Benefits of joining IPEF's trade pillar unclear: Official

• India remains sceptical about joining the trade pillar of the Indo-Pacific Economic Framework for Prosperity (IPEF), citing a lack of "tangible benefits."
• The trade pillar is crucial, covering sensitive areas like agriculture, digital trade and labour.
• However, an agreement was not reached in the last round of negotiations in San Francisco.

Indo-Pacific Economic Framework for Prosperity (IPEF)

• IPEF was launched jointly by the US and other partner countries of the Indo-Pacific region in 2022 in Tokyo.
• Members: Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US and Vietnam.
• Together, they represent 40% of the world's economic output and 28% of global trade.

Four Pillars of the Agreement

• The framework is structured around four pillars relating to
  • Trade
  • Supply chains
  • Clean economy
  • Fair economy (issues such as tax and anti-corruption).
• India has joined all the pillars except the trade one.
• Unlike traditional trade deals, IPEF does not primarily address market access but aims to counter China's dominance in the region.

Challenges in Trade Pillar

• Lack of clarity on tangible benefits has hindered progress in the trade pillar.
• Questions around commitments without clear benefits have led to scepticism among member countries.

Contentious Issues

• Sensitivity around export restrictions, particularly on food and agriculture, poses challenges.
• Despite agreements on three pillars, consensus on commitments related to export restrictions is unlikely.

Indian Perspective

• India's decision to stay out of the trade pillar aligns with its strategy of retaining regulatory autonomy.
• Concerns about aligning with standards primarily applied in OECD economies pose a challenge for India in terms of domestic rule alignment.

Prelims Takeaway

• Indo-Pacific Economic Framework for Prosperity (IPEF)
• OECD Economies
• Indo-Pacific