India Signs Supply Chain Resilience Agreement Under IPEF
India has signed the Supply Chain Resilience Agreement (Pillar-II) under the Indo-Pacific Economic Framework for Prosperity (IPEF), a 14-member plurilateral grouping in the region. This agreement aims to strengthen supply chains crucial for national security and economic stability.
The agreement came into force on February 24, 2024, establishing a Supply Chain Council (SCC) with the US as Chair and India as Vice-Chair. IPEF partners represent approximately 40% of the global GDP and 28% of global goods and services trade, making it crucial for international trade dynamics.
The agreement seeks to strengthen economic, commercial, and trade relationships among enterprises in the participating economies and improve supply chain resilience in critical sectors. It encourages private sector engagement to improve the resilience, efficiency, productivity, sustainability, and inclusivity of IPEF supply chains.
India is actively working with stakeholders to identify critical sectors or key goods for collaboration with IPEF partners to enhance its supply chain resilience. The first SCC meeting in Washington led to the formation of Action Plan Teams focusing on key areas such as Semiconductors, Critical Minerals, and Chemicals. India has expressed its willingness to lead a proposed action plan team on the healthcare/pharma sector.
Sub-Committees focusing on Logistics and Movement of Goods, and Data and Analytics have also been formed. India participated in the first meeting of the Crisis Response Network, which included a tabletop exercise aimed at shortening response time in actual crisis situations by simulating scenarios where supply chain disruptions are highly likely.
one in the sector of semiconductors and the other in the sector of critical minerals. These MoUs are a significant step towards securing India's Supply Chain resilience in these sectors.