Trade ministers of India, Australia, and Japan in a meeting on Tuesday decided to soon launch an initiative on supply chain resilience and invited like-minded countries in the Indo-Pacific region to join the initiative

Trade ministers of India, Australia, and Japan in a meeting on Tuesday decided to soon launch an initiative on supply chain resilience and invited like-minded countries in the Indo-Pacific region to join the initiative. The move aims to counter China’s dominance of global trade and supply chains.

“Australia-India-Japan Ministers met for a new initiative on Supply Chain Resilience. Like minded nations are now working closely towards trustworthy, dependable and reliable supply chains in the Indo-Pacific region," trade minister Piyush Goyal tweeted on Tuesday.

The meeting held by videoconference was attended by Goyal, Australia’s minister for trade, tourism, and investment Simon Birmingham, and Japan’s minister of economy, trade and industry Kajiyama Hiroshi.

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 resilience of supply chains in the Indo-Pacific region, according to a joint statement by the three countries. “Recognizing the pressing need for regional cooperation on supply chain resilience in the Indo-Pacific, the ministers shared their intention to work toward the launch of a new initiative to achieve the objective through cooperation. They instructed their officials to promptly work out the details of the new initiative for its launch later this year. They noted the important role of business and academia in realizing the objective," the statement added.

The initiative could not have come at a more opportune time in the post-COVID scenario when there is a likelihood of “rechurning of supply chains" in the Indo-Pacific region, Goyal said at the trilateral meeting.

“India endorses the broad concept of working towards ensuring a trustworthy, dependable and reliable supply chain in the Indo-Pacific region. 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," he said.

Goyal described Australia, India and Japan as crucial players in the region and said that during 2019 the cumulative GDP of the three countries was $9.3 trillion while cumulative merchandise goods and services trade were $2.7 trillion and $0.9 trillion, respectively. “With such a strong baseline, it is important that we use this opportunity to work towards enhancing the share of our trade and investment in the region," he said. He stressed on the need to expand trade between the three countries, but pointed out that with Japan, despite India’s global exports and Japanese global imports being high with zero preferential tariffs, the procurement from India was limited.

Goyal said that the digitization of trade procedures is a very important step for facilitating trade and maintaining resilience in supply chains.