The Indo-Pacific Economic Framework for Prosperity (IPEF) is an economic initiative, not a traditional treaty or institution, launched by U.S. President Joe Biden on May 23, 2022, with 14 founding member nations, including India. It originated as the Biden administration's response to the political difficulty of re-entering the Trans-Pacific Partnership (TPP) after the U.S. withdrawal in 2017, aiming to re-engage the region economically without requiring Congress to ratify market-access concessions. The IPEF is designed to strengthen economic ties and address challenges in the region, but notably excludes provisions for tariff reductions or new market access, which differentiates it from conventional free trade agreements like the Regional Comprehensive Economic Partnership (RCEP) or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The framework operates through four distinct pillars, allowing member countries to opt into individual pillars selectively. These pillars are: Pillar I (Trade), covering digital trade, labor, and environmental standards; Pillar II (Supply Chains); Pillar III (Clean Economy), focusing on clean energy and decarbonization; and Pillar IV (Fair Economy), which targets anti-corruption and tax measures. India joined Pillars II, III, and IV, but opted out of the Trade pillar. The IPEF Supply Chain Agreement under Pillar II was the first to be substantially concluded in May 2023 and entered into force on February 24, 2024, establishing a Crisis Response Network and a Supply Chain Council. Negotiations for Pillars III and IV were substantially concluded in November 2023. The IPEF is a key component of the U.S. strategy to bolster its economic leadership in the Indo-Pacific region.