Explained | Why India Sidestepped From US’ Pax Silica Club: Here's What It Means

The United States’ recently announced Pax Silica initiative signals a move to turn control over technology supply chains into strategic power, shaping who sets the rules in the age of artificial intelligence. India is not part of the first group. That matters, not because of symbolism, but because it reveals where leverage in the next technology order will lie.

A quiet but consequential shift is taking place in global geopolitics, and it has little to do with borders or armies. The new battleground is supply chains. The United States’ recently announced Pax Silica initiative signals a move to turn control over technology supply chains into strategic power, shaping who sets the rules in the age of artificial intelligence. India is not part of the first group. That matters, not because of symbolism, but because it reveals where leverage in the next technology order will lie.

Pax Silica brings together eight US partners to secure trusted access across the AI value chain, from critical minerals and semiconductor manufacturing to logistics, finance, and security. The logic is clear: those who control the hardest inputs shape standards, pricing, and access for everyone else.

For India, this is not a story about exclusion. It is a reminder of how power will be organised.

Why These Eight Countries?

Each member of the Pax Silica group offers a key chokepoint in the technology supply chain. Japan and South Korea provide advanced manufacturing strength. The Netherlands controls highly specialised chipmaking equipment that few others can produce. Singapore combines global port access with a strong semiconductor base. Australia brings depth in critical minerals. The UK, Israel, and the UAE add supply-chain security, advanced defence and cyber technologies, and capital-backed ambition for AI infrastructure.

Together, they cover the earliest and most sensitive links in the technology chain. When these links sit inside a small, trusted circle, trade becomes less about price and more about trust. Market access begins to depend on membership.

Such coalitions are not only about power. They also help members coordinate standards, reduce dependence on single suppliers and protect themselves from shocks. But they also draw lines between insiders and outsiders.

Why India’s Absence Is Being Misunderstood

India is not in the initial grouping. Some see this as a diplomatic slight. Others argue it is irrelevant. Both views miss the real issue. The question is not whether India was invited, but whether it is moving fast enough up the supply-chain ladder to be treated as a partner rather than a customer.

India is far from marginal in the semiconductor world. In chip design, it is already indispensable. Nearly 20 per cent of the world’s chip design engineers are based in India, and global firms run large design centres across the country. This is not a capacity that can be relocated quickly, regardless of political shifts. That is why design work continues to flow to India even as geopolitics hardens.

Where India Is Gaining Ground

India is also beginning to build strength in areas that matter more than they appear. The government has approved ten semiconductor projects across six states, covering outsourced assembly and testing (OSAT) and advanced packaging. These are not headline-grabbing fabs, but they are critical links. Design creates intelligence; packaging and testing make chips usable at scale.

This is where India can fill gaps. Its design talent, combined with back-end capacity, reduces concentration risk for global supply chains. These are practical chokepoints, and India is starting to occupy them.

That progress is real, not theoretical. Which is why dismissing Pax Silica as irrelevant would be a mistake.

The Real Risk: Being Outside The Inner Circle

Supply-chain groupings can quickly become instruments of power. In a crisis, insiders are protected first. Outsiders face delays, conditions, and uncertainty. Rules are shaped within small groups, while others are left to comply without influence.

India’s exposure is unique. It is both a vast future market and a growing capability hub. Markets are welcome. Capability nodes get seats at the table. Pax Silica underlines why India must become more of the latter.

Capability comes before membership. The goal is not entry for its own sake, but leverage strong enough to make entry meaningful.

Where India Can Move Fastest

Over the next two to three years, India’s strongest gains lie upstream.

First, critical minerals processing and recycling. India has approved a ₹1,500 crore incentive scheme and issued operational guidelines in October 2025. Processing creates leverage quickly and reduces vulnerability to external bottlenecks. It also makes India useful to any group seeking to diversify supply away from single-country dominance.

Second, advanced packaging and OSAT. Clusters such as Sanand in Gujarat are already emerging. Strengthening the wider packaging ecosystem would allow India to become indispensable without pretending it can leapfrog the most advanced fabrication hubs overnight.

Playing The Long Game

Diplomatically, India should engage with Pax Silica as a capability contributor, not as a late entrant seeking concessions. Entering later is not a failure if leverage has increased.

There is precedent. The Minerals Security Partnership was launched in June 2022, and India joined a year later, in June 2023. The lesson is straightforward: build strength first, and membership follows on better terms.

Pax Silica is not a rejection of India. It is a map of where power will sit in the technology economy. The task now is to ensure India occupies more of those positions, so that when doors open, it walks in as a partner, not a petitioner.