‘US does not seek to decouple from China’: Raimondo on semiconductor supply MoU with India
2 min read . Updated: 10 Mar 2023, 10:05 PM IST
Premium- According to reports, China has sanctioned USD 140 billion to boost domestic chip manufacturing to overcome the US export restrictions.
India and the United states on Friday inked a deal on increasing private sector cooperation in the area of semiconductors. The Memorandum of Understanding signed between US Secretary of Commerce Gina Raimondo and Commerce and Industry Minister Piyush Goyal aims to facilitate business opportunities and develop an ecosystem with a view to reduce their dependency on China and Taiwan.
The MoU was signed during the US Commercial Dialogue. According to a joint statement, both sides have agreed to set up a semiconductor sub-committee, led by the Department of Commerce for the US side and the Ministry of Electronics and Information Technology (MeitY) and Ministry of Commerce and Industry for the Indian side.
However, while addressing reporters, Raimondo clarified, “We also want to be clear that the US does not seek to decouple from China nor it seeks the technological decoupling from China.".
China has been the biggest consumer of semiconductor chip in 2020. China bought 53.7% of the world supply of chips worth around $240 billion.
"What we seek to do is ensure that certain technologies where the US is ahead and where Chinese explicit strategy is to have these technologies and deploy them in Chinese military apparatus, those are the technologies that we have used export controls to ban the sale to China," Raimondo told reporters in Delhi.
She also said that majority of the trade with China is in benign products and that will and should continue.
"So this is not about decoupling, what it is about is keeping eyes wide open to the fact that China is explicitly trying to get access to American technology for use in its military and we need to protect ourselves and our allies and partners from that happening," she said.
According to reports, China has sanctioned USD 140 billion to boost domestic chip manufacturing to overcome the US export restrictions.
Indian government has also approved a ₹76,000 crore-scheme to boost semiconductor and display manufacturing in the country in a bid to position India as a global hub for hi-tech production and attract large chip makers.
Incentives have been lined up for companies engaged in silicon semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensor fabs, semiconductor packaging and semiconductor design.
After the pandemic, several sectors, including automobile and telecom, were severely impacted on account of shortage of semiconductor chips as India mainly imports them from China and Taiwan.
Semiconductors are silicon chips that are used in various products, including automobiles, computers and cellphones.