As an observer India is closely watching the negotiations on the trade pillar of the Indo-pacific Economic Framework for Prosperity (IPEF) and would take a call on whether to join it or stay out after contours of the agreement are clearer.
“We are not close to the idea nor have we committed to the idea (of joining trade pillar). As it progresses, as countries come together and start finalising the deal, we will take a call at that point of time whether it is good or bad for us,” an official said.
The trade pillar that rest of the 13 members of the IPEF are negotiating does not involve commitments on tariff concessions but deal with other issues around trade like labour, environment, gender and digital trade. The countries involved are discussing rules and standards around these subjects which would then be binding on the signatories.
The trade pillar of IPEF has no market access provisions but will have dispute settlement provisions and binding commitments on the other trade-related issues being discussed.
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Apart from India other members of the IPEF are Australia, Brunei, Fiji, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and USA.
Out of these India already has FTAs with seven members of the grouping through the Asean trade pact. FTAs are also functional with Japan, Korea and Australia. That leaves out the US, Fiji and New Zealand. The US has stopped pursuing bilateral FTAs and with New Zealand India is already exploring a bilateral FTA. “So at the end of day India does not gain much from the trade pillar, the official added.
Trade is the first pillar of IPEF. India has joined the other three of the agreements. Pillar II deals with supply chain, pillar III with clean economy and pillay IV with fair economy.
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