US to help India with chips’ standards, manufacturing

The move is part of the Indo-Pacific Economic Framework (IPEF) agreement on supply chain, aimed at cutting reliance on China and fixing supply chain gaps.

Aligning Indian standards with globally accepted ones for products is crucial amid the ongoing supply chain realignment caused by the Russia-Ukraine war and covid-19 pandemic.

Moreover, Indian products that meet global standards will find greater acceptance once free trade deals that are under negotiations are sealed, experts said.

Officials said the commerce ministry is set to begin inter-ministerial and industry stakeholder talks on preparing and implementing the agreement. The commerce ministry had earlier said that negotiations on supply chains were substantially concluded at a recent IPEF ministerial meeting.

Anil Jauhri, former CEO, National Accreditation Board for Certification Bodies (NABCB) said many Indian regulations fall short of international standards.

“It needs to be understood that both the WTO Agreements on Technical Barriers to Trade (TBT), which largely applies to industrial goods, and Sanitary and Phytosanitary Measures (SPS), which applies to food, plant and animal health, encourage members to base their regulations on international standards. These agreements also provide for adopting standards stricter than international standards based on scientific justification which many developed economies have invoked and which becomes another challenge for the developing economies," Jauhri added.

Under the supply chains section, IPEF partner-countries are seeking to make supply chains more resilient, robust, and well-integrated through crisis response measures; mitigate disruptions to ensure business continuity; and improve logistics and connectivity.

The agreement also includes promoting investments particularly in critical sectors and production of key goods; worker-role enhancement through upskilling and reskilling; and increasing “comparability" of skill credential frameworks across IPEF.

The framework is structured around four pillars: trade, supply chain, clean economy and fair economy. India has joined Pillars II to IV while it has an observer status in Pillar-I.

“A call on the trade pillar has not been taken yet and the text has also not been finalized," an official aware of the development said.

PTI had reported that as many as 32 civil society organizations have urged the government not to join in the talks of the trade pillar on the grounds it can impact India’s policy space to develop critical economic sectors.

They also claimed that India has joined IPEF talks without due consideration and parliamentary scrutiny of IPEF’s implications for India’s economic and development policy space.

The proposed agreement would establish an emergency communication channel for IPEF partners to seek support during a supply chain disruption and facilitate information sharing during a crisis to minimize the impact on their economies.

IPEF partner countries are Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and the US. It seeks to strengthen economic engagement among partner countries to advance growth, peace and prosperity in the region.

Queries sent to the commerce ministry remained unanswered.