In News
America plans to pursue a ‘friendshoring’ approach to diversify away from countries that present geopolitical and security risks to the supply chain and deepen economic integration with trusted trading partners like India,
About ‘Friendshoring’
- The term, a cousin of “reshoring” and “onshoring” and a sibling to “nearshoring,” is shorthand for the practice of relocating supply chains to countries where the risk of disruption from political chaos is low.
- The approach involves partnering with developing countries to grow local industries and connect them to the global supply chain.
- Objectives: To reduce risks to the supply chains on which the US and its partners rely by not allowing countries to use their dominance in key raw materials, technologies, and products to exert geopolitical advantage.
- Indian Context: For India to benefit more from friendshoring, it must participate more deeply in regional blocs like the US-led Indo-Pacific Economic Framework (IPEF)
- Although India joined the grouping, it has for now opted out of the trade pillar, which is one of the four pillars of this bloc that aims to enhance supply chain resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness.
Source: IE
