Impact of the US Indo-Pacific Strategy on China-India Economic Cooperation

Abstract

India has grown to be a significant component of the US Indo-Pacific strategic layout in South Asia because of its unique geographic location, political and economic power, and other factors. Through collaborative efforts within the Indo-Pacific Economic Framework (IPEF), the US and India have fostered project cooperation by aligning policy dispositions to address shared interests and contain China. Analysis of the economic and trade interactions between China and India suggests a declining trend in their cooperation from many perspective. In a strategic move, India opted out of the China-led Regional Comprehensive Economic Partnership Agreement in 2019 to prioritize economic and trade relations in accordance with its strategic objectives. In addition, India got supports and advancements in high-tech industries through the US Indo-Pacific strategy, consequently reducing collaboration with China in this sector. Furthermore, the US and India have taken measures to diversify supply chains and explore alternative trade routes, steering away from China and promoting regional industrial transfers. This shift has prompted India to intensify its focus on developing high-tech industries to lessen its dependence on China's industrial chain supply. These initiatives have also contributed to the formation of an internal trade network within the IPEF, disrupting traditional trade exchanges between China and India. However, the economic cooperation between the US and India falls short of reaching its full potential because of differences in national interests, history, culture, and other factors. Consequently, the impact of China-India economic relations is not catastrophic, even in the face of heightened US trade restrictions on China that have compelled India to make strategic decisions.