- 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:
- Fair and resilient trade.
- Supply chain resilience.
- Infrastructure, clean energy, and decarbonization.
- 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
- 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)
- India’s current policy of pursuing geopolitical ends without geoeconomic ballast is a regressive step. Critically analyze.
(200 WORDS, 10 MARKS)
