Source: The post is based on the article “India frets over US proposal seeking advance tariff notices at IPEF” published in Business Standard on 9th May 2023
What is the News?
India fears that a proposal by the United States under the “supply chains” pillar of the Indo-Pacific Economic Framework (IPEF) could violate multilateral rules and reduce policy elbowroom.
What is the Indo-Pacific Economic Framework(IPEF)?
IPEF members represent 40% of the global gross domestic product and 28% of the world’s trade.
The IPEF has four pillars: trade, supply chains, clean economy, and fair economy.
– Note: India has yet to take a call on whether to join the trade pillar, though it has joined the other three.
What has been proposed by the US under IPEF?
The US has proposed that all IPEF partner countries will have to provide advance notices on tariff changes and export restrictions.
However, India fears that such an exercise could amount to a violation of the WTO (World Trade Organization) rules as well as a possible loss of policy space to the government. Notifications are usually done only after measures are taken and not before.
Hence, industry inputs have been sought by India to safeguard its interests.