 "Piyush Goyal with the US President Joe Biden")
Government officials declared on Tuesday that India will not need to amend its domestic laws, as there are no “hard, binding obligations” in the recently concluded supply-chain resilience agreement under the US-driven Indo-Pacific Economic Framework for Prosperity (IPEF).
This development provides India with the necessary policy flexibility to make decisions aligned with its domestic needs. Importantly, it will not impact the country’s rights to impose export restrictions or adjust Customs duties on various items, including agricultural products crucial for domestic food security.
The supply-chain resilience agreement within IPEF was signed by all 14 nations in the plurilateral economic cooperation arrangement last week in San Francisco. The announcement also included the substantial conclusion of negotiations for clean economy and fair economy agreements under the grouping.
Rajesh Agarwal, additional secretary in the commerce department, emphasised that under the supply-chain agreement, India retains the policy space to exercise its rights to modify tariffs or export policies without the obligation to provide advance information to IPEF member nations.
Agarwal clarified that the mention of ‘unnecessary’ export restrictions in the agreement is comparable to provisions in the World Trade Organization and does not extend beyond that.
The term ‘unnecessary’ export restrictions implies imposing export curbs without proper justification.
“There is no policy space issue concerning export restrictions... We have not constrained our policy space in that regard,” added Agarwal.
The supply-chain resilience agreement focuses on fostering cooperation among IPEF nations in the event of stress or crisis in specific products. Members collaborate to mitigate stress, enhance the robustness and integration of supply chains, and improve crisis coordination and response to supply-chain disruptions.
The agreement also aims at supporting the timely delivery of affected goods to member countries during a crisis and building capacity to increase investment in critical sectors.
Apart from India and the US, the 12 other members of the IPEF include Australia, Brunei, Fiji, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam.
IPEF aims to create a more conducive environment for enhancing trade and investment linkages, developing resilient supply chains, and promoting sustainable development through its four pillars: trade, supply-chain resilience, clean economy, and fair economy.
