• The Trade Ministers of India, Japan and Australia have formally launched the Supply Chain Resilience Initiative (SCRI).
  • The SCRI aims to create a virtuous cycle of enhancing supply chain resilience with a view to eventually attaining strong, sustainable, balanced and inclusive growth in the Indo-Pacific region.
  • The trio (India, Japan and Australia) along with the US makes Quad grouping.

Important points:

  • In the context of international trade, supply chain resilience is an approach that helps a country to ensure that it has diversified its supply risk across a clutch of supplying nations instead of being dependent on just one or a few.
  • In unanticipated events -whether natural, such as volcanic eruptions, tsunamis, earthquakes or even a pandemic; or manmade, such as an armed conflict in a region — that disrupt supplies from a particular country or even intentional halts to trade, could adversely impact economic activity in the destination country.

Supply Chain Resilience Initiative:

The Covid-19 pandemic was having an unprecedented impact in terms of lives lost, livelihoods and economies affected, and that the pandemic had revealed supply chain vulnerabilities globally and in the region.

  • To attract foreign direct investment to turn the Indo-Pacific into an “economic powerhouse”.
  • To build a mutually complementary relationship among partner countries.
  • To work out a plan to build on the existential supply chain network. Japan and India, for example, have an India-Japan competitiveness partnership dealing with locating the Japanese companies in India


  • The SCRI, first proposed by Japan, aims to reduce dependence on China amid a likelihood of rechurning of supply chains in the Indo-Pacific region amid the Covid-19 pandemic.
  • Initially, SCRI will focus on sharing best practices on supply chain resilience and holding investment promotion events and buyer-seller matching events to provide opportunities for stakeholders to explore the possibility of diversification of their supply chains.
  • Joint measures may include supporting the enhanced utilisation of digital technology and trade and investment diversification.
  • Expansion of the SCRI may be considered based on consensus, if needed, in due course. The ministers have decided to convene at least once a year to provide guidance to the implementation and development of the SCRI.
  • This assumes significance in the wake of Japan’s keenness to onboard the ASEAN in the initiative, something that India has opposed.
  • India wants to safeguard its interests from China’s indirect influence through the bloc (ASEAN) as it builds on its self-reliance through reduced dependence on imports.


  • Following the border tensions with China, partners such as Japan have sensed that India may be ready for dialogue on alternative supply chains.
  • China still remains a large source of critical imports for India, from mobile phone components to pharmaceutical ingredients. An internal push to suddenly cut links with China would be impractical.
  • Over time, if India enhances self-reliance or works with exporting nations other than China, it could build resilience into the economy’s supply networks.

Way Forward

  1. It will help boost India’s manufacturing competitiveness and increase its share in world trade. In this pursuit, there is a need to create an infrastructure that raises the competitiveness of India’s exports.
  2. While India appears an attractive option for potential investors both as a market and as a manufacturing base, it needs to accelerate progress in ease of doing business and in skill building.


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