CUTS International Washington DC Center
Monthly Brief #59, February 2023
Four Pillars for a Firmer Foundation: On India and IPEF
The development of the Indo-Pacific Economic Framework for Prosperity (IPEF) is gathering momentum. While the focus of the Special Negotiating Round in Delhi held earlier this month was on the IPEF’s Supply Chains, Clean Economy and Fair Economy pillars, talks on the Trade pillar are expected to figure in the next round scheduled for mid-March in Bali, Indonesia. India is presently participating in three pillars, while engaging as an observer in the Trade pillar.
We have been strong advocates of India’s decision to join the IPEF and have voiced our belief that, going forward, India should also join the IPEF Trade pillar.
While the U.S. will seek to fashion the Trade pillar in a manner that enhances U.S. domestic competitiveness, focusing on its companies and workers, that does not by and of itself mean that India cannot also stand to gain. Resilient and sustainable supply chains, backed by rules-based, high standards trade and investment among the dynamic economies of the Indo-Pacific is aligned with India’s economic, as well as geopolitical interests.
While there are presently no explicit market access commitments envisaged under the trade pillar, the emphasis it places on standards is equally important. Standards can themselves act as significant determinants of market access in global trade today. India should therefore enhance its presence in emerging standard-setting frameworks such as the IPEF Trade pillar in order to shape rules from the inside.
The focus of the Trade pillar on labour, environment and digital economy-related initiatives should also not deter India. There are expected to be significant overlaps between the four pillars, and therefore, issues relating to labour and digital economy will not just be a part of the Trade pillar, but may also emerge in the other pillars which India has already joined. Supply chains and trade aspects are also intrinsically interlinked.
Negotiating on these trade-related issues within IPEF will also help complement India’s efforts in ongoing FTA negotiations with the EU, UK and Canada, among others, where similar issues may arise. Overall, convergence in approaches may be found between the IPEF agenda and other, more traditional FTA negotiations, which can ensure India is better placed to navigate a broader range of negotiations at multilateral, bilateral and other platforms.
However, there are no pre-existing templates for the IPEF agreements, with discussions only at the stage of zero drafts and non-papers for now. There is always talk of what the IPEF is not (“not a traditional trade agreement”). In this context, as the contours of the IPEF take more concrete shape, extensive stakeholder consultations will be required at each stage, in order to fully take on board various concerns and understand the implications of the agreements.
Pradeep S. Mehta

P.S. As the Ukraine war enters its second year, will Russia embark on a new spring offensive? What do the coming months hold for peace and security in Europe, and what will be its global ramifications?
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The G20 may help us push for a revival of rule-based world trade
The slowdown in the biggest economies has negative global implications, especially for emerging markets and indebted countries. What can the India-led G20 do to counter it? Global growth is expected to slow to under 3 percent in 2023, with a major decline for the U.S. and other advanced nations. While the threats stem from persistent inflation, rising interest rates and the Ukraine war, there are other shocks, such as those related to world trade.

IPEF: India should trade cautiously on the clean economy pillar
It may be worthwhile to raise two questions about international trade’s role in a country’s broader economic goals drawing from two divergent strands of thought. First, how do we estimate the gains from international trade over an anticipated future? Second, how do we ensure that an incipient global trade framework will not end up accentuating inequalities between the developed and the not-so-developed worlds? The eventual decision on whether India should join all pillars of the Indo-Pacific Economic Framework (IPEF) should be predicated upon detailing the responses to these two fundamental questions.

India to be key beneficiary of US$200-billion fund
U.S. will provide financial support from its US$200-billion Partnership for Global Infrastructure and Investment (PGII) Fund to Indian tech entrepreneurs and infrastructure projects to bolster ‘friend shoring’, terming India as its trusted trading partner U.S. Treasury Secretary Janet Yellen said on February 25, 2023. In June 2022, the U.S. announced a plan to raise US$200 billion in private and public funds through 2027 for infrastructure financing in developing countries under a G7 initiative aimed at countering China’s multi-trillion-dollar Belt and Road project.

EU and India launch Trade and Technology Council
The European Union (EU) and India on February 06, 2023 launched a new Trade and Technology Council. Three working groups on digital governance and connectivity, green tech, and trade - will start their work ahead of a ministerial meeting planned for spring 2023, the European Commission said in a statement. "Together, we will work towards a democratic model of technological development that drives innovation and puts people at the centre," said Executive Vice President of the European Commission Margrethe Vestager.


India’s ‘LiFE’ initiative can save US$440 billion globally in 2030
The ‘Lifestyle for Environment’ (LiFE) initiative of India for the adoption of energy-efficient behaviour can save the world US$440 billion in 2030, according to a report by International Energy Agency (IEA). The report titled ‘LiFE lessons from India’ said that the saving would be equivalent to around 5 percent of all fuel spending across the global economy in that year. LiFE measures would also save consumers globally around US$440 billion in 2030 through both lower consumption and lower prices.

World needs new institutions to drive climate action, SDGs
The world needs new institutions to drive climate action and sustainable development goals (SDGs) as organisations such as the International Monetary Fund (IMF) and the World Bank are not designed to address these challenges, India's G20 Sherpa Amitabh Kant said on February 24, 2023. Participating in a discussion on "India's G20 Presidency - Forging Actionable Agenda for Global South" at the Vivekananda International Foundation, he talked about the challenges as India holds the Presidency of G20 - an intergovernmental forum comprising 19 countries and the European Union (EU).
Australia remains committed to coal
Australia was governed by climate change deniers for years. Leading politician’s long boycotted global efforts to tackle the problem. About two years ago, for example, leaked documents showed how the previous government under Scott Morrison lobbied to tone down the United Nation climate report. It was only shortly before the Glasgow climate summit that Australia sought to catch up with the rest of the world and announced a zero emissions target by 2050. By the end of 2030, however, emissions would be reduced by only 26 to 28 percent below their 2005 level.

U.S. supports Modi's goal of having 500 GW from renewable energy sources by 2030
In an exclusive interview to a news agency, U.S. Assistant Secretary of State for Energy Resources Geoffrey R. Pyatt has fully supported Prime Minister Narendra Modi's vision for renewable energy.  He admitted that his country fully endorses the sentiments behind the ambitious project for renewable energy. It is Prime Minister Narendra Modi who has worked tirelessly for International Solar Alliance that works for exploring infinite opportunities in solar energy.


Round Two of IPEF Negotiations
India hosts the second negotiation round of the Indo-Pacific Economic Framework for Prosperity (IPEF) in New Delhi from February 08-11, 2023. A new economic initiative driven by the U.S., that include discussions on pillars covering issues related to supply chains, clean economy (decarbonisation and infrastructure) and fair economy (anti-corruption and tax) was discussed. The Round was hosted by Commerce and Industry Minister Piyush Goyal, who urged the member-nations of the IPEF to focus on ‘early harvest deliverables’ that would benefit all countries. In this edition of CUTS ONW, news of significant importance and expert analysis about this meet are highlighted.

Trilateral framework: India, France, UAE unveil cooperation plan
India, France and the United Arab Emirates (UAE) on February 04, 2023 announced an ambitious road map for cooperation in defence, energy and technology under a trilateral framework. The plan was finalised during a phone conversation among External Affairs Minister S Jaishankar, and his France and UAE counterparts, Catherine Colonna and Sheikh Abdullah bin Zayed Al Nahyan, respectively. The three Foreign Ministers met on September 19, 2022 for the first time in a trilateral format on the margins of the United Nation General Assembly in New York.

QUAD meet to boost cyber security in Indo-Pacific
The QUAD Cyber Security Group met in New Delhi coinciding with National Security Advisor Ajit Doval's U.S. visit and discussed building cyber security capacity for QUAD members and for partners in the Indo-Pacific region. During the meeting, participants of the four countries discussed sharing threat information, identifying and evaluating potential risks in supply chains for digitally-enabled products and services, and aligning baseline software security requirements to improve the broader software development ecosystem for the benefit of the Indo-Pacific region, officials said.

Japan and India will bridge ‘Global South’, G7 countries, and IPEF countries
Japan is encouraging India to join the Indo-Pacific Economic Framework (IPEF) Trade Pillar that also includes the digital economy. Prime Minister Narendra Modi has been a strong votary of the digital economy. Japanese Negotiator in IPEF Yamashita Takanari who was in India to participate in the second round of the IPEF negotiations told Economic Times that Narendra Modi has announced to launch ‘Digital Public Infrastructure Task Force’ (Paywall) at G20 and IPEF Trade Pillar has digital economy as one of its key pillars.


What is tech diplomacy and why does it matter?
Technology is an increasingly core dimension of global, economic and industry agendas. Even before the pandemic caused rates of technology adoption to soar, Accenture’s Chief Technology Officer, Paul Daugherty, declared: “Every company is a technology company – some just don’t recognise it yet.” We are now seeing the rise of GovTech Ecosystems, with tech start-ups and small to medium-sized enterprises providing products and services to aid the digital transformation of administrations enabling governments to more efficiently serve the public.

India, U.S. to jointly develop UAVs and share IP Rights
India and the U.S. have moved ahead to jointly develop air launched unmanned aerial vehicles that will be used for surveillance missions, with first flight of the prototype likely to take place by the end of this year. The Air Launched Unmanned Aerial Vehicle (ALUAV) program is taking place under the Defence Technology and Trade Initiative (DTTI) and a critical factor is that the Intellectual Property (IP) rights for the new system will be jointly shared by the two sides.

A new chapter in defence and tech
The U.S. and India inaugurated their Initiative on Critical and Emerging Technologies (ICET). The promise of this initiative, if fulfilled, could have a transformative impact on India-U.S. relations. Since the 1960s, India has made many attempts to jump on the U.S. technology bandwagon. But all of them have failed, primarily because of the mismatch between the two countries on the purposes for which they collaborated. The ICET is perhaps better positioned.
Delhi, Berlin decide to enhance cooperation on innovation, tech
India and Germany agreed on a vision statement to enhance cooperation on innovation and technology during Prime Minister Narendra Modi’s meeting with visiting German Chancellor Olaf Scholz on February 25, 2023. The statement said the two countries share a long history of cooperation in science and technology, research and innovation, institutionalised under the framework of the Inter-Governmental Agreement on ‘Cooperation in Scientific Research and Technological Development’, signed in May 1974.


India joins Agriculture Innovation Mission for Climate
India has joined a global platform launched by the U.S. and the United Arab Emirates (UAE) with an aim to accelerate investment and support for climate-smart agriculture and food systems innovation, the state department. The Agriculture Innovation Mission for Climate (AIM4C) was launched by the two nations in November 2021. Joint Secretary of the Ministry of External Affairs Dammu Ravi signed a letter expressing the Indian intention to join the AIM4C on the margins of the I2U2 - Israel, India, the U.S. and the UAE - Business Forum in Abu Dhabi.

Why India is key to 21st century multilateralism
India’s natural influence as a democracy and sincere interlocutor that can engage the political spectrum of nations gives it unique moral authority. Indeed, 21st century multilateralism needs more India’s. The G20 with its mix of developing and developed countries - offers the perfect platform for India to infuse partner nations with foundational ideas. The world has much to learn on putting humanity first, adopting a pro-planet orientation, promoting peace, and placing equity and inclusion at the heart of internationalism. With its ethos of One Earth, One Family, One Future, India could show the way.

Deepening French ties keeping Indo-Pacific region stable
Prime Minister Narendra Modi on February 14, 2023, said the Tata-Airbus deal reflects the deepening ties between India and France and the two nations are contributing to stability of the Indo-Pacific region. Addressing the virtually meeting between the two leaders, Narendra Modi said the deal reflects the deepening ties between India and France, as well as the successes and aspirations of India's civil aviation sector.
India’s role on global stage continues to grow
India’s role on the global stage continues to grow and the India-U.S. ties are one of the consequential relationships, a senior State Department Official has said. Speaking to community leaders and local ethic Indian media reporters during a trip to the Silicon Valley, Deputy Assistant Secretary of State for South and Central Asia, Nancy Izzo Jackson also said that India’s Presidency of the G20 will help the country intensify its growth in every sphere.