India Signs Agreement with IPEF Members

Context:

• According to the Ministry of Commerce, India has signed a supply chain resilience agreement with the US and 12 other Indo-Pacific Economic Framework for Prosperity (IPEF) members. 

Agreement with IPEF Members

• IPEF Supply Chain Resilience Agreement: IPEF partners seek to provide a framework to build their collective understanding of significant supply chain risks, improve crisis coordination and response to supply chain disruptions, facilitate cooperation, mobilize investments, promote regulatory transparency in sectors and goods critical to national security and public health and safety. 
  • The member countries would identify the critical sectors.
• Potential Benefits of the Agreement: An attempt by  Indo-Pacific Economic Framework for Prosperity member nations to decrease their dependency on China and mitigate risks of economic disruptions from supply chain shocks.
  • For instance, it aims to prevent future supply chain disruptions, as witnessed during the COVID outbreak, as most countries depended on China for various products.
• Other benefits: These include shifting production centers in critical sectors, Supply chain diversification, mobilization of investments, deeper integration of India in global value chains, support to MSMEs, and creation of a seamless regional trade ecosystem.
•  Indo-Pacific Economic Framework for Prosperity Supply Chain Council: It would be set up to implement and monitor the agreement. The council will meet every year and all the members would have to report on the agreement’s implementation progress.
  • The block would also set up The  Indo-Pacific Economic Framework for Prosperity Supply Chain Crisis Response Network and The IPEF Labour Rights Advisory Board.

What is IPEF?

• In May 2022, the United States launched the IPEF and the 14 IPEF partners represent 40% of global GDP and 28% of global goods and services trade.
• Members:  14-Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam, and United States.
• The framework is structured around four pillars relating to trade, supply chains, clean economy, and fair economy (issues such as tax and anti-corruption). 
• India has joined all the pillars except the trade.
• Aims and Objectives: 
  • This framework will advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in these economies. 
  • IPEF partners aim to contribute to cooperation, stability, prosperity, development, and peace within the region.  

• • To offer tangible benefits that fuel economic activity and investment, promote sustainable and inclusive economic growth, and benefit regional workers and consumers.  

News Source: Mint

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