Technology is the economic security tool driving US-India ties
posted by Marsha Vande Berg on July 14, 2023 - 11:54pm
After PM Modi's US state visit, it is apparent that the partnership between the US-India will rely on tech and innovation to achieve greater economic security.
It may be stating the obvious that technology is central to Prime Minister Modi’s realization of his twin goals for rapid-fire and sustainable economic growth – all the while creating jobs for the world’s largest population.
What may be less obvious is the lengths to which the PM must succeed to drive India’s transformation into a technology-driven and green 21st-century economic powerhouse with regional and global influence. By all counts, he achieved a significant milestone and established critical momentum in furtherance of his ambitions during his recent three-day, official state visit to the White House.
His address on June 22 to a joint session of the US Congress — his second since taking office in 2014, placing him in ranks along with Winston Churchill and Nelson Mandela — illustrates this point. Shifting between candor and bemused levity, the affable prime minister signaled that a historic shift is underway in the 25 years of US-India relations, accelerated under US President Joe Biden.
Artificial Intelligence (AI) has realized numerous advances; he told an enthusiastic congressional audience. “At the same time there have been even more momentous developments in another AI – America and India,” he told the audience.
Earlier that afternoon in a joint press conference, Mr. Biden declared Washington’s bipartisan support for the US-India relationship — which is bestowed on very few relationships given the fractious political divide in US politics today. The relationship, among America’s most consequential, is “stronger, closer and more dynamic than at any time in history,” said Mr. Biden.
In a joint statement released by the White House on the same day, the two leaders jointly affirmed their vision for a “partnership of democracies.” In some respects, the partnership is underway already. In others, it is now poised to engage in fields such as defense, private sector engagement at both ends of the partnership spectrum, academic research and the mutual exchange of knowledge and know-how, incrementally facilitated by US technology transfer.
The objective for both nations is greater economic security by way of reciprocal help to each other in both identifying and creating solutions to a range of issues, including the ‘existential crisis’ of global warming. The thread that runs through the enterprise of this new US-India pact is technology and innovation. As described, technology is central to the two nations’ respective national interests, economic security, jobs, prosperity and overall quality of life.
Technology’s role is pivotal in this case. For the US government, this means ensuring competitive policies and programs are in place in support of the innovation and R&D. For India, it means growing the capacity for innovation on top of its globally recognized IT prowess, while broadening the jobs and talent base to form a national competitive advantage. For both countries, five critical technologies top the list: Artificial Intelligence, quantum computing, bioscience, semiconductors and autonomous systems.
Current trends have pointed to the value of and need for greater collaboration, including by way of an advanced “technology corridor”. The idea persists to use technology to cross-pollinate innovation across economic sectors and to streamline the interface with bureaucracies to attract private sector and foreign investment. For India and the US, there is a readily available role model in the dynamic Silicon Valley and India’s tech corridor and the countless contributions of the Indian diaspora to the country’s advance.
The US-India joint statement declared on June 22, charts such a future drawing on the experience with Silicon Valley by zeroing in on technology’s “defining role”. In doing so, it enjoins the private sector to help advance India’s startup culture, position the country as a viable supply chain alternative to China and as a flag bearer in the global fight against the climate crisis.
The joint statement’s blueprint promotes building on the successes of the digital public infrastructure (DPI) and the technology sector’s aspirations to be a global technology hub. By all counts, the long-term intention is to facilitate reciprocal innovation together with collaboration and the identification of and execution of mutually beneficial solutions.
Mr. Modi characterized the US-India collaboration as “strategic” and talked about the decision by US chipmaker Micron Technology to invest $825 million to build a new semiconductor assembly and test facility with support from the Indian government for a combined $2.7 billion investment to advance the sophistication of India’s semiconductor industry.
While appearing as an incremental step in the larger scheme of things, the chipmaker’s initiative is anchored to a broader platform designed to accentuate coordination under an MOU signed by the two leaders as part of the semiconductor supply chain and innovation partnership.
A weighty nod also was paid to clean tech collaboration alongside initiatives having to do with trade, defense, space, supply chains and domestic manufacturing. Marquee announcements noted both leaders’ ambitions to curtail and eliminate, if possible, carbon emissions by dates included for cooperation in developing green hydrogen, wind energy, better battery storage, nuclear energy resources and more effective carbon capture.
Notably, a spree of initiatives highlighted Indian companies’ investment in the US. VSK Energy, a joint venture between Kolkata-based solar panel maker Vikram Solar and New York-based sustainability-focused PE firms, Phalanx Impact Partners and Das & Co – announced a $1.5 billion investment for developing a solar panel manufacturing unit in Colorado. Mumbai-based Epsilon Carbon plans to invest $650 million in a greenfield electric vehicle battery component factor while JSW Steel plans to invest $120 million at its steel plant in Ohio. All three are likely to capitalize on incentives under the Biden administration’s Inflation Reduction Act.
Meanwhile, leading tech giants, including Google’s parent, Alphabet Inc., and Amazon promised additional investments following their executives’ interaction with Modi during the last leg of his three-day official visit. E-commerce giant Amazon pledged over $15 billion, bringing its total investment in India to $26 billion. Google, which had committed to invest $10 billion through the India Digitization Fund in 2020, announced plans to open a global fintech operation in Gujarat.
A major push was made to accelerate the deployment of electric vehicles, including enhanced support for electrifying India’s public transportation sector. This included a plan to put electric buses on streets in major cities and another to help Indian Railways realize an ambitious net zero carbon target by 2030.
Much was accomplished but clearly much remains to be done. The accomplishments realized during Mr Modi’s trip may well be only the tip of the proverbial iceberg of what needs to be done and what is possible.
At the top of that list will be sustaining the dialogue now underway in the face of the vicissitudes of America’s four-year political cycle and the potential to get overwhelmed when the magnitude of issues requiring solutions involves 1.4 billion citizens.
The resolve between the two countries will be critical. Still, technology’s potential for good is an important advantage to have at the heart of the pragmatic partnership that marks this new stage in US-India relations.
Dr. Marsha Vande Berg is a corporate director and advisor. A former journalist working in the US, she is recognized widely for her contributions to international publications.