The launch of a new US alliance called Pax Silica to secure semiconductor manufacturing supply chains for the coming Artificial Intelligence era has drawn attention, among other reasons, for its exclusion of India. The initiative came not long after Trump and his Chinese counterpart Xi Jinping’s meeting in Busan, South Korea to ease tensions between their countries surrounding tariffs and technology controls.
A new phase of techno-geopolitics is unfolding. Trade policies, the resurgence of techno-nationalism and the tightening of export controls—particularly in strategic materials like rare-earth magnets—represent the three defining pillars of the emerging global technology order. As global trade and technology flows become increasingly securitised and restricted, India faces the urgent task of reducing its technological dependence.
In essence, the Busan truce between Trump and Xi signalled a tactical pause in the US-China contest during which, as Pax Silica shows, there will be efforts to consolidate supply chains and strengthen technological defences.
For countries like India, the lessons from this trade war, and temporary truce, are profound. Strengthening local technological capabilities is no longer optional—it is a prerequisite for maintaining strategic autonomy.
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Boost semiconductor manufacturing
In the semiconductor industry, India is entirely dependent on imports. The government’s Semiconductor Mission provides 50% co-funding for private firms. Currently, six semiconductor units — one fabrication unit (fab) and five Assembly, Testing, Marking, Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) plants — are under construction or nearing completion.
India’s first commercial fabrication venture is being set up by the Tata Group in collaboration with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan. These fabs from the Tatas are expected to produce 50,000 wafers per month by early 2026. These will cater to automotive, AI, wireless communication and other advanced applications.
In contrast, China operates 44 fabs with 22 more under construction, while South Korea has 21 operational units.
With 97 percent of the initial funds for the Semiconductor Mission 1.0 (₹76,000 crore) already committed, the government needs to expedite the launch of Semiconductor Mission 2.0 with an expected budget of ₹1.76 lakh crore to establish additional fabs.
India also has the third-largest (by volume) pharmaceutical industry in the world, yet it remains heavily reliant on China for key starting materials and active pharmaceutical ingredients (APIs).
In 2014, National Security Adviser Ajit Doval raised serious security concerns as our dependence on China was as high as 85 percent. Overall import dependence remained above 70 percent in 2024, and for 45 critical APIs, the country is entirely reliant on foreign sources.
Three schemes for pharmaceuticals and bulk drug production have been allocated ₹24,940 crore over ten years. To effectively overcome this strategic vulnerability, the government should reassess these schemes and consider a greater infusion of funds to reduce dependence by 50 percent in three years.
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Quantum computing: Nascent efforts
Quantum technologies are poised to play a transformative role and their potential applications will redefine national power, economic competitiveness and strategic national security in future.
A fierce global technology race is underway, and India has established four quantum hubs under the Quantum Mission. With the exception of research publications, however, we are nowhere near the USA, China, France, UK and other countries in patents and quantum processing units.
In hardware, IBM recently unveiled Condor, a 1,121-qubit processor and plans to develop a 100,000-qubit computer by 2033. Google, Amazon, Microsoft and Intel are also advancing with comparable platforms. China unveiled its 504-qubit “Tianyan” chip and ez-Q Engine 2.0, reportedly capable of supporting over 1,000 qubits.
Here too, Indian efforts remain nascent: the Tata Institute of Fundamental Research has developed a 7-qubit system, while a Bengaluru-based startup announced 25 and 64-qubit processors, aiming to scale up to 300 qubits in the near future.
In the medium term, the plan is to develop quantum computers with 50 to 1,000 qubits in eight years (2025-2033).
On the other hand, China’s public investment in 2022 is US$ 15.3 billion in quantum technologies, miles ahead of the USA (3.7) and India (1.0).
At this rate, it is hard to imagine how India will ever catch up with China.
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Lagging behind in energy
With nearly 1.75 million electric vehicles (EVs) on roads, more than 85 percent of lithium-ion batteries—the most critical component in their manufacture—are still imported. The EV industry must urgently expand R&D innovation and downstream activities in the mining, processing and supply chains of critical raw materials, and explore alternatives to lithium-ion batteries to enhance self-reliance.
Sodium-ion batteries are emerging as a cheaper, safer, and more sustainable alternative to lithium-ion batteries for EVs.
The sodium to lithium ratio in the earth’s crust is 23,600 parts per million (ppm) to 20 ppm. The natural abundance of sodium leads to a much lower cost of extraction. Moreover, as James Quinn, chief executive of Faradion, the UK-based battery technology company, told BBC, “It takes 682 times more water to extract one tonne of lithium versus one tonne of sodium.”
Benchmarking against global EV leaders like the Chinese CATL and BYD, India’s investment in hydrogen and EV-related activities remain dismal, underscoring the urgent need for greater public-private R&D and innovation funding to build a robust indigenous EV and clean mobility ecosystem.
India remains heavily reliant on coal for its energy needs; about 75 percent of the country’s electricity is still generated from coal. It needs to decarbonise this “black gold” to meet long-term climate and energy-security goals. A demonstration-scale carbon capture, utilisation, and storage (CCUS) plant that captures carbon dioxide from power generation centres, or industrial facilities that use fossil fuels or biomass as fuel, and makes it available for use in a range of applications, costs nearly $US 500 million.
Collaboration with major coal-producing partners such as Australia, Indonesia, and South Africa could help develop more affordable and scalable CCUS solutions.
Beyond reduction of emissions, the captured carbon dioxide also opens up the possibility of producing clean liquid hydrogen — an emerging strategic fuel. CCUS also offers the potential for producing clean liquid hydrogen.
In January 2022, the Hydrogen Energy Supply Chain (HESC) Project in Victoria, Australia, achieved a world first by demonstrating the extraction of clean liquid hydrogen from Latrobe Valley coal via carbon capture, utilisation and storage.
India has launched the National Green Hydrogen Mission with ambitious goals, but is unlikely to meet the stated target of producing 5 million tons per year. India’s coal power giant, NTPC, could integrate hydrogen production into its large-scale coal gasification plans, combining energy generation with the production of cleaner liquid hydrogen fuel.
In the nuclear sector, India has yet to fully realise nuclear physicist Homi Bhabha’s vision from the 1950s of achieving 8,000 MW of nuclear capacity. As of 2025, 24 reactors generate 7,438 MW, accounting for just 3 percent of the country’s total electricity.
Fast-tracking the 18 planned reactors, which are expected to add 22,480 MW by 2031-32, would help. In 2022, plans were announced to develop Bharat Small Modular Reactors (SMRs) of 300 MW under a public–private partnership model.
If these SMR plans move beyond the pilot stage, they could play a role in strengthening decentralised energy security, particularly for industrial clusters and regions distant from major grids. India’s ability to do so will depend in part on access to proven designs and operating experience, areas where collaboration with countries such as Russia, Japan and France could shorten development cycles over the coming decade.
More broadly, India’s experience across nuclear, quantum and advanced manufacturing highlights the central role of sustained research funding. Public R&D spending remains below that of most major economies, while private-sector investment is comparatively modest. Without a significant and durable increase in both, ambitions in strategic missions and frontier technologies are likely to remain constrained by capacity rather than intent.
Venni V Krishna is Professorial Fellow, University of New South Wales, Sydney, Australia. He can be reached at v.krishna@unsw.edu.au. Originally published under Creative Commons by 360info
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