Indo-Pacific Economic Framework for Prosperity (IPEF) Meeting

Syllabus: GS2/ International relations

Context

• The Indian delegation attended the first in-Person meeting of the Supply Chain Council of the Indo-Pacific Economic Forum (IPEF) for Prosperity held in Washington DC followed by the Crisis Response Network meeting.

Key highlights

• The Council established three Action Plan Teams pertaining to three sectors, namely Semiconductor; Critical Minerals with a focus on batteries; and Chemicals.
• Also two sub-committees were established for cross cutting issues.
  • The Sub-committee on Logistics and Movement of Goods would facilitate efforts to improve logistics services and logistics infrastructure in the IPEF region.
  • The Sub-committee on Data and Analytics would build upon the work already undertaken by IPEF countries to exchange analytical approaches to supply chain exposures and risk.

Indo-Pacific Economic Framework for Prosperity (IPEF)

• IPEF was launched in 2022 at Tokyo, Japan, comprising 14 countries – Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and USA. 
• The IPEF seeks to strengthen economic engagement and cooperation among partner countries with the goal of advancing growth, economic stability and prosperity in the region.
• The IPEF block together, accounts for 40 percent of the world’s economic output and 28 percent of trade.
• The framework is structured around four pillars relating to;
  • Trade (Pillar I); 
  • Supply Chain Resilience (Pillar II); 
  • Clean Economy (Pillar III); and 
  • Fair Economy (Pillar IV). 

Supply Chain Resilience Agreement 

• Supply Chain Resilience Agreement (Pillar II Agreement) under IPEF came into effect in 2024 to strengthen supply chains through economic engagement among partner countries.
• Under this Agreement, three institutional bodies have been created namely,
  • Supply Chain Council (SCC), 
  • Crisis Response Network (CRN) and 
  • The Labour Rights Advisory Board (LRAB).

Way Ahead

• The paradigm shift due to growth in technological advancements and demand for clean energy solutions has brought to the forefront the critical importance of securing a reliable supply of critical minerals.
• One of the key challenges lies in the supply risk on account of its concentration and global market dynamics and, which can result in price volatility and uncertainty leading to supply disruptions.
• Here India has an opportunity to consider members as alternative sources for its raw materials requirements. This could reduce India’s overdependence on China for these inputs. 

Source: PIB