India signs supply chain resilience agreement with IPEF members to reduce reliance on China

With an aim to help reduce dependence on China, and shift production of critical sectors and key goods to member countries, India, the US and 12 other members of the Indo-Pacific Economic Framework For Prosperity (IPEF) grouping have signed a supply chain resilience agreement that would provide benefits such as potential shifting of production centres in critical sectors and mitigating risks of economic disruptions from supply chain shocks.

India and the United States, along with 12 other countries, are recognized as supply chain resilience partners within the IPEF. The list includes Australia, Brunei Darussalam, Fiji, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

This international agreement on supply chain resilience is perceived as a response to the imperative of reducing overdependence on China, especially in the wake of substantial supply disruptions following the impact of the COVID-19 pandemic.

The proposed accord aims to establish a framework that enhances the collective understanding of significant supply chain risks among IPEF partners. Additionally, it seeks to improve crisis coordination and responses to disruptions in the supply chain.

The agreement also focuses on ensuring that both workers and businesses, with a particular emphasis on micro, small and medium-sized enterprises, reap the benefits of resilient, robust, and efficient supply chains.

To achieve this, the partners intend to guarantee the availability of an adequate number of skilled workers in critical sectors and key goods. This involves initiatives such as upskilling and reskilling workers, among other measures.

In a post on microblogging site X, after the signing of the agreement, Union Minister Piyush Goyal who is currently on a four-day visit to the US said that first-of-its-kind international agreement will “fortify and strengthen” global supply chains, and “foster adaptability, stability and sustainability.”

Goyal thanked his US counterpart Gina Raimondo for her leadership and personal commitment to ensuring the “truly historic” moment towards a more resilient future.

Following the launch of IPEF in Tokyo, Japan on May 23 last year and the subsequent release of the IPEF Ministerial Statements on September 9, the partners have worked constructively, including through four rounds of in-person negotiations, several virtual intersessional meetings, and numerous bilateral meetings, according to a US Department of Commerce statement.

Earlier on November 13, Goyal participated in the Investors Round Table organized in collaboration with the US-India Strategic Partnership Forum and Indiaspora.

The event was attended by venture capitalists and entrepreneurs from a wide spectrum of industries in the US, including from the domains of energy, manufacturing, logistics, and technology, among others.

In an interactive session held in San Francisco as part of the first leg of the tour in the US, the Union Minister held wide-ranging discussions with the participants and highlighted the various steps taken by the government of India to improve the ease of doing business. He has so far held various bilateral meetings with his counterparts of various countries.

“…highlighted how the country offers promising opportunities for investors, thanks to the unique combination of our demographic dividend, manufacturing capabilities & conducive business environment,” Goyal posted on X, contending that India is an attractive investment destination for the world.
The Commerce and Industry minster kicked off his US official tour with a visit to the the Tesla Factory Unit in Fremont and interacted with the senior executives of the Tesla group.

In a post on X Goyal said that the US electric car maker is on its way to double its component imports from India.

He said that he is “delighted” to see Indian engineers and finance professionals working in senior positions and contributing to Tesla’s journey to transform mobility.
Tesla CEO Elon Musk had in June this year said that he was planning to visit India next year, adding that he was confident that the electric carmaker will be in India and will do so “as soon as humanly possible.”

With ANI inputs.