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News:
- Japan, South Korea, Taiwan and Australia are trying to forge closer economic ties with India.
Important Facts:
- Japan, South Korea, Taiwan, and Australia are planning to divert their economic interest, away from mainland China and towards Southeast Asia and India.
- Why these Nations are sceptic about trading with China and inclining towards India:
- Rising concern over aggressive China’s Belt and Road Initiative.
- Beijing’s militarization in South China Sea
- Beijing’s use of its economic muscle for political purposes.
- Suspending rare earth metal exports to Japan in 2010.
- Seoul’s decision to install a missile defence system in 2017.
- China’s limited market growth potential
- Strategy adopted by these Nation to contain China:
Japan’s Policy:
- Reviving TPP
- Trade Agreement with EU
- Constitutional revision for more overt Military role.
- Japan’s Free and Open Indo-Pacific strategy to divert its investment Southeast Asia and India.
Korea’s New Southern Policy – Policy proposed by Korea’s president to focus on Southeast Asia, it also “makes India Korea’s key partner for cooperation.
Taiwan Southbound Policy – To enable investment in Electronics Manufacturing sector in India.
Australia Policy– It has commissioned an ambitious India Economic Strategy with the goal of making India its third-largest investment destination and export destination by 2035.
- However, in spite of the attractive opportunities India may not be able to take full advantage because:
- Uneven economic liberalization
- Protectionist sentiments taking root (theory of protecting domestic producers by impeding or limiting, as by tariffs or quotas, the import of goods and services)
- History of poorly-negotiated trade deals
- General election around the corner.
