In a world where strategic competition is increasingly fought over semiconductors, artificial intelligence infrastructure, critical minerals, and data, India has made a decisive move by joining the Pax Silica alliance — a US-led coalition focused on building trusted, democratic infrastructure for AI and critical technologies. The decision, which has been likened by analysts to India’s earlier choices on nuclear technology and defense platforms, represents a significant alignment of India’s technological future with the democratic world’s effort to build supply chains that are not dependent on China.
The name “Pax Silica” — a play on the Latin “Pax” (peace) and Silicon — reflects the alliance’s ambition to create a geopolitical order built around the control of semiconductor technology and the AI systems that depend on it. For India, joining is simultaneously an economic opportunity, a strategic calculation, and a potential constraint on the foreign policy flexibility that has been the hallmark of Indian diplomacy for seven decades.
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Table of Contents
Five Important Key Points
- The Pax Silica alliance focuses on critical minerals, semiconductor manufacturing, and AI infrastructure, complementing India’s domestic programs including India Semiconductor Mission, IndiaAI, and the National Critical Mineral Mission.
- India’s membership can provide access to advanced equipment, attract FDI in high-tech manufacturing, influence global technology standards, and financially justify new supply chains not pegged to China.
- The primary risks include potential economic retaliation from China (which supplies key upstream inputs in minerals and active pharmaceutical ingredients), and stricter technology-transfer guardrails that could clash with India’s preference for strategic autonomy.
- The alliance’s “trusted ecosystem” framework could create rigid expectations around export controls that limit India’s ability to maintain its traditional “issue-based alignment” foreign policy approach.
- Success depends on whether Pax Silica partners move beyond declarations to build a real-world end-to-end supply chain — from mining critical minerals to refining them, converting them into chips, and deploying them in AI systems — all within the alliance’s member countries.
What Are Critical Minerals and Why Do They Matter?
Critical minerals are raw materials that are essential for modern technology — particularly for batteries, semiconductors, renewable energy systems, defense electronics, and communication infrastructure — but whose supply chains are heavily concentrated in a small number of countries, many of which are either geopolitically unstable or aligned with China. The list of critical minerals typically includes lithium, cobalt, nickel, rare earth elements, gallium, germanium, graphite, and several others.
China’s dominance of critical mineral supply chains is extraordinary. China controls approximately 60% of global lithium refining, 80% of cobalt refining, and over 90% of rare earth element processing. For semiconductors, gallium and germanium — both of which China has recently restricted for export — are essential components. This concentration gives China immense potential leverage over the defense and technology sectors of democratic nations, a vulnerability that the Pax Silica alliance is explicitly designed to address.
India’s positioning in this landscape is complex. India has significant deposits of several critical minerals — including rare earth elements (with one of the world’s largest estimated reserves), mica, bauxite, and iron ore — but its processing and refining capacity is negligible. Most of India’s rare earth ore is exported unprocessed and then imported back as refined material, largely through Chinese processing facilities. Building domestic processing capacity is a strategic imperative but requires massive capital investment, technology transfer, and regulatory reform of India’s mining sector.
India’s Strategic Calculus: Opportunity and Autonomy
For India, the Pax Silica alliance offers a path toward accelerating its semiconductor and AI ambitions. The India Semiconductor Mission, launched in 2021, aims to establish a domestic semiconductor fabrication and design ecosystem. However, semiconductor fabrication requires not only massive capital investment (a state-of-the-art fab can cost $20 billion or more) but also access to advanced equipment — particularly extreme ultraviolet (EUV) lithography machines made almost exclusively by the Dutch company ASML. US export controls on advanced chips and chip-making equipment to China have created an opportunity for India to position itself as an alternative manufacturing location for companies redirecting their supply chains away from China.
The Pax Silica alliance, by creating a framework of “trusted ecosystems,” could facilitate technology transfer, joint R&D, and preferential market access that accelerates India’s semiconductor ambitions. The alliance could also give India a seat at the table in setting global technology standards — standards for AI safety, data governance, critical mineral certification, and semiconductor export controls — which will significantly affect India’s future economic and strategic options.
However, the strategic autonomy concern is real and must be taken seriously. India’s foreign policy since independence has been built around the principle of non-alignment — later evolved into “strategic autonomy” — which emphasizes that India makes its international alignments based on specific interests rather than ideological or alliance commitments. This approach has served India well, allowing it to maintain productive relationships with Russia, Iran, the Gulf states, and Israel simultaneously, even as these relationships involve obvious contradictions.
Joining a technology alliance anchored in US strategic interests creates genuine risks. The most immediate is Chinese economic retaliation. China is India’s largest trading partner by total volume, a major supplier of electronics components, active pharmaceutical ingredients (APIs), and industrial inputs. If China interprets Pax Silica membership as a hostile act, it could restrict exports of critical upstream inputs, slow approvals of Indian business operations in China, or use its influence in third markets to disadvantage Indian companies. The 2020 Galwan Valley clash demonstrated that China is willing to use economic pressure alongside military signaling.
The Technology Transfer and Export Control Dilemma
A central feature of the Pax Silica framework is its emphasis on “trusted ecosystems” — the idea that advanced technology should only flow among nations that have robust export control regimes, cybersecurity standards, and democratic governance structures. This is operationalized through requirements like end-use verification, re-export restrictions, security audits of facilities handling sensitive technology, and aligned export control lists.
For India, implementing these requirements creates both opportunities and burdens. On the positive side, India’s compliance with high-standard technology transfer protocols would strengthen its case for access to advanced US defense and dual-use technologies — including those relevant for AI, quantum computing, and advanced communications. The US-India Defence Technology and Trade Initiative (DTTI) and the foundational defense agreements (LEMOA, COMCASA, BECA) have already created a framework for deeper technology sharing; Pax Silica could extend this logic to the civilian technology domain.
On the negative side, strict export control requirements create compliance costs for Indian companies, particularly smaller firms that may lack the legal and administrative infrastructure to navigate complex dual-use export control regimes. Indian companies attempting to join global value chains — including in the semiconductor, AI hardware, and quantum computing spaces — may face significant delays, costs, and uncertainty as they seek to demonstrate compliance with multiple overlapping regulatory frameworks (US Export Administration Regulations, EU export controls, and India’s own SCOMET framework).
The China Factor and Managing Bilateral Complexity
Perhaps the most sensitive dimension of India’s Pax Silica membership is its implications for Sino-Indian relations. The India-China relationship, already deeply strained by the 2020 military standoff in Eastern Ladakh and the subsequent four-year process of disengagement, exists in a state of managed tension. Trade and economic links remain substantial despite the political and military friction — India imported approximately $100 billion worth of goods from China in 2024-25, including electronics, chemicals, and industrial machinery.
A technology decoupling from China through Pax Silica membership could exacerbate this tension. China has already demonstrated that it views technology alliances — whether the US-Japan-Netherlands semiconductor export control coordination, the AUKUS advanced technology pillar, or the Quad’s semiconductor supply chain initiative — as strategic threats to its own technology ambitions and its position as the dominant power in Asia. India joining another such coalition will likely provoke a negative response, though its form and magnitude remain uncertain.
India’s task is to manage this complexity by ensuring that Pax Silica membership is accompanied by consistent diplomatic engagement with China, clear communication about the non-hostile intent of India’s technology policy choices, and maintenance of enough economic interdependence to ensure that China calculates the costs of retaliation as higher than the benefits.
Relevance for UPSC and SSC Examinations
This topic sits at the intersection of several UPSC Mains GS Paper II themes — India’s foreign policy, bilateral relations, multilateral groupings, and technology diplomacy — and GS Paper III themes — critical minerals, semiconductor policy, AI governance, and economic security. For Prelims, awareness of what critical minerals are, India’s semiconductor policy, the concept of “trusted ecosystems,” and India’s strategic autonomy doctrine are all potentially testable. Essay paper candidates can explore the theme of “technology sovereignty and the limits of strategic autonomy in a multipolar world.” For SSC aspirants, a basic understanding of why semiconductors and critical minerals matter for national security and economic competitiveness is the key takeaway.