Indo-Pacific Economic Framework for Prosperity (IPEF) Ministerial meeting

Context:

Indian delegation led by Secretary, Department of Commerce, Shri Sunil Barthwal participated in the Indo-Pacific Economic Framework for Prosperity (IPEF) Ministerial meeting held in Singapore on 6 June 2024.

Details

Indo-Pacific Economic Framework for Prosperity (IPEF):

• IPEF was launched on 23 May 2022 at Tokyo, Japan, comprising of 14 countries – Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and USA.
• The IPEF seeks to strengthen economic engagement and cooperation among partner countries with the goal of advancing growth, economic stability and prosperity in the region.
• This framework is intended to advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for member economies. 
• IPEF will seek to complement and build on existing regional architecture and support the global rules-based trading system.
• The framework is structured around four pillars relating to Trade (Pillar I); Supply Chain Resilience (Pillar II); Clean Economy (Pillar III); and Fair Economy (Pillar IV).
• India had joined Pillars II to IV of IPEF while it has maintained an observer status in Pillar-I.

Recent Development

On November 14, 2023, IPEF members marked a significant milestone by announcing the substantial conclusion of negotiations for three key agreements:

• The Clean Economy Agreement
• The Fair Economy Agreement
• The overarching Indo-Pacific Economic Framework for Prosperity.

These first-of-their-kind agreements address modern challenges and aim to strengthen economic engagement across a critical region.

India's Role and Ratification Process

• India actively participated in the ministerial deliberations and signing proceedings. However, India did not formally sign the agreements as its domestic approval processes are still underway and will be completed after the formation of the new government.
• The agreements will enter into force once at least five IPEF partners complete their internal legal procedures for ratification, acceptance, or approval.

IPEF Clean Economy Agreement

• The Clean Economy Agreement aims to accelerate efforts toward energy security, climate resilience, and greenhouse gas emissions mitigation.
• It seeks to develop innovative ways to reduce dependence on fossil fuels, promote technical cooperation, workforce development, capacity building, and research collaborations.

Cooperative Work Programme (CWP)

• The CWP mechanism fosters long-term cooperation among partners on climate solutions. Since May 2023, CWPs have focused on hydrogen supply chains, carbon markets, clean electricity, sustainable aviation fuel, and just transition.
• Recently, a new CWP led by India on “e-waste urban mining” was announced, aiming to create a sustainable e-waste management system through technology exchange and efficient recycling of critical metals and minerals.
• India's commitment to transitioning to a circular economy through CWPs, addressing e-waste management for resource efficiency and pollution prevention.

IPEF Catalytic Capital Fund

• The operational launch of the IPEF Catalytic Capital Fund aims to support clean economy infrastructure projects in IPEF emerging and upper-middle-income economies.
• Founding supporters – Australia, Japan, Korea, and the United States – have committed US $33 million in initial grant funding to catalyze up to US $3.3 billion in private investment.
• The Private Infrastructure Development Group (PIDG) will administer the Fund, focusing on concessional financing, technical assistance, and capacity building to attract private investment.

Investor Forum

• The Investor Forum witnessed active participation from Invest India and more than 30 Indian companies showcasing investment opportunities in the renewable energy sector.
• The forum provided a platform for Indian projects and ClimateTech startups to present their business cases to over 100 top global investors, including Blackrock, KKR & Co., and JP Morgan. Six Indian investors explored potential collaborations with global investors and multilateral development banks.

IPEF Fair Economy Agreement

• The Fair Economy Agreement aims to create a transparent and predictable business environment, promoting trade and investment, ensuring a level playing field for businesses and workers, combating corruption, and enhancing tax transparency and administration.
• India welcomed the agreement's focus on Technical Assistance and Capacity Building, particularly highlighting India's training programs in Digital Forensics & System-Driven Risk Analysis, which will be offered to other IPEF partners.

IPEF Upskilling Initiative

• The IPEF Upskilling Initiative, launched in September 2022, supports sustainable and inclusive economic growth by providing digital skills training, primarily to women and girls in IPEF emerging and middle-income partner countries.
• In the last two years, 14 participating U.S. companies and the Asia Foundation have provided 10.9 million upskilling opportunities, with India receiving 4 million of these opportunities.

Sources:

PIB