Ever since the COVID pandemic began, the world’s discomfort with the fact China was the lynchpin of the global supply chain was palpable. When the pandemic began in China, fears over the non-supply of many essential materials and goods from China came true. Since then the world has felt an increasing need to diversify its supply chains.
Adding fuel to this fire, China’s belligerent attitude and conflicts with most of its neighbours have convinced the world on the need to decouple. Here, India is seen as a destination to replace China in many global supply chains.
In our previous article, we chronicled how India’s reforms under Aatma Nirbhar Bharat are making the world place trust in India, a fact acknowledged by US Secretary of Mike Pompeo too.
Important that democracies like ours work together at a time when we see true scope of challenge posed by Chinese Communist Party. Recent clashes initiated by PLA are examples of CCP's unacceptable behaviour. Deeply saddened by deaths of 20 Indian servicemembers: US Secy of State pic.twitter.com/CX6fVLon6w
— ANI (@ANI) July 22, 2020
Building Resilient Supply Chains
Now, trade ministers of India, Japan, and Australia are working on an initiative to build resilient supply chains in the Indo-Pacific region. This, as reported in various media, will seek to reduce dependence on China following its hostile political and military conduct.
In a joint statement released by the three countries, Ministers reaffirmed their determination to take a lead in delivering a free, fair, inclusive, non-discriminatory, transparent, predictable and stable trade and investment environment and in keeping their markets open.
It also mentioned that 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 resiliency of supply chains in the Indo-Pacific region.
The statement also recognized the pressing need for regional cooperation on supply chain resilience in the Indo- Pacific and stated their intention to work toward the launch of a new initiative to achieve the objective through cooperation.
Respective officials of each country were instructed by the ministers to promptly work out the details of the new initiative for its launch later this year and noted the important role of business and academia in realizing the objective.
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.https://t.co/QzGXBEMS0E pic.twitter.com/pqDt9hylzJ
— Piyush Goyal (@PiyushGoyal) September 1, 2020
Commerce Minister Piyush Goyal during the meeting is quoted as saying that the initiative comes at a time when there is a likelihood of rechurning of supply chains in the Indo-Pacific region and that the diversification of the supply chain is critical for managing the risks associated with the supply of inputs including disciplining price volatility.
The Minister also added that India could provide the core pathway for linking value chains in the region by creating a network of reliable long-term supplies and appropriate capacities and endorsed the broad concept of working towards ensuring a trustworthy, dependable and reliable supply chain in the Indo-Pacific region.
This initiative, when launched later this year, will seek to significantly reshape global supply chains and go a long way in establishing India in a pre-eminent position in the global supply chain and ensure Aatma Nirbhar Bharat too.