India on Friday (February 20) signed the Pax Silica declaration on the sidelines of the AI Impact Summit in New Delhi, formally entering the American-led strategic initiative to counter China’s dominance in artificial intelligence and technology supply chains.

The Donald Trump administration had launched the grouping on December 12, but left India out of its first list.

It was only a month later that the new US Ambassador to India, Sergio Gor, announced that India would be invited to join the initiative, striking a conciliatory note amid the trade tensions that were prevailing between the two countries, before the agreement on a trade deal framework was struck.

This comes after the US earlier this month rolled back 25% additional tariffs, and New Delhi and Washington are expected to sign an interim trade deal next month.

Speaking at the signing ceremony at the AI Summit, US Ambassador to India, Sergio Gor, said that Pax Silica is a coalition of capabilities that replaces “coercive dependencies” with positive-sum alliances with trusted industrial bases. “India’s entry in Pax Silica is not just symbolic, it’s strategic and essential. India is a nation with deep talent, deep enough to rival challengers. India’s engineering depth offers critical capabilities for this vital coalition. India has made important strides in critical minerals processing capacity, and India and the US are engaged,” Gor said.

Here’s a look at what Pax Silica is, why India was included only belatedly, and why the grouping matters.

Pax Silica is a US-led initiative to counter China’s dominance in new age sectors such as critical minerals that has created a wide gap in the price points of Chinese products and those produced elsewhere. 

According to the US, Pax Silica is aimed at bringing “friendly and trusted” countries together to reduce “coercive dependencies”, protect materials and capabilities “foundational to artificial intelligence”, and “ensure aligned nations can develop and deploy transformative technologies at scale”. 

The fine print issued by the US State Department after the initiative was launched in December says the move aims to build a “secure, prosperous, and innovation-driven silicon supply chain” to secure access across the AI stack, from minerals and chips to security and logistics.

Measures under Pax Silica include pursuing new joint ventures and strategic co-investment opportunities, protecting sensitive technologies and critical infrastructure from undue access or control by countries and building trusted technology ecosystems, including Information and Communication Technology (ICT) systems, fibre-optic cables, data centres, foundational models and applications. India, for instance, has had concerns over China’s involvement in critical infrastructure, such as telecom.

While India has concerns over China’s involvement in India’s critical infrastructure, such as telecom, the West has worries over extreme dependence on China. The US has been engaged in a trade war with China to decouple due to the widening trade gap, and India has been positioning itself to get a share of the manufacturing supply chain shift.

Why India was left out of the first list

The US initiative intends to sideline China and India naturally sees itself in being part of such an initiative. But the lack of processing capacity and expertise is the primary reason why India did not make the cut right at the outset. 

It was seen as lacking the critical edge technologies or access to resources that Pax Silica is targeting, and is not a major repository of critical minerals.

That is not the case with the list of eight countries that Pax Silica brought together, each of which have some sort of a lead in AI or semiconductor supply chains — Japan, Korea, Singapore, the Netherlands, the UK, Israel, the UAE and Australia.

“Together, these countries are home to the most important companies and investors powering the global AI supply chain,” the statement said. 

The Netherlands, for instance, has a stranglehold over specialised lithography machines that are extremely hard to substitute for chipmaking, while Japan and South Korea have technology and manufacturing expertise.

Australia is a repository of critical minerals and has mining expertise, while Israel is an innovation and technology centre and Singapore is a global transhipment hub, experts said.

The UK is a services and tech hub, while the UAE has made visible progress in fostering AI expertise and ramping up supporting infrastructure.

Why does it matter?

Pax Silica aims to build secure supply chains — ranging from critical minerals and energy inputs to advanced manufacturing and semiconductors. All of these are areas of concern for India.

It is significant because it signals the manner in which the next global tech order could take shape as countries regroup in strategic sectors involving a Chinese presence. Grouping such as Pax Silica could cohesively work to address supply chain chokepoints next.

India too has been trying to position itself as a spoke in the global supply chain realignment as American and European companies look to diversify away from China.

India’s presence in Pax Silica could help New Delhi’s growth in technology-heavy sectors, which it currently lacks, deepening its import dependency. Experts said that the countries that are part of the US-led initiative are among the leaders in AI and semiconductor supply chain.

India currently lacks a global-scale AI infrastructure and stands to gain from the likely investments and partnerships under the initiative. Its entry in Pax Silica comes with considerable investments committed by US companies in Indian AI infrastructure.

Microsoft late last year announced plans to spend $17.5 billion to expand its AI infrastructure and cloud computing capacity in India over the next four years. The investment, its largest in Asia, is on top of the $3 billion announced by the tech giant earlier this year, with Microsoft clarifying that it is on track to spend that amount by the end of 2026.

Google also announced investments worth over $15 billion over five years to set up an artificial intelligence data centre in Andhra Pradesh, in what would be its biggest investment yet in the country. The tech giant has partnered with the Adani Group and Airtel to build the infrastructure for the project, which also includes the construction of a new international subsea gateway. In a blog post, Google said the data centre will create “substantial economic and societal opportunities for both India and the United States”.

Overall, this is expected to power India’s late-start and growth in the semiconductor mission and the AI race. Sources said the presence of top American CEOs and founders at the AI Impact Summit, including Sundar Pichai and Sam Altman, is an indication of Delhi’s value in the overall AI and semiconductor landscape.