Other BriefingsPM Modi’s Official Visit to the US: Technology Cooperation, Clean Energy Transition, and Strategic Goals
Indian Prime Minister Narendra Modi’s official visit to the US and an invitation from both chambers of the US Congress to address a joint session indicate strengthening ties between New Delhi and Washington DC. The two countries are aligned on their concerns vis-a-vis the rise of China and the need for de-risking supply chains and achieving technological advancements with cross-sector application. This provides an opening for increasing technical, scientific, and defense cooperation on the one hand, and US investments in India’s efforts to upgrade capability in critical sectors like semiconductors, on the other. Beyond the immediate MoUs and commercial announcements around the visit, a shift in favor of a stronger India-US trade and investment partnership is becoming more visible.
Indian Prime Minister Narendra Modi recently concluded his highly significant state visit to the United States (US) at the invitation of President Joe Biden. The visit showcased the growing cooperation, shared values, and India’s increasing influence in global affairs.
The collaboration between India and the US is poised to have a profound impact on the global stage as both nations actively engage in various multilateral and regional alliances, with the Quad being a notable example. Together, they are committed to fostering a free, open, inclusive, and resilient Indo-Pacific region.
During a joint news conference, President Biden emphasized the tremendous importance of the partnership between India and the US, highlighting its consequential nature and unprecedented dynamism. The discussions between the leaders revolved around their joint endeavors in addressing critical global issues, such as climate change, healthcare, and space exploration. The economic ties between the two nations were also recognized, underscoring their significant growth and potential.
Notably, the invitation extended to Prime Minister Modi the opportunity to address a joint meeting of the US Congress for the second time reflecting bipartisan consensus in Washington DC on strengthening bilateral relations. This honor has been given to very few leaders in the past – Winston Churchill, Nelson Mandela, Binyamin Netanyahu, and Yitzhak Rabin.
Overall, Modi’s state visit to the US highlighted the deepening cooperation and shared bilateral objectives with far-reaching implications for various sectors, including for business. We highlight the key takeaways from the visit in this article.
India-US tech partnership
The India-US tech partnership is on a trajectory of growth, innovation, and collaboration. With a focus on fostering an open and secure technology ecosystem, both countries want to harness the potential of emerging technologies and drive economic growth.
Semiconductor supply chain and innovation partnership
The signing of a Memorandum of Understanding (MoU) on semiconductor supply chain and innovation partnership stands as a significant step in coordinating the semiconductor incentive programs of India and the US. This agreement opens doors for commercial opportunities, research collaborations, talent development, and skill enhancement.
- Micron Technology, Inc., announced plans to invest up to US$825 million in building a semiconductor assembly and test facility in India, with support from the Indian government.
- The combined investment, valued at US$2.75 billion, is expected to create 5,000 new direct jobs and 15,000 community job opportunities over the next five years.
- Lam Research proposed to train 60,000 Indian engineers through its Semiverse Solution virtual fabrication platform, contributing to India’s semiconductor education and workforce development goals.
- Applied Materials, Inc., committed to investing US$400 million to establish a collaborative engineering center in India.
These investment commitments further demonstrate the strong intent to boost the semiconductor ecosystem in India, foster job creation, and advance semiconductor education and workforce development goals.
Advanced telecommunications
India and the US share a common vision of establishing secure and trusted telecommunications, resilient supply chains, and promoting global digital inclusion. This shared objective has led to the creation of two Joint Task Forces focused on advanced telecommunications, specifically Open RAN and research and development in 5G/6G technologies.
Collaboration between India’s Bharat 6G Alliance and the US Next G Alliance, supported by funding from the US International Development Finance Corporation (DFC), will play a pivotal role in driving Open RAN field trials and roll-outs in both nations. This collaboration aims to accelerate the implementation and adoption of Open RAN technology, which will enhance the flexibility and security of telecommunications networks.
Furthermore, both countries have endorsed an ambitious vision for 6G networks, emphasizing the importance of standards cooperation, accessibility to chipsets for system development, and joint research and development projects. To ensure secure and reliable telecommunications, a “Trusted Network/Trusted Sources” bilateral framework has been emphasized. This framework aims to establish a trustworthy and robust telecommunications infrastructure that safeguards sensitive information and protects against cyber threats.
Quantum technology and AI collaboration
To facilitate collaboration among industry, academia, and government in the field of quantum technology, a joint Indo-US Quantum Coordination Mechanism was established. This mechanism will drive the development of a comprehensive Quantum Information Science and Technology agreement. Both countries are committed to reducing barriers to US-India research collaboration, sustaining and expanding quantum training and exchange programs, and promoting public-private collaborations in high-performance computing (HPC) facilities and the development of artificial intelligence (AI) and quantum technologies.
Joint research collaborations funded by the US National Science Foundation (NSF) and the Indian Department of Science and Technology (DST) are playing a pivotal role in driving innovation in emerging technologies. Funding joint research projects in various fields, including computer and information science, engineering, cybersecurity, and sustainable technologies, further strengthens the bilateral partnership.
Both countries have also welcomed Google’s continued investment through its India Digitization Fund and its AI Research Center in India, which supports the development of models for over 100 Indian languages.
Cutting-edge scientific infrastructure
The India-US collaboration in the development of the Proton Improvement Plan-II Accelerator for the Long Baseline Neutrino Facility and the construction of the Laser Interferometer Gravitational-Wave Observatory (LIGO) in India highlight the commitment to advanced scientific research. Both leaders called for extending these partnerships to advanced biotechnology and biomanufacturing while emphasizing the importance of biosafety and biosecurity practices.
Initiative on Critical and Emerging Technology (iCET)
The technology sector is set to play a pivotal role in enhancing the partnership between India and the US. Prior to Modi’s state visit, the inauguration of the Initiative on Critical and Emerging Technology (iCET) in January 2023 marked a significant milestone in the relationship between the two countries.
Space cooperation
NASA and ISRO have committed to developing a strategic framework for human spaceflight cooperation by the end of 2023. The announcement of advanced training for Indian astronauts at the Johnson Space Center in Houston and the joint effort to the International Space Station in 2024 further exemplify the deepening cooperation. The delivery of the NASA-ISRO Synthetic Aperture Radar (NISAR) satellite to ISRO’s U.R. Rao Satellite Centre in Bengaluru sets the stage for its anticipated launch from India in 2024.
India and the US also emphasized the need for increased commercial collaboration in the space economy, addressing export controls, and facilitating technology transfer with India’s signing of the Artemis Accords for space exploration on June 21.
India-US joint effort in catalyzing clean energy transition
Acknowledging the significance of the US Inflation Reduction Act (IRA Act) and India’s production-linked incentives (PLI) scheme for cutting-edge clean and renewable technologies, the collaboration between the two nations is exemplified through initiatives like the US-India Climate and Clean Energy Agenda 2030 Partnership and Strategic Clean Energy Partnership (SCEP).
A noteworthy development is the establishment of a task force under SCEP dedicated to the development and deployment of energy storage technologies. Furthermore, the launch of the US-India New and Emerging Renewable Energy Technologies Action Platform aims to accelerate cooperation in areas, such as green hydrogen, offshore and onshore wind, and other emerging technologies. Both countries are determined to collaborate on reducing the cost of green/clean hydrogen, aligned with India’s National Green Hydrogen Mission and the US Hydrogen Energy Earthshot. India’s co-leadership of the multilateral Hydrogen Breakthrough Agenda has been warmly welcomed by the US.
Carbon capture, utilization, and storage (CCUS) are recognized as crucial elements in emission reduction, and the leaders express their support for joint efforts in this area. Additionally, India’s VSK Energy LLC’s commitment to investing up to US$1.5 billion in a vertically integrated solar panel manufacturing operation in both the US and India, as well as JSW Steel USA’s plan to invest US$120 million in its Ohio-based steel plant, demonstrate the commitment to renewable energy and infrastructure sectors.
Decarbonizing the automotive sector
Decarbonizing the automotive sector is a key focus for both countries. Accelerating the deployment of zero-emission vehicles, promoting public and private financing for electric transportation, and developing biofuels, including sustainable aviation fuels, are areas of collaboration. The upcoming launch of the Global Biofuels Alliance, with the US as a founding member, is an important step in this direction. The US Agency for International Development’s support for Indian Railways’ target to become a “net-zero” carbon emitter by 2030, as outlined in the signed memorandum of understanding, highlights the shared commitment to sustainable transportation.
Innovative investment platforms
Both governments support creating innovative investment platforms that attract international private finance and lower the cost of capital for greenfield renewable energy, battery storage, and emerging green technology projects in India. To this end, the countries aim to establish a multibillion-dollar investment platform that provides catalytic capital and de-risking support for such projects—a first-of-its-kind initiative.
Securing critical minerals supply chains
Both countries are collaborating to secure resilient critical minerals supply chains through enhanced technical assistance and commercial cooperation. India’s participation in the Mineral Security Partnership (MSP) is welcomed by the US, as it accelerates the development of diverse and sustainable critical energy minerals supply chains globally.
India-US defense cooperation
The US-India Major Defense Partnership has become a crucial element in maintaining global peace and security. Through joint exercises, robust defense industrial cooperation, the annual “2+2” Ministerial Dialogue, and other consultative mechanisms, significant progress has been made in building an advanced and comprehensive defense partnership. The coordination between both militaries across all domains, strong military-to-military ties, and mutual logistics support have been highly appreciated. Efforts are being made to streamline the implementation of foundational agreements, and the placement of Liaison Officers in each other’s military organizations will further enhance joint service cooperation. Maritime security cooperation, including underwater domain awareness, is also being strengthened.
The launch of dialogues in new defense domains, such as space and AI, is a significant development. These dialogues will contribute to capacity building, knowledge sharing, and expertise enhancement in these critical areas.
Landmark defense manufacturing initiative
The signing of a landmark MoU between General Electric and Hindustan Aeronautics Limited for the manufacture of GE F-414 jet engines in India is a significant achievement. This initiative will facilitate greater transfer of US jet engine technology to India than ever before. The governments of both countries are dedicated to supporting and advancing this unprecedented co-production and technology transfer proposal.
Defense technology innovation
The establishment and launch of the US-India Defense Acceleration Ecosystem (INDUS-X) is highly welcomed. This ecosystem, consisting of universities, startups, industries, and think tanks, will facilitate joint defense technology innovation and co-production of advanced defense technology between the two countries. Notably, the US Department of Defense’s Space Force has already signed its first International Cooperative Research and Development Agreement with Indian startups 114 AI and 3rdiTech. These companies will collaborate with General Atomics to co-develop components using cutting-edge technologies in AI and semiconductors, respectively.
Enhanced defense capabilities
India’s plans to procure General Atomics MQ-9B HALE UAVs have been well-received. The assembly of these unmanned aerial vehicles (UAV), or drones, in India will enhance the intelligence, surveillance, and reconnaissance (ISR) capabilities of India’s armed forces across different domains. Furthermore, General Atomics will establish a Comprehensive Global MRO facility in India to support India’s long-term goals of strengthening indigenous defense capabilities.
Accelerating defense industrial cooperation
Accelerating defense industrial cooperation is a shared objective, and the adoption of a Defense Industrial Cooperation Roadmap is a welcome step. This roadmap will provide policy direction to defense industries and enable the co-production of advanced defense systems, collaborative research, testing, and prototyping of projects.
Negotiations for a Security of Supply arrangement and discussions regarding a Reciprocal Defense Procurement agreement are also underway between both countries.
Mutual cooperation for propelling growth
Digital public infrastructure (DPI) for inclusive development
Both countries recognize the potential of Digital Public Infrastructure (DPI) approaches in fostering open and inclusive digital economies. They intend to collaborate and align their efforts to promote the development and deployment of robust DPIs, ensuring appropriate safeguards for privacy, data security, and intellectual property.
Strong trade and investment partnership
The trade and investment partnership between the US and India serves as an engine for global growth. Bilateral trade exceeded US$191 billion in 2022, demonstrating significant growth since 2014.
The reconvening of the US-India Commercial Dialogue and CEO Forum underscores the commitment to enhance engagement and technical cooperation in building resilient supply chains for emerging technologies, clean energy technologies, and pharmaceuticals.
The focus also extends to promoting an innovative digital economy, reducing trade and investment barriers, harmonizing standards and regulations, and prioritizing workforce development through skill-building initiatives.
Resolution of outstanding WTO disputes
A significant milestone was achieved during the visit as both India and the US successfully resolved six WTO disputes, with three cases initiated by each side. The disputes revolved around crucial matters such as solar cell imports, export subsidy schemes, and retaliatory duties.
While the specific details of the mutually agreed-upon solutions have not been made public yet, it is worth noting that India’s Commerce Ministry has announced its intention to lift retaliatory duties on 28 items imported from the US. This decision is part of the efforts to foster a more cooperative trade relationship between the two nations and is expected to positively impact trade dynamics.
Enhancing GSP eligibility and developing criteria
Both countries have expressed support for advancing progress on issues related to India’s eligibility for the US Generalized System of Preferences (GSP) scheme, aiming to restore India’s status as a beneficiary. Restoration of GSP eligibility would also result in the US recognizing India as a developing country, offering advantages within the WTO framework.
Bilateral government procurement
India expressed interest in being recognized as a Trade Agreements Act (TAA)-designated country, prompting talks on issues related to bilateral government procurement. Considering India’s engagement in government procurement chapters within FTA negotiations with other countries, this area holds potential for cooperation with the US, although the compatibility of a standalone bilateral agreement with WTO rules requires examination.
(This article was originally published on June 27, 2023 and last updated on June 30, 2023.)
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