Lok Sabha Question No. 1182 (UNSTARRED), answered on 2024-12-03
Subject: Supply Chain Resilience Agreement
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Baijayant Panda

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 1182 ANSWERED ON 03/12/2024

## SUPPLY CHAIN RESILIENCE AGREEMENT

## 1182.  SHRI BAIJAYANT PANDA:

Will the Minister of COMMERCE & INDUSTRY ( वाणिज्य एवं उद्योग मं त्री ) be pleased to state:

(a) the details of India's role in the Indo-Pacific Economic Framework for Prosperity (IPEF), particularly in the Supply Chain Resilience Agreement;

(b) the expected benefits of this agreement for Indian manufacturers and exporters; and

(c) the  steps  being  taken  by  the  Government  to  enhance  India's  supply  chain  resilience  in critical sectors such as electronics, automotive and pharmaceuticals?

## ANSWER

## वाणिज्य और उद्योग मंत्रालय में राज्य मंत्री (श्री णिणिन प्रसाद)

## THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI JITIN PRASADA)

(a) India has signed the Supply Chain Resilience Agreement (Pillar-II) in November 2023 under  the  Indo-Pacific  Economic  Framework  for  Prosperity  (IPEF),  a  14  member  plurilateral grouping  in  the  region.  The  Agreement  seeks  to  strengthen  supply  chain  crucial  for  national security and economic stability. The Agreement came into force on February 24, 2024.  Under the Agreement, a Supply Chain Council (SCC) has been set up with the US as Chair and India as Vice-Chair.

(b) & (c) IPEF  partners  represent  approximately  40  percent  of  the  global  GDP,  and  28 percent 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 economies of the Parties and improve supply chain resilience in critical sectors. Article  6.10  of  the  Agreement  also  encourages  private  sector  engagement  to  improve  the resilience, efficiency, productivity, sustainability inclusivity etc. of IPEF supply chains.

Article 10 of the Agreement provides for identification of critical sectors or key goods by the IPEF partners towards ensuring national security, public health and safety, or prevention of significant or widespread economic disruptions. India is closely working with stakeholders such as  industry,  academia,  experts,  etc.  for  identification  of  critical  sectors  or  key  goods  for

collaboration with IPEF partners for India's supply chain resiliency. In September 2024, 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. In the meeting, India has expressed its  willingness to lead a proposed action plan team on the healthcare/pharma sector. Two SubCommittees focusing on Logistics and Movement of Goods, and Data and Analytics have also been  formed.  India  participated  in  the  first  meeting  of  Crisis  Response  Network  held  in Washington  DC  in  September  2024,  which  included  a  tabletop  exercise  aimed  at  shortening response time in actual crisis situations by simulating scenarios where supply chain disruptions are highly likely.

Further,  two  Memorandum  of  Understanding  (MoUs)  have  also  been  signed  by Department of Commerce with the USA in last two years: one in the sector of semiconductors and  other  in  the  sector  of  critical  minerals  both  of  which  are  a  strong  step  towards  securing India's Supply Chain resilience in these sectors.

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