New Indo-Pacific Pact Enhances Global Supply Chain Resilience

A Supply Chain Council (SCC) has been inaugurated under the Indo-Pacific Economic Framework for Prosperity to reinforce supply chain resilience. The U.S. chairs the council, with India as Vice-Chair. The initiative focuses on critical sectors like semiconductors and healthcare, involving 14 countries representing 40% of global GDP.

In a strategic move aimed at boosting supply chain resilience, the newly formed Supply Chain Council (SCC) has been established under the Supply Chain Resilience Agreement, which is integral to the Indo-Pacific Economic Framework for Prosperity (IPEF). The United States has taken the helm as Chair, while India has been appointed as Vice-Chair, in a testament to their growing economic partnership, confirmed by the Ministry of Commerce and Industry.

Initially signed in November 2023, the agreement will take effect on February 24, 2024, and aims to strengthen supply chain stability in sectors crucial to national security, economic stability, and public health. With 14 member countries involved, the IPEF represents about 40% of the global GDP and 28% of world trade, highlighting its significant influence on global economic affairs.

The SCC's first meeting took place in Washington in September 2024, setting the stage for Action Plan Teams to focus on key areas such as semiconductors, critical minerals, and chemicals. India has offered to spearhead efforts in the healthcare and pharmaceutical domains, showcasing its resolve to mitigate global supply chain challenges.

Further, two sub-committees were created within the SCC concentrating on logistics and data analytics to improve operational efficiency and decision-making. India also engaged in the inaugural Crisis Response Network meeting in September 2024, featuring a tabletop exercise meant to prepare countries for hypothetical supply chain disruptions.

This exercise is designed to enhance the countries' reaction times and coordination during actual economic and logistics crises. Union Minister of State for Commerce and Industry, Jitin Prasada, reported to the Lok Sabha about India's signing of two Memoranda of Understanding (MoUs) with the U.S. over the last two years, emphasizing semiconductors and critical minerals for bolstering supply chain resilience in upcoming industries.

Moreover, Article 6.10 of the Agreement highlights the crucial role of the private sector in enhancing supply chain resilience, efficiency, and sustainability. Collaborative initiatives with industry leaders, academic circles, and experts are active in India, aiming to identify critical sectors and essential goods for strengthened collaboration with IPEF partners. (ANI)

(With inputs from agencies.)