The trade ministers of Australia, India and Japan have underscored the necessity and potential to enhance the resiliency of supply chains in the Indo-Pacific region. The ministers noted the important role of business and academia and called for other countries in the region to participate in the initiative.
This was highlighted in a meeting, via video-conferencing, of the Minister of Commerce and Industry Piyush Goyal, Australia’s Minister for Trade, Tourism and Investment Simon Birmingham and Japan’s Minister of Economy, Trade and Industry Kajiyama Hiroshi.
Goyal said in the post-COVID scenario, there is a likelihood of re-churning of supply chains in the Indo-Pacific region. “India wholeheartedly endorses the broad concept of working towards ensuring a trustworthy, dependable and reliable supply chain in the Indo-Pacific region,” he said. “The diversification of the supply chain is critical for managing the risks associated with the supply of inputs, including disciplining price volatility.” For this, the minister said countries might need to identify the manufacturing and services sectors that contribute most to the domestic value addition in the region. Goyal stated that India supports the need for specific activities listed for enhancing the resilience of the supply chains, which include those related to promotion and facilitating trade and investment as well as diversification of production base.
In regards to India-Japan trade, he said despite their global exports and Japanese global imports being high with zero preferential tariffs, the procurement from India was limited. “This cuts across many sectors such as steel, marine products, processed agriculture, agrochemicals, plastics, carpets, clothing and footwear.”
Experts are of the opinion that Australia-India-Japan seeks to build more robust supply chains to shake off China’s dominance in the region. In the meeting, the three ministers agreed that ASEAN nations would be good candidates to reach out to next. Japan’s trade ministry in a statement said Kajiyama suggested including the digitalization of trade procedures and support for capital expenditure as part of the initiative. It added that a pre-existing scheme where Japan is supporting Capex into ASEAN countries would serve as one reference point for the initiative.