IPEF supply chain pact to increase resilience in Indo Pacific region

Union Minister Piyush Goyal said that the agreement seeks to establish institutional mechanisms to enable the 14 countries to work together on supply chains in critical sectors and key goods

The supply chain agreement, signed by the 14-member grouping IPEF, aims to increase the resilience, efficiency, diversification, and security of supply chains in the Indo-Pacific region, Parliament was informed on Friday.

In a written reply to the Rajya Sabha, Commerce and Industry Minister Piyush Goyal said that the agreement seeks to establish institutional mechanisms to enable the 14 countries to work together on supply chains in critical sectors and key goods.

IPEF partners, including India, signed the Indo-Pacific Economic Framework for Prosperity (IPEF) Agreement Relating to Supply Chain Resilience on November 14, 2023.

The IPEF was launched jointly by the US and other partner countries of the Indo-Pacific region on May 23 in Tokyo. The 14 IPEF partners represent 40 per cent of global GDP and 28 per cent of global goods and services trade.

The framework is structured around four pillars relating to trade, supply chains, clean economy, and fair economy (issues like tax and anti-corruption).

"The IPEF Supply Chain Agreement is a first-of-its-kind plurilateral agreement that aims to increase the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of supply chains in the Indo Pacific region," Goyal said.

He also said that agreement on clean economy is expected to facilitate inward foreign investment with a focus on renewable energy and other environmentally friendly technologies.

Commenting on the supply chain agreement, international trade expert and Hi-Tech Gears Chairman Deep Kapuria said that the most distinctive feature of the pact that it is envisaging the strong role of private sector in building a resilient and efficient supply chain involving the 14 members.

"The text advocates creation of CEO Forum involving private sector leaders under IPEF Supply Chain Council is a strong endorsement of private sector's role in realizing the desired goal of this unique agreement," Kapuria said.