India opts out of joining IPEF trade pillar, to wait for final contours
India has decided to join three pillars of the United States-led Indo-Pacific Economic Framework (IPEF)–supply chains, tax and anti corruption and clean energy–while opting out of the trade pillar for now.
Commerce and Industry Minister Piyush Goyal, who was in Los Angeles to attend the first official in-person IPEF ministerial on September 8-9, said that decision was taken because so far, under the trade track, broader consensus had not emerged on certain issues such as environment, labour and public procurement.
“On one pillar which deals primarily with trade, the contours of the framework, particularly any commitments required on environment, labour, digital trade, public procurement, are certain areas in which a broader consensus is yet to emerge on all nations. We are yet to see what benefits member countries will derive and whether any conditionalities on, for example, environment, may discriminate against developing countries, who have been imperative to provide low cost and affordable energy to meet the needs of a growing economy,” Goyal said in a media briefing after the conclusion of the IPEF ministerial meet.
“We are also in the process of firming up digital framework and laws, particularly regarding privacy and data,” the minister said, adding that India, while continuing to engage with the trade track in IPEF, will wait for final contours to be decided before finally associating with the trade track.
Meanwhile, officials will be participating in discussions with an open mind and in the best interests of the people of India and businesses, he said
Apart from India and the US, the 12 other members of the IPEF are Australia, Brunei, Fiji, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam. All the other member nations have joined the four pillars — trade, supply chains, clean economy, and fair economy.
The IPEF was launched jointly by the US and other partner countries of the Indo-Pacific region on the sidelines of the Quad Summit in Tokyo on May 23. It seeks to strengthen economic partnership among participating countries with the objective of enhancing resilience, sustainability, inclusiveness, economic growth, fairness and competitiveness in the region. IPEF is also seen as an economic initiative to counter China’s influence in the South and Southeast Asian nations. IPEF partner countries represent over 40 per cent of the global economy
This is the first plurilateral deal that India has agreed to join after exiting Regional Comprehensive Economic Partnership (RCEP) deal at the last minute in 2019.
“We believe that certain responsibilities of the developed world, the developed countries should also be an integral part of any such agreement. And that is a matter which will require deeper engagement and more consultation,” Goyal said.
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