Kamal Ghorui
Pax Silica opens gates to big investment in India, even as the tech Cold War heats up
Now that India has joined Pax Silica, anxiety over being left out in Dec should be buried, and attention should turn to making the most of this US-led alliance. What is Pax Silica? Literally, it means ‘silicon peace’, silicon being a byword for computing technologies. But this ‘peace’ does not exist. It’s a long-term goal. What we’re living through is a tech Cold War whose fallout we experienced twice last year, in April and Oct. Both times, China curbed exports of rare earths and magnets made from them, hurting other countries’ industries. With 90% of world’s rare earth production, China can inflict this punishment on anyone, anytime. Hence, the need for a rival alliance that can secure supplies of minerals, semiconductors, energy, and human talent. Or, as US puts it: “Reduce coercive dependencies.”
And given the fresh round of uncertainties set off by the US Supreme Court’s tariff rebuke to Trump, it is important to note that Pax Silica is not a tariff-focussed pact as traditional trade agreements are. This is about backstopping technological leadership with supply-chain control. That’s why US started the alliance with a handful of countries like Japan, S Korea and Australia that are strong in semiconductors and critical minerals. Plus Netherlands, which has a monopoly on machines that make advanced chips.
But India has its place too. At Friday’s signing, US ambassador Sergio Gor mentioned “deep talent…engineering depth…critical minerals processing capacity,” all key to AI development. And AI is what this tussle is all about. It’s believed to be the most transformative technology ever, so both US and China want to establish their supremacy in it. India usually doesn’t take sides, but sitting on the fence won’t get us those multi-billion-dollar data centres, new submarine cables and chip-making factories that investors promised at the just-concluded AI Impact Summit. India’s entry into Pax Silica makes it easier for other partner nations to invest in it as part of their China+ strategy. Nobody expects this to erase China’s lead in, say, critical minerals, but if 20-30% of processing capacity comes up outside, it won’t be able to bully and disrupt supply chains. Therefore, peace – Pax Silica.
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