India's Indo-Pacific Strategy: Balancing Economic Integration and Strategic Autonomy

Indian Express - Opinion · 21 Jul 2026 · 2 min read
Prelims · International relations Mains · GS2 International relations High relevance

PM Modi's recent visits to Indonesia, Australia, and New Zealand highlight India's efforts to deepen Indo-Pacific partnerships amid growing US-China tensions, emphasizing the need for economic integration alongside security cooperation to shape regional order.

Key points

Strategic Partnerships: India signed a Strategic Partnership and Roadmap 2030 with New Zealand, expanded defence and critical minerals cooperation with Australia, and secured a $630 million missile deal with Indonesia, reinforcing its Indo-Pacific commitments.

Economic Integration: India's FTAs with Australia and New Zealand complement existing agreements with ASEAN, Japan, and South Korea, but lag behind China's deeper economic ties with these nations through RCEP and CPTPP.

Indo-Pacific Economic Framework (IPEF): The US-led IPEF lacks traction, and India's absence from CPTPP and RCEP limits its influence in regional trade blocs dominated by China.

China's Economic Dominance: ASEAN-China trade exceeds $1 trillion, while China's bilateral trade with Japan, South Korea, and Australia each surpasses $200 billion, highlighting India's relatively limited economic integration with China ($150 billion trade).

Digital Public Infrastructure (DPI): India's DPI initiatives enhance its attractiveness as a partner, offering scalable technological solutions amid regional uncertainty over US commitments.

[GS3-Economy] India's trade deficit with China ($130 billion imports) underscores the need for diversification and competitiveness to reduce dependency and integrate into global value chains.

Strategic Autonomy: India's non-alignment with US security alliances and limited economic integration with China positions it uniquely, but requires pragmatic engagement with both blocs to shape the Indo-Pacific order.

Way Forward: India should consider joining CPTPP, negotiate investment protection agreements, and boost domestic competitiveness to integrate into Indo-Pacific value chains, while leveraging DPI and defence partnerships for strategic influence.

Key terms

Indo-Pacific Economic Framework (IPEF)

A US-led economic initiative launched in 2022 to counter China's influence in the Indo-Pacific, focusing on trade, supply chains, clean energy, and governance. India joined but opted out of its trade pillar, reflecting its cautious approach to binding trade commitments.

Regional Comprehensive Economic Partnership (RCEP)

A free trade agreement among 15 Asia-Pacific nations, including China, Japan, and ASEAN members, covering 30% of global GDP. India withdrew in 2019 due to concerns over Chinese dumping and inadequate protections for domestic industries.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

A 12-nation trade bloc evolved from the TPP after US withdrawal, setting high standards in digital trade, labor, and environment. India's non-membership limits its access to advanced trade rules and supply chains.

SAGAR (Security and Growth for All in the Region)

India's maritime strategy emphasizing capacity building, sustainable development, and collective security in the Indian Ocean. It complements the Indo-Pacific vision by fostering regional partnerships and countering Chinese expansion.