IPEF: India likely to sign clean, fair economy pacts

Sub: IR

Sec: Int groupings

Context:

India is close to finalizing Cabinet notes for signing the Clean Economy and Fair Economy agreements under IPEF.
The country is not ready to join the trade pillar due to concerns over high-standard rules on the digital economy, data flows, data localization, and labour and environment issues.
India was the only IPEF member that did not endorse the Clean and Fair Economy pacts in June 2023 due to general elections.

About IPEF:

The IPEF, launched by US President Joe Biden in May 2022, aims to counter China’s influence in the Indo-Pacific.
The 14-member IPEF includes the US, India, Australia, Brunei, Fiji, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.
IPEF Structure:
- Four pillars: Trade, Supply Chains, Clean Energy, and Tax & Anti-Corruption.
- No provisions on tariff cuts on goods.
- All 14 members, including India, have signed the supply chains resilience agreement effective from February 24, 2024.

Clean Economy Pact:

Focuses on energy security, climate resilience, GHG emissions mitigation, and reducing dependence on fossil fuels.
Promotes technical cooperation, workforce development, capacity building, and research collaborations.
India aims to attract investments and concessional financing for clean energy projects.

Fair Economy Agreement:

Aims to create a transparent and predictable business environment to boost trade and investment.
Enhances anti-corruption frameworks, tax transparency, and information exchange for tax purposes.

Trade Pillar:

Still under negotiation, with the US showing less interest in digital trade.
India opted out of trade pillar negotiations early on.

Source: TH_BL