The geopolitical wires are buzzing this week with the US State Department’s announcement of the Pax Silica Initiative, a new plan to secure the global silicon supply chain—from critical minerals to AI infrastructure. The inaugural summit will feature close US allies: Japan, South Korea, Singapore, the Netherlands, the UK, Israel, the UAE, and Australia.
The stated goal is to create a “secure, prosperous, and innovation-driven” ecosystem that “reduces coercive dependencies, protects the materials and capabilities foundational to artificial intelligence, and ensures aligned nations can develop and deploy transformative technologies at scale.”
India’s absence from the announced list has sparked much speculation and debate, but a cooler look at the semiconductor landscape suggests there is no cause for alarm just yet. In fact, India’s absence might just be a temporary bargaining tactic in a larger trade game.
Also read this alternative perspective from Amb Syed Akbaruddin on NDTV.
Here is why India remains indispensable to any global silicon strategy, whether or not it is at the Pax Silica inaugural summit.
- Irrespective of which flags fly at the summit, India remains the engine room of the global semiconductor design segment, one of the pillars identified as part of Pax Silica. Nearly every top-25 fabless company by revenue—including the US giants driving this initiative—has a design centre in India. These companies rely on Indian talent for their core IP. Knowledge spillovers into India are structural and inevitable. A diplomatic summit cannot firewall the fact that the chips powering Pax Silica are likely being designed in Bengaluru.
- India’s hardware game is improving. The narrative that India is “not ready” for a seat at the table ignores the ground reality. Eight OSAT (Outsourced Semiconductor Assembly and Test) plants and one commercial CMOS fab are under active construction. By the time the high-level policy frameworks of Pax Silica actually translate into action, India will already be an operational node in the semiconductor manufacturing supply chain.
- Kai-fu Lee famously distinguished between “internet AI” and “enterprise AI.” Indian software firms are poised to become the global delivery vehicle for the latter. Furthermore, as one of the largest data markets in the world, India will be a decisive battleground for AI deployment and usage. Any strategy to counter China that ignores the scale of the Indian market and the capability of Indian integrators is, frankly, dead on arrival.
- If the true goal of Pax Silica is to counter Beijing, the current coalition has glaring holes. Taiwan, the most critical node of global chip manufacturing, is missing. Next, India, the largest potential counter-market and talent pool, is missing. Finally, while the Netherlands and the UK are present, major European economies like France and Germany are notably absent. Without these pillars, the initiative risks being a paper tiger.
- Why was India excluded? I speculate it is related to the unresolved friction in India-US trade ties. With the American administration singling out India on tariffs, India probably declined to join this grouping until the ridiculous tariff regime is addressed. This feels less like a permanent exclusion and more like a negotiation tactic. India is likely waiting for a better deal before signing on the dotted line.
- We have seen this movie before. When the US-led Mineral Security Partnership (MSP) was first announced to secure critical mineral supply chains, India was not a founding member. The strategic community panicked then, too. But India joined as the 14th member a year later. Pax Silica will likely follow the same trajectory. The semiconductor firms that rely on India for their Global Capability Centres (GCCs) will ensure that India is eventually brought into the fold.
Right now, the Pax Silica “fact sheet” is heavy on vague announcements but light on executable policy. India should wait, watch, and continue building.