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September 24, 2021, marked the first time the members of the Quadrilateral Security Dialogue (QUAD) met in person to discuss their joint response to China’s dominance in the Indo-Pacific region. US President Joe Biden invited Prime Minister Scott Morrison of Australia, Prime Minister Narendra Modi of India, and Prime Minister Yoshihide Suga of Japan to the White House to put forth several initiatives that are viewed as a challenge to China’s power.

What is QUAD?

The QUAD is not a military alliance, but is a strategic partnership.

In a statement the leaders said, “we recommit to our partnership, and to a region that is a bedrock of our shared security and prosperity—a free and open Indo-Pacific, which is also inclusive and resilient.”

The QUAD leaders have already worked together to ramp up production of COVID-19 vaccines by launching the QUAD Vaccine Partnership. The Vaccine Partnership has also pledged to donate vaccine to other countries, and so far, has donated 79 million vaccine doses in the Indo-Pacific region.

In addition to working together to end the COVID-19 pandemic, the QUAD leaders also pledged to work together to better prepare for the next pandemic.

Implications for supply chains, infrastructure, and climate change

The semiconductor supply chain was addressed by the group with the launch of a joint initiative “to map capacity, identify vulnerabilities, and bolster supply-chain security for semiconductors and their vital components.” The shortage of semiconductors due to the pandemic has impacted several industries that use chips, including automobiles and smart phones.

Infrastructure initiatives in the Indo-Pacific region also were a topic of discussion, with the QUAD leaders agreeing to seek out new opportunities in regional infrastructure projects.

The QUAD leaders focused on climate change and in a Fact Sheet from the meeting said the “Quad countries will focus their efforts on the themes of climate ambition, including working on 2030 targets for national emissions and renewable energy, clean-energy innovation and deployment, as well as adaptation, resilience, and preparedness.”
Noting that the QUAD countries have large maritime shipping hubs, the QUAD leaders said their countries are “uniquely situated to deploy green-port infrastructure and clean-bunkering fuels at scale,” and they will begin by “launching a Quad Shipping Taskforce and will invite leading ports, including Los Angeles, Mumbai Port Trust, Sydney (Botany), and Yokohama, to form a network dedicated to greening and decarbonizing the shipping value chain.”

Developing US-India relationships in new domains

In a joint US-India statement, Biden and Modi said they “decided that the United States and India must continue and expand their partnership in new domains and many areas of critical and emerging technology – space, cyber, health security, semiconductors, AI, 5G, 6G and future generation telecommunications technology, and Blockchain.”
“India with its inherent human resource talent and English-speaking population can further progress economically” with the initiatives discussed at the meeting, said Rukshad Davar, Partner and Head M&A Practice, Majmudar & Partners, a leading Indian law firm, in commenting on the QUAD meeting.

This development occurs in a context of tensions between China and India, whose military forces have engaged in skirmishes at the two countries’ shared border in 2020.

“We see a thrust to the electronics manufacturing semiconductor industry, the pharma industry more particularly for development of vaccines, as well as the infrastructure industry for renewable energy, telecommunications given the inclination of private partnerships to support infrastructure growth,” said Davar.

Opportunities for businesses

When asked about the opportunities and challenges to businesses that are presented by the QUAD initiative, Davar said, “In our view, policy decisions should be streamlined and effected in an expeditious manner without delay in policy making or interference of political parties to achieve the desired infrastructure growth which has been a challenge.”

Indian businesses should be ready for the future, said Davar, by adopting ethical practices and scaling up “talent to maximise these opportunities.”

Davar noted that, “India has progressively liberalised its foreign exchange policy as a result of which 100 percent foreign participation is allowed in electronics manufacturing and in the pharmaceutical sector.” 

While the QUAD initiative shows how the US is moving beyond its usual diplomatic engagement with Europe, the European Union also has recognized the importance of the Indo-Pacific region with its Strategy for Cooperation in the Indo-Pacific.
The QUAD initiatives present opportunities for businesses, but in-house counsel should be aware of the political implications. 

Region: Global
Interest Area: Government
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