The first edition of the Indo Pacific Business Summit – a three day virtual conference organized by the Confederation of Indian Industry (CII), in partnership with the Ministry of External Affairs, Government of India – concluded on July 8, 2021. It involved governments, enterprises, business chambers, and think tanks from 21 participating countries of the region. Some of the key objectives of the summit were providing a platform for decision makers, business leaders, and policymakers from Indo-Pacific countries to meet and discuss sector-specific opportunities to increase trade; enabling “business to business” (B2B) meetings with sectoral focus, matching the requirements of businesses from the region with Indian companies and vice-versa; and facilitating technology transfers.
Amidst the devastating effects of the COVID-19 pandemic on the health and economic sectors, the Indo-Pacific Business Summit is a step toward boosting the economic partnership and deepening business linkages among the countries of the region. This summit is vital to India and its significance can be explained through three aspects. First, it is a step toward economic recovery from COVID-19, when the disruption of global supply chains has become a matter of concern. Second, it is an opportunity for India to assuage doubts regarding its vision of the Indo-Pacific as a “free, open, and inclusive” region. And third, it is a possible attempt toward forging a strong and viable alternative to Regional Comprehensive Economic Partnership (RCEP), which India opted out of in November 2020.
The Pandemic’s Disruptive Effects
In addition to wreaking havoc on health infrastructure worldwide, the COVID-19 pandemic has had a debilitating effect on global trade infrastructure as well. The closure of borders, temporary shutting down of manufacturing facilities, and a general rise in economic nationalism, which was underway even before the pandemic struck, have made states realize the potential risks of being dependent solely on the pre-existing supply chains. It is in this context that the external affairs minister of India, Dr. S. Jaishankar, in his address at the summit highlighted three important sectors of healthcare, digital economy, and sustainable development where India can play an important role in the days to come.
With the Indo-Pacific constituting almost two-third of the world’s GDP and more than half of global trade passing through its waters, facilitating intra-regional trade by overcoming major trade barriers through improvement in infrastructure and connectivity can bring in substantial economic gains, paving the way for formalizing regional economic cooperation in the region. India would be looking to play a significant role in this development, particularly in the healthcare sector. At a time when the government is facing backlash for its supposed mismanagement of the nationwide vaccination drive, this summit provided a platform for New Delhi to underline the merits of its vaccine diplomacy. India, however, needs to deliver on its promise of manufacturing about a billion doses of vaccine for distribution to the Indo-Pacific countries which was announced in March 2021 in order to justify its tag of “the pharmacy of the world.”
Reaffirmation of Its Indo-Pacific Vision
In his speech at Shangri-La Dialogue in 2018, Prime Minister Narendra Modi was loud and clear that India’s engagement in the Indo-Pacific would be inclusive and that contests must not turn into conflicts. However, India’s involvement in the Quad grouping has raised suspicion because according to the official proclamations, India doesn’t want to get identified with any particular group. Being part of the strategic Quad contradicts such pronouncements. The Indian strategic community seems to be torn between projecting India as a benign power in the region on one hand and pushing toward increasing militarization of the region with an eye on China on the other. In this regard, summits like these along with certain other connectivity projects would go a long way in assuaging the doubts of the Indo-Pacific littoral states vis-a-vis India’s claims of being a benign power in the region.
Adhering to India’s vision of the “Free and Open Indo-Pacific,” the Indo-Pacific Oceans Initiative (IPOI) was announced in November 2019. It draws upon existing regional cooperation architecture and mechanisms to focus on seven central pillars conceived around maritime security, maritime ecology, maritime resources, capacity building and resource sharing, disaster risk reduction and management; science, technology, and academic cooperation; and trade connectivity and maritime transport.
This inaugural Indo Pacific Business Summit touches upon a specific pillar of the IPOI, namely trade connectivity and maritime transport. However, a lot needs to be done with regard to other aspects too for India to emerge as a net security provider in the region and gain unambiguous legitimacy for its vision of an inclusive rules-based regional architecture.
A Viable Alternative to RCEP?
India’s decision to pull out from the RCEP negotiations in November 2020 had been attributed to its reservations regarding the terms of negotiations, coupled with worsening of ties with China due to an ongoing border standoff. There were apprehensions that the move would hamper India’s bilateral ties with the RCEP member states. Thus it was imperative for India to forge a strong alternative, and this summit may be a small but significant step toward that end. A notable advancement has been made through the formal launch of the trilateral Supply Chain Resilience Initiative (SCRI) along with Japan and Australia, in April 2021.
The SCRI was launched in the backdrop of global and regional supply chain vulnerabilities exposed by the COVID-19 pandemic. It is an indirect move to reduce the over-dependence on Chinese imports, which explains why Japan and Australia went ahead with it despite being members of RCEP as well. The SCRI is committed to promoting trade facilitation by supporting the enhanced utilization of digital technology; and holding investment promotion events and buyer-seller matching events to provide opportunities for stakeholders to explore the possibility of diversification of their supply chains. However, the SCRI needs to be expanded rapidly in order to emerge as a feasible institutional framework minus China.
The maiden edition of the Indo Pacific Business Summit is a noteworthy platform to foster trade cooperation and post-pandemic recovery in the region. Additionally, being an India-led initiative, it can be analyzed as a bid to achieve certain foreign policy objectives as highlighted above. It is evident that even though achieving these objectives would require more than a business summit, it’s a step in the right direction nonetheless.