India, US and 12 other IPEF members have endorsed a supply chain resilience pact aiming to offer advantages such as the potential relocation of production hubs in vital sectors and reducing the risks associated with economic disturbances caused by supply chain shocks. This agreement was signed during the ministerial gathering of the Indo-Pacific Economic Framework For Prosperity (IPEF) in San Francisco, attended by Commerce and Industry Minister Piyush Goyal.
The agreement aims to assist countries like India in reducing reliance on China. The global supply chain was severely affected by the COVID outbreak due to heavy dependence on China for various products, including pharmaceutical raw materials. Commerce and Industry Minister Piyush Goyal shared on social media platform X, stating that India, along with the US and 12 other IPEF partners, has signed the IPEF Supply Chain Resilience Agreement. This groundbreaking international agreement aims to reinforce global supply chains, promoting adaptability, stability, and sustainability.
Negotiations on this agreement, a key pillar of the IPEF, were concluded by bloc members on May 27 in Detroit. The pact offers various advantages, including diversification of supply chains, increased investments, deeper integration of India into global value chains, support for MSMEs, and the creation of a seamless regional trade environment, facilitating the flow of Indian products. The IPEF, initiated by the US and partner countries in the Indo-Pacific region, is structured around four pillars concerning trade, supply chains, clean economy, and fair economy, addressing issues such as taxation and anti-corruption. India has participated in all pillars except for trade.
Additionally, it is expected that talks on the clean economy and fair economy pillars will also conclude this week. The bloc consists of members such as Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US, and Vietnam. The agreement will come into effect once it is implemented by any of the five member countries.