India, US signal intent to counter China’s economic dominance

NEW DELHI: Among the key terms of the India-US joint statement is both sides’ agreeing to strengthen economic security alignment to enhance supply chain resilience and innovation through complementary actions, addressing “non-market policies of third parties, as well as cooperation on inbound and outbound investment reviews and export controls”. The tacit “non-market” reference to China has been used by the US, EU and G7 countries to draw attention to China’s economic model driven by overcapacity, export restrictions, state-owned dominance and industrial subsidies. With the joint statement, both countries are also signalling they will synchronise their strategies for derisking or reducing China’s global dominance in manufacturing in areas like semiconductors and green energy. At the critical minerals meeting hosted by the US this week, external affairs minister S Jaishankar spoke about the challenges arising out of excessive concentration and the importance of de-risking supply chains through structured international cooperation. The statement also builds upon commitment made by both sides, during PM Modi’s visit to the US last year, as part of TRUST (Transforming the Relationship Utilising Strategic Technology) initiative, to build trusted and resilient supply chains. The fact that both sides are willing to work together to counter Chinese economic influence is a positive signal for India, especially at a time Trump appears circumspect in his commitment to the Indo-Pacific. An early Quad summit with Trump visiting host India can help quell that perception. With the India-US trade differences resolved at least for now, not just India but also Australia and Japan would like the summit to take place without further delay.