The arrangement will, in the long term, act as a counterweight to current and proposed trading arrangements in the Asia-Pacific region, senior officials said. This includes the proposed Regional Comprehensive Economic Partnership pact being discussed by both Australia and Japan. During 2019, the cumulative GDP of the nations was $9.3 trillion while cumulative merchandise goods trade and services trade were $2.7 trillion and $0.9 trillion respectively.
"The 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," a statement by the Commerce Department said. Back in May, Prime Minister Narendra Modi had stressed that it is the need of the hour that India should play a big role in the supply chains.
Trade officials have now been directed to work out the details of the new initiative for its launch later this year. The parties have also kept the arrangement open to other countries in the region, which share similar views. India has suggested that greater convergence in market oriented policies, demography, growth potential, fiscal state of play including existing debt burdens and geo-political strategy may be adopted.
"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.” Commerce and Industry Minister Piyush Goyal said.
Goyal added that also dwells on improving the competitiveness of sectors and identification of manufacturing and services sectors which contribute most to the domestic value addition in the region would need to be undertaken.
"Digitization of trade procedures is a very important step for facilitating trade and thereby maintaining resilience in supply chains. This was clearly exemplified during the Covid crisis when many of the regulatory agencies were not functioning physically. It is important that all of us maintain this momentum on facilitation through adoption of electronic documents, commensurate with our capacities,” he added.
Goyal also pointed out that procurement by Japan from India remains limited, pushing for greater uptake of Indian goods in sectors such as steel, marine products, processed agriculture, plastics, and others.