India keeping close watch on IPEF trade pillar talks

New Delhi: India is keeping a close watch on the trade negotiations of the Indo-Pacific Economic Framework (IPEF) for Prosperity, which the other 13 members have joined as the trade off to take on binding commitments under the pact is not clear, an official said Thursday. The members have also started a critical mineral dialogue to work on areas like regulations and technological gaps in the sector to enhance cooperation.

“We are not closed to the idea neither we have committed to the idea…We will wait, we are observing it closely. As it progresses and as countries come together and start finalising the deal, maybe we will take a call at that point of time whether it is good or bad for us,” said an official on India joining the trade pillar.

The IPEF is structured around four pillars: trade, supply chain resilience, clean economy and fair economy. India has joined all the pillars except the one on trade.

“We are waiting for the final outcomes because there are binding commitments in the trade pillar without clear market access provisions. There is going to be a dispute settlement in many areas,” the official added.

The IPEF has 14 countries including India, Australia, the US, Japan, Fiji, South Korea, New Zealand, Singapore and Thailand, representing 40% of global gross domestic product and 28% of the global trade in goods and services.

All 14 members have joined the agreements on supply chains, clean economy, and fair economy. An agreement will be in force when a minimum five members complete the ratification process.On the critical mineral dialogue, the official said that it started around six months ago to look at the grouping’s resource map, regulations, technological gaps and recycling technology. At the end of this dialogue, the members will come out with recommendations.

Oz, ASEAN trade pacts
India is looking at further strengthening the pact on services with Australia in the proposed compressive economic cooperation trade agreement (CECA) to boost the sector’s exports, an official said on Thursday. The two countries have already implemented an interim trade agreement in goods and services in December 2022 and are now under negotiations to expand its scope through CECA. The next round of talks is likely in December here.

India will also host the next round of talks with the ASEAN countries to review the Asean-India Trade in Goods Agreement (AITIGA) from November 19-22.

“There are challenges in the way the agreement is constructed and the fact that the 10 ASEAN countries need to build consensus,” said an official, adding that India can consider bilateral negotiations if the talks don’t work out otherwise.

The talks are crucial as 30% of ASEAN’s imports are from China, higher than before.