The commerce department has sought the Union Cabinet’s nod for approval of United States-led Indo Pacific Economic Framework’s (IPEF’s) ‘supply-chain’ agreement, people aware of the matter said.
“The process of legal vetting of the supply chain pillar’s text has been completed. The text will be made public in November, along with the text of all the four pillars under IPEF,” one of the persons cited above told Business Standard.
There are four pillars — trade, supply chain resilience, clean economy, and fair economy (tax and anti corruption) — under the economic initiative. As of now, the supply chain is the first pillar to be finalised by the 14 IPEF member nations.
In May, an official statement had mentioned the substantial conclusion of the negotiations of a ‘first-of-its-kind international IPEF Supply Chain Agreement’ at the IPEF Ministerial Meeting in the US.
During the subsequent ministerial meeting earlier this month in South Korea, officials also advanced the legal review of the proposed agreement.
The idea behind the agreement is to increase the ‘resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity’ of supply chains. This can be done through both collaborative activities and individual actions taken by each IPEF member nation.
It is aimed at making supply chains more robust and well-integrated.
It also aims to improve crisis coordination and response to supply-chain disruptions and working together to support the timely delivery of affected goods to member countries during a crisis. It is also eyeing capacity building to increase investment in critical sectors.
The commerce department has also begun an outreach programme to apprise the industry about the proposed supply chain deal so that it can prepare for implementation.
Apart from the US, 13 other members of the IPEF include Australia, Brunei, Fiji, Indonesia, India, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam.