Posted on by Insights Editor
Print Friendly, PDF & Email

EDITORIAL ANALYSIS :Geopolitics without geoeconomics

 

Source: The Hindu

 

  • Prelims: Current events of international importance(ASEAN, IPEF etc)
  • Mains GS Paper II: Bilateral, regional and global grouping involving India, Significance of Indo-Pacific for India etc

 

ARTICLE HIGHLIGHTS

  • India has managed to emerge as a major pivot of the global Indo-Pacific grand strategic imagination.
  • It avoided the temptations to militarize/securitise the Quad and has ensured that ASEAN states do not feel uneasy by the ever-increasing balance of power articulations in the Indo-Pacific.

 

INSIGHTS ON THE ISSUE

Context

Indo-Pacific Economic Framework (IPEF)

  • It was announced in 2021 to set regional standards for cooperation, and includes the Association of Southeast Asian Nations (ASEAN) member states.
  • IPEF is created to encourage regional economies to “decouple” from the Chinese market by leading them to alternative supply chains.
  • The IPEF will not include market access commitments such as lowering tariff barriers, as the agreement is “more of an Administrative arrangement”.
  • IPEF is viewed as reflecting the US’ ambitions to expand ties with key Indo-Pacific economies by building a supply chain that excludes China.
  • It has four “pillars” of work:
  1. Fair and resilient trade.
  2. Supply chain resilience.
  3. Infrastructure, clean energy, and decarbonization.
  4. Tax and anti-corruption.

What India is missing:

  • Linkage: Indian Policymakers do not appear to appreciate the inescapable linkages between geopolitics and
  • Multilateral agreements: Unwilling to join two of the region’s key multilateral trading agreements(RCEP and IPEF)
  • Trade pillar: India’s refusal to join the trade pillar of the Indo-Pacific Economic Framework (IPEF) while deciding to join the three other pillars of the IPEF.
  • Favours bilateral agreements: It is not keen on multilateral, plurilateral and even soft agreements such as the IPEF.

 

Recent steps by India:

  • Free trade agreements (FTA): with the United Arab Emirates(UAE)
  • Early Harvest Agreements: with Australia and the United Kingdom

 

Why it was a regressive step:

  • China’s geoeconomic hegemony: Absence of India from various regional trading platforms will invariably boost China’s geo-economic hegemony in Asia.
  • Sino-Indian economic partnership: It could be weaponized by Beijing for political purposes.
  • Multilateral trading agreements: It would be hard to integrate itself into the regional and global supply chains without being a part of important regional multilateral trading agreements.
  • Optionless: We have no option but to address some of the deeper challenges plaguing the investment and business environment in India.
  • Look East: without creating economic stakes with the states of the region, India’s ‘Act East’ policy will revert to its earlier avatar — ‘Look East’.
  • Sino-Indian rivalry: The less India engages with the region economically, and the more China does so.
  • Economically ‘isolated’ in the region: The more China would be able to weaponize trade against India during times of major bilateral standoffs.

 

Way Forward

  • Trading with China: India must not shy away from trading with China as part of multilateral arrangements while at the same time joining arrangements which have no Chinese presence.
  • decoupling from China: have not turned up at India’s doorstep. Most of them went to countries such as Vietnam thereby highlighting the fact that we need to get our house in order.
    • By joining some of these multilateral trading arrangements will force us to do precisely that.
  • Trading Agreements: India does have an FTA with the ASEAN, but it is also important for India to become part of trading arrangements which have major non-regional states so as to become a major part of the region’s supply chains.
  • Rethink about joining: Given that India has not closed the door on the trade pillar of the IPEF, we have an opportunity to rethink our position.
    • In fact, India should also rethink its decision not to join the RECP and seek to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
  • Minerals Security partnership: India should also proactively lobby to become a part of the Minerals Security Partnership, theS.-led 11-member grouping to secure supply chains of critical minerals.
  • Asian century of economic growth: If indeed, India seeks to be a part of the Asian century and its economic growth story in particular, it must let go of its historical hesitations and phobias regarding multilateral trading arrangements.

 

QUESTION FOR PRACTICE

  1. Indian Diaspora has an important role to play in South East Asian countries economy and society.Appraise the role of Indian Diaspora in South-East Asia in this context.(UPSC 2017)

(200 WORDS, 10 MARKS)

  1. India’s current policy of pursuing geopolitical ends without geoeconomic ballast is a regressive step. Critically analyze.

(200 WORDS, 10 MARKS)