Union Minister Shri Piyush Goyal joins Indo-Pacific Economic Framework for Prosperity (IPEF) Virtual Ministerial Meeting

Shri Goyal welcomes continued progress at IPEF

Union Minister of Commerce & Industry, Consumer Affairs, Food and Public Distribution, and Textiles, Shri Piyush Goyal .joined U.S. Secretary of Commerce Gina Raimondo, Thai Deputy Prime Minister and Foreign Minister Parnpree Bahiddha-Nukara, along with the ministers from the other IPEF partners, in their first Ministerial meeting this year.

During the virtual ministerial meeting on Pillars II-IV, IPEF partners welcomed the significant progress made since the substantial conclusion of the negotiations for the proposed IPEF Clean Economy Agreement (Pillar III), the IPEF Fair Economy Agreement (Pillar IV), and Agreement on IPEF in November 2023. The IPEF partners also discussed the ongoing cooperative work ahead across the three proposed agreements.

Additionally, IPEF partners welcomed the entry into force of the IPEF Supply Chain Agreement w.e.f. 24 February 2024. The texts of the proposed Clean Economy Agreement, Fair Economy Agreement, and Agreement on IPEF were also made public. 

Addressing the Ministerial gathering, Minister Goyal called for an expeditious implementation of all the action-oriented collaborative elements under various IPEF Pillars. On the Pillar-II (Supply Chains Resilience) Agreement, which entered into force on 24 February 2024, Minister Goyal highlighted India’s global production capacities in many critical sectors, which provide supply diversification opportunities for IPEF partners. Highlighting the 'Prime Minister Surya Ghar Muft Bijli Yojana’ as a project that not only furthers clean economy objectives but also generates large socio-economic multiplier effects, Minister Goyal invited investors from IPEF partners to invest and benefit from the trillion dollar plus opportunity that India provides in the clean economy domain.

The IPEF partners also discussed next steps to deliver concrete outcomes under the Framework over the next several months. This includes several new lines of effort under the Clean Economy pillar, including the launching of four new Cooperative Work Programs (CWPs), announcing that the inaugural IPEF Clean Economy Investor Forum will be held in Singapore on 05-06 June 2024, and providing more details on the IPEF Catalytic Capital Fund.

The IPEF partners further announced that the Ministers will next meet in-person in Singapore on 06 June 2024 to discuss the Supply Chain Agreement, the Clean Economy Agreement, the Fair Economy Agreement, and the Agreement on IPEF.

Following the substantial conclusion of the negotiations of the three proposed agreements in November 2023, the IPEF partners conducted an intensive legal review, including an in-person round held in Washington, D.C., during 19-23 February 2024. Having completed the legal review process, the IPEF partners today took a significant step forward with the finalization of the texts for the three proposed agreements. The IPEF partners will now undertake their respective domestic processes to prepare for signature of the agreements, followed by acceptance, approval, or ratification of the agreements.

IPEF Clean Economy Agreement facilitates enhanced collaboration and cooperation between IPEF partners in their respective efforts to accelerate clean energy transition, enhance energy security, and climate resilience and adaptation, and support sustainable livelihoods in IPEF member countries. The Agreement, upon implementation, is likely to increase inward investments in India in the clean economy domain, promote development of low-cost climate technologies, facilitate technical assistance and capacity building, provide new opportunities for Indian exports, and generate additional employment opportunities.

The proposed Fair Economy Agreement aims to create a more transparent, predictable trade and investment environment across the Indo-Pacific. To achieve these goals, under the proposed agreement, the IPEF partners would work together to enhance their efforts to prevent and combat corruption including bribery, and support efforts to improve tax transparency and the exchange of information, domestic resource mobilization, and tax administration.

To help ensure effective implementation of initiatives across the IPEF pillars and agreements, as well as ensure the durability of the Framework over the long-term for ongoing economic cooperation, the proposed Agreement on IPEF establishes two ministerial-level bodies, each to meet annually: an IPEF Council, which will consider matters affecting the collective operation of the IPEF agreements and Framework as whole, including proposals for negotiations on new agreements and accession of new members; and a Joint Commission to monitor the work under the Supply Chain Agreement, the Clean Economy Agreement, and the Fair Economy Agreement, with a view to identifying cross-cutting synergies and avoiding duplication of work.

Pillar II: Building Supply Chain Resiliency for the Indo-Pacific

Following the signing of the IPEF Supply Chain Agreement in November 2023, the agreement entered into force on 24 February 2024, after five partners deposited their instruments of ratification, acceptance, or approval. The IPEF partners are now working towards operationalizing the agreement, including naming their representatives to the agreement’s three bodies (the Supply Chain Council, the Crisis Response Network, and the Labor Rights Advisory Board), electing chairs, and adopting terms of reference for each, as well as identifying their respective initial lists of critical sectors and key goods for cooperation under the agreement.

Pillar III: Cooperating to Accelerate the Transition to Cleaner IPEF Economies

The IPEF partners further discussed the progress on Pillar III since the substantial conclusion of the negotiations of the proposed Clean Economy Agreement in November 2023. The IPEF partners welcomed the inaugural IPEF Clean Economy Investor Forum, which will take place in Singapore on 05-06 June 2024. The Forum will bring together some of the region’s largest investors and philanthropies with government agencies and innovative companies and entrepreneurs to mobilize increased investment for climate-related infrastructure, technologies, and projects in the region. These investments will advance the goals of the 14 IPEF partner countries set out in the proposed Clean Economy Agreement. For more information and future updates, please visit: www.IPEFinvestorforum.org.

The IPEF partners also announced plans to provide $33 million in initial grant funding for the IPEF Catalytic Capital Fund under the Pillar III Clean Economy Agreement. These funds will be instrumental in catalyzing up to $3.3 billion in private investment for climate infrastructure projects in IPEF economies party to the IPEF Clean Economy Agreement. The Fund’s founding supporters include Australia, Japan, the Republic of Korea, and the United States. The Private Infrastructure Development Group will administer and leverage the Fund to deploy concessional financing, technical assistance, and capacity building support to expand the pipeline of high quality, resilient, and inclusive climate infrastructure projects.

In addition, the IPEF partners took stock of the CWP on hydrogen announced in May 2023, as well potential new ones. Under the proposed agreement, the CWPs are a mechanism through which the IPEF partners or a group of partners prioritize their focus and resources on a common goal. On hydrogen, those interested IPEF partners have taken steps to advance the initiative, including establishing workstreams related to the exchange of information and sharing of best practices on methodologies, standards, and certifications developed by international bodies on the carbon intensity of hydrogen and its carriers, as well as cross-border pilots and demonstration projects.

The IPEF partners also announced four new CWPs based on proposals put forward by partners:

• On carbon markets, interested IPEF partners initially are seeking to understand existing regional carbon market priorities and identify strategies for improving the enabling conditions for cooperation;
• Interested IPEF partners also are pursuing clean electricity enhancement to facilitate increased decarbonization and access to clean energy in the region, including through public-private cooperation;
• To advance the promotion of employment creation and labor rights and strengthen efforts to address employment shifts in the move to clean energy, interested IPEF partners endeavor to pursue workforce development efforts to ensure a just transition towards achieving a clean economy; and 
• Interested IPEF partners will collaborate on sustainable aviation fuels (SAF) to enhance the availability and affordability of SAF and its feedstocks, so as to catalyze and develop regional SAF value chains in the region.

India has also proposed certain specific Cooperative Work Programmes and is working with IPEF partners for their early adoption.

Pillar IV: Enhancing Transparency and Predictability in the Business Environment

The IPEF partners also discussed ways to deliver early results under the proposed Pillar IV Fair Economy Agreement to foster a more predictable and transparent business environment and help drive greater trade and investment among the partners. The Pillar IV Agreement is expected to enhance information sharing among partners, facilitate asset recovery and strengthen cross-border investigations and prosecutions. It will also aid in India’s fight against corruption, money laundering and terror financing.

In recognition of the critical role of technical assistance and capacity building (TACB) on achieving the commitments laid out in the proposed agreement and ensuring effective implementation and enforcement of anti-corruption measures and improving transparency tax administration, the partners look forward to continuing to identify and implement TACB initiatives to strengthen anti-corruption efforts and the efficiency of tax administration. 

About IPEF

IPEF was launched in May 2022, bringing together 14 regional partners – Australia, Brunei, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the United States, and Vietnam – in a new model of economic cooperation. IPEF negotiations began in late 2022. In May 2023, the IPEF partners announced the substantial conclusion of the negotiations for a first-of-its-kind IPEF Supply Chain Agreement. In November 2023, the IPEF partners announced the substantial conclusion of the negotiations on the proposed IPEF Clean Economy and Fair Economy Agreements, as well as on a proposed overarching Agreement on IPEF to help ensure the durability of the framework and held a signing ceremony for the IPEF Supply Chain Agreement.