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US-China tech war
TechTech War

Tech war: US-India tech deal could speed up global supply chain realignment, hurting China

  • A new US-India pact on development in semiconductors, artificial intelligence and telecommunications has touched a nerve in Beijing
  • While India has emerged as a beneficiary of a global supply chain realignment, bureaucracies could limit the efficacy of its deal with Washington

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A US soldier and an Indian soldier carrying their respective national flags during disaster relief drills. Photo: AP Photo
Ben Jiangin Beijing
A new partnership between the US and India – targeting semiconductors, artificial intelligence and telecommunications, among other areas – could accelerate the realignment of global supply chains at the expense of China’s interests, according to analysts.

Details of the US-India Initiative on Critical and Emerging Technologies (iCET), published last Tuesday, also include planned cooperation in quantum computing and defence.

While China is not mentioned in the document, the agreement between Washington and New Delhi is seen as part of US efforts to limit the role of the world’s second-largest economy in global supply chains.

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US joins high-altitude military exercise with India near its Himalayan border with China

US joins high-altitude military exercise with India near its Himalayan border with China

The collaboration has touched a nerve in Beijing, where officials have shown growing concerns over a push by the US towards economic and technological decoupling with China.

Since last week, the People’s Daily has published three opinion pieces written by Zhong Sheng, a pen name representing the official position of the Chinese Communist Party’s mouthpiece, accusing the US of exerting its influence over allies to create cliques to hinder China’s development. The articles did not directly mention India.

Washington’s intention to work closer in the economic and technological fronts with India, which has by some estimates already replaced China as the world’s most populous country, stands in sharp contrast to its mistrust of China.
While the US has made steps to contain China’s semiconductor advancement to protect national security, it has pledged to support the “development of a semiconductor design, manufacturing, and fabrication ecosystem in India” and to help the South Asian nation develop a “skilled workforce” to play a bigger role in the global chip industry – a development that analysts say can weaken China’s standing.
US President Joe Biden speaks with Indian Prime Minister Narendra Modi at the G20 Summit opening session in Bali, Indonesia, in November 2022. Photo: Handout via Reuters
US President Joe Biden speaks with Indian Prime Minister Narendra Modi at the G20 Summit opening session in Bali, Indonesia, in November 2022. Photo: Handout via Reuters
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