(Bloomberg) — Narendra Modi in 2015 Since assuming office in 2014, he made his first official visit to the US, marking India’s highest geopolitical profile at any time. It wants to use that to become an important partner in America’s technological ambitions. .
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The trip will be high-profile with a White House party and a speech to the US Congress, making Modi the first Indian prime minister to address the legislature twice. In addition to meeting US President Joe Biden, he is also set to meet with private sector leaders, including Tesla Inc’s Elon Musk.
For Biden, India provides a diplomatic and military counterbalance to China’s power in the region at a time when the United States is distancing itself from its largest trading partner and world manufacturing power. Both countries see Beijing as a threat if Biden expands export restrictions to China under the Trump administration and the Modi government bans hundreds of Chinese apps in the wake of a 2020 border skirmish that killed 20 Indian soldiers.
High on the agenda is business, particularly in the technology space, removing regulatory restrictions. As the Biden administration tries to prevent China from acquiring advanced chips and other technologies, the US and India are working on ways to promote semiconductor manufacturing in India, according to the officials, who spoke on condition of anonymity because the discussions are private.
On Tuesday, National Security Council spokesman John Kirby said there is no more “consequential” partner than India on issues such as artificial intelligence, quantum computing, resilient supply chains, clean energy, semiconductors and climate change.
“We know that India will be a strategic partner for decades to come,” he told a news conference.
Modi’s desire to make India a player in chip manufacturing looks more credible today, with South Asian chip imports more than 38-fold in the first quarter. Apple Inc. tripled iPhone production in India last fiscal year to reduce its dependence on Beijing, while China’s embattled memory maker Micron Technology Inc. is close to winning government approval for a $1 billion semiconductor plant. .
Read More: Apple’s India iPhone production rises to $7 billion on China shift
“India, as a consumer of technology, is now being replaced by India at the table, looking to set the standards for the future of technology with like-minded countries,” frequent minister Rajeev Chandrasekhar of the government’s technology policy group told Bloomberg News in a recent interview.
Technology cooperation with the US is also spilling over into defence. General Electric Company and Hindustan Aeronautics are set to sign an agreement during Modi’s visit to manufacture engines for India’s fighter jets. The two parties will have a flexible license agreement that allows for technology transfer.
“America is selective about who it shares military technology with,” said Manjari Chatterjee Miller, a senior fellow at the Council on Foreign Relations. “GE deal to manufacture jet engines in India – shows how seriously America takes its partnership.”
US national and business leaders have heaped praise on India despite the government imposing high tariffs on various sectors. According to Hon Hai Precision Industry Co., India has reduced the import duties of these smartphones to bring more advanced manufacturing within its borders. And she paired it with grants designed to get attendees like Wistron Corp. to set up shop locally.
Done: Hon Hai is planning a $700 million factory for iPhone parts, and Samsung Electronics Co. is also looking to expand production.
Read more: Foxconn enters India for new electronics manufacturing
“India offers a unique crane for technology – successes there are guaranteed to be successful anywhere in the world,” Sanjay Gupta, head of Google India, said at an industry event.
Although India has seen some success in smartphone assembly, helping Apple export more than $7 billion of its devices from the South Asian country last fiscal year, many components still come from China. Even as India’s $10 billion push to make chips is just getting started, questions remain about whether the country can provide uninterrupted power and water supplies to companies that make cutting-edge chips, including Taiwan Semiconductor Manufacturing Co.
Modi’s visit comes at a critical time for India’s tech ecosystem, with a new digital law in consultation — and sometimes in conflict — with big names like Google, MetaPlatforms Inc. and Twitter. The draft law, which is expected within weeks, will help determine exactly how much opportunity India will give to foreign players.
India is among the top countries demanding content removal, even as internet companies pour billions of dollars into the country, citing China-like opportunities to avoid censorship by the Communist Party. Twitter Inc has gone to court to fight an order to suppress free speech.Organisations such as the Electronic Frontier Foundation have called on India to reverse its plans to crack down on classified communications.
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In March, an Indian court upheld an antitrust fine against Alphabet Inc.’s Google over its dominance of mobile platforms. Far from giving up, Google is pouring more investment and energy into customizing its Android software for India and expanding the local languages it supports.
Chandrasekhar said in the interview that India has the single largest pool of internet users in the world at around 830 million. That means that if companies want the market share, they have to follow Indian law, the government does not intend to have “hostile relations” with anyone.
“Don’t be fooled into thinking that they are here for any philanthropic purpose,” Chandrasekhar said of tech investors in India. “There is no market this big.”
–With help from Saritha Rai.
(Updates with US quote)
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