India, US to have dialogue on semiconductors: US Commerce Secy Raimondo
1 min read . Updated: 09 Mar 2023, 02:59 PM IST
PremiumWashington was looking to work closely with allies in India and Europe to avoid a subsidy race and secure its supply chains. It is in this context that New Delhi and Washington will discuss semiconductor cooperation.
New Delhi: India and the US are set to hold a formal dialogue on semiconductor cooperation, according to US Secretary of Commerce Gina Raimondo. Speaking at an event in New Delhi, Raimondo outlined Washington’s desire to work closely with partners like India to reduce supply chain vulnerabilities.
“On semiconductors, the United States is overly dependent on Taiwan. 93% of the world’s most advanced semiconductors are produced in Taiwan. By no measure is that stable. Having said that, we never expect to make all the semiconductors we consume in America," she said.
Washington, Raimondo added, was looking to work closely with allies in India and Europe to avoid a subsidy race and secure its supply chains. It is in this context that New Delhi and Washington will discuss semiconductor cooperation. Raimondo pointed to Indian and American strengths in semiconductor design as a possible area of cooperation.
However, high tariffs on certain input components for semiconductors remain a challenge for US business in India, the Secretary went on to say. Besides this, navigating regulatory differences between Central and state regulations is also a challenge.
Secretary Raimondo, who is on a four-day visit to India, is slated to meet her counterpart Minister Piyush Goyal tomorrow. Both ministers, Raimondo said, have agreed to re-launch the India-US Commercial Dialogue. This will be the first meeting under this Dialogue framework in three years.
An additional focus for the two commerce ministers will be the US-India CEO Forum meeting tomorrow.
“The US-India CEO Forum was soft-launched by Secretary Raimondo and Indian Commerce & Industry Minister Piyush Goyal in November 2022," says a statement by the US Department of Commerce.
The forum’s key priorities include, “increasing supply chain resilience; enhancing energy security & reducing overall greenhouse gas emissions; advancing inclusive digital trade; and facilitating post-pandemic economic recovery, especially for small businesses," the statement goes on to say.
During her remarks, Raimondo also said that a Free Trade Agreement with India is “off the table". “There is no political appetite for an FTA at the moment," she admitted.
“Having said that, my hope is that the Indo-Pacific Economic Framework (IPEF) will prove to be more economically impactful than an FTA in many ways," she added.
IPEF, which was launched in 2022, is the Biden Administration’s signature economic initiative in the Indo-Pacific. The Framework has four negotiating pillars on trade, anti-corruption, green economies and supply chains.
Raimondo pointed out that free trade deals have had a mixed record in bringing economic prosperity to negotiating parties with a number of downsides. She added that initiatives like IPEF are trying to arrive at the modern equivalents of FTAs.
“If we do it right, and I believe we will, that will unleash orders of magnitude more job creation than a traditional FTA," she said.