Various plans and investments to test and assemble semiconductors in India were approved during Modi’s trip, though production will still have to wait. Some defense agreements were also signed, not only to counter Beijing, but also to de-link Delhi from Moscow’s dependency. For the Indian prime minister, criticized for the deterioration of human rights, it is also a great success in view of next year’s elections.
Washington () – US President Joe Biden and Indian Prime Minister Narendra Modi yesterday announced a series of trade and defense agreements that revolve around improving military ties and the production of microchips.
Just days before Modi’s “historic” visit to the US, the Indian government had approved a $2.75 billion plan to build a new semiconductor assembly and testing facility in India for chipmaker Micron. Technology, which will invest more than $800 million in the project. Delhi has agreed production-related incentives worth 110 billion rupees ($1.34 billion) for its facility, which is to be built in Modi’s home state of Gujarat, likely in the city of Sanand.
Chips will not yet be manufactured at the new facility, but may instead be tested by Micron (or other manufacturers) and packaged before shipping to customers. However, it is an important step in US-India relations, as Biden tries to reduce the risks of reliance on China by domestic companies. In the context of the current trade dispute between the two largest economies in the world, in October last year Washington imposed a series of limits on the sale of microchip manufacturing software to China, while in May Beijing announced that it could no longer buy Micron products.
For Modi, who maintains a less assertive attitude towards Beijing, it is an undoubted gain, and not only because it is a source of great prestige to be able to do business with the largest democracy in the world on the eve of next year’s elections: since the coronavirus pandemic Covid-19, India has also tried to present itself as an alternative to China by announcing a $10 billion incentive plan to increase semiconductor production in the country. In addition to Micron, Applied Materials, which supplies hardware and software for the production of chips and other electronics materials, has announced the creation of a new $400 million semiconductor innovation and marketing center, while Lam Research, another microchip maker, plans to launch a training program involving up to 60,000 Indian engineers.
Upon his arrival in New York, Modi met with billionaire Elon Musk, CEO of Tesla and SpaceX. “I am sure that Tesla will come to India and we will do it as soon as humanly possible,” Musk told reporters after meeting with the Indian prime minister on June 20. “I plan to visit India next year. I want to thank Prime Minister Modi for his support and I hope we can announce something in the future. It is very likely that there will be significant investment in India,” Musk stressed again. Statements demonstrating the overcoming of previous tensions with the Indian government after the electric vehicle company moved its production from India to the Middle East in 2022.
But the agreements that were signed these days between Washington and Delhi are multiple and also have to do with defense; not only with the aim of preventing an increase in Chinese power in the Indo-Pacific, but also in an attempt to reduce India’s reliance on Russia for arms supplies. General Electric’s aerospace division signed an agreement with India’s state-owned Hindustan Aeronautics for the production of Tejas fighter engines used by the Indian Air Force. Delhi will also buy 31 MQ-9B drones produced by General Atomics, another company that announced the establishment of a new plant in India. For its part, the Indian company Vikram Solar will invest up to 1.5 billion dollars to help the United States produce solar panels and be competitive in the clean energy sector, and India will join the Minerals Security Partnership, an initiative to buy minerals led by the United States. Finally, trade, space cooperation and the granting of work visas to Indian citizens will be facilitated.
However, some experts They raised questions about granting sensitive technologies to India, which continues to maintain military and economic relations with Russia even after the invasion of Ukraine. On the other hand, two Muslim members of the United States Congress and other progressive legislators, including Alexandra Ocasio-Cortez, yesterday boycotted Modi’s speech before the US Parliament, recalling the aggression of Hindu nationalism against religious minorities and the repression of the press freedom since Modi came to power. At the press conference, when asked what measures he was prepared to take to “improve the rights of Muslims and uphold freedom of expression”, Indian Prime Minister Modi responded by saying that there is no need for improvements, stating that “no there is no place for any kind of discrimination” under his administration.
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