India out of US-led coalition on critical minerals supply chain

Pax Silica is a US-led strategic initiative to build a “secure, prosperous, and innovation-driven silicon supply chain” — from critical minerals and energy inputs to advanced manufacturing, semiconductors, AI infrastructure, and logistics.

“Rooted in deep cooperation with trusted allies, Pax Silica aims to reduce coercive dependencies, protect the materials and capabilities foundational to artificial intelligence, and ensure aligned nations can develop and deploy transformative technologies at scale. Countries will partner on securing strategic stacks of the global technology supply chain, including, but not limited to, software applications and platforms,” the State Department said.

“Countries affirmed a shared commitment to pursue projects to jointly address AI supply chain opportunities and vulnerabilities in priority critical minerals. semiconductor design, fabrication, and packaging, logistics and transportation, computing, and energy grids and power generation,” it said.

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 of concern and building trusted technology ecosystems, including ICT systems, fibre-optic cables, data centres, foundational models and applications.

Experts said countries that are part of the US-led initiative are among the top in terms of AI and semiconductor supply chain, and India currently has not evolved in these sectors, which could be one of the reasons why India does not find mention in the list of countries.

However, like in the case of earlier such initiatives, particularly the Minerals Security Partnership (MSP) launched by the US in 2022, India could join the initiative at a later stage.

Ganesh Sivamani, Associate Fellow, Centre for Social and Economic Progress (CSEP), said, “The US, for instance, leads in design and IP for semiconductor chips. The Netherlands is essential for lithography machines, which are used for printing chips. You can run through each of these countries and identify the comparative advantage it has in the existing semiconductor supply chains.”

“India currently does not have an evolved supply chain in this sector. We have expressed ambitions to do so in the future. 
We are strong in design, we also possess significant quartz reserves that are used for silicon production, and we mine quartz. But we do not have the capacity to process the quartz to the high grade needed for semiconductors. When MSP was launched, India was not part of it, and it joined the grouping later,” Sivamani said.

Federation of Minor Minerals Industry (FEMMI) secretary general CH Rao said, “China dominates the global supply chain of critical minerals. Several countries, including India, send raw material for processing the rare earth elements because they have huge capacities. The US initiative intends to sideline China, and India’s intention should be to join such an initiative. But the ground reality is that India does not have much processing capacity. We not being part of the initiative could be a reflection of the challenges around the trade deal. But once the differences are settled, India should join this initiative.”

In an interview in October, US Secretary of the Treasury Scott Bessent had framed China’s new export controls on critical minerals as “China versus the rest of the world”, stating that the US is pushing back firmly and expects strong support from “Europe, India and other Asian democracies”.