India and the Indo-Pacific

Contact Counsellor

Last Updated20/09/2022

India in the recent past has developed a keen desire to be part of the geopolitical developments in the Indo-Pacific.

Indian policymakers do not appear to appreciate the inescapable linkages between geopolitics and geoeconomics.
India’s decision to not join RCEP and IPEF show that geoeconomics and geopolitics are imagined and pursued parallelly in India.

A U.S.-sponsored soft trade arrangement.
India has refused to join its trade pillar while deciding to join 3 other pillars of the IPEF — supply chains, tax and anti-corruption, and clean energy.

Will invariably boost China’s geo-economic hegemony in Asia.
Despite the military stand-off on the LAC, India-China trade has increased in the past year.
Therefore, if it is not possible for India to avoid trading with China.
It would be hard for India to integrate itself into the regional and global supply chains without being a part of important regional multilateral trading agreements.
India now needs to address some of the deeper challenges plaguing the investment and business environment in India.
If India is serious about its maritime grand strategy, it needs to get the states in the region to create economic stakes in India and vice-versa.
Without creating economic stakes with the states of the region, India’s ‘Act East’ policy will revert to its earlier avatar — ‘Look East’.
India has 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.
Potential regional economic isolation
The less India engages with the region economically, and the more China does so, India might risk getting economically isolated in the broader region.
The more India is economically ‘isolated’ in the region, the more China would be able to weaponise trade against India.

India should rethink its geo-economic choices if it wants to enhance its geopolitical influence in the region.
Given that India has not closed the door on the trade pillar of the IPEF, we have an opportunity to rethink our position.
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) from which the U.S. walked out and China is seeking to join.
Or India could start with the IPEF and the CPTPP, both of which do not have China on board.
India should also proactively try to become a part of the Minerals Security Partnership, the U.S.-led 11-member grouping to secure supply chains of critical minerals.

If 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.
To that extent, the current policy of pursuing geopolitical ends without geoeconomic ballast is ill-thought out.