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Published: Mar 10, 2023
Updated: Mar 10, 2023

US and India to Strengthen Collaboration on Semiconductors

The US and India are set to sign a memorandum of understanding to enhance their cooperation in the semiconductor industry, according to Gina Raimondo, the US Commerce Secretary. Speaking during her visit to New Delhi, Raimondo emphasized that the agreement will focus on information-sharing and policy dialogue. The two countries will also discuss ways to coordinate their incentive plans and avoid over-subsidization for their industries.

Benefits of Greater Collaboration on Chips

Raimondo highlighted the importance of greater collaboration on chips between the US and India, saying that US firms are optimistic about the future of ties with India. She added that the US would like to see India play a larger role in the electronic supply chain. The agreement comes amid increased focus on the Quad grouping, which includes Japan and Australia, as American policymakers seek to contain China's growing assertiveness.

Export Controls and Investments in the US Semiconductor Industry

Raimondo's department applied broad export controls on chipmaking technology for China last year on national-security and strategic concerns. The US is also leading the way in pouring about $52 billion into the US semiconductor industry, which Raimondo frames as a key to American competitiveness. While there were no specific investment commitments by US firms to announce, Raimondo expressed confidence in the benefits of collaboration between the US and India.

The Importance of India's Geopolitical Position

India's geopolitical importance to the US and its allies has increased, as they seek to counter China's growing assertiveness. As a result, India has become a key player in the global semiconductor industry, and the country is eager to attract investments from the US. Raimondo's visit to India includes meetings with Indian public and private sector leaders and participation in a US-India Commercial Dialogue and CEO Forum.

Move to strengthen ties between India and the U.S

The US and India's memorandum of understanding to enhance their cooperation in the semiconductor industry highlights the importance of collaboration in a rapidly evolving sector. As geopolitical tensions rise, the two countries recognize the need to work together to maintain their competitive edge. While no specific investment commitments were announced, the agreement represents a significant step forward in strengthening ties between the US and India.