India has chosen not to participate in the trade pillar of the Indo-Pacific Economic Framework (IPEF). Union Commerce Minister Piyush Goyal stated that all choices will be made with “national interest” in mind.
The IPEF is built on four pillars: commerce, supply chains, sustainable energy-decarbonization infrastructure, and tax and anti-corruption measures. The forum allows the 14 member countries to choose which pillar(s) they want to be a part of.
When asked why India has chosen to stay out of the trade pillar for the time being, US Trade Representative Katherine Tai said after the two-day ministerial meeting ended on Friday: “This can be answered by Minister Goyal. I won’t say India has opted out of the trade pillar. I will say they are not in right now.” She added that the US will hold bilateral talks with India later this year to discuss the same issue.
According to trade experts, India may have legitimate reservations about certain components of the trade pillar that go beyond WTO standards. On Thursday, Piyush Goyal stated that any decision will be made in India’s “national interest.”
Gina Raimondo, the United States’ Secretary of Commerce, stated on Friday, “All 14 IPEF members have worked together on the issues. There were no sceptics in the room, we have a clear roadmap for the mutual benefit of all members. The timelines for implementation are aggressive as people depend on us to succeed.”
“IPEF is meant to be flexible. Member countries can choose which pillar they want to participate in. There has been great enthusiasm on ensuring a resilient supply chain between the member countries. IPEF will lead to more investments and create more jobs in all the 14 countries.” stated Ambassador Tai.
The primary agenda is to avoid supply chain disruptions seen during Covid due to over-dependence on one country that has virtually emerged as the world’s factory in recent years, according to Union Commerce Minister Piyush Goyal at the end of day one of deliberations Thursday that the 14 member countries had a “very useful engagement, laying the ground to find a robust framework in areas of mutual interest.”
On the sidelines of the IPEF, Goyal held bilateral conversations with the US, Secretary Raimondo, and Ambassador Tai, among others. “The climate is favourable for further expansion of trade ties with the US and for more investment by American companies in India. We are in agreement to have a resilient supply chain between the two countries,” Goyal stated.
India is a major provider of IT services to US businesses. “Work from home has meant that our people in tier III and IV cities are providing cost-effective (IT) solutions to US companies. After meeting several Ameri companies, it is clear that the hiring plans for tech support from India are staggering. We will soon have the next trade policy engagement with the US,” Goyal stated.
He also met with Japan’s and Vietnam’s trade ministers. “Areas of mutual interest were discussed. We plan to increase exports to both these countries. All these efforts will lead to significant job creation in India,” Goyal added.
Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the United States, and Vietnam are among the 14 members of IPEF. Unlike trade agreements, this framework does not seek to expand market access.
