India to benefit from greater trade and investment as Quad countries seek to cut reliance on Chinese goods, says Moody’s
- Quad, which is a diplomatic network of four countries, is seeking to reduce reliance on Chinese production and diversify imports among other countries.
- This is in line with ongoing efforts by Western countries to reduce reliance on Chinese technologies because of national security concerns.
- India will benefit from greater trade and investment flows, although regulatory and infrastructure constraints remain, as per Moody’s.
AdvertisementGlobal ratings firm Moody’s Investors Service said on Tuesday that deepening economic relationships among the members of the Quadrilateral Security Dialogue, better known as the Quad, would have potential long-term credit implications resulting from supply-chain and trade reconfigurations.
The members of the Quad are already in talks to reduce reliance on Chinese production and diversify imports among other countries. India, Australia, Japan and the US are part of the Quad.
“Quad members will seek to be less reliant on Chinese-produced critical materials and technology. These trends will affect production of inputs for advanced computing, renewable energy, 5G telecommunications equipment and semiconductors,” said the report.
This is in line with ongoing efforts by Western countries to reduce reliance on Chinese technologies because of national security concerns.
India will benefit from greater trade and investment flows, although regulatory and infrastructure constraints remain. The US and Japan will continue to be major sources of foreign direct investment (FDI) to India in services, telecommunications and software, while Australia's presence will grow as a result of a free-trade agreement with India, said the report.
While countries look to diversify supply of critical products and technologies, the Quad will continue to drive some long-term supply-chain shifts toward Southeast Asia and India.
Moreover, recent global events surrounding China have led countries to avoid remaining entirely dependent on China for its goods.
“Geopolitical tensions arising from the Russia-Ukraine military conflict and around the Taiwan Strait, along with the resurgence of Covid-19 outbreaks and lockdowns in China, have further highlighted supply-chain resilience concerns. Governments and multinational corporations have thus intensified their strategy of reducing dependence on a single economy for critical production inputs,” said the report.
Meanwhile, India has already blocked 59
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