In a strategic move to counter territorial aggressor’s dominance of supply chain in the Indo-Pacific region, trade ministers of India, Japan and Australia formally launched the Supply Chain Resilience Initiative (SCRI) on Tuesday. Commerce and industry minister Piyush Goyal, Australia’s minister for trade, tourism and investment Dan Tehan, and Japan’s minister for economy, trade and industry Kajiyama Hiroshi were present in the ministerial videoconference.
In a joint statement issued by the three ministers, it has been stated that “The SCRI aims to create a virtuous cycle of enhancing supply chain resilience with a view to eventually attaining strong, sustainable, balanced and inclusive growth in the region. The ministers consented that expansion of the SCRI may be considered based on consensus, if needed, in due course,”.
It is to be noted that the SCRI was proposed by India, Japan and Australia last year as a trilateral push with the intent of reducing the dependence on China and was aimed at the creation of a free and transparent trade and investment environment.
According to the reports, the cumulative GDP of the three countries, in 2019, was $9.3 trillion. While, the cumulative merchandise goods and services trade stood at $2.7 trillion and $900 billion, respectively.
The SCRI members had first met in September to explore and discuss the possibility of a supply chain initiative in the Indo-Pacific region.
According to the joint statement issued by the members, it has been stated that “Based on the high-level consultations among Australia, India and Japan since September, the ministers noted the importance of risk management and continuity plans in order to avoid supply chain disruptions and affirmed their commitment to strengthen resilient supply chains. Possible policy measures may include: (i) supporting the enhanced utilization of digital technology; and (ii) supporting trade and investment diversification,”.
According to the plan of action of the SCRI, initially, the initiative will focus on sharing best strategic practices on supply chain resilience and will subsequently hold investment promotion events and buyer-seller matching events to provide opportunities for stakeholders to explore the possibility of diversification of their supply chains.
Reportedly, the ministers have decided to convene at least once a year to provide guidance in the work of implementation of the SCRI as well as to consult on how to develop the initiative.
Given the unprecedent times, the ministers acknowledged that the covid-19 pandemic was having an adverse impact on economies in terms of lives lost, livelihoods and economies affected. The ministers also acknowledged that the ominous pandemic has effectively revealed supply chain vulnerabilities globally and in the region.
The statement further stated that “The ministers noted that some supply chains have been left vulnerable due to a range of factors,”.