India joins US move to set up Indo-Pacific economic bloc

NEW DELHI: India joined a dozen other nations on Monday to launch the Indo-Pacific Economic Framework for Prosperity (IPEF), a US-led trade initiative meant to counter China’s aggressive expansion in the region, with Prime Minister Narendra Modi emphasising the need to establish an “inclusive and flexible” structure.

Among the 13 countries backing the initiative are Australia, Brunei, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam, and the members jointly account for 40% of the global GDP. Unlike traditional trade blocs, IPEF won’t negotiate tariffs or market access, and the framework will focus on integrating partner countries in four areas – the digital economy, supply chains, infrastructure projects and clean energy, and tax and anti-corruption measures.

In his remarks at the launch event, Modi described the unveiling of IPEF as the declaration of the collective will to make the Indo-Pacific an engine of global economic growth. Thanking US President Joe Biden for the “important initiative”, he said it is necessary to find common and creative solutions to the region’s economic challenges. “India will work with all of you to build an inclusive and flexible IPEF,” Modi said, speaking in Hindi. He listed trust, transparency and timeliness as the three main pillars for resilient supply chains. “I am confident this framework will help strengthen these three pillars and pave the way for development, peace and prosperity in the Indo-Pacific region,” he said.

Modi noted the Indo-Pacific has always been a centre of manufacturing, economic activities, trade and investments, and said India has historically been at the centre of trade flows across the region. He pointed out that India’s oldest commercial port was located at Lothal in his home state of Gujarat.

The event in Tokyo marked the launch of discussions toward negotiations on IPEF, and the framework partners invited other Indo-Pacific countries to join the framework. Besides the in-person participation of Biden, Modi and Japanese PM Fumio Kishida, senior officials and leaders of the 10 other countries joined the event virtually.

The external affairs ministry said IPEF seeks to strengthen economic partnership among participating countries in order to enhance resilience, sustainability, inclusiveness, economic growth, fairness and competitiveness in the Indo-Pacific. The partner countries will now have discussions focused on strengthening economic cooperation and achieving shared goals.

“India is keen to collaborate with partner countries under the IPEF and work towards advancing regional economic connectivity, integration and boosting trade and investment within the region,” the ministry said.