India, US to ink MoU on semiconductors, launch dialogue on export controls

A memorandum of understanding (MoU) to be signed by India and the US on cooperation in semiconductors.

Will help the Indian side play a greater role in diversified supply chains and identify opportunities for joint ventures or technology partnerships, US commerce secretary Gina Raimondo said on Thursday.

Raimondo and her Indian counterpart Piyush Goyal will on Friday co-chair the India-US commercial dialogue after a gap of three years to discuss ways to drive trade and investment. The dialogue comes close on the heels of the launch of the inauguration of the initiative on Critical and Emerging Technology (iCET).

“We would like to see India achieve its aspirations to play a larger role in the electronic supply chain and to that end, the MoU that I am signing on this trip around semiconductors is designed to help achieve that goal,” Raimondo told a telephonic media briefing.

Raimondo said India and the US are in a “fortunate situation” as both sides are beginning to implement separate incentive programmes for the semiconductor industry. Discussions between the two sides have looked at transparency in incentives, coordinating on their respective semiconductor initiatives, sharing information, preventing over-subsidising and a glut of certain kinds of chips, jointly mapping supply chains, and alignments based on the demand for semiconductors, she said.

India has launched a production-linked incentive scheme for chips and the US recently unveiled its CHIPS and Science Act to help rebuild its manufacturing and supply chains. Both initiatives have come at a time when India and the US are working to end their dependence on China for chips.

“The MoU talks about how we will share information about the semiconductor commercial opportunities between our two countries, how we will have a continued dialogue around policies that would encourage private sector investment in the semiconductor ecosystem,” Raimondo said.

Jointly mapping the supply chain will help the two countries to figure out where there might be opportunities for joint ventures or technology partnerships, job training, and research and development partnerships, she said.

“So, we are looking for near-term commercial opportunities, but also we’re looking for longer-term strategic opportunities because you know this isn’t a one-year collaboration. We think this is a five, 10 [or] 20-year collaboration between the US semiconductor industry and electronic supply chains and India,” she added.

Raimondo said she and Jaishankar launched the India-US Strategic Trade Dialogue at a meeting on Thursday. On the US side, the dialogue will be led by the under secretary of the Bureau of Industry and Security under the commerce department while the foreign secretary will head it on the Indian side, with the focus on export controls.

“This is exciting because it’s an official government-to-government arrangement where we’re going to deepen our engagement with India, specifically around the area of aligning our export controls and sharing information with one another,” she said.

The dialogue will address export controls, explore ways of enhancing high technology commerce, and facilitate technology transfers between the two sides, the external affairs ministry said.

During their discussions, Jaishankar and Raimondo agreed on the need for increased bilateral strategic and high technology trade, given the shared priorities of building resilient and trusted global supply chains, the ministry said. They also talked about efforts to deepen economic engagement iCET and the Indo-Pacific Economic Framework (IPEF).

In the context of the IPEF, Raimondo said the US expects to have the supply chain, infrastructure and tax and anti-corruption pillars “signed up, including India, by the end of the year”.

The US, India and 12 other partners in the region are developing policies under IPEF to create more resilient and secure supply chains, accelerate progress on green transition and demonstrate their commitment to a better business environment, she said.