India, US & 12 other members of IPEF grouping ink supply chain resilience pact

India, the US and 12 other members of the IPEF grouping have signed a supply chain resilience agreement that would provide benefits like potential shifting of production centres in critical sectors and mitigating risks of economic disruptions from supply chain shocks.

The agreement was signed in San Francisco, where Commerce and Industry Minister Piyush Goyal is attending the ministerial meeting of the Indo-Pacific Economic Framework For Prosperity (IPEF).

The agreement would help member countries like India to reduce their dependence on China.

The COVID outbreak severely disrupted the global supply chain, as most countries were dependent on China for various products, like pharma raw materials.

On the social networking platform X, on Wednesday, Goyal said: “India joins the US and 12 other IPEF partners to ink the IPEF Supply Chain Resilience Agreement, a first-of-its-kind international agreement that will fortify and strengthen global supply chains; and foster adaptability, stability and sustainability”.

Members of the bloc concluded the negotiations on this agreement, one of the four pillars of the IPEF, on May 27, this year in Detroit.

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.

The agreement was signed by the minister, along with the ministers from other IPEF partner countries, the commerce ministry said in a statement.

“The Agreement is expected to make IPEF supply chains more resilient, robust, and well-integrated, and contribute towards economic development and progress of the region as a whole,” it said.

Speaking at the event, Goyal emphasized on enhancing collaboration to realise the collective aims of the IPEF, particularly on the need for mobilising affordable financing for a clean economy transition and for enhancing technology cooperation.

He also urged early implementation of the envisaged cooperative work under IPEF, including on bio-fuels alliance suggested by India.

Further, the Ministers from IPEF partner countries also had productive discussions on the “substantial” progress made in clean and fair economy pillars.

On the sidelines of the IPEF ministerial, Goyal held bilateral meetings with Gina Raimondo, United States Secretary of Commerce; Tengku Zafrul Aziz, Minister of International Trade and Industry, Malaysia.

During the interaction with his counterparts from ASEAN countries, the minister suggested an expedited conclusion of the free trade agreement review exercise.

IPEF was launched jointly by the US and other partner countries of the Indo-Pacific region on May 23 last year in Tokyo.

Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US and Vietnam are members of the bloc.

The members are expected to announce the conclusion of talks for the clean economy and fair economy pillars during

this week.