The negotiations in the Indo-Pacific Economic Framework for Prosperity (IPEF) have been conducted “in secrecy” with limited public inputs and concerns emerge on whether India has retained enough flexibility and policy space to meet its economic goals, according to trade policy think-tank Global Trade Research Initiative (GTRI)
In the Supply Chain Pillar, a major issue is whether the agreement might restrict members from trading critical materials, particularly with China.
“It’s hoped that India has negotiated enough flexibility to avoid strict clauses, such as 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 said.
In the Clean Economy Pillar, the hope is that India has 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.
Additionally, there is concern that India might have committed to minimum standards for clean energy technologies in the domestic market, which could force reliance on imports and negatively impact local producers.
India needs to ensure it can support its own industries during the clean energy transition, aGTRI said.
India’s preferential treatment for domestic suppliers in government procurement is a key policy tool for supporting local businesses. “Hope India has not agreed to drop this preference as it could severely disadvantage local manufacturers in favour of foreign competition, potentially harming domestic economic growth,” GTRI’s co-founder Ajay Srivastava said.
As India formalises it’s commitments under IPEF, it is crucial that the government provides detailed briefings to industry stakeholders about the agreements signed.
“Sharing the legal text alone will not be enough, as businesses require clear insights into how these commitments will impact sectors, compliance needs, and long-term policy goals,” Srivastava said.
On the Fair Economy Pillar, India already implements anti-corruption measures, but new obligations could lead to international scrutiny and make domestic actions legally enforceable. This could complicate governance. Similarly, commitments related to the effective administration of tax policy might curtail the ability to raise tax revenue.
Most standards and regulations being discussed in IPEF are already in place in the U.S. and OECD countries. If India adopts these standards without adequate preparation, it risks being pushed into compliance not only in IPEF but also in future trade deals with the EU, UK, and others. India must ensure that it can develop domestic standards quickly to avoid being at a disadvantage in international negotiations.