressed.
Asked if India would join the deal at some later date, she reiterated that India has "conveyed that we will not be joining the RCEP".
"It is now clear only the 15 countries concluded for now since India has until next year to settle his remaining issues and decide if he can still sign with the 15 countries next year", he said.
Over the weekend, the trade ministers from 16 RCEP nations - who met on the sidelines of the ASEAN summit - failed to resolve the outstanding issues though back-channel talks.
While conveying that India will not join the trade deal, Modi spoke of Mahatma Gandhi's "advice of recalling the face of the weakest and poorest and then ask if the steps are of any use to them".
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This reflects both our assessment of the current global situation as well as the fairness and balance of the agreement. When I measure the RCEP agreement with respect to the interests of all Indians, I do not get a positive answer.
The RCEP is unlikely to be concluded any time in the near future because of lack of consensus among the countries negotiating the free trade agreement. "India's final decision will depend on satisfactory resolution of these issues", it said, keeping alive hope of New Delhi's return to the fold.
Singh said that India has participated in "good faith in the RCEP discussions and negotiated hard with a cleared eyed view of our interests".
Prime Minister Modi made the announcement during his speech at the RCEP Summit at Bangkok, which was attended by several world leaders.
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 has been forcefully raising the issue of market access as well as protected lists of goods mainly to shield its domestic market as there have been fears that the country may be flooded with cheap Chinese agricultural and industrial products once it signs the deal. Moreover, India was not getting anything in the area of services.
The important thing points include- insufficient safety towards import surge, inadequate differential with China, doable circumvention of guidelines of origin, the bottom 12 months remaining as 2014 and no credible assurances on market entry and non-tariff obstacles.
If finalised, the RCEP would have become the world's largest free trade area, comprising half of the world population and will account for almost 40 per cent of the global commerce and 35 per cent of the GDP.
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