The Evening Wrap: India joins Biden’s new trade initiative for Indo-Pacific, negotiations to begin

India signalled its readiness to join a new economic initiative led by the United States for the region, as Prime Minister Narendra Modi joined U.S. President Joe Biden, Japanese Prime Minister Fumio Kishida and leaders of 10 countries, who joined virtually, for the launch of the Indo-Pacific Economic Framework for Prosperity (IPEF) in Tokyo on May 23. The negotiations for the IPEF, which will begin on May 24, are expected to center around four main pillars, including trade, supply chain resiliency, clean energy and decarbonisation, and taxes and anti-corruption measures. The grouping, which includes seven out of 10 members of the Association of South East Asian Nations (ASEAN), all four Quad countries, and New Zealand, represents about 40% of global GDP. “India will work together with [other IPEF countries] to build an inclusive and flexible Indo-Pacific Economic Framework,” Modi said at the launch of the new initiative, that comes three years after India walked out of the 15-nation RCEP (Regional Comprehensive Economic Partnership). “I believe that resilient supply chains must be based on a three-pillar foundation of trust, transparency and timeliness and I am sure that this framework will make these pillars strong and lead to peace and prosperity in the Indo-Pacific region,” Modi added. U.S. officials made it clear that the IPEF would not be a “free trade agreement”, nor are countries expected to discuss reducing tariffs or increasing market access. In that sense, the IPEF would not seek to replace the 11-nation CPTPP (Trans-Pacific Partnership) that the U.S. quit in 2017, or the RCEP, which China, and all of the other IPEF countries (minus the U.S.) are a part of. Three ASEAN countries considered closer to China — Myanmar, Cambodia and Laos — are not members of the IPEF, however. Briefing the media, U.S. Commerce Secretary Gina Raimondo said that the U.S. would seek to attract businesses investing in China away towards IPEF. “I would say, especially as businesses are beginning to increasingly look for alternatives to China, the countries in the Indo-Pacific Framework will be more reliable partners for U.S. businesses.” U.S. Trade Representative (USTR) Katherine Tai also said that the IPEF would be different from the original Trans-Pacific partnership as the U.S. was “unable to deliver on the plan”, indicating hurdles in the U.S. Congress, where any trade concessions are seen in an increasingly unfavourable light. U.S. National Security Advisor Jake Sullivan also said that the IPEF was intended to boost U.S. manufacturing. “The Indo-Pacific Economic Framework, or IPEF, is part of President Biden’s commitment to putting American families and workers at the centre of our economic and foreign policy, while strengthening our ties with allies and partners for the purpose of increasing shared prosperity,” Sullivan told journalists. Details of the framework on the four pillars are still to be fleshed out, and government officials said India will keenly watch the progress in negotiations on the IPEF. One of the IPEF’s roles in the Indo-Pacific, said documents and a fact sheet released after the launch, will be to set and follow standards for the digital economy and cross-border data flows and data localisation, areas where India has had some strong differences with the U.S. and allies, especially after it tabled a data protection Bill that makes data localisation mandatory. The framework also seeks to counter inflation through more resilient supply chains, promoting more commitments from every member country on clean energy and decarbonisation, and commitments on a “fair economy” though effective tax regimes that tackle money laundering and bribery and corruption, the documents said. “With today’s launch, partner countries will begin discussions focusing on strengthening economic cooperation and achieving shared goals,” the Ministry of External Affairs’ statement said, underlining the fact that the IPEF’s contours are still to be formally agreed upon. The IPEF plan follows a U.S. plan for a “Blue Dot Network” to certify infrastructure projects against a set of criteria and standards, that was launched by the U.S., Japan and Australia in 2019. India’s GDP likely grew just 3.5% in Q4 of 2021-22: ICRA India’s GDP growth may have slowed down to 3.5% in the fourth quarter of 2021-22, from 5.4% in the October to December 2021 quarter, rating agency ICRA has projected. The economy’s Gross Value Added (GVA) is expected to rise even slower at 2.7% between January and March 2022 compared to 4.7% in the previous quarter. The rating firm attributed the downturn in growth momentum to the impact of higher commodity prices on margins, decline in wheat yields and the hiccups in the recovery of contact-intensive services owing to the third COVID-19 wave as well as the high base from last year. The National Statistical Office (NSO) is scheduled to release updated national income estimates for 2021-22 on May 31. In its last estimates, the NSO had projected a GDP growth of 8.9% for the last financial year, assuming a 4.8% growth rate for the fourth quarter. “The last quarter (Q4) of 2021-22 was challenging, with the Omicron-fuelled third wave of COVID-19 arresting momentum in contact-intensive services, and a pervasive pressure on margins from higher commodity prices,” said Aditi Nayar, chief economist at ICRA. “Moreover, the heat wave has adversely affected wheat output in March 2022. We are apprehensive that both agriculture and industry will post a sub-1% GVA growth, whereas services growth will print at around 5.4% for the quarter”, she added. This indicates a sharp sequential dip — Services had recorded GVA growth of 8.2% in the previous quarter, while industry had grown 0.2% and Agriculture by 2.6%. The Omicron effect could halve the growth rate for contact-intensive trade, hotels, transport, communication and services sectors to around 3% in Q4 from 6.1% in Q3, the agency reckoned. ICRA expected India’s retail inflation to average 6.5% in 2022-23 and said the recent cuts in petroleum taxes, which have been backed by reduction in State levies on petrol and diesel by Maharashtra and Kerala, could bolster sentiment and create some cushion for stretched household budgets. “Moreover, the downshift in the inflation trajectory for the remainder of this year has pared the likelihood of sharply front-loaded monetary tightening”, Nayar noted. World lost 11.2 crore jobs in the first quarter of 2022: ILO The “world of work” is being buffeted by multiple crises, says the ninth edition of the International Labour Organisation (ILO) Monitor. The report says that after significant gains during the last quarter of 2021, the number of hours worked globally dropped in the first quarter of 2022, to 3.8% below the employment situation before the pandemic. About 11.2 crore jobs might have been lost in this period, according to the report. The gender gap in India’s employment scenario is mentioned in the report on the “world of work”. The report said both India and lower-middle-income countries excluding India experienced a deterioration of the gender gap in work hours in the second quarter of 2020. “However, because the initial level of hours worked by women in India was very low, the reduction in hours worked by women in India has only a weak influence on the aggregate for lower-middle-income countries. In contrast, the reduction in hours worked by men in India has a large impact on the aggregates,” the report mentions. Explaining the data, an ILO official told The Hindu that for every 100 women at work prior to the pandemic, 12.3 women would have lost their job as an average through the entire period considered by the report. The official added that, in contrast, for every 100 men, the equivalent figure would have been 7.5. “Hence, the pandemic seems to have exacerbated the already substantial gender imbalances in employment participation in the country,” the official said. The fresh lockdowns in China, the conflict between Ukraine and Russia, and the global rise in the prices of food and fuel are cited as the main reasons for the findings. The ILO urged its member countries to take a humane approach to address the situation. Financial turbulence, potential debt distress and global supply chain disruption points at a growing risk of a further deterioration in hours worked in 2022, as well as a broader impact on global labour markets in the months to come, the report said. The report added that a “great and growing divergence between richer and poorer economies” continues to characterise the recovery. “While high-income countries experienced a recovery in hours worked, low- and lower-middle-income economies suffered setbacks in the first quarter of the year with a 3.6 and 5.7 per cent gap respectively when compared to the pre-crisis benchmark,” the report said. Commenting on the report, trade unions urged the Centre to address the issue of unemployment. “Women employment in India has come down, particularly in sectors such as healthcare as a result of the COVID-19 pandemic. The ILO report suggests that the purchasing capacity of the workers should be improved. ILO has been proposing decent jobs and decent wages. We do not have decent employment here in India. Most people are on contract without any social security. If there are no decent wages, purchasing power will also come down.” Bharatiya Mazdoor Sangh (BMS) general secretary Binoy Kumar Sinha said. Sri Lanka crisis: President Gotabaya expands Cabinet again without Finance Minister Embattled Sri Lankan President Gotabaya Rajapaksa on Monday, May 23, 2022, expanded the Cabinet with the induction of eight more Ministers but he did not appoint a Finance Minister once again to handle the worst economic crisis facing the island nation. The new Ministers belong to the ruling Sri Lanka Podujana Peramuna (SLPP) and its allies — the SLFP and the EPDP, a Tamil minority party in the north. Rajapaksa, since the public protests began to rage against him for his resignation, has now reshuffled his Cabinet five times, including forcing the resignation of his elder brother and Prime Minister Mahinda Rajapaksa. The Ministers will serve in the interim Cabinet of Prime Minister Ranil Wickremesinghe set up with the objective of handling the ongoing economic crisis. The new Ministers who were sworn in include Douglas Devananda — Minister of Fisheries; Keheliya Rambukwella - Minister of Health, Water Supply; Ramesh Pathirana — Minister of Industries; and Mahinda Amaraweera - Minister of Agriculture, Wildlife and Wildlife Conservation, the Economy Next news portal tweeted. The post of Finance Minister continued to remain unstable ever since President Gotabaya in April sacked is younger brother Basil Rajapaksa, who was at the centre of anger within the ruling Sri Lanka Podujana Peramuna (SLPP) coalition over mishandling of the economic crisis. In Brief A Ukrainian court sentenced a 21-year-old Russian soldier to life in prison on Monday for killing a Ukrainian civilian, in the first war crimes trial held since Russia’s invasion. Sgt. Vadim Shishimarin was accused of shooting a Ukrainian civilian in the head in a village in the northeastern Sumy region in the early days of the war. He pleaded guilty and testified that he shot the man after being ordered to do so. He told the court that an officer insisted that the Ukrainian man, who was speaking on his cell phone, could pinpoint their location to the Ukrainian forces. Evening Wrap will return tomorrow [logo] The Evening Wrap 23 MAY 2022 [The Hindu logo] Welcome to the Evening Wrap newsletter, your guide to the day’s biggest stories with concise analysis from The Hindu. [[Arrow]Open in browser]( [[Mail icon]More newsletters]( India joins Biden’s new trade initiative for Indo-Pacific, negotiations to begin [India signalled its readiness to join a new economic initiative led by the United States for the region]( as Prime Minister Narendra Modi joined U.S. President Joe Biden, Japanese Prime Minister Fumio Kishida and leaders of 10 countries, who joined virtually, for the launch of the Indo-Pacific Economic Framework for Prosperity (IPEF) in Tokyo on May 23. The negotiations for the IPEF, which will begin on May 24, are expected to center around four main pillars, including trade, supply chain resiliency, clean energy and decarbonisation, and taxes and anti-corruption measures. The grouping, which includes seven out of 10 members of the Association of South East Asian Nations (ASEAN), all four Quad countries, and New Zealand, represents about 40% of global GDP. “India will work together with [other IPEF countries] to build an inclusive and flexible Indo-Pacific Economic Framework,” Modi said at the launch of the new initiative, that comes three years after India walked out of the 15-nation RCEP (Regional Comprehensive Economic Partnership). [Prime Minister Narendra Modi addresses members of the Indian community during an event, in Tokyo, Japan., on May 23, 2022] “I believe that resilient supply chains must be based on a three-pillar foundation of trust, transparency and timeliness and I am sure that this framework will make these pillars strong and lead to peace and prosperity in the Indo-Pacific region,” Modi added. U.S. officials made it clear that the IPEF would not be a “free trade agreement”, nor are countries expected to discuss reducing tariffs or increasing market access. In that sense, the IPEF would not seek to replace the 11-nation CPTPP (Trans-Pacific Partnership) that the U.S. quit in 2017, or the RCEP, which China, and all of the other IPEF countries (minus the U.S.) are a part of. Three ASEAN countries considered closer to China — Myanmar, Cambodia and Laos — are not members of the IPEF, however. Briefing the media, U.S. Commerce Secretary Gina Raimondo said that the U.S. would seek to attract businesses investing in China away towards IPEF. “I would say, especially as businesses are beginning to increasingly look for alternatives to China, the countries in the Indo-Pacific Framework will be more reliable partners for U.S. businesses.” U.S. Trade Representative (USTR) Katherine Tai also said that the IPEF would be different from the original Trans-Pacific partnership as the U.S. was “unable to deliver on the plan”, indicating hurdles in the U.S. Congress, where any trade concessions are seen in an increasingly unfavourable light. U.S. National Security Advisor Jake Sullivan also said that the IPEF was intended to boost U.S. manufacturing. “The Indo-Pacific Economic Framework, or IPEF, is part of President Biden’s commitment to putting American families and workers at the centre of our economic and foreign policy, while strengthening our ties with allies and partners for the purpose of increasing shared prosperity,” Sullivan told journalists. Details of the framework on the four pillars are still to be fleshed out, and government officials said India will keenly watch the progress in negotiations on the IPEF. One of the IPEF’s roles in the Indo-Pacific, said documents and a fact sheet released after the launch, will be to set and follow standards for the digital economy and cross-border data flows and data localisation, areas where India has had some strong differences with the U.S. and allies, especially after it tabled a data protection Bill that makes data localisation mandatory. The framework also seeks to counter inflation through more resilient supply chains, promoting more commitments from every member country on clean energy and decarbonisation, and commitments on a “fair economy” though effective tax regimes that tackle money laundering and bribery and corruption, the documents said. “With today’s launch, partner countries will begin discussions focusing on strengthening economic cooperation and achieving shared goals,” the Ministry of External Affairs’ statement said, underlining the fact that the IPEF’s contours are still to be formally agreed upon. The IPEF plan follows a U.S. plan for a “Blue Dot Network” to certify infrastructure projects against a set of criteria and standards, that was launched by the U.S., Japan and Australia in 2019. India’s GDP likely grew just 3.5% in Q4 of 2021-22: ICRA I[ndia’s GDP growth may have slowed down to 3.5% in the fourth quarter of 2021-22,]( 5.4% in the October to December 2021 quarter, rating agency ICRA has projected. The economy’s Gross Value Added (GVA) is expected to rise even slower at 2.7% between January and March 2022 compared to 4.7% in the previous quarter. The rating firm attributed the downturn in growth momentum to the impact of higher commodity prices on margins, decline in wheat yields and the hiccups in the recovery of contact-intensive services owing to the third COVID-19 wave as well as the high base from last year. The National Statistical Office (NSO) is scheduled to release updated national income estimates for 2021-22 on May 31. In its last estimates, the NSO had projected a GDP growth of 8.9% for the last financial year, assuming a 4.8% growth rate for the fourth quarter. “The last quarter (Q4) of 2021-22 was challenging, with the Omicron-fuelled third wave of COVID-19 arresting momentum in contact-intensive services, and a pervasive pressure on margins from higher commodity prices,” said Aditi Nayar, chief economist at ICRA. “Moreover, the heat wave has adversely affected wheat output in March 2022. We are apprehensive that both agriculture and industry will post a sub-1% GVA growth, whereas services growth will print at around 5.4% for the quarter”, she added. This indicates a sharp sequential dip — Services had recorded GVA growth of 8.2% in the previous quarter, while industry had grown 0.2% and Agriculture by 2.6%. The Omicron effect could halve the growth rate for contact-intensive trade, hotels, transport, communication and services sectors to around 3% in Q4 from 6.1% in Q3, the agency reckoned. ICRA expected India’s retail inflation to average 6.5% in 2022-23 and said the recent cuts in petroleum taxes, which have been backed by reduction in State levies on petrol and diesel by Maharashtra and Kerala, could bolster sentiment and create some cushion for stretched household budgets. “Moreover, the downshift in the inflation trajectory for the remainder of this year has pared the likelihood of sharply front-loaded monetary tightening”, Nayar noted. World lost 11.2 crore jobs in the first quarter of 2022: ILO [The “world of work” is being buffeted by multiple crises, says the ninth edition of the International Labour Organisation]( Monitor. The report says that after significant gains during the last quarter of 2021, the number of hours worked globally dropped in the first quarter of 2022, to 3.8% below the employment situation before the pandemic. About 11.2 crore jobs might have been lost in this period, according to the report. The gender gap in India’s employment scenario is mentioned in the report on the “world of work”. The report said both India and lower-middle-income countries excluding India experienced a deterioration of the gender gap in work hours in the second quarter of 2020. “However, because the initial level of hours worked by women in India was very low, the reduction in hours worked by women in India has only a weak influence on the aggregate for lower-middle-income countries. In contrast, the reduction in hours worked by men in India has a large impact on the aggregates,” the report mentions. Explaining the data, an ILO official told The Hindu that for every 100 women at work prior to the pandemic, 12.3 women would have lost their job as an average through the entire period considered by the report. The official added that, in contrast, for every 100 men, the equivalent figure would have been 7.5. “Hence, the pandemic seems to have exacerbated the already substantial gender imbalances in employment participation in the country,” the official said. [Photo used for representation purpose only.] The fresh lockdowns in China, the conflict between Ukraine and Russia, and the global rise in the prices of food and fuel are cited as the main reasons for the findings. The ILO urged its member countries to take a humane approach to address the situation. Financial turbulence, potential debt distress and global supply chain disruption points at a growing risk of a further deterioration in hours worked in 2022, as well as a broader impact on global labour markets in the months to come, the report said. The report added that a “great and growing divergence between richer and poorer economies” continues to characterise the recovery. “While high-income countries experienced a recovery in hours worked, low- and lower-middle-income economies suffered setbacks in the first quarter of the year with a 3.6 and 5.7 per cent gap respectively when compared to the pre-crisis benchmark,” the report said. Commenting on the report, trade unions urged the Centre to address the issue of unemployment. “Women employment in India has come down, particularly in sectors such as healthcare as a result of the COVID-19 pandemic. The ILO report suggests that the purchasing capacity of the workers should be improved. ILO has been proposing decent jobs and decent wages. We do not have decent employment here in India. Most people are on contract without any social security. If there are no decent wages, purchasing power will also come down.” Bharatiya Mazdoor Sangh (BMS) general secretary Binoy Kumar Sinha said. Sri Lanka crisis: President Gotabaya expands Cabinet again without Finance Minister [Embattled Sri Lankan President Gotabaya Rajapaksa on Monday, May 23, 2022, expanded the Cabinet]( the induction of eight more Ministers but he did not appoint a Finance Minister once again to handle the worst economic crisis facing the island nation. The new Ministers belong to the ruling Sri Lanka Podujana Peramuna (SLPP) and its allies — the SLFP and the EPDP, a Tamil minority party in the north. Rajapaksa, since the public protests began to rage against him for his resignation, has now reshuffled his Cabinet five times, including forcing the resignation of his elder brother and Prime Minister Mahinda Rajapaksa. The Ministers will serve in the interim Cabinet of Prime Minister Ranil Wickremesinghe set up with the objective of handling the ongoing economic crisis. The new Ministers who were sworn in include Douglas Devananda — Minister of Fisheries; Keheliya Rambukwella - Minister of Health, Water Supply; Ramesh Pathirana — Minister of Industries; and Mahinda Amaraweera - Minister of Agriculture, Wildlife and Wildlife Conservation, the Economy Next news portal tweeted. The post of Finance Minister continued to remain unstable ever since President Gotabaya in April sacked is younger brother Basil Rajapaksa, who was at the centre of anger within the ruling Sri Lanka Podujana Peramuna (SLPP) coalition over mishandling of the economic crisis. In Brief A Ukrainian court sentenced a 21-year-old Russian soldier to life in prison on Monday for killing a Ukrainian civilian, in the first war crimes trial held since Russia’s invasion. Sgt. Vadim Shishimarin was accused of shooting a Ukrainian civilian in the head in a village in the northeastern Sumy region in the early days of the war. He pleaded guilty and testified that he shot the man after being ordered to do so. He told the court that an officer insisted that the Ukrainian man, who was speaking on his cell phone, could pinpoint their location to the Ukrainian forces. Evening Wrap will return tomorrow  Today’s Top Picks [[Watch | Surat & Udaygiri: India’s new indigenous warships] Watch | Surat & Udaygiri: India’s new indigenous warships]( [[Google’s complicated relationship with Tinder parent] Google’s complicated relationship with Tinder parent]( [[Was pilot suicide the reason for the China Eastern crash? | In Focus podcast] Was pilot suicide the reason for the China Eastern crash? | In Focus podcast]( [[Asia Cup hockey | India concedes late goal to draw with Pakistan] Asia Cup hockey | India concedes late goal to draw with Pakistan]( Copyright @ 2021, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please [try here]( If you do not wish to receive such emails [go here](