On September 24, 2024, India signed two pivotal agreements under the U.S.-led Indo-Pacific Economic Framework (IPEF), focusing on Clean Economy and Fair Economy initiatives. These agreements will officially take effect on October 11 and 12, 2024, as announced by the U.S. Commerce Department. The Clean Economy Agreement emphasizes energy security and climate resilience, while the Fair Economy Agreement aims to prevent corruption and tax evasion. This development follows the earlier signing of the Supply Chain resilience agreement in February 2024, which aims to bolster economic cooperation among the 14 member economies, including the U.S., Japan, Australia, and others. [561c507a]
The IPEF, launched in May 2022, is designed to reduce dependence on China and enhance regional economic collaboration without negotiating tariffs or market access. The Supply Chain Agreement establishes three bodies dedicated to labor rights and crisis response, addressing critical sectors such as semiconductors and critical minerals. These agreements are expected to create business opportunities, generate jobs, and enhance investment cooperation in clean energy across the Indo-Pacific region. [d321d804]
India's participation is particularly significant as it aligns with the country's goals for clean energy and supply chain sustainability. Japan has already completed its domestic procedures for the clean economy agreement, indicating a strong commitment to the IPEF's objectives. Ongoing discussions regarding the trade pillar are anticipated to shape future economic cooperation among member nations, with the next ministerial meeting scheduled for September. [c0e79794]
In a related development, the Philippines has expressed optimism that the IPEF will be fully operational by 2025, with the trade component expected to be largely completed by the end of 2024. International Trade Group Undersecretary Allan B. Gepty highlighted that negotiations on the trade pillar are ongoing, aiming for a substantial conclusion this year. The framework, which includes four pillars—trade, supply chains, clean energy, and tax/corruption—was launched by the U.S. in 2022 and involves 14 economies, including Australia, India, and Japan. The Supply Chain Agreement was signed in November 2023 and became effective in February 2024, while three additional agreements were signed in June 2024, expected to take effect mid-October 2024. Gepty emphasized the importance of the trade pillar for the full implementation of the IPEF. [0c539a79]
As the geopolitical landscape evolves, the IPEF's focus on clean energy and supply chain resilience is seen as a strategic countermeasure to China's influence in the region. The agreements aim not only to enhance economic ties but also to address the pressing challenges of climate change and economic transparency. An online ministerial meeting held on September 23, 2024, focused on decarbonization projects and technical assistance, further underscoring the urgency of these initiatives. [55ae89fd]