India will gain by playing by the rules

India stands to benefit by joining the trade pillar of the US-led Indo-Pacific Economic Framework (IPEF), negotiations for which deal with setting standards for labour, the environment, digital trade and public procurement. Since there is no broad consensus on these issues, India could find support for its position among the 14 member nations on the pace of harmonising rules. Last year, India decided to sign up for the other three pillars of IPEF – supply chain, clean economy and fair economy – but stayed away from trade because it involved negotiating on matters New Delhi feels are better dealt with in multilateral fora (such as labour) or individually (climate commitments). India is the only IPEF member to have opted out of the trade negotiations that do not have tariffs, and, hence, market access, on the agenda.

IPEF is about lowering non-tariff barriers to trade, and this could very well be accomplished through the other pillars that India has signed up for. Plugging into supply chains will require synchronised standards in industry verticals – for instance, sanitary standards in drugs. Environmental and corporate guidelines will creep in through investment flows. The digital economy is a key component of the IPEF trade pillar, and India separately wants to build consensus over digital public infrastructure in the G20 as its current president. Calls for India to sign up for IPEF negotiations in their entirety cannot be ignored, although it must be mindful of committing to accelerated transitions to standards the US is pushing for. On its part, the US must realise lowering non-tariff barriers to trade is more difficult to accomplish without improved market access.

India was a surprise entry into the grouping designed to curb China‘s economic influence in the region. Now that it is part of the framework, it has a stake in pushing through a standards-based trade and investment agenda. That purpose may be better served by engaging at all levels with the negotiations.