Industry And Cluster | News & Insights

India-Japan-Australia SCRI

Published: August 19, 2020
Author: G.Thulessiraman

India, Japan and Australia have begun discussions on launching a trilateral Supply Chain Resilience Initiative (SCRI). This launch has a motive of reducing dependency on China, necessitated by Beijing’s aggressive political and military behavior. This initiative was first proposed by Japan. The 3 countries have been coordinating about holding a meeting of the commerce and trade ministers by the next week.

Through the ministry of economy trade and industry, Japan has approached India and has indicated that it is an urgent initiative forward which needs to be taken. Whereas, Tokyo was in favor of launching SCRI by November.

China’s aggressive behavior on the Line of actual control at Ladakh has made the government take the proposal seriously and is thus deciding to act upon it. Any step towards this agreement will mean, India participating in an alliance against China. The government has taken a call at the highest level to become a part of the global supply chain, thus making China as an alternative.

This subject was also a key theme of PM Modi’s Independence Day speech, in which he said that businesses have began seeing India as a possible “hub for supply chains”. Also, he said that India after bringing the “Make in India” motto in action, we shall also begin “Make for the world” action.

The Japanese proposal has a two-fold objective i.e. attract foreign direct investment to turn the Indo-Pacific into an “economic powerhouse” and to build a mutually complementary relationship among partner countries. After India-Japan-Australia understanding the matter, the idea was also to throw open an initiative to the Asean (Association of South-east Asian Nations).

Following the coronavirus outbreak, Japanese Prime Minister- Shinzo Abe has already incurred a cost of around $2 billion for helping Japanese companies to shift back from China. Australia and US, amid growing security and transparency concerns, have already entered into an agreement, with the sole motive of building a “China free” supply chain for rare earth materials.

SCRI is a direct response to the aggressive political behavior of China. This action is being taken by the individual companies and economies that are affected by this behavior.



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