Will India Join The AI High Table With Pax Silica?

India’s decision to join the US-led Pax Silica initiative is a defining moment in its hi- tech and industrial policy with the potential to take the  country to the frontiers of the new AI-led industrial revolution. India has the talent, but much will depend on whether bureaucratic hurdles and red tape are minimised and the animal spirits of innovation given free flow. But the American embrace also has its strategic pay offs and comes with strings attached.

The Pax Silica framework, spearheaded by the United States, is designed to consolidate trusted supply chains among like-minded partners in critical technologies — particularly semiconductors, AI hardware, and advanced materials. AI and semiconductors are poised to change the way the world does business, and getting on to the US-led band wagon was a no-brainer for India, as China is the only other country that has the expertise for it. The trust deficit between India and China is an obstacle for high-tech cooperation for the Asian rivals. Pax Silica is implicitly designed to reduce technological dependence on China. India, while competing with Beijing, has avoided outright bloc politics.

For India, being part of Pax Silica falls neatly with its push for self-reliance in electronics manufacturing and its broader “Make in India” and digital economy aims.

India’s Strength

The semiconductor eco- system is made up of three components, chip design, foundries that manufacture integrated circuits for fabrication and backroom process of assembly, test and packaging (ATP).

Indian engineers are already in the global semiconductor industry with nearly one-fifth of the world’s chip design engineers in the field. But most are working for American companies like Qualcomm, a leader in semiconductor and telecommunication equipment. According to reports engineers are moving beyond support roles into advanced high-level design.

 The challenge is to make a solely Indian product and the government's India Semiconductor Mission, launched in 2021, aims to encourage just that. The mission has financed the training of over 67,000 professionals that provide personnel for global firms like Intel, Nvidia, and ATP. Malaysia has excelled in ATP, and during Prime Minister Narendra Modi’s visit to Kuala Lumpur earlier this year, there was a move for joint ventures between Indian and Malaysian companies to set up ATP units in India.

The AI and semiconductor space is relatively new, though developing fast. Officials say that no country can be hundred percent self-sufficient in this.  Pax Silica offers India not just market access, but technological depth and institutional partnerships.

By joining the US supply chain, India’s immediate gain will be in talent integration with the rest of the world. As pointed out earlier, the country already supplies a vast pool of engineers and chip designers to global firms, many of whom work in or closely with Silicon Valley. India aims to  design and manufacture chips for 70-75% of its domestic applications by 2029. Whether this ambitious goal is met remains to be seen.

Analysts say that it makes perfect sense for India with ambitions of becoming a five trillion dollar economy by 2030, to join the US-led initiative. Yet it comes at a strategic price for New Delhi, which had since independence tried to distance itself from global power blocs. It prides itself on its ``strategic autonomy’’ and is committed to a multi-polar world.

New Delhi has maintained  relationships with multiple power centres, stretching from Russia, US, EU, Iran and the Global South. India, China and Russia are also part of the BRICS and Shanghai Cooperation Organisation (SCO) decidedly groupings that challenge the dominance of the US and its western allies.

Joining Pax Silica will further entrench India into a tightly knit US-led technology architecture. Technology alliances today are not neutral economic platforms but  geopolitical instruments. Washington has increasingly used export controls and sanctions as policy tools. Should political differences arise in the future over trade, defence purchases, or foreign policy stances, India’s deep integration into an American-centric supply chain could become leverage in US hands.

For New Delhi, the calculation appears to be that the developmental gains outweigh the diplomatic risks. Whether Pax Silica becomes a great leap forward or a future constraint will depend on how carefully India negotiates safeguards to ensure technology transfer, diversify partnerships and policy independence.

 India is hoping that economic power will reinforce, rather than erode, its strategic autonomy. However, that is for the future to prove. It is too early to make any projection.