India, Japan and Australia on Tuesday said an initiative to build resilient supply chains in the Indo-Pacific region could be launched later this year, as they seek to reduce dependence on China following its hostile political and military conduct. The trio aims to create a free and transparent trade and investment environment.
This was decided at a virtual meeting on Tuesday attended by Australia’s minister for trade, tourism and investment Simon Birmingham; India’s minister of commerce and industry Piyush Goyal; and Japan’s minister of economy, trade and industry Kajiyama Hiroshi.
Last month, ET reported that India, Japan and Australia had begun discussions on launching a trilateral Supply Chain Resilience Initiative to reduce dependency on China. The initiative, first proposed by Japan, is now taking shape.
“The ministers reaffirmed their determination to take a lead in delivering a free, fair, inclusive, non-discriminatory, transparent, predictable and stable trade and investment environment and in keeping their markets open,” said the Australia-India-Japan Economic Ministers’ Joint Statement on Supply Chain Resilience, issued at the end of the meet.
“In light of the Covid-19 crisis and the recent global-scale changes in the economic and technological landscape, the ministers underscored the necessity and potential to enhance the resiliency of supply chains in the Indo-Pacific region,” the statement said. The ministers instructed their officials to work out the details of the initiative for its launch later this year. They called for other countries in the region, which share similar views, to participate in the initiative.
The initiative comes at a time when there is a likelihood of rechurning of supply chains in the Indo-Pacific region, Goyal said at the meeting. In 2019, the cumulative GDP of the three countries was $9.3 trillion, and their merchandise goods and services trade was $2.7 trillion and $0.9 trillion, respectively.
“The diversification of supply chain is critical for managing the risks associated with supply of inputs including disciplining price volatility. We could provide the core pathway for linking value chains in the region by creating a network of reliable long-term supplies and appropriate capacities,” Goyal said, adding that India endorsed the broad concept of working towards ensuring a trustworthy, dependable and reliable supply chain in the Indo-Pacific region.
India said there might be a need to identify the manufacturing and services sectors which contributed the most to the domestic value addition in the region. On participation by interested countries, Goyal said it was important that countries with a similar line of thinking were looked at in terms of being reliable and dependable suppliers for ensuring resiliency in the supply chains of the region.