India’s IPEF move builds strategic coalitions to counter China

India has decided not to join the trade negotiation part of the Indo-Pacific Economy Framework (IPEF) even as it signed on the supply chains, taxation and clean energy tracks of the framework. India’s position on not joining trade arrangements linking trade with labour and environmental issues has been consistent and in its interests.

At the end of the two-day IPEF meet, commerce minister Piyush Goyal said that India would wait for the final contours to be decided before it joins the trade track.

Efforts to link trade with labour and environmental issues have been made for the past many decades and India has always been careful about them as it can adversely affect its economic prospects, including its ability to export goods and services that are tagged with labour and environmental standards. Labour is one of India’s key economic advantages and it views any efforts to reduce it as being adverse to its interest. In contrast, developed countries are unwilling to consider issues like labour mobility and trade as a bargaining option. But unlike bickering in the past, the US Trade Representative Katherine Tai said that talks on the trade issue will continue with India.

The IPEF was envisaged as an alternative to meet the challenge posed by China on a number of issues that include trade and supply chains. Launched in May this year, the forum’s negotiations are proceeding at a rapid pace. India has joined other multilateral forums that are concerned with creating multilateral alternatives designed to prevent domination of trade and politics by undemocratic countries. These include the Quad group and I2U2 (India, Israel, UAE, US) group.

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