Emerging technologies will define next phase of India-US ties: Ambassador Kwatra

India's Ambassador to the United States identified artificial intelligence (AI) and semiconductors as the defining pillars of the next phase of India-US coop...

What Happened

India's Ambassador to the United States identified artificial intelligence (AI) and semiconductors as the defining pillars of the next phase of India-US cooperation.
India is emerging as a key node in global value chains (GVCs), attracting investment as multinational companies diversify production away from single-country dependency.
India's economy, projected to reach $7.3 trillion by 2030, was described as an "indispensable anchor" for global economic stability amid rising uncertainty.
"Atmanirbhar Bharat" was characterised not as an inward-looking isolationist strategy but as a framework for developing globally competitive domestic manufacturing that integrates India into international supply chains.
Cooperation covers the full spectrum from research and development to commercialisation of critical and emerging technologies.

Static Topic Bridges

TRUST Initiative (formerly iCET) — Technology Cooperation Framework

The US-India Initiative on Critical and Emerging Technology (iCET) was jointly announced by the US President and India's Prime Minister in May 2022 to deepen cooperation in AI, quantum computing, semiconductors, wireless telecommunications, and advanced defence systems. It was operationally expanded and rebranded as the TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative, announced during the February 2025 Washington Summit. TRUST retains iCET's core technology focus and adds critical minerals, biotechnology, clean energy, and space.

TRUST is jointly steered by the National Security Advisors of both countries, elevating technology cooperation to the strategic level.
The Bilateral Critical Minerals Framework was formalised on May 26, 2026, covering the full value chain from extraction to recycling, with primary focus on lithium and rare earth elements.
A US-India Roadmap on Accelerating AI Infrastructure enables investments, partnerships, and large-scale AI build-out in India.
Key domains: AI, semiconductors, quantum computing, defence co-production, biotechnology, clean energy, space.

Connection to this news: The ambassador's emphasis on AI and semiconductors as the "next phase" of ties reflects the TRUST framework's prioritisation of these sectors as the technological foundation of the strategic partnership.

India Semiconductor Mission (ISM) and Chip Manufacturing Drive

India's semiconductor policy aims to position the country as a global hub for chip design, assembly, testing, and eventually fabrication (fabs). The India Semiconductor Mission (ISM) was launched under a ₹76,000 crore incentive framework offering fiscal support of up to 50% for silicon fabs, compound semiconductor facilities, assembly and testing units, and chip design.

ISM 2.0 was announced in Union Budget 2026–27 with an allocation of ₹1,000 crore for FY 2026–27, focusing on domestic semiconductor equipment, materials, and full-stack Indian chip intellectual property.
Micron Technology's Semiconductor Assembly, Test and Packaging (ATMP) facility in Sanand, Gujarat was inaugurated on February 28, 2026 — India's first operational semiconductor facility under the current mission.
Tata Semiconductor's fab in Dholera, Gujarat (notified as an SEZ in April 2026) is India's first planned silicon fabrication facility.
The Design Linked Incentive (DLI) scheme has supported 23–24 chip design startups, which have attracted approximately ₹430 crore in venture capital funding.
13 approved semiconductor projects were operational or under development as of May 2026.

Connection to this news: The ambassador's framing of semiconductors as a defining technology for India-US ties aligns with India's ISM investments and the US interest in integrating India into trusted semiconductor supply chains as an alternative to China.

Atmanirbhar Bharat — Self-Reliance as Global Integration

Atmanirbhar Bharat (Self-Reliant India) was launched in May 2020 with a ₹20 lakh crore (approximately $268 billion) economic stimulus package, amounting to roughly 10% of India's GDP at the time. Contrary to protectionist misreadings, the policy's stated aim is to reduce import dependency in strategic sectors while making India a globally competitive manufacturing and export hub — moving up the value chain from simple assembly to deep manufacturing.

The Production-Linked Incentive (PLI) scheme, a core instrument of Atmanirbhar Bharat, recorded cumulative investments of ₹2.16 lakh crore and generated sales of ₹20.41 lakh crore (as of December 2025) across 14 sectors.
The National Manufacturing Mission (Budget 2025–26) targets raising manufacturing's share of GDP to 25% by 2035, with 143 million jobs and higher exports.
The "China + 1" opportunity — companies diversifying supply chains away from single-country dependence — is a key driver of FDI into India.
Atmanirbhar Bharat's five pillars: Economy, Infrastructure, System (technology-driven), Vibrant Demography, Demand.

Connection to this news: The ambassador's characterisation of Atmanirbhar Bharat as a strategy for "globally competitive manufacturing, not isolation" reframes the policy for an international audience, signalling that India's self-reliance push is designed to complement, not undercut, global supply chain integration.

Global Value Chains (GVCs) — India's Emerging Role

Global Value Chains (GVCs) refer to the international fragmentation of production where different stages of manufacturing — design, components, assembly, distribution — occur across multiple countries. India's integration into GVCs has historically been limited compared to East Asian peers, but is accelerating due to the China + 1 diversification trend, PLI-driven manufacturing growth, and improving logistics infrastructure.

India is the world's fourth-largest economy (nominal GDP) and is projected to reach $7.3 trillion by 2030, becoming the third-largest economy.
The IMF projects India's GDP growth at 6.2% for 2026; the World Bank at 6.5%.
Sectors where India is gaining GVC share: electronics (mobiles, semiconductors), pharmaceuticals, chemicals, automotive components, and textiles.
India's goods exports have grown substantially, with US-bound exports reaching $103.8 billion in 2025.

Connection to this news: The ambassador's statement about India becoming a "key player in global value chains" and attracting production-diversification investment directly reflects the structural shift driven by geopolitical decoupling from China.

Key Facts & Data

TRUST initiative: announced February 2025 (evolved from iCET, launched May 2022); steered by National Security Advisors
India Semiconductor Mission incentive framework: ₹76,000 crore; up to 50% fiscal support for fabs
ISM 2.0 Budget 2026–27 allocation: ₹1,000 crore
First operational semiconductor facility: Micron Technology ATMP, Sanand, Gujarat (inaugurated February 28, 2026)
First planned fab: Tata Semiconductor, Dholera, Gujarat (SEZ notified April 2026)
PLI scheme: ₹2.16 lakh crore cumulative investments; ₹20.41 lakh crore in sales (as of December 2025)
Atmanirbhar Bharat package: ₹20 lakh crore (~10% of GDP), launched May 2020
India's projected GDP: $7.3 trillion by 2030 (third-largest economy)
India-US goods exports (India to US): $103.8 billion (2025)
Bilateral Critical Minerals Framework: formalised May 26, 2026