Supply Chain Resilience Initiative – Counter to China’s Dominance

 Japan, India and Australia are planning to build stronger supply chain to counter China’s dominance
as the trade and geopolitical tensions escalate across the regions.
 The three nations are trying to bring a “SUPPLY CHAIN RESILIENCE INITIATIVE”. Japan has
proposed this initiative and is taking shape now.
 Dates are being worked out to hold the first meeting of trade and commerce ministers of these three
countries. The talks are at a working level, but Japan would like to bring them to a higher level at
some point and launch SCRI by November.
 Indian government is considering the plan quite seriously, especially in the light of China’s moves
on the Line of Actual Control in Ladakh.
 This initiative is also in line with Modi’s Key themes of Independence Day speech making India as a
possible “hub for supply chains” and that India must also “make for the world”.
 Another objective of the initiative, is to attract foreign direct investment to Indo-Pacific into an
“economic powerhouse” and to build a mutually complementary relationship among partner
countries.
 Japan is trying to pare its reliance on Chinese factories, with the government subsidizing some
companies to shift or expand operations in Japan and Southeast Asia. So far 87 firms are
participating in the program, which will pay out 243.5 billion yen ($2.3 billion).
 Both India and Australia trade and diplomatic relations with China are fraying. Prime Minister
Narendra Modi’s government restricted some Chinese imports and banned several Chinese apps
after a deadly border clash with its neighbor.
 In Australia, exports like beef, barley and now wine have been targeted by China amid deteriorating
ties between the two nations.
 Also, the trade and diplomatic relations are looking good between India and Australia, adding to this
the countries already signed a pact in early July to work together on “diversifying supply chain”.
 The new proposal will seek to lean on such bilateral agreements between countries and put in place
further measures for trade facilitation and attracting foreign direct investment in the Indo-Pacific
region.
 The ASEAN countries will be invited further once the Indian and Australian government gives green
signal to the initiative.
References: https://economictimes.indiatimes.com/news/economy/foreign-trade/india-japan-
australia-supply-chain-in-the-works-to-counter-china/articleshow/77624852.cms
https://www.bloombergquint.com/global-economics/japan-india-and-australia-are-said-to-seek-
supply-chain-pact