The United States and India have entered a strategic convergence grounded in the natural complementarities between their innovation systems. Indian Prime Minister Narendra Modi in his June 2023 remarks at the National Science Foundation headquarters stated that: “While America has prestigious educational institutions and advanced technologies, India possesses the world's largest youth factory. Therefore, I believe that the partnership between India and America will prove to be the engine for sustainable and inclusive global growth.” U.S. President Joe Biden has described this partnership more broadly as "one of the most influential alliances in the world, stronger, closer, and more dynamic than at any time in history.”
This shared commitment to an innovation partnership is memorialized in the Joint Statement issued at the end of Prime Minister Narendra Modi’s state visit to Washington in June 2023. Highlighting innovation cooperation as the top priority in the bilateral relationship, the Joint Statement affirms that “technology will play the defining role in deepening our partnership” and calls for United States and India to foster “an open, accessible, and secure technology ecosystem, based on mutual confidence.”
By strengthening the connections across the innovation systems of both nations, this collaboration will act as a catalyst for advancements in science, technology, research, and development, as well as manufacturing capabilities across both countries. It builds on existing networks of cooperation and trust created by Indian and Indian American researchers and scientists working in U.S. universities and firms and takes advantage of India’s growing market and large skilled workforce. The partnership also enhances regional security and stability, providing a counterbalance to China in the emerging global technology competition.
Growing the Innovation Partnership
To give momentum to this innovation partnership, India and the United States have initiated a number of agreements and institutional arrangements.
Co-producing Sensitive Technologies
Jump starting this new era of innovation cooperation are a set of agreements for the co-production of selected defense technologies and the transfer of some dual-use technologies. The United States is now prepared to transfer to India advanced defense technologies that have long been barred by International Traffic in Arms Regulations (ITAR). Both countries have recently signed a defense technology collaboration agreement that allows General Electric to co-produce jet engines for Indian military aircraft in India.
Alongside this, both sides recognize the need to resolve additional barriers that may resurface—especially with regard to dual use technologies. Notably, President Biden has reiterated his commitment to working with the U.S. Congress to reduce legislative barriers to the export of high-performance computing (HPC) technology and source code to India.
Enabling Private Sector Investments
This relaxation of barriers provides an opening for more private sector investments. Private investment by U.S. firms in India has already accelerated steadily, rising from at $2.4 billion in 2000 to $51.6 billion by 2022. This growth has solidified the U.S. as the third-largest contributor of foreign direct investment to India.
The Government of India’s Production-Linked Incentive Scheme welcomes this trend, providing approximately $24 billion (Rs. 1.97 trillion) in subsidies for foreign firms that produce goods in India. India in recent weeks has also relaxed regulations on the importation of laptops where regulations in India had called for firms operating in India to obtain special licenses to import laptops.
Promoting University Research Partnerships
The U.S.-India University Partnership Expansion Task Force is promoting scientific, educational, and research partnerships. In September 2023, a group of Indian universities, represented by the Indian Institutes of Technology Council (IIT Council), and the Association of American Universities (AAU), signed a memorandum of understanding to establish an India-U.S. Global Challenges Institute, with a combined initial commitment of at least $10 million. This initiative adds to previously established U.S.-India university partnerships, including those between New York University-Tandon and IIT Kanpur Advanced Research Center and the Joint Research Centers of the State University of New York at Buffalo and IIT Delhi, Kanpur, Jodhpur, and BHU.
Building Shared Ecosystems — the Role of iCET
India and the United States have also introduced an institutional mechanism—the U.S.-India Critical and Emerging Technologies Initiative (iCET)—"to build open, accessible, secure, and resilient technology ecosystems and value chains, based on mutual confidence and trust, which reinforce our shared values and democratic institutions.” The joint statement following President Biden’s visit to New Delhi on September 8, 2023 affirms joint efforts to advance technological development in semiconductors, telecommunications, quantum computing, and communications.
Further to this end, the U.S. Department of State and the Ministry of External Affairs of India have set up the India-U.S. Strategic Trade Dialogue (IUSSTD) to enable co-production, co-development, and enhanced industrial cooperation in critical technologies. At the inaugural meeting in June 2023, the US Under Secretary of Commerce for Industry and Security and India's Foreign Secretary agreed to convene future workshops to grow connections across each other’s industry, academia, and other stakeholders. Both nations also agreed to establish a regular monitoring group to review progress in deepening cooperation in bilateral high-tech trade and technology partnerships.
Cooperation in Advanced Technologies
Semiconductors
iCET calls for “enhancing bilateral collaboration on resilient semiconductor supply chains; supporting the development of a semiconductor design, manufacturing, and fabrication ecosystem in India; and leveraging complementary strengths” to strength semiconductor collaboration. This includes encouraging the development of joint ventures and technology partnerships for manufacturing mature semiconductor technology nodes and chip packaging in India. Through iCET, a U.S.-India Private Sector Task Force is assessing near-term industry opportunities and long-term strategies to link the U.S. and Indian semiconductor ecosystems.
Significantly, major U.S. semiconductor companies have announced major investments in research, workforce development, and manufacturing in India.
- Micron Technology will invest up to $825 million to build a new semiconductor assembly and test facility in India with the support of the Indian government.
- Lam Research will accelerate India's semiconductor education and workforce development goals by training 60,000 Indian engineers over a ten-year period.
- Applied Materials will invest $400 million to establish a joint engineering center with leading global and domestic suppliers as well as top research and academic institutions in India.
- Google intends to continue investing through its $10 billion India Digitization Fund, including in early-stage Indian startups.
- Microchip Technology will invest approximately $300 million in expanding its research and development presence in India.
- Advanced Micro Devices will invest $400 million in India over the next five years to expand research, development, and engineering operations in India.
Telecommunications
India and the United States share a vision of secure and trusted telecommunications, resilient supply chains, and global digital inclusion. India participates in the U.S. Rip and Replace Program to ensuring secure and reliable telecommunications. India has already banned Chinese manufacturers Huawei and ZTE from its domestic 5G market.
India and the U.S. have also established joint task forces dedicated to 5G/6G and Open RAN technologies. These task forces are instrumental in driving standards development, fostering R&D collaboration, and conducting field trials, ultimately advancing innovation and technology. The partnership between the Bharat 6G Alliance and Next G Alliance encourages engagement among a diverse array of stakeholders, including public and private entities, academia, research organizations, and standards development bodies from both nations.
In addition, in the wake of widespread 5G use and 6G R&D in India, U.S. manufacturers of Open RAN (a technology that allows users to choose from multiple vendors to build telecommunications facilities for a variety of applications other than smartphones) are working with major Indian telecom operators on 5G Open RAN trials with a major telecommunications operator in India.
These efforts underscore a strong commitment by both nations to collaborate in innovation and technological advancement. India's expanding 5G user base and ambitious plans for a 6G R&D testbed further solidify its role as a catalyst for research, development, and technology deployment.
Quantum Technologies, High Performance Computing (HPC)
The New Delhi Joint Statement, reiterates U.S. commitment to working together with India in the quantum domain. This cooperation will be pursued through the Quantum Entanglement Exchange, a platform to facilitate an exchange of students, researchers, and professionals in the field. The statement also welcomes the participation of India’s S.N. Bose National Centre for Basic Sciences, Kolkata, as a member of the Quantum Economic Development Consortium, which is a public-private consortium set up by the National Quantum Initiative Act of 2018 to identify gaps in technology, standards, and workforce and to address those gaps through collaboration.
In addition, the launch of a $2 million grant program, under the U.S.-India Science & Technology Endowment Fund, supports joint development and commercialization of Artificial Intelligence (AI) and quantum technologies. The U.S. also supports the participation of India’s Center for Development of Advanced Computing (C-DAC) in the U.S. Accelerated Data Analytics and Computing (ADAC) Institute. ADAC, with its High-Performance Computing missions brings together 11 research institutions, including Oak Ridge National Laboratory and international counterparts to tackle complex global scientific challenges. Extending this collaboration to include C-DAC in India is expected to accelerate technology transfer and HPC development in the region.
Partnership and Pragmatism
Recent Joint statements issued by the United States and India underscore the strategic recognition that that technology and innovation will play a central role in shaping the futures of both countries. Indeed, both India and the United States are working to renew domestic manufacturing, create high value employment, reduce trade deficits, expand exports, and bolster regional economic growth at home. By reinforcing each other’s innovation systems, the emerging innovation partnership between India and the United States—supported by is technology transfer, people-to-people exchanges, and direct investments—provides a positive sum solution. Building on this cooperative approach is important for a prosperous and innovative future for both countries.
Hideki Tomoshige is a research associate with the Renewing American Innovation project at the Center for Strategic and International Studies in Washington, D.C.
