India sees second opportunity to turn to Pacific in IPEF

U.S. President Joe Biden, right, reviews an honor guard with Japanese Prime Minister Fumio Kishida in Tokyo, where he released the economic framework during a visit to Japan last week. The IPEF is the lifeblood of India, which in 2020 withdrew from the China-centric agreement made up of Southeast Asian nations.

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Two years after withdrawing from the China-centric Southeast Asia Free Trade Agreement, India is seizing the opportunity to become a founding member of another bloc – this one led by the US

launch US-led Indo-Pacific economic framework President Joe Biden in Tokyo First official visit to Asia Last week gave India the opportunity to pivot to the Pacific on its own.

New Delhi’s move to cement its alliance with Washington comes amid news that the United States will overtake China as India’s top trading partner in the fiscal year ending March 2022.

Except for India and the United States, all other countries participating in the IPEF launch are part of a rival group, Regional Comprehensive Economic Partnership Agreement. RCEP includes China, which is Largest trading partner for most Convention members.

Indian Foreign Minister Subrahmanyam Jaishankar later affirmed India’s commitment to IPEF. At a meeting between India and Southeast Asian countries last week, he said India was building infrastructure to forge closer ties to Southeast Asia through Myanmar and Bangladesh, which would align with the new framework.

“[Connectivity] Not only will it build on our partnership with ASEAN and Japan, but it will actually have an impact on the Indo-Pacific economic framework that is being developed,” Jashankar said.

country in [Indo-Pacific] If policies and economies are right, the region can overcome geography and rewrite history.

Subramaniam Jashankar

foreign minister of india

“The country is [Indo-Pacific] If policies and economies are right, the region can overcome geography and rewrite history,” he noted.

Bangladesh and Myanmar are both part of the Belt and Road Initiative, under which China has poured billions of dollars into infrastructure projects on every continent. India has been sidelined from President Xi Jinping’s signature initiative due to the ongoing border dispute. In addition, a key component of the Belt and Road Initiative passes through Pakistan-administered Kashmir. India claims all Kashmir as its own.

not including China

Although IPEF is not known as a trade agreement, trade is one of its four pillars. The other pillars are supply chain resilience; clean energy, decarbonisation and infrastructure, and finally taxation and anti-corruption.

“India will benefit from signing up to the multilateral framework, which means some standardization across sectors,” Rajan Katoch, a former industry minister in the Indian government, told CNBC in the central Indian city of Bhopal.

“I hope it will bring something (trade) because it will put more pressure on the Indian system to open up. In my opinion, India is too protectionist considering the capabilities of the Indian people,” Katoch said. It added that IPEF could enable India to push for the transfer of supply lines for certain products to India.

But strategic considerations may outweigh economic considerations. “It’s becoming a very divided world, and you have a place in that camp … you want to see that as well,” Katocci said.

India-China tensions