India Looks to Indo-Pacific Amid Simmering U.S.-China Trade War

(Bloomberg) --

India's Foreign Minister S. Jaishankar is set to meet U.S. Secretary of State Michael Pompeo and British Foreign Secretary Dominic Raab in Bangkok amid trade war tensions and the U.K's looming Brexit deadline.

Thursday's meeting will be the first high-level interaction between the U.K. and India since Boris Johnson took the reins as prime minister.

Jaishankar will also hold a number of bilaterals with his counterparts on the sidelines of the Asean Foreign Ministers' meeting -- including Chinese Foreign Minister Wang Yi -- although India is expected to take a cautious approach to any criticisms of Beijing's vast Belt and Road Initiative.

India expects its economy to grow substantially out of its engagement with Southeast Asia, said Amitendu Palit, senior research fellow at the Institute of South Asian Studies at the National University of Singapore. “India's and Asean's emphasis on an inclusive Indo-Pacific is important for controlling further flare-ups in U.S.-China tensions in the region."

The region was also looking forward to signals from both Washington and Beijing on a possible truce as the trade war has begun hurting the region, Palit said ThuUrsday.

Asean has emerged as one of India's key trading partners in 2017-18, with a share of 10.58% of overall trade. Bilateral trade has grown $81.33 billion in 2017-18 from $56.24 billion in 2010-11.

China Counterweight

Since India's Prime Minister Narendra Modi came to power in 2014, he's moved towards a closer alignment with countries that act as a counterweight against a rising China.

Read more: Here's What India's Frequent Flier Modi Achieved on Trips Abroad

The U.S. has sought to engage India as part of its Indo-Pacific strategy, and has enlisted New Delhi it in a grouping known as “The Quad” along with Japan and Australia.

Since his appointment after Modi swept to power for a second term in May, Jaishankar has faced the challenge of navigating India's relations with the U.S. and China at a time when the two nations are locked in a trade war. Even though New Delhi shares strategic ties with Washington on the back of closer military co-operation in recent years, Modi is also trying to rebuild relations with Beijing that were strained due to long-simmering border disputes.

Read more: India Slips Further Behind China During First Five Years of Modi

Still, India has fallen further behind Beijing, which has continued to outspend the South Asian nation on defense, implemented sweeping reforms in its military and diplomatic structures, and built strategic infrastructure in India's backyard -- not to mention providing arch-rival Pakistan with defense technology.

One priority for Jaishankar will be to clear pending defense agreements with the U.S. and other equipment suppliers, as India attempts to modernize its aging military hardware amid border tensions with Pakistan.

To contact the reporter on this story: Bibhudatta Pradhan in Bangkok at bpradhan@bloomberg.net

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Unni Krishnan

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