Konark Bhandari
The leaders also committed, as part of the TRUST initiative, to build trusted and resilient supply chains, including for semiconductors and critical minerals. While the joint statement is lean in terms of its objectives for joint cooperation on semiconductor supply chains, that is understandably so, as India and the United States have already managed to make steady progress in this area over the years.
However, semiconductors were also an area of focus at Carnegie India’s 9th Global Technology Summit, co-hosted with the Indian Ministry of External Affairs. Some key areas and threads that emerged during the discussions convened were as follows:
A Bilateral Trade Agreement Will Guide Future Cooperation
In the past few years, significant investments have been made in India’s semiconductor ecosystem, jumpstarting the supply chain in the country. At the same time, the view here increasingly appears to be that while the U.S. CHIPS Act (along with the Indian semiconductor incentive scheme) did provide massive financial wherewithal for these firms to invest overseas in countries like India, it was not concurrently accompanied by a resolution of longstanding trade issues. Since approximately 70–75 percent of U.S. semiconductor firms get their demand from overseas markets, addressing trade barriers/market access issues in such markets would be critical to further cooperation in the semiconductor industry. Accordingly, American semiconductor firms would be keen to be able to sell to overseas markets such as India, for which, building facilities in India itself may be a better option, if the trade issues between both countries are resolved. Therefore, “friend-shoring” would likely remain a pillar of building resilient supply chains in semiconductors.
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