India, US sign MoU on 'semiconductor supply chain and innovation partnership'

By Ahmad Adil

NEW DELHI (AA) - India and the US signed a memorandum of understanding (MoU) on establishing a semiconductor supply chain and innovation partnership during the two countries' commercial dialogue in New Delhi on Friday.

India's Commerce and Industry Ministry said in a statement that the MoU was signed under the framework of the India-US Commercial Dialogue 2023, which was re-launched after a four-year hiatus, apparently due to the COVID-19 outbreak and other reasons.

US Secretary of Commerce Gina Raimondo is in New Delhi at the invitation of Indian Federal Minister of Commerce and Industry Piyush Goyal, the ministry said.

"During this visit, the India-US Commercial Dialogue was re-launched today to discuss cooperation for unlocking new trade and investment opportunities between the two countries," it added.

Following the signing of the Memorandum of Understanding, Goyal described Indian-US relations as "Resilient ties" on Twitter.

The ministry statement said the MoU aims "to establish a collaborative mechanism between the two governments on Semiconductor Supply chain resiliency and diversification in view of US’s CHIPS and Science Act and India’s Semiconductor Mission.

"It (also) aims to leverage complementary strengths of both countries and facilitate commercial opportunities and development of semiconductor innovation ecosystems through discussions on various aspects of semiconductor value chain."

“The MoU envisages mutually beneficial R&D (Research and Development), talent and skill development," the ministry noted.

The agreement was signed at a time when semiconductor manufacturing is at the center of a dispute between the US and China that has recently heated up.

In August of last year, US President Joe Biden signed legislation into law aimed at bolstering US chip manufacturing in order to counter China.

The bipartisan CHIPS and Science Act allocates $52.7 billion to increase the production of American-made semiconductors, address supply chain vulnerabilities by producing more goods in the US, boost domestic scientific research, and strengthen the country's economic and national security.

Following that, the US tightened restrictions on China's acquiring high-end US chip technology, equipment, or talent.

China, however, accused the US of hindering normal international trade and filed a formal complaint against Washington at the World Trade Organization (WTO) over restrictions on semiconductors and other high-tech exports to Chinese companies.

The US announced last month that it will build at least two new large-scale semiconductor fabrication plants by 2030.