The Supply Chain Resilience Initiative (SCRI) is an initiative that was proposed by Japan in September 2020 as a trilateral approach to trade, with Australia and India as two other partners. The main objective of this initiative is to make the supply chains in the Indo-Pacific region flexible.
Key Points
- Supply chain resilience enables a country to diversify its risks across a group of supplying nations instead of being dependent on just one or a few.
- This SCRI initiative is at the strategy stage and it is taking shape as the participating countries are expanding the scope of SCRI.
- Australia, Japan, and India are already part of another informal grouping called the Quadrilateral Security Dialogue (Quad).
- All four countries see this as an alternative for their dependence on China’s imports after its aggressive policies. India is dependent on China in several segments including electronics, pharmaceuticals, etc.
Why did Japan propose SCRI?
Japan is one of the big importers in China. As per tradingeconomics.com, Japan imported goods worth $169 billion from China in the year 2019. Due to the present aggressive policies of China and due to the impact of COVID-19, Japan fears that if this one single source of supply chain stops, it can affect the global economy. Due to the pandemic, imports of Japan from China have fallen by more than half since February 2020. Because of this, Japan has proposed an alternative supply chain. However, recent tensions between China and the US are also a threat to Japanese trade.
Why Japan chose India?
Japan sees India as one of the major members of SCRI because as per reports, the imports from Japan to India have almost doubled in the last 12 years to $12.8 billion in 2019 as well as the exports from India to Japan stood at $4.9 billion. As per Invest India, Japan is the 4th largest investor in India. In 2000-2020, the cumulative foreign direct investments touched to $33.5 billion.
India calls CLMV countries to join SCRI and ISA
Recently in the 6th India – CLMV Business Conclave 2020, India has invited the CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) to join the Supply Chain Resilience Initiative as well as International Solar Alliance (ISA).
