India attends IPEF Ministerial Meeting in Singapore
SINGAPORE : Indian delegation led by Secretary, Department of Commerce, Shri Sunil Barthwal participated in the Indo-Pacific Economic Framework for Prosperity (IPEF) Ministerial Meeting held here on 6 June 2024.
The IPEF Ministerial Statement of 14 November 2023 declared substantial conclusion of negotiations for Clean Economy, Fair Economy, and the overarching Agreement on the Indo-Pacific Economic Framework for Prosperity. Pursuant to this, the IPEF partners completed legal review of the text for these agreements and domestic approval processes.
IPEF members signed these agreements which are first-of-their-kind approaches to addressing 21st century challenges and strengthening economic engagement across a critical region. India actively participated in the signing proceedings and the ministerial deliberations. However, India did not formally sign these agreements as domestic approval processes are still underway and will be completed after formation of the new government. These agreements will enter into force after at least five IPEF partners complete their internal legal procedures for ratification, acceptance or approval.
In his intervention, Shri Barthwal reflected on substantial progress made on the establishment of the three cooperative bodies under the Supply Chain Agreement, the Cooperative Work Programmes under the Clean Economy Agreement, and the cooperative activities under the Fair Economy Agreement. He also reiterated that India, with its skilled manpower, natural resources, and policy support, aims to become a major player in the global supply chain. Government initiatives are proactive in finding solutions and ensuring India’s participation in diverse and predictable supply chains.
IPEF Clean Economy Agreement
Agreement on Clean Economy intends to accelerate efforts of IPEF partners towards energy security and transition, climate resilience and adaptation, GHG emissions mitigation; find/develop innovative ways of reducing dependence on fossil fuel energy; promote technical cooperation, workforce development, capacity building, and research collaborations; and collaborate to facilitate development, access, and deployment of clean energy and climate-friendly technologies. This agreement will facilitate investments, concessional financing, joint collaborative projects, workforce development and Technical Assistance and Capacity Building for industries, in particular MSMEs, to further integrate the Indian companies in the value chains, particularly in the Indo-Pacific region. These cooperative activities will be undertaken through joint collaborative actions such as Cooperative Work Programmes and the IPEF Catalytic Capital Fund.
Cooperative Work Programme (CWP)
The IPEF partners welcomed the continued efforts to build and sustain longer-term cooperation among various groupings of interested partners on a range of climate solutions through the CWP mechanism, in furtherance of the overarching goals of the IPEF Clean Economy Agreement. Since the announcement of the CWPs on hydrogen supply chains (in May 2023), and carbon markets, clean electricity, sustainable aviation fuel, and just transition (in March 2024), participating IPEF partners have developed detailed roadmaps for cooperation and highlighted significant progress on a number of CWPs under discussion. Shri Barthwal, in his remarks welcomed CWPs under the Clean Economy Agreement “designed to facilitate objectives of energy transition which will help create a more sustainable and prosperous Indo-Pacific region”.
A new CWP led by India on “e-waste urban mining” was announced by the group today. This CWP will facilitate a more sustainable e-waste management system for IPEF partners, including through the exchange of information on current and emerging technologies, techniques, and activities, as well as the development of solutions for efficient recovery and recycling of materials, particularly critical metals and minerals.
Shri Barthwal noted that “India’s focus on transitioning to a circular economy is evident in CWPs addressing e-waste management, aiming for resource efficiency and pollution prevention.” Commerce Secretary thanked IPEF partners for their support to India’s proposed CWP and conveyed India’s intention to work with IPEF partners on other CWPs to facilitate immense gains from such CWPs not only for developmental purposes but also towards their contribution to society.
IPEF Catalytic Capital Fund
The IPEF partners applauded the operational launch of the IPEF Catalytic Capital Fund, which supports the expansion of the pipeline of quality clean economy infrastructure projects in the IPEF emerging and upper-middle income economies under the IPEF Clean Economy Agreement. The Fund’s founding supporters – Australia, Japan, Korea, and the United States – have made significant progress in their respective domestic processes to provide US $33 million of initial grant funding to catalyze up to US $3.3 billion in private investment. The Private Infrastructure Development Group (PIDG), which administers the Fund, provided an update to IPEF partners about several initial projects in the pipeline, and discussed additional opportunities to deploy concessional financing, technical assistance, and capacity-building to catalyze private investment.
Investor Forum
A business delegation led by Invest India also participated in the Forum.
More than 30 Indian companies would be presenting opportunities of investment in renewable energy sector in the presence of top global investors like Blackrock, KKR & Co., JP Morgan etc.
Under Sustainable Infrastructure track, 4 Indian projects pitched their concepts before the global investor community. Similarly, 10 Indian ClimateTech startups also presented their business case before the interested investor community from across the globe at the Forum. The investor Forum provided a unique opportunity for project proponents and startup community to interact and network with more than 100 top global investors.
6 Indian investors including venture capital funds, private equity firms and strategic investors attended the Forum to explore investment opportunities and potential collaboration with the global investors as well as multilateral development banks.
IPEF Fair Economy Agreement
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; promote level playing field for businesses and workers in the economies of the IPEF partners; enhance efforts to prevent and combat corruption by strengthening anti-corruption frameworks, establishing confidential systems, and promote participation of groups outside public sector; support efforts to improve tax transparency and exchange of information for tax purposes between competent authorities, domestic resource mobilization, and tax administration; and support capacity building and to provide technical assistance to the IPEF partners, through sharing of expertise and best practices, development and application of technological innovations, and need-based collaboration with the private sector and other stakeholders.
Shri Barthwal during his remarks welcomed IPEF’s focus on Technical Assistance and contribution to Capacity Building for the Fair Economy Agreement, and highlighted training programme in Digital Forensics & System-Driven Risk Analysis under Pillar IV Technical Assistance and Capacity Building catalogue that will be offered by India to other IPEF partners.
The IPEF Upskilling Initiative
The IPEF partners welcomed the substantial progress on the IPEF Upskilling Initiative, which was launched in September 2022 to support sustainable and inclusive economic growth and development by providing primarily women and girls in IPEF emerging and middle-income partner countries with access to digital skills training. Under the initiative, 14 participating U.S. companies and the Asia Foundation provided 10.9 million upskilling opportunities in IPEF partners, primarily for women and girls, in the last 2 years of which India received 4 million of these opportunities.
Next Steps
Ministerial meeting also decided to encourage holding of first meeting of the three Supply Chain institutional committees virtually in July 2024 and in-person in Washington DC in later half of 2024. It was also decided to hold next ministerial meeting virtually in September 2024 and work towards holding the first meeting of IPEF Council and the Joint Commission in 2025.
About IPEF
IPEF was launched on 23 May 2022 at Tokyo, Japan, comprising of 14 countries – Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and USA. The IPEF seeks to strengthen economic engagement and cooperation among partner countries with the goal of advancing growth, economic stability and prosperity in the region.
The framework is structured around four pillars relating to Trade (Pillar I); Supply Chain Resilience (Pillar II); Clean Economy (Pillar III); and Fair Economy (Pillar IV). India had joined Pillars II to IV of IPEF while it has maintained an observer status in Pillar-I.