Indo-Pacific trade forum

When US President Joe Biden said in Tokyo on Tuesday that Quad ‘is not just a passing fad but it means business’, the literal sense of the word ‘business’ was not lost on anyone. He spelt out the American agenda on the eve of the Quad summit by launching the Indo-Pacific Economic Framework (IPEF), an initiative aimed at enhancing cooperation among ‘like-minded’ countries of the region in sectors such as clean energy, supply-chain resilience and digital trade. The US-led IPEF has 13 countries on board as of now, including Quad partners India, Japan and Australia. It is apparently America’s counter to the Regional Comprehensive Economic Partnership (RCEP), a China-backed trading agreement that India has stayed away from.

The global disruptions caused by the Covid-19 pandemic and the Russia-Ukraine war have prompted major economies to strengthen existing multilateral platforms or establish new ones with the aim of ensuring trade security and sustainability. While hoping that the IPEF will play a central role in making the Indo-Pacific an ‘engine of global economic growth’, PM Modi has emphasised that the foundation of robust supply chains must be based on trust, transparency and timeliness. These 3Ts have to be addressed by the new economic bloc to the satisfaction of all participating nations.

The IPEF can be a win-win forum for all members as long as it provides a level playing field and guarantees mutual benefits; otherwise, it will be reduced to yet another vehicle for the assertion of American hegemony. India has an enviable trade surplus of about $33 billion with respect to the US — from January to December 2021, the exports to America were valued at more than $73 billion, way above imports worth around $40 billion. The onus is on New Delhi to consolidate its gains and not let the initiative slip away. Both the ‘Make in India’ and ‘Make for the World’ initiatives need a major push to reduce the country’s overdependence on imports, particularly from China. A pragmatic, long-term approach can help India thrive economically and prevent it from becoming a pawn in the US-China tug of war.

Join Whatsapp Channel of The Tribune for latest updates.