Context: India has signed two key agreements under the Indo-Pacific Economic Framework for Prosperity (IPEF) focused on creating a clean and fair economy.

• These agreements were signed during Prime Minister Narendra Modi’s visit to the US.

What is IPEF?

• The Indo-Pacific Economic Framework (IPEF) was launched jointly by the US and other partner countries of the Indo-Pacific region in 2022. 

• The 14 IPEF partners represent 40 percent of the global GDP and 28 percent of global goods and services trade.

• It seeks to strengthen economic partnerships among participating countries with the objective of enhancing resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the region.

• The 14 members of the IPEF are as follows Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the US, and Vietnam.

Clean Economy Objectives

• Clean Energy & Climate Technologies: The clean economy agreement focuses on accelerating energy security, mitigating greenhouse gas emissions, and reducing reliance on fossil fuels. It also emphasizes technical cooperation among IPEF partners.

• Anti-Corruption and Tax Transparency: The fair economy agreement aims to promote a more transparent and predictable business environment, foster trade, and enhance cross-border investigations, asset recovery, and information sharing.

Financial Support for IPEF Initiatives

• Funding: The IPEF Catalytic Capital Fund, with an initial $33 million from Australia, Japan, Korea, and the US, aims to attract $3.3 billion in private investments. Additionally, $300 million has been allocated through the PGI Investment Accelerator.

Concerns Over Transparency and Standards

• Criticism: Experts from Global Trade Research Initiative (GTRI), raised concerns about the secrecy in negotiations and the potential risks for India. They cautioned against adopting international standards without sufficient preparation, which could hinder domestic flexibility for critical infrastructure projects.