On November 16, 2023, the President of the United States of America, Joe Biden has reaffirmed the commitment to strengthen the semiconductor supply chain with special emphasis on collaboration with key nations such as India. He also underscored the importance of working together with Japan, India, Republic of Korea (South Korea), and Singapore to strengthen the semiconductor industry.
Strengthening Semiconductor Industry
“When I travelled to Vietnam, as I had mentioned earlier, to mark thr historic new phase in the partnership of our countries, we committed to work together to strengthen the semiconductor industry and supply chain with India, South Korea, Japan, Singapore. We have launched initiatives to shape technologies and standards that will transform the future,” Biden said at the APEC (Asia-Pacific Economic Cooperation ) Summit
The President highlighted the launch of the new initiatives aimed at shaping technologies and standards that will drive transformation in the semiconductor sector The move reflects a shared commitment to addressing the challenges of the evolving technological landscape and fostering innovation in a collaborative manner.
US-India MoU
India, specifically mentioned by President Biden is set to play a pivotal role in this global initiative. The strengthened partnership between India and the US in the semiconductor domain not only signifies the mutual commitment to technological advancement but also underscores the importance of India as a key player in the global technology landscape.
In March 2023, the US and India had inked a memorandum of understanding (MoU) on the semiconductor supply chain and innovation partnership during the India-US Commercial Dialogue relaunched with the strategic outlook with a specialized focus on supply chain resilience along with diversification and new emerging areas, after a gap of three years.
The agreement was signed during the dialogue in New Delhi by the Union Minister of Commerce and Industry, Piyush Goyal and the US Secretary of Commerce Gina Raimondo on March 10, 2023 and a White House factsheet mentioned the collaboration as a technology partnership for the future.
The MoU signed between India and the US, seeks to establish a collaborative mechanism between the two governments on semiconductor supply chains resiliency and diversification in the view of the US CHIPS and Science Act and Indian Semiconductor Mission.
It aims to leverage the complementary strengths of both countries and facilitate commercial opportunities and development of the semiconductor innovation ecosystem through discussions on various aspects of semiconductor value chains. The MoU envisages mutually beneficial research and development, talent, and skill development.
The Micron Technology Inc. with support from the Indian semiconductor Mission will invest more than 800 million towards a new USD 2.75 billion semiconductor assembly and testing facility in India. The Applied Materials has announced that it will build a Semiconductor Center for Commercialization and Innovation in India to further strengthen the semiconductor supply chain diversification.
India-US Partnership
India is the ninth largest trading partner of the US while the US is the largest trade partner, and export destination for India according to a statement from the Ministry of Commerce and Industry. The bilateral trade in goods saw robust growth in Financial Year (FY)-2022 surpassing USD 131 billion in goods, thus doubling since 2014 in eight years while total trade in goods and services is expected to cross USD 180 billion.
The Commerce Ministry Statement also reveals that the US is the third biggest source of foreign direct investment (FDI) for India and is also the top five investment destination of India. It also said that the visit of the Commerce Secretary of the US will immensely contribute to furthering trade and commercial ties between the two countries.
About APEC 2023
Notably the leaders of the 21 member APEC are meeting in San Francisco for the 30th APEC Leadership Summit hosted by the US and Joe Biden. The APEC members constitute 62 percent of the global GDP and half of the global trade.
Its members are Australia, Brunei, Canada, Indonesia, Japan, S Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, US, Taiwan, Hong Kong, China, Mexico, Papua New Guinea, Chile, Peru, Russia and Vietnam. India, a major economy, is not part of APEC.
President Biden had invited Prime Minister Narendra Modi to attend this year’s APEC Leadership Summit. India is being represented by its Commerce and Industry Minister Piyush Goyal.
