Indo-Pacific Economic Framework (IPEF)
Source : PIB
GS II : Important International institutions, agencies and fora- their structure, mandate

What is discussed under Indo-Pacific Economic Framework (IPEF)?

1. About Indo-Pacific Economic Framework (IPEF)
2. Why India opt out of the trade?

Why in News ?

Recently Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal, discussions had been held over the course of the Indo-Pacific Economic Framework (IPEF) Ministerial.

About Indo-Pacific Economic Framework (IPEF)

• The Indo-Pacific Economic Framework (IPEF) was launched by United States (US) President Biden in Tokyo on May 23, 2022.
• Four pillars of IPEF
  1. Trade;
  2. Supply chains;
  3. Clean energy, decarbonisation and infrastructure;
  4. Tax and anti-corruption;
• Except Cambodia, Laos and Myanmar, other Southeast Asian nations are a part of the IPEF.
• IPEF has fourteen member states and represents 40% of world GDP.
• The member states are 
  1. Australia
  2. Brunei
  3. Fiji
  4. India
  5. Indonesia
  6. Japan
  7. South Korea
  8. Malaysia
  9. New Zealand
  10. Philippines
  11. Singapore
  12. Thailand
  13. United States
  14. Vietnam

India in the Group Initially

• India has agreed to three pillars relating to supply chains: tax, anti-corruption and clean energy.
• The fourth pillar on data and privacy is not yet agreed. 
• Reason for not agreeing : India was in the process of firming up its own digital framework and laws especially privacy. Also possible discrimination against developing economies.

Why India opt out of the trade?

• India had engaged very exhaustively in all the various streams of discussion, three out of four pillars related to supply chains, tax and

  

  anti-corruption and clean energy, India was comfortable with the outcome and text and have joined the declaration.

• India has stayed out of the trade pillar, it announced after the IPEF ministerial meeting in Los Angeles.
• India was the only one of the 14 IPEF countries, which include South East Asian countries, Australia, New Zealand, South Korea and Japan, not to join the declaration on trade.
• Reason India not been a part of 
  • India has yet to see the benefits member countries will derive from various aspects of the trade pillar.
  • US is not willing to make substantive concessions on economy and trade issues of concern to India.
  • India is unlikely to accept the principle of reciprocity that the US has demanded in trade negotiations.
  • US standards in terms of technology, labour, and environment are also deemed to be unacceptable to India.

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