IPEF Supply Chain Agreement Ensures Policy Autonomy for India

In a recent announcement, the Additional Secretary at the Commerce Ministry, Rajesh Agarwal, assured that the Indo-Pacific Economic Framework for Prosperity’s (IPEF) supply chain resilience agreement will not limit India’s ability to impose export restrictions.

Agarwal clarified that the agreement’s mention of ‘unnecessary’ export restrictions is akin to World Trade Organization (WTO) provisions, emphasizing that India’s policy space remains intact. Importantly, the agreement allows India to exercise its rights to adjust tariffs and export policies as needed for food security or other national requirements, without prior notification to IPEF members.

This clarification assumes significance given India’s historical use of export measures for food security and price control, particularly during election periods. “Under the supply chain agreement, there is nothing where in our policy space to exercise our rights of change in tariffs or change in export policy…whatever is necessary for the country’s food security or any other requirement of the country also, that policy space remains with us,” Agarwal said

Launched in May last year by the United States and Indo-Pacific partner nations, IPEF aims to counter China’s trade influence. The framework encompasses four pillars, including trade, supply chains, clean economy, and fair economy, with India participating in all aspects except trade.

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