Quote from Alex bobby on January 15, 2025, 2:54 AM

U.S. Executive Order on AI and India's Exclusion from Advanced Chip Access: Analyzing the Implications

U.S. President Joe Biden signed a pivotal executive order on Tuesday aimed at accelerating the development of artificial intelligence (AI) infrastructure in America. This move follows a major policy announcement the day prior, in which the Biden administration unveiled stringent measures to restrict China and other adversarial nations from accessing advanced U.S. semiconductors.

However, a notable absence in this list of favored nations was India—a strategic partner of the U.S. in the Indo-Pacific region. Despite ongoing technological cooperation and bilateral initiatives, India was left out of the list of 18 countries granted unrestricted access to advanced AI chips. Analysts point to India's longstanding ties with Russia and perceived gaps in its technology regulatory framework as reasons for its exclusion.

Why India Was Excluded

Under the newly announced framework by the U.S. Commerce Department, countries have been categorized into three tiers:

1. Tier One – Includes the U.S. and 18 allied countries with unrestricted access to advanced semiconductors.
2. Tier Two – Comprising over 100 countries, including India, that will face certain restrictions but may be eligible for individual exemptions.
3. Tier Three – Encompasses adversarial nations such as China and Russia, which will face the strictest controls.

India’s categorization in Tier Two was not entirely unexpected, according to experts. Bhaskar Chakravorti, dean of global business at The Fletcher School of Law and Diplomacy, noted that India’s historical ties with Russia placed it outside the “super safe” category.

“India’s relationship with Russia, especially during the Cold War and beyond, continues to influence strategic decisions,” Chakravorti said. “While the U.S.-India partnership has strengthened, these lingering ties create caution in granting unrestricted access to critical technology.”

Security analyst Scott Jones from Washington’s Stimson Center highlighted additional factors, including reports of Indian companies allegedly aiding Russia during its ongoing war in Ukraine. Jones also emphasized concerns about India’s technology regulatory environment.

“There is a perception that India’s capability to manage sensitive technology isn’t yet on par with some of the Tier One countries,” Jones explained. However, he added that this exclusion should not be seen as a setback but rather a temporary position subject to improvement.

Prospects for India’s Inclusion

Despite being excluded from the unrestricted list, analysts are optimistic about India’s future eligibility. Richard Rossow, senior adviser at the Center for Strategic and International Studies (CSIS), pointed to provisions in the policy framework allowing for individual exemptions.

“India’s growing technological collaboration with the U.S. and its strategic importance in the Indo-Pacific make it a likely candidate for future inclusion,” Rossow said. He cited ongoing bilateral initiatives like the U.S.-India Critical and Emerging Technology (iCET) partnership, which focuses on fostering technological innovation and investment.

In early January, U.S. National Security Adviser Jake Sullivan visited India to discuss strategic partnerships. During his visit, both sides reiterated their commitment to strengthening cooperation in advanced technologies, including AI and semiconductors.

Semiconductor Collaboration Between the U.S. and India

One key area of cooperation is semiconductor manufacturing. The U.S. is actively facilitating investments in India’s semiconductor ecosystem. Notably, American chipmaker Micron recently announced a $2.7 billion investment to establish semiconductor packaging facilities in India.

India’s government has also launched initiatives like the India Semiconductor Mission and the Production Linked Incentive (PLI) scheme to attract global semiconductor firms. These efforts aim to position India as a key player in the global chip supply chain.

Rossow noted that the Indian government likely anticipated its exclusion from the unrestricted access list. “Given Sullivan’s recent visit, it’s reasonable to assume that Indian officials were briefed in advance,” he said.

Ensuring U.S. Leadership in AI

The Biden administration’s latest executive order underscores the strategic importance of AI to U.S. national security and economic leadership. A White House fact sheet described the measures as part of an effort to ensure that “the world’s AI runs on American rails.”

Since October 2022, the U.S. has implemented a series of export controls aimed at preventing China from acquiring advanced semiconductors for military purposes. While these measures initially slowed China’s semiconductor industry, Beijing has continued to make progress in closing the technology gap.

Bhaskar Chakravorti cautioned that while the U.S. policy is ambitious, its implementation will face significant challenges.

“Lobbying from U.S. chipmakers, potential secondary markets, and enforcement issues could complicate the strategy,” he said.

Jones from the Stimson Center added that the policy sends a clear message to global partners.

“The U.S. is essentially telling the world: You have to pick a side. Either you align with the U.S.-led AI ecosystem or with China. There’s no middle ground,” he said.

Conclusion

While India’s exclusion from the list of countries with unrestricted access to advanced U.S. AI chips is notable, it does not signify a breakdown in U.S.-India relations. Instead, it reflects a cautious approach by the U.S. as it navigates complex geopolitical dynamics.

With ongoing technological collaboration, significant investments in India’s semiconductor industry, and a shared commitment to strategic innovation, analysts believe that India’s inclusion in the top tier is only a matter of time. Until then, both nations will continue to strengthen their partnership in critical and emerging technologies, ensuring mutual growth and security in an increasingly competitive global landscape.