Copyright infringement not intended

Picture Courtesy:  THE HINDU

Context

India joined the US-led 'Pax Silica' coalition to secure supply chains for critical minerals and AI infrastructure.

What is 'Pax Silica' Coalition?

Pax Silica is a "coalition of capabilities" securing the future of high-technology industries by connecting resource-rich, capital-rich, and technology-leading nations into one value chain.

Core Objective: To establish a secure economic order for technology supply chains, from mineral extraction to AI deployment, free from monopolistic control or coercion.

Member Nations: The alliance includes India, USA, Australia, Greece, Israel, Japan, Qatar, Republic of Korea, Singapore, UAE, and the UK.

Strategic Importance:  It connects resource-rich nations (Australia), capital-rich nations (UAE, Qatar), and technology powerhouses (USA, Japan, Korea, India) into a single value chain.

Why is this Alliance Crucial for India?

Breaking the Critical Mineral Monopoly

India's tech industry is highly dependent on imports. China processes over 60% of the world's lithium and 90% of rare earth elements. India imports nearly 100% of its lithium and cobalt needs. (Source: IEA)

Partnering with resource-rich members like Australia (the world’s largest lithium producer) gives India direct access to minerals essential for Electric Vehicle (EV) and renewable energy targets.

Accelerating the AI and Semiconductor Ecosystem

India launched the IndiaAI Mission and the India Semiconductor Mission (ISM) to build domestic capabilities, but progress is dependent on access to advanced hardware (GPUs) and a stable chip raw material supply.

Pax Silica integrates India into the global semiconductor value chain, ensuring that domestic projects, such as the Tata-PSMC semiconductor plant in Dholera, have a secure supply of technology and materials.

Countering Geopolitical Coercion

Nations use control over key resources as a political weapon, like China's 2023 export controls on Gallium and Germanium (minerals vital for chipmaking). 

Joining a US-led alliance diversifies India's supply chain risks, reducing vulnerability, and aligns with the Economic Survey 2023-24's recommendation for integration into diverse "Global Value Chains" (GVCs).

Alignment with India's Domestic Policies

Khanij Bidesh India Ltd (KABIL): Provides a diplomatic framework for KABIL to acquire overseas mineral assets in member nations like Australia.

Semiconductor Manufacturing (ISM): Ensures a stable supply of raw materials and technology transfers for new fabrication units, supporting 'Make in India'.

National Green Hydrogen Mission: Links AI's high energy demand with clean energy, opening export opportunities for India's green hydrogen to coalition partners like Japan and Singapore.

What are the Challenges and Concerns for India?

Erosion of Strategic Autonomy

Joining a US-led coalition could strain relations with nations like China and Russia, signaling departing from historical non-alignment policy.

Dependence on Foreign Tech Standards

The emphasis on "trustworthy systems" might lead to the mandatory adoption of US-developed AI and data standards, which could impact India's data sovereignty, as warned by Justice B.N. Srikrishna Committee.

The 'Resource Nationalism' Hurdle

Member countries might prioritize domestic industries by banning critical mineral exports, contradicting the coalition's goal of free material flow.

Way Forward

Leverage for Indigenization

Use the alliance to secure technology transfers and build domestic capabilities, transitioning India from a consumer to a producer within the global value chain.

Maintain Diplomatic Balance

Align with the West while maintaining engagement with the Global South (Africa, Latin America) for raw materials. Diversify cooperation with China and Russia to maintain balanced relations and avoid US bloc alignment.

Invest in R&D

Increase the Gross Expenditure on R&D (GERD) from the current 0.7% to 2% of GDP, as recommended by the NITI Aayog, to absorb and innovate the technologies shared within the coalition.

Conclusion

India joining Pax Silica recognizes technology as the new frontier of geopolitics. Success depends on converting this international declaration into domestic industrial strength.

Source: THE HINDU