Need collaborations in areas of strength for IPEF's full potential: Goyal

Piyush Goyal added that peer learning, knowledge sharing and capacity building initiatives under the fair economy agreement will remain key to achieving its objectives

Commerce and Industry Minister Piyush Goyal on Tuesday said the full potential of the IPEF can only be achieved if partner countries contribute their strengths, such as technology, investment, market potential and skilled workforce, to address supply chain challenges.

The ministry said this in a virtual meeting of IPEF (Indo-Pacific Economic Framework for Prosperity) ministers.

Goyal also said that healthcare, including pharmaceuticals and medical devices, is an "extremely" relevant area due to over concentration of global production of APIs and Key Starting Materials which can severely impair supply chain resilience and impact our capacity to address the healthcare needs of our economies.

 

Besides, the multimodal transport systems, upgrades of logistics infrastructure, enhanced technological interoperability and data flows among freight and logistics enterprises, are some of the key areas which need to be focused upon, he said.

He "emphasised that the full potential of IPEF can only be realised if each partner country brings their respective strengths to the table whether it is technological advancements or investment capacity or market potential or requisite resources, including skilled workforce, to address various challenges of supply chain resilience or green transition," the ministry said.

He added that peer learning, knowledge sharing and capacity building initiatives under the fair economy agreement will remain key to achieving its objectives.

India, Goyal said, has established a robust anti-corruption regime and has already implemented several legislative, administrative, and regulatory measures to address both corruption and promote tax transparency.

The two agreements of the 14-member IPEF (Indo-Pacific Economic Framework for Prosperity) bloc on clean and fair economy will be implemented from October, the ministry said.

These pacts were signed by India on September 22.

The agreements would help facilitate development, access, and deployment of clean energy and climate-friendly technologies; catalyse investment and strengthen measures for anti-corruption, tax transparency etc and improve business environment.

In June, 13 IPEF bloc members signed these agreements in Singapore, while India said it would ink the deals after getting domestic approval.

The ministry said that while the Clean Economy Agreement will come into force on October 11, the Fair Economy Agreement will be implemented on October 12.

The agreement on clean economy intends to accelerate efforts of IPEF partners towards energy security, GHG (greenhouse gas) emissions mitigation, developing innovative ways of reducing dependence on fossil fuel energy, promoting technical cooperation, capacity building, besides collaborating to facilitate development, access, and deployment of clean energy and climate-friendly technologies.

It will also facilitate investments, project financing, including concessional financing, joint collaborative projects, workforce development and technical assistance for industries.

Further, the 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; enhance efforts to prevent and combat corruption by strengthening anti-corruption frameworks, support efforts to improve tax transparency and exchange of information for tax purposes between competent authorities.

India has also signed an overarching IPEF agreement, which is an administrative pact to set up an oversight ministerial-level mechanism. This pact will come into effect from October 11.

The 14-member IPEF bloc was launched jointly by the US and other partner countries of the Indo-Pacific region on May 23, 2022, in Tokyo.

Together, they account for 40 per cent of the world's economic output and 28 per cent of trade.

The framework is structured around four pillars relating to trade, supply chains, clean economy and fair economy. India has joined all the pillars except the trade.

Australia, Brunei, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US, and Vietnam are members of the bloc.

The block has already signed the agreement on the supply chain in November 2023.

"One of the key challenges in supply chains is risk on account of concentration of global capacities or resources, which can add to price volatility and supply uncertainty. The work under the Action Plan team needs to address this global concentration of supply chains in any form," it said.