CUTS International Washington DC Center
Monthly Brief #54, September 2022
Why should India be a major player in the IPEF?
 
A group of 14 Indo-Pacific countries, which represents over 40 percent of the global GDP and 28 percent of global goods and services trade, has come together to walk on a path towards shared prosperity under the Indo-Pacific Economic Framework for Prosperity (IPEF).
 
The IPEF has been conceived by its founding members as an instrument to prepare their economies for the future and withstand economic disruptions. India is one of the founding members and could benefit from this agreement immensely if it does not shy away from any of its pillars, including clean energy and trade pillars.
 
Currently, it has chosen to opt-out of the trade pillar during the ministerial meeting held in Los Angeles last month. By joining the trade pillar, India could stimulate much-awaited domestic reforms and help achieve other development goals. This would have positive multiplier effects across all sectors and areas of the Indian economy.
 
On the other hand, aligning with the Paris Agreement goals, India has shown willingness to work on the clean energy pillar of the IPEF. India would also involve in deeper cooperation on clean energy technologies to decarbonise economies.
 
The road to India’s ambitious target of becoming the third largest economy in this decade and a manufacturing and export powerhouse could be made smoother if India chooses to join all the pillars of the IPEF. This would assist India to become a developed economy by 2047, the year India celebrates its 100 years of Independence.
 
In short, the IPEF would further India’s policy of ‘Look and Act East’. Overall, it is a welcome initiative and India should become a part of its standard-making process. It’s a futuristic arrangement for achieving prosperity and India should not shy away from taking full advantage, while balancing its interests.
      
Pradeep S. Mehta
Editor

P.S. Countries which do not have a major role in climate change are the worst affected ones and climate stressed. Could the upcoming COP-27 be an opportunity to address this imbalance?


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Don’t be afraid of IPEF: Why India should join all pillars of Indo-Pacific bloc
Even though reportedly a decision has not yet been taken, not joining the trade pillar of the Indo-Pacific Economic Framework for Prosperity (IPEF) would be a mistake. First, it is bad signalling at a time when the world is appreciating India's high growth rates. Second, it would adversely impact (Paywall) the international reputation of Prime Minister Narendra Modi. The third setback would be towards achieving India's goals of becoming first a US$5 trillion economy, and then a US$10 trillion one in the near future.

US-India trade is vital to shaping the future of the Indo-Pacific
As it celebrates 75 years of independence, India has become the world’s fastest growing large economy and a global leader and trendsetter that will soon overtake China as the world’s most populous country. US strategy in Asia cannot neglect India’s importance or growing economic weight. To shape the next phase of development for a free and open Indo-Pacific, it’s vital that the US deepen commercial engagement with the world’s largest democracy.

As countries move out from China for global supply, India stands good chance of filling niche
According to the Director of the World Trade Organisation (WTO) Shishir Priyadarshi, India stands a good chance of filling in a suitable position in manufacturing, leaving behind several South Asian countries including China. ‘Aatmanirbhar Bharat Abhiyan’ attempts to correct this imbalance by incentivising manufacturers, addressing disabilities, and attracting global value chains. He believes that as far as the global value chain is concerned, most countries at present are not likely to be dependent on a single country.
 
Defence exports grew by 334 percent in last five years
The government said defence exports have grown by 334 percent in the last five years and India is now exporting to over 75 countries due to collaborative efforts. Defence Secretary Ajay Kumar had said, efforts were being made to "unleash the energy" of the Make-in-India initiative as a whole in the defence sector and the country's Amrit Kaal vision is to see it among the top five countries globally in defence production.

 

Climate technology: US will seek revamp of India’s IP regime
Bilateral cooperation between India and the US rests on transfer of technology in the renewable energy sector. Accessibility to climate technology is key to the success of India’s climate action plan, but India must buttress its intellectual property (IP) regime to succeed in this critical area. India and the US have an ongoing partnership in the field of climate change and energy. This was materialised with the establishment of the India-US Climate and Clean Energy Agenda 2030 Partnership.

After polluting the world for 300 years, the West lectures India on climate change
India has taken the goal of reducing carbon emissions seriously despite contributing to just a fraction of global pollution since the 18th century. At COP26 in Glasgow last year, Prime Minister Narendra Modi announced India’s pledge to attain net-zero carbon emissions by 2070. The country’s investment in green renewable energy is among the world’s most ambitious.
 
India to set climate resilient urban growth as G-20 infra agenda
India will focus on climate resilient urban infrastructure growth (Paywall) as the next president and host of Group of 20 nations. This is a topic which policymakers believe will resonate with developed and emerging members of the powerful multination grouping on which quick action can be taken. It can be done with the consensus of all involved.

How CEM could shape India’s green steel future
Clean Energy Ministerial (CEM13) is an international meeting tasked with the goal of advancing the clean energy transition. CEM13 will also address intensive sectors like the global iron and steel industry which consumes about 8 percent of the world’s energy. As the world’s second-largest steel producer and a top exporter of steel products India’s ability to lead the global steel industry into a green future is great. However, this will require a major shift in production technologies and energy infrastructure, resulting in a cost burden that must be shared with developed economies and steel consumers.

 

Globalisation is not dying, it’s changing
Martin Wolf Chief Economics Commentator, Financial Times said “what is the future of globalisation? This is among the biggest questions of our time. In June, 2022, I argued that contrary to increasingly widespread opinion, Globalisation is not dead (Paywall). It may not even be dying. But it is changing. Among the most important ways in which it is changing is via the growth of services provided at a distance.

With an eye on China, US to develop drones with India
The US and India will co-develop drones, as Washington seeks closer ties with Delhi as a way of countering China. India will build these aircraft and export them to other countries in its region. Delhi wants to diversify its weaponry, which is mainly Russian-made, and also to develop its own defence industry. Eli Ratner, Assistant Secretary of Defence for Indo-Pacific security affairs said, we want to support India on both fronts and are doing so, that means that we are going to be working closely with India on co-producing and co-developing capabilities that will support India's own defence modernisation goals.

A ground plan for India’s reformed multilateralism
At the heart of India’s participation in the 77th General Assembly is the call for a ‘reformed multilateralism’ (Paywall) through which the United Nations Security Council (UNSC) should reform itself into a more inclusive organisation representing the contemporary realities of today. India’s call for this structural overhaul of global multilateral institutions incorporates institutional accountability and a wider representation of the developing countries.

The US and India: Democracy and Strategic Autonomy
In spite of their differing responses to the Russian invasion of Ukraine, the Biden administration correctly has doubled down on its partnership with India. On the 75th anniversary of Indian independence, President Biden described India and the US as indispensable partners. Is India a global strategic partner of the US and other democracies or is it mainly seeking regional strategic support against its border threats - China and Pakistan? Is strategic autonomy now producing not autonomy but deference to Russia? These questions should be of concern to the US and India if they are truly indispensable partners.

 

Defence, technology cooperation and maritime security dominate India-US talks
India-US met to advance cooperation on a range of bilateral issues. According to a press release by the Ministry of External Affairs, included discussion on defence, counter-terrorism, maritime security, education, health, climate and clean energy, critical technologies, space, and people-to-people linkages. Both sides discussed developments in the global maritime domain, bilateral maritime cooperation endeavours, regional support initiatives and collaborative efforts such as Indo-Pacific Partnership for Maritime Domain Awareness.

India gained from right targeting, digitalisation
International Monetary Fund (IMF) Managing Director Kristalina Georgieva said, India effectively used its financial resources in the aftermath of the COVID-19 pandemic as accelerated digitisation and digital public infrastructure helped improve tax collections and target aid to the needy. Georgieva further added that India’s COVID-19 response, which she termed prudent and not oversized, kept the buffer for further support during an evolving crisis.

How can India promote Innovation and Entrepreneurship?
Innovation and entrepreneurship are two key building blocks of any fast-growing economy.  India has become a global hub for state of the art research and development, with some of the brightest minds in the world, which offers a unique blend of massive market opportunity, technical competencies and a highly scalable workforce.  India has benefitted from the increased policy focus on innovation diplomacy in forging economic ties with other nations.
 
India will cement its place in the upper echelons of tech manufacturing
Mukesh Aghi, President and CEO of the US-India Strategic Partnership Forum (USISPF) said the Indian government has been busy inking trade deals with lucrative markets in the United Arab Emirates (UAE) and Australia and a deal with the UK. More importantly, the PLI scheme has given a boost to India’s manufacturing capabilities and incentivised biz in electronics, pharma, and auto components to produce more. Furthermore, PLI will help large scale electronics manufacturing and incentivise mobile manufacturers and specified electronic component makers, thereby, helping India cement its place in the upper echelons of tech manufacturing, as Taiwan has successfully done.

 

Celebrating 75 Years of India-US defence ties
Defence has emerged as a key pillar of the overall India-US relations. In the next 25 years, the status of this relationship will be a deciding factor in the shaping of security dynamics in West Asia and in the Indo-Pacific region in particular. The engagement between the world’s largest and the oldest democracy has overcome the hesitations of history. Their diplomatic and strategic ties began in 1941 at the Mid-Atlantic Summit between the American President Franklin Roosevelt and the British Prime Minister Winston Churchill.

Indo-Pacific Economic Framework for Prosperity Ministerial Summit
The first in-person IPEF Ministerial Summit was held in Los Angeles in September, 2022. This Summit constituted 14 partner countries which represents over 40 percent of the global GDP and 28 percent of global goods and services trade. Following a constructive discussion in the pursuit of inclusive economic framework, the partner countries affirmed to advance resilience, sustainability and economic growth. The Ministerial Summit revolves around four pillars namely, supply chain, tax and anti-corruption, clean energy and trade. This edition of CUTS Occasional News Wrap has collated some important articles, marking the highlights of the IPEF Ministerial Summit, 2022.

India-Japan 2+2 Ministerial Meeting in Tokyo
This year marks 70 years of diplomatic relations between the two peace-promoting nations. The second India-Japan 2+2 Foreign and Defence Ministerial Meeting was held in Tokyo on September 08, 2022. The Ministers offered to further strengthen the Special Strategic and Global Partnership which was first emphasised during the first 2+2 meet held in New Delhi in 2019. The Ministers reaffirmed their commitment to a rules-based international order that respects the sovereign and territorial integrity of nations. The meeting also discussed measures toward enhancing greater bilateral cooperation in security and defence. This edition of CUTS Occasional News Wrap highlights the important takeaways from the second India-Japan 2+2 Ministerial Meet.
 
Jaishankar says 'India-US ties have grown in 8 years; India, China should find way to accommodate each other'
Prime Minister Narendra Modi has no ideological baggage and this has helped India-US ties to grow in tremendous way during the last eight years. India-US ties have seen turnaround since 2000 when then US President Bill Clinton visited India and the civil nuclear deal contributed to it. Under the Prime Minister the relations have grown as he is a practical leader, pointed out Jaishankar at the session moderated by Arvind Panagariya, Former Vice Chairman NITI Aayog.