With China in mind, Biden and Modi to seal deals from space to chips, 5G to critical minerals

Leaders will hold talks on Thursday and announce a raft of agreements, senior US officials say
It comes as the two nations move closer amid a mutual desire to counter Beijing’s rising clout

US-China relations

Khushboo Razdanin Washington

Published: 5:40pm, 22 Jun 2023

Why you can trust SCMP

US President Joe Biden and Indian Prime Minister Narendra Modi on Thursday will announce a slew of cooperation agreements spanning from space to semiconductors, critical minerals to core technologies, telecommunications and defence.

Biden is hosting Modi at the White House for a state visit, only the third such visit for his administration since taking office in January 2021. They will hold bilateral talks on Thursday afternoon.

Known for avoiding impromptu media interactions, Modi will hold a joint press briefing with Biden to share the outcomes of the meeting. It will be followed by Modi’s address to a joint session of US Congress.

01:55

Elon Musk meets with Indian PM Modi, says Tesla may make ‘significant investment’

According to senior Biden administration officials, the two leaders will announce key collaborations under the umbrella of the US-India Critical and Emerging Technology (iCET) initiative, which was launched in May last year to deepen cooperation in artificial intelligence, quantum computing, semiconductors and wireless telecommunication.

American chip maker Micron Technology will set up a US$2.75 billion semiconductor assembly and test facility in India. On Wednesday, Micron’s Indian-American CEO Sanjay Mehrotra also met Modi to discuss the plan.

In addition, Applied Materials, an American manufacturing company that offers equipment, services and software to chip makers, will open a commercialisation and innovation centre in India. Lam Research, another US-based semiconductor company, will train 60,000 Indian engineers.

The developments come against the backdrop of a fierce competition between Beijing and Washington for supremacy in advanced semiconductor technology. Last month, Micron was blocked from key infrastructure projects by Beijing in an apparent retaliation to Biden’s ban on the export of cutting-edge semiconductor technology to China.

But diversification of semiconductor supply chains is not the only area of concern for the Biden administration as it is also looking to reduce reliance on China for critical minerals used in batteries that power electric vehicles.

In this regard, Washington will support New Delhi’s membership to the US-led mineral security partnership aimed at strengthening critical minerals supply chains. Other members of the grouping are Australia, Canada, Finland, France, Germany, Japan, South Korea, Sweden, the United Kingdom and the European Commission.

02:05

China imposes restrictions on US chip maker Micron, escalating tech war

Partnerships on advanced telecommunications are also on the cards when Biden and Modi talk business. According to senior Biden administration officials, both sides have agreed to work together on 5G and 6G technologies. India will also participate in the US “rip and replace” programme that removes telecoms equipment made by untrusted vendors.

In November, the US banned the sale and import of new communications equipment from five Chinese companies, including telecoms giant Huawei Technologies, on national security concerns.

A senior Biden administration official on Wednesday said there was “no partner more consequential now and into the future than India” when thinking about the future of AI, computing, building resilient supply chains for clean energy technologies, semiconductors and other critical and emerging technology.

Lifting the new-found bilateral trust to cosmic levels, US and Indian space agencies will be developing the strategic framework for human space flight cooperation this year. Both sides have also agreed to a joint mission to the International Space Station in 2024. New Delhi will also join the Artemis Accords, a US-led effort to return humans to the moon by 2025.

The Biden-Modi bilateral talks will also herald the two countries’ entry into what a Biden administration official described as the “next generation of defence partnership”, including a proposal by the US’ General Electric to jointly produce F414 jet engines with India’s Hindustan Aeronautics. This marks a greater transfer of American jet engine technology to a non-treaty ally than ever before. India will also be buying 31 MQ-9B drones worth US$3 billion.

On Wednesday, the India-US Defence Acceleration Ecosystem, also called Indus X, was launched to facilitate joint innovation on defence technologies, and accelerate the integration of India’s fledgling private sector defence industry with the US industrial complex.

02:26

Beijing hits back at US President’s ‘dictator’ comments as violating ‘China’s political dignity’

A senior Biden administration official said that India’s emergence as a great power would be “central to ensuring US interests and the interests of our partners in the coming decades”.

Another key agreement is expected in allowing US Navy ships operating across theatres to service and undergo major repairs in Indian shipyards.

India, along with Australia and Japan, is a member of the US-led Quadrilateral Security Dialogue aimed at countering China in the Indo-Pacific region. The grouping is largely seen by Beijing as anti-China.

On Tuesday, just hours before Modi landed in Washington, Biden claimed he had told Chinese President Xi Jinping that the Quad was aimed at ensuring that “international air and sea lines remain open”.

“So now we have India, Australia, Japan and the United States working hand in glove in the South China Sea,” he added.

‘No fantasies’ as China slams ‘ridiculous’ Biden comments on Xi: analysts

Beijing claims large swathes of the South China Sea in a dispute with the Philippines, a mutual defence treaty ally of the US. While Washington does not have any territorial claims in the region, it asserts the right to innocent passage under the freedom of navigation. Beijing says US actions violate international law due to the use of military ships and aircraft.

India after long maintaining a neutral stance has made a tilt towards Washington on the issue. Locked in a historical dispute over a land border with Beijing, New Delhi in 2020 called the South China Sea a “part of global commons”.

A senior Biden administration official on Wednesday said India’s “growing commitment to playing a more engaged international role, including in the Indo-Pacific Quad, demonstrates a new and growing willingness” to join Washington in “protecting and advancing a shared vision of a free, open and rule-based global order as a strong maritime democracy”.

Narendra Modi greets supporters as he arrives in New York on Tuesday. Photo: AP

However, some in Washington have accused Biden of becoming blinded by the great power rivalry and rolling out a red carpet for Modi – a man who was once denied a US visa for violent riots that largely targeted India’s Muslim minority under his watch in 2002.

Human rights groups have also raised concerns regarding democratic backsliding and suppression of political opposition and a free press under Modi in India.

A Biden administration official on Wednesday said Biden shared a close relationship with Modi and would not shy away from holding conversations on religious discrimination, treatment of minorities and press freedoms.