A Factory For Quad

Context: India’s growing manufacturing ability has undermined China’s leverage.

Dilemma before Quad: China was the factory of the world. It had become an almost indispensable cog in the global supply chain owing to its low-cost manufacturing prowess at a mass scale.

• The dilemma was thus to challenge China’s power-play dynamics while at the same time being dependent on its factories to sustain its economies. (led to stunted growth of Quad after 2007.)

Factors Contributing to the Emergence of Quad 2.0

• Recent developments:
  • Australia’s return to Malabar Naval exercises in 2020, after 13 years.
  • The first summit-level meet of the Quad (the US, India, Japan and Australia) in March 2021.
• Rise of India as a new global manufacturing hub: Chinese benefits of quality, scale, speed, skilled manpower and a vast domestic market is now operative for India through the following developments-
  • Success in PPE kits: by creating manufacturing capacity to meet its own and worlds need.
  • Soft power of Vaccine Maitri: by not only vaccinating domestic population but also exporting millions of indigenous vaccines.
  • Deeping private industry base: Recent New York Times report noted that Hindustan Syringes alone has ramped up its manufacturing capacity to almost 6,000 syringes a minute!
  • Precision high-end manufacturing: PLI scheme has ramped up the manufacturing capacity of over $150 billion and exports of $100 billion.
  • Ability to indigenously manufacture a fourth-generation fighter jet.
  • Ease of doing business based economic policies: like
    • Lowest tax rates (15% for new manufacturing units); Taxation is now faceless, thus ending the spectre of rent-seeking.
    • Low-interest rates and Privatization of PSUs,
    • Ease in FDI norms (automatic approval processes instituted for FDI even up to 100%
    • Reformed labour, bankruptcy laws and digital infrastructure.

Conclusion: Emergence of Quad-2.0 as an Arc of democracies is a must for a better and more sustainable model of global democratic governance to counter the drawbacks of the Chinese model.