Table of Contents
What is the Indo Pacific Economic Framework (IPEF)?
- About: Indo Pacific Economic Framework is an economic initiative launched by United States in May 2022.
- Aim: Enhancing economic cooperation and integration in the Indo-Pacific region.
- Members: Indo Pacific Economic Framework has fourteen member states which includes QUAD nations (India, USA, Japan and Australia), 7 of the ten ASEAN nations except Cambodia, Laos and Myanmar and others include South Korea, New Zealand and Fiji.
- Size: The 14 Indo Pacific Economic Framework partners represent 40% of global GDP and 28% of global goods and services trade.
What are the Four Pillars of Indo Pacific Economic Framework?
What benefits India will get by joining the three of the four pillars of Indo-Pacific Economic Framework(IPEF)?
- Benefits from the pillar of Resilient Economy: This pillar will reduce the world’s and India’s supply chains dependence on China through creating early warning systems to ensure predictable flow of goods.
- It is also in line with the views of India’s Prime Minister on how supply chain resilience must be based on three Ts — “trust, transparency and timeliness”.
- Benefits from the pillar of Clean Economy: This decarbonisation pillar will entail a focus on green technologies and sustainable financing.
- This is seen as a possible way to help meet India’s goals while giving another avenue to push the advanced western economies to meet their commitments.
- Benefits from the pillar of Fair Economy: This pillar will build on existing international frameworks such as OECD and G-20 principles, United Nations conventions on anti-corruption and anti-bribery, and also include elements such as battling terror financing, which is in line with the India’s policies.
Why India has not Joined the Pillar of Connected Economy?
- The concern of market access: The framework is not a free trade agreement and doesn’t involve market access. This pillar entails commitments on digital trade, labour, and environment, without providing market access. This has deterred India from participating in the pillar at this stage.
- Consensus yet to emerge: In the fourth pillar of Indo Pacific Economic Framework, there are certain areas such as environment, labour, the digital trade, and public procurement in which a broader consensus has yet to emerge amongst all the nations.
- Environment: India is still examining the conditionalities on environmental front. For example, how environment may discriminate against developing countries who have the imperative to provide low cost and affordable energy to meet the needs of a growing economy.
- Data privacy: India is still in the process of firming up its own digital framework and laws, particularly regarding privacy and data.
More on the Indo Pacific Economic Framework News
- India has decided to become part of resilient economy, clean economy, and fair economy components of the framework, but it will not join the connected economy (trade) pillar of Indo Pacific Economic Framework (IPEF).
- India would continue to engage with the trade track in the Indo Pacific Economic Framework and will wait for the final contours to be decided on the trade pillar before it formally associates with that track.
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