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Insights EDITORIAL ANALYSIS : Indo-Pacific Economic Framework


Source: The Indian Express

  • Prelims: Current events of international importance(IPEF, Regional forums(QUAD, East Asia Summit) etc)
  • Mains GS Paper II: Significance of US’ Indo-Pacific strategy, Indo-Pacific Region,Free and open Indo-Pacific, International organizations.


  • United States President Joe Biden, on an East Asia trip that will first visit Seoul and in Tokyo on Sunday ahead of the May 24 Quad summit, is expected to launch his Administration’s much discussed Indo-Pacific Economic Framework (IPEF) in the Japanese capital along with Prime Minister Kishida Fumio.



Indo-Pacific Economic Framework (IPEF)

  • It was announced in 2021 to set regional standards for cooperation, and includes the Association of Southeast Asian Nations (ASEAN) member states.
  • IPEF is created to encourage regional economies to “decouple” from the Chinese market by leading them to alternative supply chains.
  • The IPEF will not include market access commitments such as lowering tariff barriers, as the agreement is “more of an Administrative arrangement”.
  • IPEF is viewed as reflecting the US’ ambitions to expand ties with key Indo-Pacific economies by building a supply chain that excludes China.
  • It has four “pillars” of work:
  1. Fair and resilient trade.
  2. Supply chain resilience.
  3. Infrastructure, clean energy, and decarbonization.
  4. Tax and anti-corruption.

India and IPEF:

  • India is currently studying the benefits of participation but appears to have a preference for bilateral economic forums with the United States.
  • It will help India face up to the China challenge, as Beijing tries to dominate all the supply-chain linkages in Asia under the Regional Comprehensive Economic Partnership (RCEP).
  • The IPEF may garner interest if it is turned into a real economic programme instead of merely advancing the US security objectives.
  • Some areas proposed in the IPEF do not appear to serve India’s interests. For example, the IPEF talks about digital governance but the IPEF formulation contains issues that directly conflict with India’s stated position which are:
  1. Prohibition / restrictions on cross-border data flows and data localization requirements, including for financial services;
  2. The prohibition of the levying of customs duties on digital products distributed electronically;
  3. Promotion of the interoperability of privacy rules and related enforcement regimes.


significance of Indo-Pacific region for India:

  • Strategic significance: The Indo-Pacific is a multipolar region that accounts for over half of global GDP and population.
  • Mineral Resources: Maritime regions have also become important storage areas for essential resources such as fish stocks, minerals, and offshore oil and gas.
  • Economic Growth: The Indo-Pacific area accounts for approximately 60% of world GDP, making it the most important contributor to global growth.
  • Commerce: Many of the world’s most important choke points for global trade are located in this region, including the Straits of Malacca, which are crucial for global economic growth.


Quadrilateral Security Dialogue(QUAD):

  • It is the informal strategic dialogue between India, USA, Japan and Australia with a shared objective to ensure and support a “free, open and prosperous” Indo-Pacific region.
  • In November 2017, India, the US, Australia and Japan gave shape to the long-pending “Quad” Coalition to develop a new strategy to keep the critical sea routes in the Indo-Pacific free of any influence (especially China).
  • In 2021, Quad countries issued a “Spirit of the Quad” joint statement promoting a free, open rules-border, rooted in international law to advance security and combat threats both in the Indo-Pacific and beyond.
  • 3C strategy of QUAD


East Asia Summit:

Established in 2005, it is a forum of 18 regional leaders for strategic dialogue and cooperation on the key political, security, and economic challenges facing the Indo-Pacific region.

There are six priority areas of regional cooperation within the framework of the EAS:

    1. Environment and Energy
    2. Education
    3. Finance
    4. Global Health Issues and Pandemic Diseases
    5. Natural Disaster Management
    6. ASEAN Connectivity.

>It comprises the ten member states of the ASEAN along with 8 other countries namely Australia, China, Japan, India, New Zealand, the Republic of Korea, Russia and the USA.
It is an ASEAN-centered forum so it can only be chaired by an ASEAN member.

Association of Southeast Asian Nations(ASEAN)

    •  It is a regional organization which was established to promote political and social stability amid rising tensions among the Asia-Pacific’s post-colonial states.
    • The motto of ASEAN is “One Vision, One Identity, One Community”.
    • ASEAN Secretariat – Indonesia, Jakarta.

●     Member Nations

 Regional Comprehensive Economic Partnership (RCEP)

●     It is a trade deal between the ASEAN countries and China, Japan, South Korea, Australia and New Zealand.

●     It will lower tariffs, open up trade in services and promote investment to help emerging economies catch up with the rest of the world.

●     It will reduce costs and time for companies by allowing them to export a product anywhere within the bloc without meeting separate requirements for each country.

●     It also touches on intellectual property, but will not cover environmental protections and labour rights.

●     India withdrew from the RCEP largely because of concerns it would open it up to Chinese goods amid an already wide trade imbalance with China, and the failure of the agreement to adequately open up to services.

Trans Pacific Partnership(TPP)

●     TPP is a Trade Agreement among 12 Pacific Rim countrie

●     Goals:

1.      promote economic growth;

2.      support the creation and retention of jobs;

3.      enhance innovation, productivity and competitiveness;

4.      raise living standards;

5.      reduce poverty in our countries;

6.      promote transparency, good governance,

7.      enhanced labor and environmental protections

●     Signatories:
USA, (USA has withdrawn from TPP in Jan 2017)
New Zealand,

●     It covers 40% of the world’s economy

●     India is not a part of this.

●     It can not be ratified now as the USA has withdrawn from it.


Way Forward

  • Indo Pacific is a strategic space which offers a number of challenges and opportunities for India and all other stakeholders.
  • Appropriate diplomatic maneuvering and economic and military assertion is vital for the implementation of India’s interests in the region along with leveraging the space as a building block for a multipolar world order.
  • It will also deepen USA its regional treaty alliances like QUAD and work with groups such as ASEAN, the European Union (EU) and NATO.



India should prefer bilateral economic forums with the United States rather than joining the Indo-Pacific Economic Framework (IPEF). Do you agree with the statement? Also discuss the significance of IPEF in the Indo-Pacific region. (200 WORDS, 10 MARKS)