New Delhi: The Indo-Pacific Economic Framework for Prosperity (IPEF) negotiations have mostly been conducted in secrecy with limited public input and it raises concerns whether the member countries, including India, were able to protect their key interests, think-tank Global Trade Research Initiative (GTRI) said Sunday. It cautioned that the commitments related to the effective administration of tax policy might curtail the ability to raise tax revenue.
It said in the supply chain pillar, a major issue is whether the agreement might restrict members from trading critical materials, particularly with China, as this could pose challenges for Asean countries, whose largest trading partner is China. "It is hoped that India has negotiated enough flexibility to avoid strict clauses, such as the not to use export restrictions. These are critical during emergencies, as no country can be expected to supply essential goods when facing its own crisis," GTRI founder Ajay Srivastava said.
In the clean economy pillar, he hoped that India had not agreed to a "non-derogation clause", which would prevent the government from easing domestic regulations for projects of national importance. "Such flexibility is essential for India to pursue key infrastructure projects without being hindered by rigid international commitments," he said, adding.
On the fair economy pillar, the think-tank said India already implements anti-corruption measures, but new obligations could lead to international scrutiny and make domestic actions legally enforceable. "This could complicate governance, so it is important that India has carefully examined these commitments to avoid unnecessary legal and administrative burdens," he cautioned.
"After implementation of the FTA, EU products will continue to enter India at zero duties, but Indian products may pay 20-35% tariff equivalent as Carbon Border Adjustment Mechanism (CBAM) charges. A suitable text may be inserted in the FTA chapters dealing with this possibility," Srivastava said.
It said in the supply chain pillar, a major issue is whether the agreement might restrict members from trading critical materials, particularly with China, as this could pose challenges for Asean countries, whose largest trading partner is China. "It is hoped that India has negotiated enough flexibility to avoid strict clauses, such as the not to use export restrictions. These are critical during emergencies, as no country can be expected to supply essential goods when facing its own crisis," GTRI founder Ajay Srivastava said.
In the clean economy pillar, he hoped that India had not agreed to a "non-derogation clause", which would prevent the government from easing domestic regulations for projects of national importance. "Such flexibility is essential for India to pursue key infrastructure projects without being hindered by rigid international commitments," he said, adding.
On the fair economy pillar, the think-tank said India already implements anti-corruption measures, but new obligations could lead to international scrutiny and make domestic actions legally enforceable. "This could complicate governance, so it is important that India has carefully examined these commitments to avoid unnecessary legal and administrative burdens," he cautioned.
India-EU FTA
Ahead of the ninth round of India-EU bilateral free trade agreement (FTA) talks this week, it also highlighted the key challenges of sustainability regulations, labour standards and tariff asymmetries, and that a political push may be needed to bridge these differences and finalise the agreement."After implementation of the FTA, EU products will continue to enter India at zero duties, but Indian products may pay 20-35% tariff equivalent as Carbon Border Adjustment Mechanism (CBAM) charges. A suitable text may be inserted in the FTA chapters dealing with this possibility," Srivastava said.
