Indo-Pacific Economic Framework for Prosperity

Context

Recently, India joined a dozen other nations to launch the Indo-Pacific Economic Framework for Prosperity (IPEF), a US-led trade initiative meant to counter China’s aggressive expansion in the region. 

What is IPEF?

• The grouping, which includes seven out of 10 members of the Association of South East Asian Nations (ASEAN), all four Quad countries, and New Zealand, represents about 40% of global GDP.
• IPEF is short for Indo-Pacific Economic Framework for Prosperity. The framework envisions a free, open and secure Indo Pacific Region. 
• The negotiations for the IPEF are expected to centre around four main pillars, including trade, supply chain resiliency, clean energy and decarbonisation, and taxes and anti-corruption measures.
• Countries would have to sign up to all of the components within a module, but do not have to participate in all modules.
• The “fair and resilient trade” module will be led by the US Trade Representative and include digital, labor, and environment issues, with some binding commitments.
• The IPEF seeks to strengthen economic partnership amongst participating countries with the objective of enhancing resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the Indo-Pacific region.

About the Indo-Pacific region

• The Indo-Pacific region is the centre of manufacturing, economic activity, global trade and investment. 
  • The world’s oldest commercial port was in Lothal Gujarat, India.
• India is committed to a free, open, and inclusive Indo-Pacific region and believes that deepening economic engagement among partners is crucial for continued growth, peace, and prosperity.
• India is keen to collaborate with partner countries under the IPEF and work towards advancing regional economic connectivity, integration and boosting trade and investment within the region.

India’s Indo-Pacific strategy 

• India’s Indo-Pacific strategy walks on two legs-
  • Strengthening national engagement with the region- It elevates India’s salience in the Indo-Pacific and raises Delhi’s value for its partners
  • Stronger partnerships with like-minded nations- To boost India’s national capabilities and enhance its reach and impact.