Prime Minister Narendra Modi on Monday formalized India’s entry into the Indo-Pacific Economic Framework (IPEF), along with 12 other countries, including the United States, to strengthen economic cooperation as a geostrategic counterbalance to China’s growing influence in the region.

Other countries that joined IPEF ahead of the QUAD Leaders Summit in Tokyo include Australia, Brunei Darussalam, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam.

But the Biden administration that conceptualized the IPEF diluted the language of the joint statement to allow more countries to participate in the initiative. The joint statement does not call for launching negotiations for a trade pact. He only promises to start “collective discussions with a view to future negotiations” with an ambitious wish list.

Speaking at the launch event in Tokyo, Modi said India would work with other members to build an “inclusive and flexible” IPEF. “The Indo-Pacific Economic Framework is a statement of our collective will to make the region an engine of global economic growth. I think there should be three main pillars for resilient supply chains: trust, transparency and speed. I am convinced that this framework will contribute to strengthening these three pillars, and will pave the way for development and peace. and prosperity in the Indo-Pacific region,” Modi said, without mentioning the other three pillars of the proposed trade deal.

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The joint statement spoke of four pillars: trade; supply chains; clean energy, decarbonization and infrastructure; taxation and the fight against corruption. Under the trade pillar, the joint statement aims to establish “high-level, inclusive, free and fair trade commitments”.

“Our efforts include, but are not limited to, cooperation in the digital economy,” the joint statement said without excluding tariff negotiations under the proposed trade pact.

A fact sheet released by the White House clarified the Biden administration’s goals. “We will pursue high-level rules of conduct in the digital economy, including standards on cross-border data flows and data localization. We will also seek strong labor and environmental standards and liability provisions companies that promote a race to the top for workers through trade,” he said.

On issues such as digital trade, labor and environmental standards, India and the United States have opposing views. India strongly opposes the inclusion of such standards in the free trade agreements it signs. India did not join Osaka’s digital economy trail at the 2019 G20 leaders’ summit as it remains reluctant to establish global rules on e-commerce, believing it could deprive countries in developing policy space to expand their nascent e-commerce space.

Biswajit Dhar, professor of economics at Jawaharlal Nehru University, said the language of the joint statement is deliberately vague and broad to avoid differences at the initial stage. “This allows each leader to interpret the animal as they wish. But India must certainly take this very seriously. We should weigh the proposals very carefully taking into account our own comfort level, particularly on the regulatory coherence front,” he added.

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