Semiconductors, Aerospace, Raw Materials: U.S. and India Intensify Cooperation

by | 18. Jun 2024 - 10:01 | Politics

Supply chain diversification and increased cooperation in strategic sectors probably also aimed at China.

India and the United States want to strengthen their trade relations and their technological and industrial cooperation, according to a White House statement. This was agreed at a meeting between the security advisors of both countries, Jake Sullivan and Ajit Doval, in New Delhi. The background to the meeting was the second session of the U.S.-India Initiative for Critical and Emerging Technologies (iCET), launched in January 2023. According to the White House, the two countries have already made “significant progress” in their cooperation in sectors such as space, semiconductors, telecommunications, artificial intelligence (AI), quantum technology, biotechnology, and clean energy through iCET, and this is now to be continued.

Government financial support will be provided for joint research in these areas and the promotion of private investment in the Indian semiconductor industry. A new strategic semiconductor partnership between American and Indian companies has also been launched.

In the raw materials sector, joint investments are planned in a lithium project in South America and a rare earth deposit in Africa to diversify supply chains. A bilateral agreement on critical minerals such as graphite, gallium, and germanium is also being sought soon, as well as cooperation in the processing of raw materials through to the production of materials such as neodymium-iron-boron magnets for e-mobility and wind turbines.

Counterweight to China

The expansion of US cooperation with India as an up-and-coming industrial nation and now the world’s most populous country is also likely to be seen as a counterweight to China’s influence in the Indo-Pacific region. Due to increasing geopolitical tensions, the US wants to reduce its dependence on China, including the critical minerals sector. In October 2022, the US government severely restricted the People’s Republic’s access to advanced semiconductor chips, which can also be used for military purposes (we reported), a move to which the country presumably responded with export restrictions on raw materials. Although China is not mentioned by name, the White House press release states that transferring sensitive dual-use technologies to “countries of concern” should be prevented.

Photo: iStock/MicroStockHub

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