New Delhi, Nov 15 (KNN) India, alongside the United States and 12 other members of the IPEF grouping, has inked a crucial supply chain resilience agreement.

The primary objective is to proactively manage and mitigate the risks of economic disruptions that may arise from unexpected shocks to the supply chain.

The supply chain resilience agreement holds the potential to bring about significant benefits, such as the flexibility to shift production centers in critical sectors. 

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).

This agreement is poised to assist member nations, including India, in lessening their reliance on China. The global supply chain faced significant disruptions during the COVID outbreak, highlighting the vulnerability caused by widespread dependence on China for diverse products such as pharmaceutical raw materials.

On the social networking platform X, on Wednesday, Goyal said, “India joins 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".

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.

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, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US and Vietnam are members of the bloc.

According to an official, the commerce ministry is expected to hold an outreach programme pan India for domestic industry, explaining the benefits of the agreement and how to utilise that.

Under the 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, mobilise investments, promote regulatory transparency in sectors and goods critical to national security and public health and safety.

To implement and monitor the agreement, the bloc would set up The IPEF Supply Chain Council.The council will meet every year and all the members would have to report on the progress of implementation of the agreement.

(KNN Bureau)