In November 2019, India walked out from the trade pact called the Regional Comprehensive Economic Partnership (RCEP) involving China, Japan, South Korea, Australia, New Zealand and the 10-state Association of Southeast Asian Nations (ASEAN) grouping. Fast forward to 2023, and now India along with many of the same countries, but with China replaced by the United States, is getting into the U.S.-driven Indo-Pacific Economic Framework for Prosperity (IPEF). The obvious questions are: what has changed? And how are the two economic partnership frameworks different?
The devil and deep sea
The one clear difference is of China versus the U.S. Developing a strategic partnership with the U.S. is India’s top foreign policy priority. Its relationship with China has, meanwhile, further deteriorated. But a strategic partnership with the U.S. need not come at the cost of economic dependency on it. With China, the big economic fear was any trade deal’s impact on India’s manufacturing sector; of cheap Chinese goods flooding Indian markets. But the economic issues with the U.S. have been no less problematic, e.g. about agriculture, intellectual property, labour and environment standards, and the digital economy. Strategic partnership should not mean accepting a completely U.S. self-interest-driven economic framework that does not suit India’s current economic interests.
