What is the News?
India, Japan, and Australia formally launched the Supply Chain Resilience Initiative (SCRI) to build resilient supply chains in the Indo-Pacific region as they seek to reduce dependence on China.
What is Supply Chain Resilience Initiative?
- In the context of international trade, supply chain resilience is a strategy that assists a country in ensuring that its supply risk is spread across a number of supplying countries rather than being reliant on just one or a few.
- Unforeseen events (whether natural, such as volcanic eruptions, tsunamis, or earthquakes) or even a pandemic or human-caused event, such as an armed conflict in a region – that disrupt supplies from a specific country or intentional trade halts, could have a negative impact on economic activity in the destination country.
- The SCRI seeks to create a virtuous cycle of supply chain resilience in order to achieve strong, sustainable, balanced, and inclusive growth in the Indo-Pacific region.
Also Read: Indo-Pacific Economic Framework
Objectives of Supply Chain Resilience Initiative
- To attract foreign direct investment in order to transform the Indo-Pacific region into an “economic powerhouse.”
- To establish a mutually beneficial relationship among partner countries.
- To devise a strategy for expanding the existing supply chain network.
- Japan and India, for example, have an India-Japan competitiveness partnership that deals with Japanese companies located in India.
Also Read: Strategic convergence between India and US is growing
Significance
- The SCRI aims to reduce dependence on China amid a likelihood of rechurning of supply chains in the Indo-Pacific region amid the Covid-19 pandemic.
- It seeks to build upon the existing bilateral frameworks like the Asean-Japan Economic Resilience Action Plan and India-Japan Industrial Competitiveness Partnership and attract foreign direct investment in the region.
Also Read: India – Australia Critical Minerals Investment Partnership
Conclusion
It will aid India’s manufacturing competitiveness and increase its global trade share. In this pursuit, there is a need to build infrastructure that boosts India’s export competitiveness. While India appears to be an appealing option for potential investors as both a market and a manufacturing base, it needs to accelerate progress in terms of ease of doing business and skill development.
Also Read: Supply Chain Resilience Initiative
