India decides to join Indo-Pacific Economic Framework for Prosperity (IPEF)

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India decides to join Indo-Pacific Economic Framework for Prosperity (IPEF)

India decided to become one of the 13-nation economic initiatives Indo-Pacific Economic Framework for Prosperity (IPEF), led by U.S.

About the initiative

  • The initiative is seen as a substantial step by the U.S. as part of its “pivot to Asia”, and an attempt at putting economic heft into its Indo-Pacific presence.
  • US presence in Indo-Pacific has been on the decline after its decision to quit the Trans-Pacific Free Trade Agreement, the CPTPP, in 2017.
  • IPEF framework has four “pillars”:
    • Supply-chain resilience
    • Clean energy, decarbonization
    • Infrastructure, Taxation and anti-corruption
    • Fair and resilient trade.
  • Mr. Biden’s visit to Japan and South Korea, attendance at Quad summit and IPEF launch is also aimed at reassuring Eastern hemisphere about U.S.’s focus.
  • India’s joining is strong statement of commitment to Indo-Pacific goals, and to broadening regional economic cooperation.
  • It is significant that all IPEF members, other than India and the U.S., are part of RCEP free trade agreement, and yet have chosen to be part of this initiative.

Areas of scrutiny

  • Launch only signals willingness of the 13 countries to begin discussions on the contours. Much will depend on how inclusive the process is.
  • U.S. officials have made it clear that it is not FTA; nor will it discuss tariff reductions or increasing market access, raising questions about its utility.
  • The four pillars also created confusion, whether there is enough common ground among 13 countries to set standards together, or be open to issues that vary for each country.
  • U.S.’s statement that IPEF is focused on “American workers” also raises questions on whether increasingly protectionist global trends will chafe.
  • Each IPEF countries has considerable trade interests in China, with most having large trade deficits.
  • It remains to be seen how much they will be willing to sign on with the IPEF.
  • Three ASEAN countries, Cambodia, Laos and Myanmar, have decided to stay out of framework’s launch.


  • The fact that U.S.’s previous initiatives (Blue Dot Network and Build Back Better Initiative) have made little progress in changing region’s infrastructural needs, IPEF faces a credibility challenge.
  • Negotiators will need to move with both caution and clarity before making any big promises on its benefits for region.

Exam track

Prelims take away

  • Blue dot network
  • Build Back Better Initiative
  • Trans-Pacific Free Trade Agreement
  • Indo-Pacific Economic Framework for Prosperity (IPEF)