India ,US and other IPEF member ink supply chain resilience pact

Subject: IR

Section: International Groupings

Context: India, US, 12 other IPEF members sign supply chain resilience agreement

More about the news:

India, the US, and 12 other Indo-Pacific Economic Framework (IPEF) members have signed a supply chain resilience agreement to reduce dependence on China and shift manufacturing of crucial goods within member nations.
The 14 countries, constituting 40% of global GDP and a third of global trade, aim to fortify global supply chains, enhance adaptability, stability, and sustainability.
The IPEF focuses on four pillars: trade, supply chains, clean economy, and fair economy.
India has joined all pillars except the trade pillar.
The agreement is expected to make IPEF supply chains more resilient and well-integrated, contributing to regional economic development.
The pact will also seek to improve crisis coordination and response to supply chain disruptions and work together to support the timely delivery of affected goods during a crisis
Three new IPEF Supply Chain bodies could be set up to facilitate cooperation among the partners. The bodies will be – the supply chain council; the supply chain crisis response network, and the IPEF Labor Rights Advisory Board.
The other benefits of the pact include supply chain diversification, mobilisation of investments, deeper integration of India in global value chains, support to MSMEs and creation of a seamless regional trade ecosystem, which would facilitate the flow of Indian products.

Some facts about Indo-Pacific Economic Framework for Prosperity (IPEF)

It is a regional initiative aimed at fostering cooperation and economic integration in the Indo-Pacific region, launched by United States President Joe Biden on May 23, 2022.
The framework seeks to promote resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness among member economies,
IPEF seeks to complement and build on existing regional architecture while supporting the global rules-based trading system.
The framework includes 14 partner countries: Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the United States, and Vietnam.
The economic framework is built upon four pillars:
- Trade
- Supply chain resilience
- Clean Energy, Decarbonization, and Infrastructure
- Taxes and anti-corruption measures
While not constituting a Free Trade Agreement (FTA), the IPEF allows members to negotiate specific aspects of interest. India has actively engaged in the IPEF but has chosen not to participate in the trade pillar, citing misalignment with its trade policies on most promoted issues.