IPEF Clean Economy Pact To Boost Investments In Sector

The implementation of the proposed clean economy agreement between IPEF member countries is likely to push investments in India's clean economy segment and promote the development of low-cost technologies, an official statement said on Thursday.

The IPEF member countries, including India and the U.S., have also decided to start internal processes for signing the clean and fair economy agreements, talks for which were concluded last year in November, it added.

After the signing of the agreement, it will be ratified for acceptance.

The clean and Fair Economy agreements are aimed at strengthening the implementation of effective anti-corruption and tax measures and promoting sustainable trade.

These agreements came up for discussion during a virtual ministerial meeting of IPEF (Indo-Pacific Economic Framework for Prosperity) trade ministers on Thursday. The legal review of these agreements has been completed by the member countries.

"The IPEF partners will now undertake their respective domestic processes to prepare for the signature of the agreements, followed by acceptance, approval, or ratification of the agreements," the commerce ministry said.

Implementation of the clean agreement, it said, "is likely to help increase inward investments in India in the clean economy sector, promote the development of low-cost climate technologies, facilitate technical assistance and capacity building, provide new opportunities for Indian exports, and generate additional employment opportunities".

IPEF 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% 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 Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the U.S. and Vietnam are members of the bloc.

The members have already implemented the supply chain agreement on Feb. 24.

Commerce and Industry Minister Piyush Goyal has called for an expeditious implementation of all the action-oriented collaborative elements under various IPEF pillars.

Goyal also invited investors from IPEF partners to invest and benefit from the trillion-dollar-plus opportunity that India provides in the clean economy domain.

The IPEF partners further announced that ministers will meet in person in Singapore on June 6, 2024, to discuss the Supply Chain Agreement, the Clean Economy Agreement, the Fair Economy Agreement, and the Agreement on IPEF, the statement said.

The inaugural IPEF Clean Economy Investor Forum will also take place in Singapore on June 5-6 this year.

The forum will bring together some of the region's largest investors and philanthropies with government agencies, innovative companies and entrepreneurs to mobilise increased investment for climate-related infrastructure, technologies, and projects in the region.

"The IPEF partners also announced plans to provide $33 million in initial grant funding for the IPEF Catalytic Capital Fund under the Pillar III Clean Economy Agreement. These funds will be instrumental in catalysing up to $3.3 billion in private investment for climate infrastructure projects in IPEF economies party to the IPEF Clean Economy Agreement," the statement said.