Commerce and Industry Minister Piyush Goyal joined representatives from India, the US, and 12 other IPEF members in signing a supply chain resilience pact during the Indo-Pacific Economic Framework For Prosperity (IPEF) ministerial meeting in San Francisco. The pact aims to provide benefits such as potential production hub relocation in critical sectors and minimizing economic risks linked to supply chain disruptions.
The aim of the agreement is to help countries like India lessen their dependence on China, which was evident during the COVID outbreak when the global supply chain was significantly disrupted due to heavy reliance on China for various products, including pharmaceutical raw materials. Commerce and Industry Minister Piyush Goyal announced on social media platform X that India, alongside the US and 12 other IPEF partners, has signed the IPEF Supply Chain Resilience Agreement. This significant international agreement seeks to strengthen global supply chains, fostering adaptability, stability, and sustainability.
Negotiations on this pivotal agreement within the IPEF concluded on May 27 in Detroit. The pact presents several benefits, such as diversification of supply chains, increased investments, deeper integration of India into global value chains, support for MSMEs, and the establishment of a smooth regional trade environment, facilitating the flow of Indian products. The IPEF, initiated by the US and partner countries in the Indo-Pacific region, is based on four pillars encompassing trade, supply chains, clean economy, and fair economy, addressing concerns such as taxation and anti-corruption. India has participated in all pillars except trade.
Furthermore, discussions regarding the clean economy and fair economy pillars are anticipated to wrap up this week. Member countries of the bloc include Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the US, and Vietnam. The agreement will be activated once implemented by any of the five member nations.