US Excludes India from AI Chips
Why did the United States exclude its “strategic partner” India from the AI chip list?
A day after announcing a wide-ranging measure to prevent the most advanced semiconductors from falling into the hands of China and other adversaries, Biden, who leaves office on Jan. 20, signed an executive order to encourage the private sector to build artificial intelligence infrastructure.
Today’s announcement provides momentum for developing domestic production capacity, while the measures announced on Monday laid the foundation for a massive global effort to protect America’s technological advantage in artificial intelligence.
Under the announced temporary rules, the United States will only allow its 18 allies to use its advanced chips without restrictions. Many other partners and friends failed to make the coveted list, one of which is India, the United States’ strategic partner in the Indo-Pacific region.
‘It’s not surprising that India was excluded’
The U.S. Department of Commerce’s policy framework divides the world into three categories: the first category includes the United States and 18 countries that have unrestricted use of U.S. advanced chips; the second is more than 100 countries that will be subject to new restrictions on advanced semiconductors, but there are individual exemptions; the third category includes adversaries such as China and Russia that face the greatest restrictions.
India, along with other US allies and close partners such as Israel and Singapore, falls into the second category.
Richard Rossow, senior advisor and chair of India and Emerging Asia at the Center for Strategic and International Studies (CSIS), believes that the considerations present in this new framework will ensure India’s future participation.
“In fact, they’ve announced that some countries will have a path to get exemptions above what they consider to be the standard ceiling, and I imagine India will be one of the few countries that will be exempted,” he told VOA.
However, Bhaskar Chakravorti, dean of global business at the Fletcher School of Law and Diplomacy at Tufts University, believes that India’s relationship with Russia “does not put it in the super-safe category.”
“While the U.S. wants to maintain a strong relationship with India, and certainly Modi will strive to continue to have a close relationship with Trump, the Indian government does tend to be an unreliable ally because it (alarmingly) takes actions that are consistent with what the U.S. government deems to be in the best interests of India and political parties. These are often not the same as U.S. interests,” he told VOA via email.
Scott Jones, a non-resident fellow at the Stimson Center, a Washington think tank, also highlighted recent reports accusing some Indian companies of aiding Russia’s war in Ukraine but stressed that while it was disappointing, it was “not a setback for India.”
He also mentioned the impression that “India’s ability to control and manage technology may not be as strong as some of the 18 countries have proven.”
While India is not currently on this list of allies, growing technological cooperation may protect it from the latest restrictions.
In early January, U.S. National Security Advisor Jake Sullivan traveled to India to meet with Indian Prime Minister Narendra Modi and other senior officials. During the visit, the two sides reaffirmed their commitment to establish a “strategic technology partnership” and strengthen cooperation under the U.S.-India Initiative on Critical and Emerging Technologies (CET), a bilateral mechanism focused on technology partnership.
On semiconductors, the United States is promoting investment in India’s semiconductor manufacturing industry and strengthening R&D cooperation.
During the visit, Sullivan singled out U.S. chipmaker Micron’s investment of about $200 million in a semiconductor packaging facility in India, which he hopes will help “make India a new hub for the global chip ecosystem.”
The Indian government has also invested billions of dollars through its dedicated program called the Indian Semiconductor Mission and Production-Linked Incentive Program.
Rossow of the Center for Strategic and International Studies believes that the Indian government will not be “very surprised” that they were not included on the list.
India’s lack of response to the latest rules is likely to re-emphasize the assumption that the US National Security Advisor gave reassurances about India’s standing among US allies during his recent visit.
Jones of the Stimson Center agrees.
“I would be very surprised if Jake Sullivan had not informed his Indian counterparts in New Delhi last week about what was going to happen,” he said.
Ensuring American leadership in artificial intelligence
The Biden administration has been focused on the centrality of artificial intelligence to U.S. security and economic strength. The latest measures on AI are part of its efforts to prevent outsourcing of this critical technology and ensure that “the world’s AI operates within America’s orbit,” according to a White House fact sheet.
Since October 2022, the U.S. government has enacted a series of export control measures to block advanced semiconductors from entering China to prevent their use in military applications. While these measures initially had an adverse impact on China’s semiconductor industry, Beijing has been continuously improving its capabilities and trying to narrow the technological gap. It has been accused of obtaining chips through smuggling and exploiting loopholes to purchase chips through third countries. These practices are what the new rules are designed to counter.
This broad global strategy will not be easy to implement, Tufts University’s Chakravorty said.
“There are many challenges to implementation—from lobbying by U.S. chipmakers that would begin as soon as Trump takes office to potential leaks in the carefully calibrated list of countries and their allocations of graphics processing units,” he said. “Will there be a secondary market? How does that affect where future data centers are built?”
Jones of the Stimson Center believes the policy is more of a “symbolic gesture than a practical consideration” but sends a stern message to the rest of the world.
“The United States is making it clear that if you want to participate in the U.S.-sponsored AI ecosystem, you have to choose now. You choose China or you choose us. You can’t have it both ways. You can’t use one against the other. You have to make a choice,” he concluded.
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