By: Meghna Dasgupta, Research Analyst, GSDN

From the eastern coast of Africa, to the western shores of Americas the strategically important region known as the Indo-Pacific region has emerged to be very influential in world politics. It incorporates some of the world’s most important trade channels, economic zones and strategic sea bottlenecks. In recent years, economic growth, shifts in the balance of power, significance of the area for the world economy, as well as new conflicts and cooperation opportunities has made the region the focus of great powers competition.

Economic Significance of the Indo-Pacific

The Indo-Pacific region is still considered the backbone of the global economy today. It holds 65 % of the world population and contribute over 60% to the global GDP. Asian countries like China, India, Japan, South Korea, and all ASEAN countries drive this global economic growth.

Trade routes through the Indo-Pacific region is currently some of the busiest in the entire globe. The South China Sea is an important channel through which more than $3.4 trillion of trade passes every year. It also transports about 32.2 million barrels of crude oil daily. Another chokepoint is the Strait of Malacca through which a third of the world’s energy supplies pass. It should therefore come as no surprise that any disruption to these sea lanes spells doom for world commerce and energy supplies.

Large market opportunities are also evident in the region as a result of FDI. In 2022, United States had trade worth $2 trillion with the Indo-pacific countries, emphasizing its economic integration with the region. More recent efforts include the quadrilateral dialogue, ASEAN’s Regional Comprehensive Economic Partnership (RCEP) and its Indo-Pacific Economic Framework for Prosperity (IPEF) which are expected to advance economic cooperation in the trade, supply chain and sustainable development spheres.

Strategic and Military Dynamics

The Indo-Pacific is not simply the largest economic region in the world, it is also a strategically significant area. Seven of the biggest Armed forces in the world operate in this region, making this region play a very crucial role in defense. Some of the major military presence here are of United States, China, India, Japan, South Korea and Australia.

One of the most contested areas is the South China Sea, where multiple countries, including China, the Philippines, Vietnam, Malaysia, and Brunei, have overlapping territorial claims. Chinese actions which may have escalated tension include building artificial islands equipped with military features. These actions are contrary to the norms approved by the world community under the United Nations Convention on the Law of the Sea (UNCLOS).

To match China’s activities, the United States and its partners have sought to ramp up their activities within the region. The United States’ Navy always engages in FONOPs in the South China Sea to challenge excessive claims regarding maritime. The Quad, made of USA, India, Japan and Australia has come out as key forum to provide the vision of a “Free and Open Indo-Pacific”. It also conducts exercises like the Malabar Naval Exercise with similar objectives of stability and moderation.

Geopolitical Rivalries in the Indo-Pacific

The Indo-Pacific is currently the theatre for great power rivalry, mainly between the US and China. The Belt and Road Initiative by China with over US$ 1 trillion in investment, aims to advance influence via Asia, Africa and the Pacific region mostly through infrastructure investments. But these investments are normally accompanied by strings that are strategic and political in nature, leading to debate over debt dependency and sovereignty.

The United States, in turn, has been actively working to forge containment strategies to restrict China through enhancing partnerships. It has revived the Quad and has also improved its defense cooperation with countries such as Japan South Korea, Philippines and Australia. For example, the AUKUS unveiled the Australia-UK-US defense alliance’s plan to strengthen the capability of the Australian navy, including acquiring nuclear-powered submarines.

India as a major regional power, has also been gradually expanding its strategic profile. India has signed defense agreements with Southeast Asian countries like Vietnam and the Philippines, and is very involved in dialogue regarding maritime security in the Southeast Asian region. Given India’s ‘Act East Policy’, the country is focusing to enhance relations with ASEAN states, the country’s participation in the ‘Quad’ establishes the country as a strategic participant in pacific region.

Regional Cooperation and Multilateral Initiatives

However, it is also a region of cooperation because it has both strategic and economic significance for the United States and other countries. ASEAN remains central in the promotion of dialogue and economic cooperation as its founding members unite to set the foundation for an economic community. The creation of global trading systems, such as the Regional Comprehensive Economic Partnership (RCEP), which connects 15 countries, including China, Japan, and Australia, to create the largest trading block in the world is a testimony of this claim.

The Indo-Pacific Economic Framework (IPEF), introduced by the United States in 2022, focuses on building resilient supply chains, advancing clean energy technologies, and ensuring fair trade practices. This initiative complements existing agreements and fosters greater economic collaboration.

India’s Growing Role in the Indo-Pacific

India is gradually transforming into a crucial actor in influencing the Indo-Pacific region. India, belonging to the South Asian region, has strategic interests like navigation and security of the Indian Ocean.

India’s naval capabilities have significantly expanded due to increasing emphasis on the maritime domain and combined operations. India has enhanced cooperation with island nations like the Maldives, Seychelles and Sri Lanka in order to boost partnership on maritime security. An instance of such contribution is the transfer of the INS Kirpan to Vietnam in 2023 to enhance regional defense capabilities.

Further, India is engaged in multilateral frameworks such as IORA, as well as ASEAN-India mechanisms. Its commitment to the Quad nations is also reflective of another of its strategic directions in dealing with coercive actions in the Indo-Pacific region.

Non-Traditional Security Challenges

The Indo-Pacific region is facing several non-conventional threats such as piracy, terrorism, human trafficking, and climatic change. These are some of the challenges that must be addressed in an integrated manner. For example, regional navies have embarked on cooperative measures in combating piracy in the Gulf of Aden and the Malacca Strait.

Another issue worth mentioning is climate change. The impact of the rising sea level is devastating to many small island nations in the world including the Maldives, Kiribati, and Tuvalu. Cyclones and other natural disasters are common in the region and often affect the livelihoods and economies. To address these existential threats, initiatives like the Pacific Islands Forum provide a synthesis of cooperating efforts.

Future Outlook: Challenges and Opportunities

It is thus the actions and policies of both regional and extra-regional actors that will to a large extent determine the future trajectory of the Indo-Pacific region. Coordinating the containment of great power conflicts with the promotion of economic relations can be rather challenging. Given that technology cooperation, infrastructure development, and supply chain security are major areas of focus in the Quad, the framework has been useful in underlining possible solutions to common issues.

However, un-demarcated borders and militarization remain threats to security in the region. This is why abidance to international laws, including UNCLOS, as well as diplomacy can play a significant role in reducing such tensions.

Some of the newer threats that need to be addressed are; global warming and other environmental degradation activities. Strengthened regional frameworks and international support may assist these nations to draw lessons from the present circumstances.

Conclusion

The Indo-Pacific region holds unparalleled geopolitical significance in the 21st century. Its economic vitality, strategic waterways, and the interplay of major powers make it a cornerstone of global affairs. As the centre of gravity shifts toward the Indo-Pacific, understanding its dynamics is essential for shaping a stable, prosperous, and inclusive global order.

The future of this region will not only influence the lives of its inhabitants but also determine the trajectory of global politics, economics, and security.