The Indo-Pacific Economic Framework (IPEF) was recently launched in Tokyo, with the participation of India’s Prime Minister. This economic initiative, designed to bolster partnerships and drive inclusive, sustainable growth in the Indo-Pacific region, was introduced just a day prior to the second in-person summit of the Quad leaders; a democratic coalition consisting of India, the United States, Australia, and Japan.
The Quad: A Democratic Coalition
The Quad is a strategic grouping of four democracies – India, Australia, the U.S., and Japan. These nations share democratic values and support common interests such as unhindered maritime trade and security, making them natural allies in their collective endeavor to ensure a “free, open, and prosperous” Indo-Pacific region. The initial idea for the Quad was proposed by Japanese Prime Minister Shinzo Abe in 2007, but it wasn’t until 2017 that the coalition was finally formed due to withdrawal from Australia amid Chinese pressure.
Significance of the IPEF
Launched by a US-led initiative, the IPEF aims at strengthening economic partnerships amongst participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competition in the Indo-Pacific region. The framework, launched initially with twelve partners representing 40% of global GDP, encapsulates a shared aspiration to make the Indo-Pacific the engine of global economic growth.
Key Focus Areas of the IPEF
Unlike traditional trade blocs, the IPEF focuses on four key areas; Trade, Supply Chains, Clean Energy, Decarbonization, Infrastructure, Tax and Anti-Corruption. In terms of trade, the framework intends to build high-standard, free and fair-trade commitments, and develop innovative approaches in trade and technology policy. With respect to supply chains, the IPEF seeks to improve transparency, security, diversity, and sustainability.
In line with the Paris Agreement goals, the framework plans to accelerate the development and deployment of clean energy technologies to decarbonize economies and build resilience against climate impacts. Lastly, the IPEF is committed to promoting fair competition by enforcing robust tax, anti-money laundering, and anti-bribery regimes to curb tax evasion and corruption in the Indo-Pacific region.
India’s Role in the Indo-Pacific Region
India’s trade is witnessing rapid expansion in this region with a considerable volume of overseas investment directed towards the East. This includes Comprehensive Economic Partnership Agreements with Japan, South Korea, and Singapore, and Free Trade Agreements with the Association of Southeast Asian Nations (ASEAN) and Thailand. India has been particularly proactive in advocating for a Free and Open Indo-Pacific.
Common views expressed by the U.S., Australia, and ASEAN members indicate a shared expectation for India to play a greater role in the region. India is keen to work cooperatively with other nations in the Indo-Pacific to manage a rules-based multipolar regional order, ensuring no single power dominates the region or its waterways. As a result, India, along with its Quad partners, is considering strategic moves to augment its role and influence in the Indo-Pacific.