{"id":186576,"date":"2022-05-26T21:00:57","date_gmt":"2022-05-26T15:30:57","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=186576"},"modified":"2022-05-26T21:00:57","modified_gmt":"2022-05-26T15:30:57","slug":"the-indo-pacific-economic-bloc-offers-india-a-new-opportunity","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-indo-pacific-economic-bloc-offers-india-a-new-opportunity\/","title":{"rendered":"The Indo-Pacific economic bloc offers India a new opportunity"},"content":{"rendered":"\n

News<\/strong>: Recently, the US launched the Indo Pacific Economic Framework (IPEF)<\/strong> at the Quad meeting in Tokyo.<\/p>\n

Significance of IPEF
\n<\/strong><\/h5>\n

In General<\/strong><\/p>\n

Geopolitical:<\/strong> All its members (the US, India, Japan, Australia, South Korea and 8 other East Asian countries), share worries about China\u2019s muscular nationalism <\/strong>and expansionist ambitions. <\/strong>Therefore, this gives the group a distinct geo- political flavour.<\/strong><\/p>\n

On the economic front, <\/strong>the group could become the foundation for longer term economic integration<\/strong> of like-minded countries<\/strong>. It would lead to cooperation<\/strong> in investment<\/strong> and technology development<\/strong> for clean energy<\/strong>.<\/p>\n

The immediate focus is on common standards<\/strong> in areas of labour rights, environmental standards, protection of intellectual property rights and rules covering the digital economy.<\/p>\n

For India<\/strong><\/p>\n

The world is dividing itself into autocracies<\/strong> and democracies<\/strong>. This division is reflected in economic alignments<\/strong>. India has a deep stake in aligning with the democratic group<\/strong>. Therefore, India leadership has already signalled India\u2019s support of the new initiative.<\/p>\n

Negotiations under the IPEF could be a mechanism for bringing our system in line<\/strong> with the best practices<\/strong> in the rest of the world.<\/p>\n

It would make India an attractive trading partner<\/strong> and as a destination for investment<\/strong>, especially in new supply chains.<\/p>\n

Digital trade <\/strong>and e-commerce <\/strong>are another critical area included under the IPEF. India has a comparative advantage<\/strong> in software development and application.<\/p>\n

What are the challenges?<\/strong><\/p>\n

Economic integration must ultimately be reflected in trade integration<\/strong>. But the IPEF is not a conventional free trade agreement (FTA)<\/strong>.<\/p>\n

Progress in some areas identified under the IPEF may run into problems from India’s side. It will involve many departures<\/strong> from its traditional positions. <\/strong><\/p>\n

The new arrangements will not require a consensus. IPEF is not a multilateral trade negotiation<\/strong>, where any country could hold up progress of negotiations by not agreeing. India may simply be left out, if India does not accept terms.<\/p>\n

In the past, India has resisted such behind-the-border alignment<\/strong> of standards<\/strong> because they reduce our policy space.<\/p>\n

Taxes and anti-bribery provisions<\/strong> are another element of the IPEF that could pose problems. India takes taxation as a sovereign function. Therefore, it is not subject to negotiation. However, India\u2019s taxation system is often accused of being a form of \u201ctax terrorism<\/strong>“.<\/p>\n

The US and Europe have differences on the issues of digital trade and e-commerce businesses.<\/p>\n

Trade negotiations are too complex. It cannot be handled by individual ministries acting in silos.<\/p>\n

There are many contentious issues in digital trade<\/strong> and e-commerce<\/strong>. For example, issues of transparency<\/strong>, the requirements of fair competition<\/strong> in a world dominated by a few players, and the ownership and localization of personal data.<\/p>\n

Way Forward<\/strong><\/h5>\n

Areas should be identified<\/strong> where the negotiations require a departure from past practice. India should consider whether these departures are in the national interest<\/strong> in the light of changed circumstances.<\/strong><\/p>\n

–<\/strong> For example, India adopted what advanced countries were demanding like freedom for workers<\/strong> to form trade unions <\/strong>because this was in our national interest.<\/strong><\/p>\n

If India decides to go ahead with IPEF<\/strong>, it should avoid prolonged negotiations<\/strong> as were done in the RCEP.<\/p>\n

The \u2018atmanirbharta\u2019 (self-reliance)<\/strong> does not mean isolation<\/strong> and protectionism<\/strong>. It involves attracting foreign investment<\/strong> and becoming part of global supply chains<\/strong>. Therefore, India should become part of IPEF as building reliable supply chains is part of its agenda.<\/p>\n

The exceptions can be carved out for specially sensitive areas<\/strong>. India can build in a suitable adjustment period to comply with these standards.<\/p>\n

India should initiate an internal review of its tax administration <\/strong>with involvement of experts and not just the Department of Revenue.<\/p>\n

Indian business should be mobilized in support of the new integration. Indian businesses<\/strong> that are potentially competitive globally and are often not heard.<\/p>\n

Finally, negotiations involve multiple ministries<\/strong>. Therefore, there should be inter-ministerial consultations<\/strong>. We need an empowered trade negotiator<\/strong> to consult with concerned ministries and report to the Prime Minister and key ministers with an assessment of pros and cons.<\/p>\n

The NITI Aayog should be mobilized to conduct broad consultations<\/strong> and elicit the opinions of stakeholders, including state governments.<\/p>\n

The NITI Aayog should engage in the education of the Indian public on the benefits to India from greater integration.<\/p>\n

Source<\/strong>: The post is based on an article \u2018the Indo-Pacific economic bloc offers India a new opportunity<\/strong>\u201d published in the Live Mint<\/strong> on 26th<\/sup> May 2022<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

News: Recently, the US launched the Indo Pacific Economic Framework (IPEF) at the Quad meeting in Tokyo. Significance of IPEF In General Geopolitical: All its members (the US, India, Japan, Australia, South Korea and 8 other East Asian countries), share worries about China\u2019s muscular nationalism and expansionist ambitions. Therefore, this gives the group a distinct… Continue reading The Indo-Pacific economic bloc offers India a new opportunity<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10501],"class_list":["post-186576","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704632994},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/186576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=186576"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/186576\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=186576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=186576"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=186576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}