India signs IPEF bloc's clean, fair economy agreements to boost cooperation

India on Sunday signed the 14-member IPEF (Indo-Pacific Economic Framework for Prosperity) bloc's agreements on a clean and fair economy with an aim to enhance cooperation in these areas.

The agreements would help facilitate development, access, and deployment of clean energy and climate-friendly technologies; catalyse investment and strengthen measures for anti-corruption, tax transparency etc. and improve business environment, the commerce ministry said in a statement.

In June in Singapore, 13 IPEF bloc members signed these agreements, while India said it would ink the deals after getting domestic approval.

"India signed and exchanged the first-of-its-kind agreements focused on Clean Economy, Fair Economy, and the IPEF Overarching arrangement under IPEF for prosperity, on September 21 at Delaware, USA, in the presence of Prime Minister Narendra Modi who is on 3-day visit to the US for the Quad Summit," it said.

The agreement on clean economy intends to accelerate efforts of IPEF partners towards energy security, GHG (greenhouse gas) emissions mitigation, developing innovative ways of reducing dependence on fossil fuel energy, promoting technical cooperation, capacity building, besides collaborating to facilitate development, access, and deployment of clean energy and climate-friendly technologies.

It will also facilitate investments, project financing including concessional financing, joint collaborative projects, workforce development and technical assistance for industries.

"These activities will be undertaken through joint collaborative actions such as Cooperative Work Programmes, the IPEF Catalytic Capital Fund, the IPEF Accelerator," it said.

Further, the agreement on fair economy intends to create a more transparent and predictable business environment, which can spur greater trade and investment in the markets of member countries; enhance efforts to prevent and combat corruption by strengthening anti-corruption frameworks, support efforts to improve tax transparency and exchange of information for tax purposes between competent authorities.

"It focuses on enhancing information sharing among partners, facilitating asset recovery, and strengthening cross-border investigations and prosecutions. This will also support India's efforts in fighting corruption, money laundering, and terror financing," the ministry said.

India has also signed an overarching IPEF agreement, which is an administrative pact to set up an oversight ministerial-level mechanism.

"This agreement seeks to establish a high-level political oversight framework at the ministerial level over the various individual IPEF agreements while setting general guidance and goals, and guiding Leaders' vision and mandate for IPEF," it said.

The Union Cabinet had accorded the approval earlier this month for signing and ratification of these three agreements.

Further, the ministry said that under the clear economy pact, the partners aim to catalyze investment in green technology and reduce GHG emissions through various means including annual business matching events under the Investor Forum.

One of the initiatives of the block is a dialogue on critical minerals.

This ongoing dialogue focuses on several key areas, including the comprehensive mapping of mineral resources across IPEF partners to develop an extensive database, promoting trade by mapping trade flows within the region and enhancing business engagements, and fostering technical collaboration for mineral recovery and recycling in the region.

These initiatives are aimed at strengthening the critical mineral supply chain and ensuring sustainable mining practices in the region, it said.

The 14-member IPEF bloc was launched jointly by the US and other partner countries of the Indo-Pacific region on May 23, 2022, in Tokyo.

Together, they account for 40 per cent of the world's economic output and 28 per cent of trade.

The framework is structured around four pillars relating to trade, supply chains, clean economy and fair economy. India has joined all the pillars except the trade.

Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US, and Vietnam are members of the bloc.

On November 14, 2023, the IPEF concluded negotiations for a clean economy, a fair economy, and the overarching agreement on the IPEF for Prosperity.

These two agreements will enter into force after at least five IPEF partners complete their internal legal procedures for ratification, acceptance or approval.

The block has already signed the agreement on the supply chain in November 2023.