Quad Summit 2022: India likely to take a cautious stance on IPEF

India may take a cautious stance on the proposed Indo-Pacific Economic Framework (IPEF), details of which will be unveiled by US President Joe Biden at the Quad leaders’ summit in Tokyo on Tuesday.

Prime Minister Narendra Modi on Sunday left to attend the second in-person Quad summit, along with his counterparts from the US, Japan and Australia. Quad is believed to be a forum to strategically counter China’s economic and military rise. After the Trump administration decided to exit the Trans-Pacific Partnership (TPP) trade deal, the Biden administration seeks to engage with the Indo-Pacific countries through a fresh economic approach. However, IPEF is not meant to be a traditional free trade agreement where countries are required to cut tariffs, giving each other greater market access. This has led to many Southeast Asian countries questioning its relevance. India has not so far revealed its position on the issue.

Biden first spoke about the IPEF at the East Asia Summit in October last year, where he said that the “United States will explore with partners the development of an Indo-Pacific economic framework that will define our shared objectives around trade facilitation, standards for the digital economy and technology, supply chain resiliency, decarbonisation and clean energy, infrastructure, worker standards, and other areas of shared interest.”

On issues such as digital commerce and labour standards, India and the US have contrasting views. India strongly resists putting labour standards in any of the free trade agreements it signs. India didn’t join the Osaka track on the digital economy at the G20 leaders’ summit in 2019 as it remains reluctant on setting global rules e-commerce holding that this may deny policy space to developing countries to expand their nascent e-commerce space.

“The US wants to make the IPEF a lot more inclusive. The scope is very vast. You can have broad understanding on the elements of the framework on paper, but when it comes to the specifics, they always have to be negotiated,” a senior government official said, adding that a final decision on India’s level of engagement with IPEF will be taken during the Quad meeting.

Foreign secretary Vinay Kwatra on Saturday said discussions and conversations around IPEF are still going on. “We will let you know how it unfolds going forward. But we do all realise that in so far as the Indo-Pacific region is concerned, the economic segment of it is very important, both in terms of harnessing the opportunities of economic partnership that are available in the region, whether they are in various dimensions of economic areas or they are related to capacity building. One of the focusses of the Prime Minister’s conversations during the Quad summit will be on the Indo-Pacific which is essentially one of the main areas of Quad’s focus and within that space, the economic dimension of the cooperation,” he added.

Bishwajit Dhar, professor of economics at the Jawaharlal Nehru University, said India is in a tricky situation as it may have to walk an extra mile to woo Quad partners, especially the US, having already irked the Western partners over its “neutral” position in the Russia-Ukraine war.

“The US is trying to bring about a certain degree of regulatory coherence. The foundation of TPP was also that. That’s where India has its weaknesses. On labour standards, India and the US are diametrically on the opposite side. This is going to be problematic for India. Unless we improve institutional and other capabilities, it is not going to be beneficial to us,” Dhar said.