Economy: Supply Chain Management ,Important International Institutions, agencies and fora – their Structure, Mandate
News: India elected as Vice-Chair of the Supply Chain Council
India has been recently elected as the Vice-Chair of the Supply Chain Council (SCC), one of the three key bodies established under the Indo-Pacific Economic Framework (IPEF). Discuss the role of supply chain council and also how it is strategically importance for India and the Region.
With its goal of strengthening supply chain resilience through increased member nation cooperation, this election is a significant step forward for both India and the Indo-Pacific region as a whole. The objective of the 14-member IPEF bloc, which is composed of countries like the US, Japan, Australia, and India, is to promote economic growth and stability in the region by working together on important issues like trade, labor rights, and supply chains.
Three bodies have been established by the IPEF to address various facets of economic cooperation.
The Labor Rights Advisory Board (LRAB)
- It seeks to improve worker development and labor rights throughout the supply chains in the region.
- In order to guarantee the preservation of fair labor practices and consequently contribute to a sustainable and equitable economic environment, this board brings together members from labor unions, employers, and governments. This board is chaired by the United States, while the vice-chair is Fiji.
The Crisis Response Network (CRN)
- It gives its members a forum to plan joint emergency responses in the event of a supply chain breakdown.
- This network is intended to function as a crisis management tool and early warning system for impending dangers that may jeopardize the economic stability of the region.
- Japan and Korea have been chosen to serve as this network’s vice-chair and chair, respectively.
Supply Chain Council
- One of the main pillars of the IPEF is the Supply Chain Council, which is dedicated to tackling supply chain vulnerabilities and building resilience throughout the area.
- The council is responsible for pursuing focused, practical projects that strengthen supply chains for industries that are thought to be essential to public health, economic growth, and national security.
- This project is especially important in view of the disruptions to the global supply chain that have brought attention to the necessity for concerted international action to maintain economic stability.
Significance of India and the region:
- The elevation of India to the Vice-Chair position in the SCC highlights the country’s increasing sway and prominence in regional economic matters.
- India is able to actively participate in the development of policies that would lessen supply chain vulnerabilities because to its role, especially in vital industries like manufacturing, technology, and medicines.
- India and its IPEF partners want to create more adaptable and robust supply chains that may survive future upheavals by concentrating on diversifying supply sources and fostering regional cooperation.
- The election is also consistent with India’s overall economic policy, which aims to increase its participation in international supply chains, diversify its trade partnerships, and lessen its reliance on a single nation for vital imports.
- Disruptions in global supply networks can have far-reaching effects, affecting everything from manufacturing to food security, as the world has recently seen. Thus, the SCC’s efforts will be essential to reducing these risks and guaranteeing the region’s continued economic security.
Implications of IPEF:
- An alliance of 14 nations, including Australia, Brunei, Fiji, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam, and the United States, the IPEF was introduced in Tokyo on May 23, 2022.
- With the ultimate objective of promoting growth, economic stability, and prosperity, the framework is intended to strengthen economic participation and cooperation in the Indo-Pacific area.
- The IPEF is structured around four pillars:
- Trade (Pillar I)
- Supply Chain Resilience (Pillar II)
- Clean Economy (Pillar III)
- Fair Economy (Pillar IV)
India has made the decision to remain an observer in Pillar I, which is associated with trade, but to actively engage in Pillars II, III, and IV. India’s strategic aims and its dedication to tackling the most urgent economic issues in the area are reflected in this chosen involvement.
Reference: https://pib.gov.in/PressReleasePage.aspx?PRID=2039370