India has called for redoubling efforts to ensure expeditious implementation of all the action-oriented collaborative elements comprising the Indo-Pacific Economic Framework for Prosperity (IPEF) Supply Chain Agreement, namely IPEF Pillar-III (Clean Economy), Pillar-IV (Fair Economy) and the Agreement on the Indo-Pacific Framework for Economic Prosperity. India had joined Pillars II (Supply Chains) to Pillar IV of the IPEF following its launch on 23 May 2022 jointly with the USA and other 14 partner countries of the Indo-Pacific region to strengthen economic engagement across a critical region comprising 40 per cent of global GDP and 28 per cent of global goods and services trade. India has an observer status in Pillar-I which is trade.
The first-of-its-kind IPEF Supply Chain Resilience Agreement was signed by Commerce and Industry Minister Piyush Goyal along with Ministers from other IPEF partner countries, setting the stage for making supply chains more resilient, robust and well-integrated which can contribute towards economic development and progress of the region as a whole.
The substantial conclusion of negotiations paves the way for establishing a ministerial-level IPEF Council and Joint Commission. The IPEF Council would consider matters affecting the collective operation of the agreements related to the four IPEF pillars, as well as consider the possibility of adding new members or new agreements. The Joint Commission would monitor work under the agreements negotiated under Pillars II-IV, to identify ways to reduce duplication and potential conflicts and enable work between or across those agreements.
While these signal a substantial conclusion of text-based negotiations on the three pillars, Minister Goyal has emphasized – under the Clean Economy (Pillar-III) — the need for increased collaboration among partners on research and development of innovative and affordable climate-friendly technologies. India is also seeking to prioritize the implementation of the cooperative work programmes envisaged under this pillar, including the hydrogen supply chain initiative and other proposals such as India’s proposal for biofuels and e-waste recycling.
India’s proposal is in the context of IPEF partners’ broad aim under Pillar Three and through cooperative efforts to accelerate the research, development, commercialization, availability, accessibility, affordability, and deployment of a diverse set of clean energy and climate-friendly technologies. Of special interest to India, is a move to provide a mechanism for the IPEF partners or a group of partners to craft a Cooperative Work Programmes (CWP) to prioritize their focus and resources towards a common goal. Following the May 2023 announcement by interested IPEF partners of the launch of a regional hydrogen initiative as the first CWP, interested partners are developing a detailed framework for cooperation. The IPEF partners also exploring possible new CWPs on biofuels, e-waste solutions, clean electricity, carbon markets, and sustainable aviation fuels under consideration.
The recommendations related to Pillar Three, if finalised and ratified, will strengthen clean energy supply chains across the 14 markets by building a better understanding of the challenges and vulnerabilities of the region’s supply chains and securing more diversified and sustainable sources of critical inputs, including critical minerals or materials, for clean energy technologies. India can gain from the IPEF push to decarbonize the transportation sector through the establishment of green shipping corridors
and increasing the production and availability of sustainable aviation fuels.
India also has a stake in increased investment flows to the region, as IPEF partners look to addressing the acute need for financing for climate-related infrastructure, technologies, and projects in support of their transitions to clean economies. The IPEF partners have proposed an increased flow of investments via measures that boost investor confidence in the region such as promoting secure, resilient, and diverse clean energy supply chains, fostering innovative financial mechanisms, and working towards a stable and more seamless regulatory and policy environment. Going beyond stated commitments, the IPEF partners will convene an annual IPEF Clean Economy Investor Forum, with the first meeting taking place in Singapore in the first half of 2024, to catalyze investment for sustainable infrastructure and climate technology. An IPEF Catalytic Capital Fund has been established which will be administered by the Private Infrastructure Development Group to expand the pipeline of bankable climate-related infrastructure projects.
Under the IPEF Fair Economy Agreement (Pillar-IV), Goyal has put forth India’s interest in enhanced information sharing among partners, facilitating asset recovery, and strengthening cross-border investigations and prosecutions as the key benefits to emerge from the Agreement. “This will strengthen the joint resolve to fight against corruption, money laundering, and terror financing,” Goyal said, as IPEF partners get ready to strengthen the implementation of effective anti-corruption and tax measures to boost commerce, trade, and investment among IPEF economies. Closely aligned to India’s global call for fairness, inclusiveness, and transparency to improve the trade and investment environment, the IPEF partners recognize that a more transparent and predictable business environment can spur greater trade and investment in their markets and level the playing field for businesses and workers in the IPEF partner economies.
The proposed Pillar IV Agreement has significantly empowered the IPEF partners to establish a new Capacity Building Framework (CBF) which will enhance each other’s capabilities to effectively implement all aspects of the proposed Agreement. The IPEF partners would also monitor implementation through a system of mutual information exchange.
The Commerce Minister also held a series of bilateral meetings including with Peru’s Minister of Foreign Trade Juan Carlos Mathews and discussed the
progress of the ongoing Free Trade Agreement (FTA) negotiations that the two countries are working on. Goyal also held talks with US Secretary of Commerce Gina Raimondo, Minister of International Trade & Industry, Malaysia Tengku Zafrul Aziz, and Coordinating Minister for Economic Affairs of Indonesia IR. Airlangga Hartarto on bilateral collaboration on trade, commerce, and investment, enhanced business engagements, WTO matters, and other issues of mutual interest.