Cabinet approves India's agreement with 14-member IPEF economic bloc

The Union Cabinet has approved the commerce ministry's proposal to sign the 14-member IPEF (Indo-Pacific Economic Framework for Prosperity) bloc's agreements on a clean and fair economy, an official said on Monday.

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

The official, who does not wish to be named, said that the proposal to sign these agreements has been approved by the cabinet in its meeting here on Monday.

Agreement on a clean economy intends to accelerate efforts of IPEF partners towards energy security and transition, climate resilience and adaptation, GHG (greenhouse gas) emissions mitigation, finding/developing innovative ways of reducing dependence on fossil fuel energy, promoting technical cooperation, workforce development, capacity building, and research collaborations, and collaborate to facilitate development, access, and deployment of clean energy and climate-friendly technologies.

The agreement will facilitate investments, concessional financing, joint collaborative projects, workforce development and technical assistance.

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.

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.