INDO-PACIFIC ECONOMIC FRAMEWORK (Syllabus: GS Paper 2 – IR)

Context: Indian delegation participated in the inaugural Indo-Pacific Economic Framework for Prosperity (IPEF) Clean Economy Investor Forum.

Indo-Pacific Economic Framework (IPEF)

• About: The initiative, spearheaded by the US, seeks to bolster economic cooperation among participating nations, fostering resilience, sustainability, inclusivity, growth, fairness, and competitiveness in the Indo-Pacific region.
• Launched by: United States (US) in Tokyo at the QUAD summit on May 23, 2022. 
• Aim: The framework intends to “advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness” in these economies. 
• Not an FTA: IPEF is not a Free Trade Agreement (FTA) like the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Transpacific Partnership (CPTPP). 
• IPEF Pillars: Trade, Supply chains resilience, Clean Economy, and Fair Economy.
• Members: Quad members (India, USA, Australia and Japan),

o7 members of ASEAN (Except Cambodia, Laos and Myanmar).

oTogether they account for 40 per cent of the world’s economic output and 28 per cent of trade.

India and IPEF

• Participation in Key Pillars: India is a part of three key pillars of the Indo-Pacific Economic Framework for Prosperity (IPEF):

oResilient Economy (Supply Chain)

oClean Economy (Decarbonization and Infrastructure)

oFair Economy (Anti-Corruption and Tax)

• Non-Participation in Connected Economy (Trade) Pillar: India has opted not to join the Connected Economy (Trade) pillar of the IPEF.