The Trade Ministers of India, Japan and Australia formally launched the Supply Chain Resilience Initiative (SCRI) in a Trilateral Ministerial Meeting held virtually on 27 April 2021.
SCRI was proposed by India, Japan and Australia last year in September as a trilateral initiative intended to build a mutually complementary relationship among partner countries. The prime objective of this alliance is to develop a supply chain by attracting foreign direct investment and turn the Indo-Pacific into an “economic powerhouse”.
What is Supply Chain Resilience?
The approach of Supply Chain Resilience when understood in terms of international trade, implies that a country is able to diversify its supply risk across a clutch of supplying nations instead of being dependent on just one or a select few.
The SCRI is an initiative spearheaded by the trio India, Japan and Australia which represents the QUAD Grouping including the US. It is aimed at the creation of a free and transparent trade and investment environment.
The Roadmap for SCRI
In a virtual meeting, Union Minister of Commerce and Industry Piyush Goyal, Australia’s Trade Minister Dan Tehan and Japan’s Trade and Industry Minister Kajiyama Hiroshi acknowledged that the COVID-19 pandemic is putting an unprecedented impact in terms of lives lost, livelihoods and economies affected. The pandemic has revealed how vulnerable the global supply chain is, in the present international market and in the Indo-Pacific region due to a range of factors.
A Joint Statement released by the three ministers maps the immediate plan of action wherein they have instructed the functioning officials to implement some of the initial projects of the SCRI starting with sharing of best practices on supply chain resilience.
The second step will be organising investment promotion and buyer-seller matching events to create opportunities for stakeholders and explore the possibility of diversification of multiple supply chains.
It was noted that business and academia are two important pillars for the growth of this resilient supply chain, under which a direction has been ruled for officials to meet as often as required to take the initiative forward.
Subsequently, the Ministers have also decided to convene at least once a year to provide guidance to the implementation of the SCRI as well as to consult on how to develop the Initiative.
The intention behind establishing SCRI is to create a virtuous cycle of enhancing supply chain resilience with a target of attaining strong, sustainable, balanced and inclusive growth in the region.
Based on the high-level consultations among the tri-parties since September, it has further been noted that the importance of risk management is essential for continuity of plans in order to avoid supply chain disruptions and affirmed their commitment to strengthen resilient supply chains.
Therefore, certain possible policy measures have also been taken into consideration such as supporting the enhanced utilization of digital technology, while boosting trade and investment diversification.
The Joint Statement also reveals that there are fair chances of expansion of the SCRI, on the basis of consensus in due course.