India, Australia, and Japan have started the discussions for the launch of a trilateral Supply Chain Resilience Initiative (SCRI) in order to reduce the dependency on China. The initiative which was first proposed by Japan might be executed.
The officials have been working on the dates to hold the first meeting of the commerce and trade ministers of the three countries. Earlier, Japan through its Ministry of Economy, Trade, and Industry had approached India and had pressed on the urgency of taking the initiative forward.
In the light of China’s aggressive moves in the Line of Actual Control in Ladakh, the Indian government has decided to consider the proposal quite seriously. As per the sources, Tokyo was in favour of launching SCRI by November 2020.
What is the Objective?
It can be assumed that the objective of the Japanese proposal is two-fold, one is to attract foreign direct investment to turn the Indo-Pacific into an ‘economic powerhouse’ and second to build a mutually complementary relationship between the partner countries.
The idea has also been to throw open the initiative to the ASEAN (Association of Southeast Asian Nations) after India-Japan-Australia builds an understanding of the matter.
The objective of the countries will be to work out a plan to build on the existential supply chain network. Japan and India, for example, have an India-Japan competitiveness partnership dealing with locating the Japanese companies in India.
About Supply Chain Resilience Initiative:
Supply Chain Resilience Initiative (SCRI) is a direct response to the individual economies and companies who are concerned about the Chinese political behavior and the disruption which may lead to supply chains.
The purpose of creating the supply chain will be to improve its resilience across the Indo-Pacific, which through such an effort will be able to develop a sound economic profile to its security logic.
India, Japan, Australia plans for China free supply chain:
Being one of the key themes of PM Modi’s Independence Day Speech on August 15, 2020, where he mentioned that businesses have now started viewing India as a possible ‘hub for supply chains’, with this proposal, the government appears to have taken the call at the highest level for becoming the part of the global supply chain and emerging as an alternative to China.
In Japan, Prime Minister Shinzo Abe, following the pandemic, has already instituted a $2 billion fund which will help Japanese companies to shift back from China, countering its dominance in the supply chains.
While the US and Australia, amid the growing transparency and security concerns, have also entered into an ambitious agreement for the creation of what’s being called a ‘China free’ supply chain for the rare earth materials.
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