IPEF agreement: India has played its cards deftly
In a world of rapidly changing geopolitical realities with growing uncertainty and instability, international trade is striving to cope with emerging challenges. After abrupt supply-chain disruptions during the pandemic, revealing global overdependence on China for trade as well as investment, national governments and corporates worldwide sought to diversify both and establish alternative supply chains.
At a recent meeting at San Francisco in the US, India, led by Union commerce minister Piyush Goyal, signed the Supply Chain Resilience Agreement of the Indo-Pacific Economic Framework for Prosperity (IPEF), which should help the country leverage its growing economic strength to participate in global value chain (GVC) networks. It is expected to strengthen India’s position as a reliable partner in the creation of resilient supply chains in the region and help mitigate disruption risks at times of crisis.
Supply stability is a major cause of concern for global trade ,especially for fast-rising economies like India. Given rising conflicts across the world, from Ukraine-Russia and US-China-Taiwan to Israel-Palestine and many more in the Middle-East, with their geopolitical dynamics gaining complexity, India needs to secure its interests and has been playing its cards deftly.
Signing the IPEF supply chain agreement is another example of it. An earlier one is how India’s non-alignment on the Ukraine-Russia war let it import petroleum from Russia at discounted prices, saving billions of dollars, despite Western displeasure, while maintaining harmonious relations with the West.
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