India on Saturday signed multiple agreements focused on promoting clean economy, fair economy and global prosperity in Delaware, USA. The event took place during Prime Minister Narendra Modi’s three-day visit to the United States for the Quad summit, the Commerce Ministry confirmed in a statement on Sunday.
Earlier this month, the Union Cabinet headed by PM Modi had approved these agreements for signing and ratification. Though these agreements were initially set up during the IPEF ministerial meeting in Singapore on June 6, 2024, India had held back from signing at that time due to pending domestic approvals.
The Indo-Pacific Economic Framework (IPEF), launched on May 23, 2022 in Tokyo, aims to strengthen economic cooperation among partner countries to promote growth, stability, and prosperity in the region. The framework is built around four key pillars: trade (Pillar I), supply chain resilience (Pillar II), clean economy (Pillar III), and fair economy (Pillar IV). India ratified the Supply Chain Resilience Agreement in February 2024 and has maintained observer status in the trade pillar.
The recently signed Agreement on Clean Economy is designed to enhance technical cooperation, workforce development and research collaboration among IPEF partners. It aims to facilitate the development and deployment of clean energy and climate-friendly technologies, which will ultimately help accelerate collective efforts towards energy security, climate resilience and greenhouse gas emission reduction. The agreement will boost investments and project financing, particularly benefiting small and medium enterprises (MSMEs) in India, as well as integrate Indian companies into global value chains.
A comprehensive agreement was also signed, establishing a high-level political monitoring framework at the ministerial level for the various IPEF agreements. This administrative agreement aims to provide guidance and set goals for the IPEF Partnership, ensuring the effective implementation of the individual agreements, particularly those relating to clean and fair economies. It is expected to create a formal mechanism for ministerial discussions on emerging issues, thereby enhancing the longevity and recognition of the IPEF Partnership.
Under the Clean Economy Agreement (Pillar III), IPEF partners will focus on attracting investments in green technology and reducing greenhouse gas emissions through various initiatives. For instance, the first Investor Forum held in Singapore in June 2024 identified USD 23 billion in priority infrastructure projects, with India contributing USD 4 billion aimed at renewable energy investments. Notably, Singapore-based Sembcorp is planning to invest Rs 36,238 crore in a state-of-the-art green ammonia plant in Thoothukudi following a MoU between companies from India, Singapore and Japan.
IPEF provides platforms for technical assistance, concessional financing and viability gap funding. The IPEF Catalyst Capital Fund, which received an initial grant of USD 33 million from Australia, Japan, Korea and the United States, aims to catalyze total private investment of USD 3.3 billion. Additionally, the PGI Investment Accelerator has received initial funding of USD 300 million from the US International Development Finance Corporation (DFC).
In terms of workforce development, IPEF has launched an upskilling initiative to support sustainable economic development. The program primarily targets women and girls in emerging and middle-income partner countries, providing access to digital skills training. Over the past two years, 14 US companies and the Asia Foundation have provided 10.9 million upskilling opportunities across IPEF partners, of which 4 million opportunities benefited India.
IPEF is also actively involved in the Critical Minerals Dialogue, which focuses on mapping mineral resources, promoting trade within the region, and enhancing technical cooperation for mineral recovery and recycling. These initiatives aim to strengthen the critical minerals supply chain and ensure sustainable mining practices. Another important feature of IPEF is the Tech Council, which facilitates coordination and collaboration on key technologies among member countries. Current cooperation areas include cybersecurity, undersea cables, and artificial intelligence.
