• India has joined Pax Silica, a US-led effort to reshape global supply chains for semiconductors and critical technologies. However, India entered after the initiative was largely designed, similar to its late entry into the Minerals Security Partnership (MSP). This matters because Pax Silica prioritises strong manufacturing capacity, advanced processing, and ready technology ecosystems, areas where India still lags. The episode highlights a clear pattern: India is valued for strategic reasons but lacks technological leverage, limiting its bargaining power in US-led economic security groupings.
• India’s belated induction into US-led initiatives like Minerals Security Partnership and Pax Silica has evoked a sense of déjà vu among policymakers. 
• As with MSP—where India joined a year after launch—its entry into Pax Silica came after the initiative was already underway, seen largely as a conciliatory gesture amid efforts to steady bilateral ties.
• The significance lies in what these groupings signal about the emerging global tech order, especially as countries reorganise supply chains in strategic sectors with Chinese presence.
• Platforms like Pax Silica could shape rules by addressing chokepoints in inputs such as magnets and critical minerals—effectively determining where leverage will sit.
• India’s initial exclusion, followed by a late inclusion, carries a subtle message: strategic goodwill alone may not suffice. 
• To be a partner of first choice in US-led initiatives, India must be seen as bringing tangible capabilities and value to the table in shaping resilient, rules-setting supply chains.

About Pax Silica

• Pax Silica is a US-led strategic initiative aimed at countering China’s dominance in next-generation technologies. 
• It seeks to reduce “coercive dependencies” and protect materials and capabilities foundational to artificial intelligence, enabling aligned nations to develop and deploy transformative technologies at scale.

Objectives and Scope

• According to the US State Department, Pax Silica is designed to build a secure, prosperous, and innovation-driven silicon supply chain.
• Strategic concept: Spanning critical minerals → energy → advanced manufacturing → semiconductors → AI infrastructure → logistics
• It aims to ensure access across the entire AI stack—from critical minerals and semiconductor chips to security and logistics infrastructure.

Long Term Framework

• Unite countries hosting advanced tech companies to unleash the economic potential of the new AI age
• Establish a durable economic order to drive AI-powered prosperity across partner nations

Key Thrust Areas Under Pax Silica

Under Pax Silica, participating countries aim to:

1. Pursue joint ventures and strategic co-investments
2. Protect sensitive technologies and critical infrastructure from undue foreign control
3. Build trusted technology ecosystems spanning ICT systems, fibre-optic cables, data centres, foundational AI models, and applications

Founding Members and Their Strengths

• The inaugural Pax Silica Summit brought together Japan, the Republic of Korea, Singapore, the Netherlands, the United Kingdom, Israel, the United Arab Emirates, and Australia. 
• These countries collectively host key companies and investors that power the global AI and semiconductor supply chain, reflecting their technological or resource-based leverage.

Why India Was Initially Excluded from Pax Silica?

• Pax Silica aims to secure supply chains spanning critical minerals, energy inputs, advanced manufacturing, and semiconductors. 
• India’s initial absence reflects perceptions that it lacks decisive edge technologies or control over key resources central to the grouping’s objectives.

How does Pax Silica compare with other member countries?

• The Netherlands: controls specialised lithography machines vital for chipmaking.
• Australia: contributes critical mineral reserves and mining capabilities.
• Japan and South Korea: Strong semiconductor fabrication and equipment manufacturing base.
• Taiwan: Global leadership in advanced chip manufacturing.
• Singapore: Critical logistics, processing hubs, and supply-chain integration.
• Israel: Advanced innovation ecosystems and high-end R&D capabilities.
• UK: Offers strengths in services and technology.
• UAE: The UAE has rapidly built AI capabilities and supporting infrastructure.
• India: Emerging manufacturing base but insufficient scale and specialization.

A Familiar Pattern from MSP

• A similar logic shaped the initial membership of the Minerals Security Partnership, where early partners included countries with clear mineral, technology, or institutional advantages. 
• India joined later, despite its efforts to position itself as a node in global supply-chain realignment as firms diversify away from China.

What does India’s late entry into Pax Silica indicate?

• Timing disadvantage: Signals entry after agenda-setting was completed, limiting India’s ability to shape rules or priorities.
• Pattern repetition: Reflects earlier experience with MSP, where India joined after core structures were in place.
• Diplomatic signalling: Indicates conciliatory outreach by the US rather than proactive Indian leverage.

Why is India seen as lacking a ‘critical edge’?

• Manufacturing depth: Absence of large-scale advanced semiconductor fabrication capacity.
• Processing capability: Limited expertise in high-end chip processing and precision manufacturing.
• Ecosystem gaps: Weak integration of research, fabrication, and supply-chain logistics.

Why does Pax Silica matter?

• Strategic objective: Restructures semiconductor and advanced manufacturing supply chains away from China.
• Economic coercion control: Reduces vulnerability to Chinese leverage in global chip production.
• Technology governance: Aligns partner countries on standards for AI, semiconductors, and digital infrastructure.

Why does this matter for India’s foreign and economic policy?

• Reduced bargaining power: Late inclusion weakens India’s ability to demand concessions.
• Capability-first diplomacy: Demonstrates that geopolitical alignment alone is insufficient.
• Strategic lesson: Economic security partnerships increasingly reward technological readiness, not political intent.

The Takeaway for India

• The common thread among the founding members is a tangible lead in AI or semiconductor supply chains—an area where India currently lacks comparable processing capacity and expertise. 
• As with earlier initiatives such as the MSP, this gap explains India’s absence at the outset.
• The exclusion underscores a consistent message: entry into US-led strategic groupings hinges on demonstrable capabilities and leverage—not just intent. 
• To be a first-choice partner, India must strengthen its control over critical inputs, technologies, or platforms that shape supply-chain rules.

Shared Challenge: China’s Critical Minerals Dominance

• Experts point out that China’s dominance in critical minerals has created sharp global price gaps, disadvantaging non-Chinese supply chains. 
• While this opens space for India to attract US investment, it also raises risks of Chinese coercion as India deepens alignment with Washington.
• US Treasury Secretary Scott Bessent framed China’s export controls as “China versus the rest of the world,” calling for support from Europe, India, and Asian democracies.
• Despite this rhetoric and shared concerns, India remained outside Pax Silica’s initial list, underscoring a gap between strategic alignment and perceived capabilities

Conclusion

• India’s entry into Pax Silica underscores a structural challenge in its external engagement: strategic relevance without commensurate technological capacity. The episode reinforces that future influence in global groupings will depend less on diplomatic goodwill and more on domestic manufacturing strength, processing expertise, and ecosystem maturity.

PYQ Relevance -

[UPSC 2024 Mains]

“The West is fostering India as an alternative to reduce dependence on China’s supply chain and as a strategic ally to counter China’s political and economic dominance.” Explain this statement with examples.

UPSC Prelims 2025

Consider the following statements:

1. India has joined the Minerals Security Partnership as a member.
2. India is a resource-rich country in all the 30 critical minerals that it has identified.
3. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.

Which of the statements given above are correct?

(a) I and II only

(b) II and III only

(c) I and III only

(d) I, II and III