News Brief
IPEF: India, US, And Other Indo-Pacific Countries Unite To Reduce Dependence On China
US President Joe Biden, Japan’s Prime Minister Fumio Kishida, and India’s Prime Minister Narendra Modi attend the Indo-Pacific Economic Framework for Prosperity with other regional leaders via video link.
India, the United States, and 12 other members of the Indo-Pacific Economic Framework (IPEF) have officially inked a historic supply chain resilience agreement aimed at diminishing reliance on China.
The accord, signed in San Francisco during the IPEF ministerial meeting, seeks to shift production of critical sectors and essential goods among member countries.
The IPEF comprises 14 nations, including India, Australia, the US, Japan, Fiji, South Korea, New Zealand, Singapore, and Thailand, collectively representing 40 per cent of the global gross domestic product and 28 per cent of global trade in goods and services.
As reported by The Economic Times, Commerce and Industry Minister Piyush Goyal, attending the meeting in San Francisco, took to social media to announce the signing, stating, "India joins US and 12 other Indo-Pacific Economic Framework for Prosperity partners to ink the #IPEF Supply Chain Resilience Agreement, a first-of-its-kind international agreement that will fortify and strengthen global supply chains, foster adaptability, stability and sustainability."
The pact is designed to enhance the resilience and integration of IPEF supply chains, contributing to the economic development of the entire region.
The agreement will become effective after implementation by any five member countries.
Minister Goyal underscored the need for increased collaboration to achieve the collective goals of IPEF, emphasising affordable financing for transitioning to a clean economy and enhanced technology cooperation.
Additional benefits of the pact include supply chain diversification, increased investments, deeper integration of India into global value chains, support for micro, small, and medium enterprises (MSMEs), and the creation of a seamless regional trade ecosystem facilitating the flow of Indian products.
Structured around four pillars concerning trade, supply chains, clean economy, and fair economy, India has joined all pillars except for trade.
3The supply chain agreement envisions three new bodies – the supply chain council, the supply chain crisis response network, and the IPEF labor rights advisory board – to facilitate cooperation among partners.
The IPEF labor rights advisory board, comprising government, worker, and employer representatives, will support the promotion of labor rights, sustainable trade and investment, and opportunities for investment in businesses that respect labor rights.
The trade pillar is expected to take more time to conclude, with announcements regarding the fair economy and clean economy pillars anticipated in the coming week.
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