India’s acceptance of global through Indo-Pacific Economic Framework allows other countries to review its labour law compliance as part of international economic agreements.
Author
Prabhash Ranjan, Professor, Jindal Global Law School, O.P. Jindal Global University, Sonipat, Haryana, India.
Summary
During Prime Minister Narendra Modi’s visit to the US, India signed the Fair Economy and Clean Economy agreements negotiated under the aegis of the Indo-Pacific Economic Framework (IPEF), a US-led initiative, launched in 2022, to create a regional framework for deeper economic integration in the Indo-Pacific region. India also signed the IPEF’s overarching agreement.
Apart from the US and India, the IPEF has 14 members including Australia, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, and Vietnam. Although one of the pillars of IPEF is trade, it is not a typical trade agreement aiming at tariff liberalisation.
However, this does not mean trade is not central to the IPEF. The difference is in terms of vision. IPEF aims to boost trade, not through binding market access commitments but by using the tools of regulatory coherence and promoting linkages of trade with non-trade issues like labour. The other three pillars of IPEF are supply chains, fair economy, and clean economy. Since countries can choose their pillars, India has opted out of the trade pillar while accepting the other three.
India and other countries signed the Supply Chains Agreement last year. The other two agreements under the Fair Economy and Clean Economy pillars were signed on June 6, 2024. However, India could not sign them due to the general elections. The Fair Economy Agreement aims to boost economic governance in the Indo-Pacific region through steps like combating corruption and bringing about greater transparency in domestic tax regimes. The Clean Economy Agreement pushes the IPEF countries on energy transition including by fostering domestic and foreign investment in climate-friendly technologies.
Published in: Hindustan Times
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