The Pax Silica alliance is a technological partnership led by the U.S. that aims to create a secure supply chain for semiconductor chips and AI technologies. By joining this, India hopes to reduce its reliance on any single country and gain access to advanced tech tools and raw materials.

India has launched several ‘Missions’ to become self-reliant. The India Semiconductor Mission (ISM) aims to build a chip-making ecosystem. IndiaAI focuses on developing indigenous AI technologies. The National Critical Mineral Mission ensures a steady supply of minerals like lithium and cobalt, which are essential for electric vehicles and electronics.

Currently, China dominates the global supply chain for processing critical minerals like lithium, cobalt, and rare earth elements. Processing is often harder than mining because it requires specialized chemical facilities. India’s lack of this capacity is why it needs alliances like Pax Silica to build its own industry.

Many countries and companies are trying to reduce their dependence on China for manufacturing. This is called the ‘China Plus One’ strategy. Because India has a huge population (consumption) and a large workforce (manufacturing), the world sees it as the best place to move factories away from China.

Setting up a new supply chain (like a chip factory) costs billions of dollars. Companies only do this if they are sure people will buy the products. Because India has over 1.4 billion people, companies can ‘financially justify’ building these factories in India because they know there is a huge local market to buy what they make.

The U.S. and its allies want to ensure that AI and other tech are used ‘democratically’ (with privacy and freedom) rather than for mass surveillance, as seen in some autocratic countries. By including India, the world’s largest democracy, the group’s rules look much more legitimate and powerful to the rest of the world.

India is often called the ‘pharmacy of the world,’ but it depends on China for nearly 70% of its Active Pharmaceutical Ingredients (APIs). If China retaliates by stopping these supplies, India’s medicine industry could face a major crisis. This is a significant risk of joining a U.S.-led tech alliance that excludes China.

India follows a policy of ‘Strategic Autonomy.’ This means it wants to make its own decisions without being forced by any major power like the U.S. or Russia. External Affairs Minister S. Jaishankar often emphasizes ‘issue-based alignments,’ where India might work with the U.S. on tech but still maintain its own independent relationship with other nations.

India has millions of Micro, Small, and Medium Enterprises (MSMEs). While joining a global group like Pax Silica offers them big opportunities, the cost of meeting ‘high-security’ standards set by the U.S. can be very high. This might make it difficult for small companies to compete with larger ones that can easily afford these audits.

Many international agreements fail because they remain ‘talks’ on paper. Building a ‘real-world supply chain’ requires billions of dollars in investment, thousands of skilled workers, and years of physical construction. For Pax Silica to succeed, countries must actually build the factories and mines they are currently just promising.