Semiconductor Collaboration and Changing Global Strategy
The recent agreement between India and the United States on semiconductor and advanced technology cooperation is not just a bilateral agreement but a decisive step towards a changing global balance of power, technological dominance, and economic security. Just as oil was considered the most strategic commodity in the twentieth century, semiconductors today are considered the backbone of the modern world. The essentiality of chips in every field—from mobile phones to missile systems, from artificial intelligence to the automobile industry—has made them a central hub of geopolitics. Therefore, India’s participation in structures like Pax Silica and the establishment of deeper cooperation with the United States are of far-reaching significance.
Over the past few years, the vulnerabilities of the global semiconductor supply chain have been laid bare. The chip crisis during the COVID-19 pandemic made it clear that excessive dependence on a select few countries and companies could destabilize the entire global economy. The greatest center of this dependence has been China and the Taiwan region. The United States and its allies have viewed this as not just an economic but also a national security threat. Against this backdrop, the role of a democratic, stable, and rapidly emerging market country like India becomes extremely important.
India has long played a limited role in the semiconductor value chain, with its contributions largely confined to chip design and IT services. However, the country lags in capabilities such as manufacturing, raw material purity, and advanced fabrication. Recent agreements indicate progress toward addressing this shortcoming. Partnerships with the United States will not only provide India with technical knowledge and investment but also enable it to become part of a robust and reliable supply chain that meets global standards.
A key aspect of this cooperation involves raw materials such as rare minerals and high-quality silicon. China holds global control over many of the elements required for semiconductor manufacturing. This situation poses a strategic risk. India-US cooperation is an important step toward reducing this dependence and developing alternative sources. India has potential mineral resources that can be integrated into global supply chains through technology and investment.
From an economic perspective, this agreement opens up huge opportunities for India. The semiconductor industry, while capital-intensive, holds immense job-creation potential. An entire industrial ecosystem develops around a fabrication unit, including suppliers, research institutes, startups, and skilled human resources. This will not only increase direct employment but also open new avenues for young people with highly technical skills. This can help transform India’s demographic dividend into a true economic powerhouse.
At a strategic level, this partnership also adds a new dimension to India’s foreign policy. India has long pursued a policy of “strategic autonomy,” where it cooperates according to its own interests without relying on any single power bloc. This technological collaboration with the United States exemplifies that balance. It brings India closer to Western countries, but also establishes it as an independent and important pillar in the global supply chain. This also strengthens India’s global bargaining power.
However, this entire scenario is not without challenges. Semiconductor manufacturing is a highly complex and cost-intensive process, requiring continuous innovation, stable policy support, and long-term investment. Global competitiveness in this industry is impossible without addressing issues such as infrastructure, power quality, water availability, and a skilled workforce in India. Furthermore, issues related to technology transfer and intellectual property rights are also sensitive, requiring balanced solutions.
Another important question is whether India will limit this collaboration to import substitution or transform it into innovation-based self-reliance. If India remains merely a production base for foreign companies, the long-term benefits will be limited. What is needed is a parallel promotion of research and development within the country, a deeper synergy between universities and industry, and a place for domestic startups in this ecosystem. Only then can India truly move towards global leadership in the semiconductor sector.
In geopolitical terms, this agreement also sends a clear message. It’s a message not just to China, but to the entire world: democratic nations are working together to make technology supply chains more secure, transparent, and diverse. However, India must also ensure that it does not become a pawn in a new polarization, but rather keeps its developmental priorities at the center.
Ultimately, the semiconductor collaboration between India and the United States offers a glimpse into a future world where technology, economy, and security will be deeply intertwined. This is an opportunity for India to establish itself not just as a major market, but as a reliable technology partner. Success will depend on the extent to which policy, institutional capacity, and long-term vision are translated into practice. If this balance is achieved, this agreement could mark a milestone in India’s technology journey.
