The Quad’s shift from security to economic resilience positions India at the centre of new supply chains, provided it overcomes logistical bottlenecks and deepens strategic reforms.
The Quadrilateral Security Dialogue (Quad), comprising the United States (US), India, Australia, and Japan, has steadily broadened its agenda from security concerns to economic cooperation. Once focused on maritime security and regional stability, the Quad now engages in areas such as vaccines, critical technologies, infrastructure, and resilient supply chains.
Despite lacking a formal trade framework, cooperation is advancing in key sectors, including semiconductors, 5G, and clean energy. Domestic constraints in India and the US remain barriers to wider trade liberalisation. Yet, the forthcoming Quad summit in India later this year, which is also expecting the US President Donald Trump in attendance, offers a crucial opportunity to institutionalise economic dialogue and deepen sectoral partnerships.
The Quad’s shift from security to economic resilience positions India at the centre of new supply chains, provided it overcomes logistical bottlenecks and deepens strategic reforms.
The Quad traces its origins to joint humanitarian efforts following the devastating 2004 Indian Ocean earthquake and tsunami. Officially formed in 2007, the Quad faced interruptions, including Australia’s withdrawal in 2008 and subsequent re-engagement in 2017. Over time, it has evolved into a platform for military cooperation, intelligence sharing, and naval exercises, underpinned by a shared concern over China’s assertiveness in the Indo-Pacific. Its agenda now encompasses emerging technologies, climate change, education, and infrastructure, reflecting its vision for a free, open, and inclusive Indo-Pacific.
Strategic unease over China’s industrial policies has propelled the Quad’s focus on resilient supply chains. The COVID-19 pandemic exposed vulnerabilities in China-centric networks, while the flaring US-China technology tensions underscored the need for diversification. The Quad has emerged as a platform to coordinate supply chain realignment, offering mechanisms for data sharing, critical node mapping, and joint strategies that could shift production and sourcing towards India and the wider Indo-Pacific. The bloc’s initiatives in digital technology and infrastructure signal strong political intent and assure global firms seeking stable trade routes and predictable policy environments. The ‘China-plus-one’ strategy is already steering investments into India’s manufacturing sector, highlighting the Quad’s potential to anchor new value chains in the region.
Launched in 2020, the Supply Chain Resilience Initiative (SCRI) aims to reroute production and supplier networks towards Quad nations and regional partners. However, progress remains limited, with activities primarily focused on dialogue and sharing best practices. For the SCRI to gain traction, it requires a clear roadmap and tangible results, evolving into a credible force that reshapes global supply chains, rather than merely a consultative forum.
Concrete steps include identifying alternative sources for critical products such as semiconductors and pharmaceuticals, establishing a dedicated implementation task force, and creating Quad-backed investment vehicles. Joint research and development (R&D) and co-financing manufacturing projects could further enhance resilience and reduce dependency on single-source suppliers.
India’s integration into global value chains hinges on resolving persistent logistical inefficiencies. High logistics costs, estimated at 13-14 percent of the Gross Domestic Product (GDP), remain a significant drag on competitiveness. Yet notable reforms are underway to modernise the sector and support the Quad’s supply chain agenda.
The Quad has emerged as a platform to coordinate supply chain realignment, offering mechanisms for data sharing, critical node mapping, and joint strategies that could shift production and sourcing towards India and the wider Indo-Pacific.
The National Logistics Policy (NLP) — unveiled in 2022 alongside the Gati Shakti initiative — aims to integrate infrastructure planning and enhance digital processes across transportation systems. The Unified Logistics Interface Platform (ULIP) integrates road, rail, ports, and customs into a single digital ecosystem, aiming for seamless cargo movement and reduced delays. Progress is evident at the state level. For instance, Gujarat — which is handling nearly 40 percent of India’s cargo — has emerged as a logistics leader through investments in ports, last-mile connectivity, and digital port management tools. In Andhra Pradesh, the Krishnapatnam port region is being developed into a major logistics and industrial hub under the Sagarmala initiative, with enhanced rail connectivity. Tamil Nadu is focusing on better integration of the Chennai and Ennore ports with inland industrial zones to improve cargo movement. Karnataka is investing in highway upgrades, particularly along the Bengaluru to Mangaluru corridor. Meanwhile, Maharashtra is enhancing its logistics ecosystem through initiatives such as the Delhi-Mumbai Industrial Corridor (DMIC) and the expansion of the logistics zone at Jawaharlal Nehru Port Trust (JNPT).
At the national level, multi-modal logistics parks are under development to enhance connectivity. One such major facility is coming up in Jogighopa, Assam, aimed at strengthening regional integration and transport efficiency. The implementation of the Goods and Services Tax (GST) has also reduced interstate delays, pruning travel times and transport inefficiencies. These reforms have begun to deliver results, with India climbing the World Bank’s Logistics Performance Index from rank 54 in 2014 to 38 in 2023 (out of 139 countries) and industry reports noting faster port operations and fewer bottlenecks. While challenges persist in rural and last-mile connectivity, momentum is shifting towards a more efficient logistics backbone.
Looking forward, the Quad’s economic agenda needs to mature from ad hoc cooperation to a structured framework delivering measurable outcomes. Establishing a Quad Economic Forum or secretariat could anchor joint initiatives in supply chains, technology standards, and infrastructure, transforming the Quad into a standing platform for sustained economic engagement.
A formal critical supply chain agreement among the Quad nations could redefine regional integration. A coordinated semiconductor ecosystem or a pact on critical minerals would allow each country to specialise while reducing dependency on non-Quad sources. By 2030, if Indian facilities are assembling advanced semiconductors or Electric Vehicle batteries using Australian lithium, American technologies, and Japanese components under a Quad-enabled ecosystem, it would mark a significant milestone in regional cooperation.
Ultimately, the Quad’s economic identity will be shaped by tangible outcomes, such as building resilient supply chains, advancing joint technology development, and strengthening regional connectivity.
Enhanced trade and investment flows should accompany these developments. This could include a full India-Australia Comprehensive Economic Partnership Agreement (CEPA), expanded trade ties with Japan, and sector-specific agreements with the US in digital commerce, electronics, or clean technologies. India’s potential entry into a high-standard regional trade agreement, backed by Quad support, or the launch of large-scale Indo-Pacific infrastructure projects such as a Green Energy Corridor, would signal the Quad’s growing economic footprint.
Institutional tools such as a Quad development finance mechanism or a dedicated investment fund focused on Indo-Pacific supply chains could further solidify the grouping’s role. The Quad’s influence in setting global standards in emerging domains, such as artificial intelligence and telecommunications, will be crucial in shaping the rules of future economic engagement.
Ultimately, the Quad’s economic identity will be shaped by tangible outcomes, such as building resilient supply chains, advancing joint technology development, and strengthening regional connectivity. If, in the near future, the Quad is mentioned alongside other leading economic partnerships, it will have successfully evolved into a catalyst for shared prosperity and a stable, rules-based Indo-Pacific.
Soumya Bhowmick is a Fellow and Lead, World Economies and Sustainability at the Centre for New Economic Diplomacy (CNED) at the Observer Research Foundation.
Manish Vaidya is a Research Assistant with the Centre for New Economic Diplomacy at the Observer Research Foundation.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
