New Delhi: As the United States deepens trade deals with key Indo-Pacific economies like Japan and Indonesia, experts in India are closely observing developments that could shape the subcontinent’s own trade trajectory. Though the deals are not yet formally signed, the U.S.’s diplomatic momentum in the region carries strategic implications, both economically and geopolitically, for India.
Key Concerns: Digital Trade, Supply Chains, and Market Access
The U.S.-Japan Economic Policy Consultative Committee (EPCC) talks and recent Indo-Pacific Economic Framework (IPEF) milestones with Indonesia highlight a renewed American focus on secure supply chains, digital trade rules, and clean energy investments.
While Japan has agreed to align more deeply with U.S. positions on digital governance and AI safeguards, Indonesia has recently emerged as a beneficiary of American funding in the semiconductor and rare earths sector. India, meanwhile, has opted out of IPEF’s trade pillar due to concerns over data localization and limited flexibility in digital trade frameworks.
“India is, of course, monitoring all the deals that are being struck with the U.S., but it’s also important to remember that these are deals so far in words and have not been officially signed yet,” a senior Indian government official familiar with the matter said.
Strategic Implications for India
India’s primary concern lies in the establishment of high-standard digital trade rules by the U.S. and its allies, which may isolate countries with divergent data policies. Additionally, India has historically resisted investor-state dispute settlement (ISDS) mechanisms and excessive foreign arbitration clauses, both of which are reportedly under discussion in the Japan-U.S. talks.
Experts warn that India must chart a careful path—avoiding being left out of emerging rulebooks while safeguarding domestic interests.
“India can learn from the caution exercised by Indonesia in resisting premature commitments. At the same time, it must also not fall behind in areas like green technology, AI regulation, and resilient trade infrastructure,” said Dr. Arpita Mukherjee, trade expert at ICRIER.
Opportunities for India
Despite these complexities, experts note that India stands to gain by focusing on bilateral arrangements with technologically advanced countries and promoting its own semiconductor and electronics supply chains through government initiatives like the Production Linked Incentive (PLI) scheme.
Additionally, the U.S.’s evolving approach toward India suggests room for flexibility. U.S. officials have emphasized the importance of a “trusted trade partner” framework in the Indo-Pacific, which could include India on favorable terms, especially in clean energy and strategic minerals.
India has already signed critical mineral agreements with Australia and is negotiating similar partnerships with the U.S. and EU. These could counterbalance trade exclusions and help New Delhi carve out its own rules-based order.
Conclusion of Trade deals
The evolving U.S. trade architecture in the Indo-Pacific—though not yet formalized—presents both risks and opportunities for India. While caution is warranted in digital and services sectors, proactive steps in clean energy, supply chain resilience, and bilateral strategic cooperation could offer India a balanced approach to regional trade integration.
For more real-time updates, visit Channel 6 Network.
Follow: Official U.S. government
