December 4, 2023

Multifaceted expansion of ‘defense’ cooperation and semiconductor deals stand out in Modi’s US visit

“One of the defining relationships of the 21st century.” This is how US President Joe Biden characterized the US relationship with India, welcoming Indian Prime Minister Narendra Modi to Washington.
Both in Biden’s statement, but also in the very results of Modi’s visit to the US, the importance that the US attaches to the relationship with New Delhi, both for the enormous potential for business for the benefit of American monopolies and for the important role that India can play in the Indo-Pacific region and more broadly, in the face of the rapid strengthening of China, which challenges American primacy.

Among other things, Washington – which is trying to capitalize on corresponding “concerns” of New Delhi about Beijing – takes into account the huge market that India represents and the abundant labor force in the country, which has reached and exceeds China in population. Also, the military power of India, one of the nuclear powers of the planet, with a rapidly upgrading military industry, in an area where until now New Delhi has “privileged” relations with Moscow.

It is no coincidence that one of the fields that the Joint Communiqué also singled out as a side of expanding cooperation was the “Road Map for Defense Industrial Cooperation”. In his statements, the Indian Prime Minister clarified that “moving away from the older relationship that existed between us, buyer-seller, today we have moved to a relationship that also includes the transfer of know-how, joint development , joint production ” .

Equally characteristic, analysts of American “think tanks”, e.g. of the Brookings Institution, emphasize that “the US views India as an important country in its own right – as a large, economically developing democracy, with military and technological capabilities, that will play a critical role in the international order” and which is also a vital “geopolitical counterweight, economic alternative and democratic counterbalance in China”.

Cooperation in the field of semiconductors is a priority

Of particular importance for international competition is the strengthening of US-India bilateral cooperation in the field of semiconductors (microchips), which are many times necessary for the development of a number of critical branches of new technologies and industry, from the automotive industry to mobile telephony, etc. .K.

“We are doubling down on our cooperation to secure the supply chains that supply us with semiconductors,” Biden said, citing a number of related contracts that have either already been closed or are expected to be finalized immediately.

Any new balances in the semiconductor sector interact with China’s position and aspirations, as Beijing maintains a significant advantage due to the large amounts of rare earths (a key raw material for semiconductors) it controls.

We also remind you that the developments in the supply chains of semiconductors internationally are also related to the competition around Taiwan ( home to some of the most important production companies in the sector), another of the tension fronts of the confrontation between Beijing and Washington.

The US-Indian industry collaboration includes US chipmaker Micron Technology ‘s $2.7 billion investment to operate a new semiconductor testing and packaging facility in India.

American semiconductor equipment maker Applied Materials is also planning a $400 million investment.

” Lam Research” has proposed to undertake the training of 60,000 Indian engineers around this particular industry.

The economic cooperation of the two sides, however, is not limited to semiconductors. In the last decade the volume of US-India bilateral trade has almost doubled.

In the coming years, among the new joint businesses that will proceed, the following stand out among others:

Aircraft maker Boeing plans to invest about $24 million in a new logistics center for aircraft parts in India. Besides, “Air India” already ordered 220 aircraft from the American company.

The Taiwanese company “Foxconn” (which works as a subcontractor for tech giants) plans to invest $500 million to set up production plants in the southern Indian state of Telangana and nearly $968 million in neighboring Karnataka. It is also planning a new factory in India to manufacture AirPods (Apple’s wireless headphones).

And “Cisco Systems” (a networking equipment manufacturing company) has set a goal to increase its production and exports in India, so that in the coming years these will reach 1 billion dollars.

In the context of the visit to Washington, Modi also had special contacts with various monopoly executives, such as the CEO of “Tesla”, Elon Musk, who, among other things, hastened to express the opinion that “India is the most promising of the major countries of the planet”, while he declared convinced that his company “will be active in India (…) as soon as humanly possible”.

“Road Axis for Defense”, with an upgrade of the Quad

Among the fields that stand out in the upgrading of bilateral relations is certainly that of “defense” – military cooperation.

Characteristically, Biden announced “more joint exercises, more cooperation between our defense industries and more consultation and coordination across the board.”

The US-India Joint Communiqué also refers to the two sides ‘ “Roadmap for Defense Industrial Cooperation” and notes that the two leaders “welcomed India’s emergence as a hub for the maintenance and repair of future US Navy ships,” but and entering into repair agreements with Indian shipyards.

It is also emphasized that “the two countries agree to cooperate in the creation of logistical support, repair and maintenance infrastructure for aircraft and ships in India”.

Plans for joint production of aircraft engines were also in focus. According to information, the American company “General Electric (GE) Aerospace” will provide critical know-how and in collaboration with the Indian “Hindustan Aeronautics Limited” (HAL) they will start the joint production of GE-F414 type engines, which will be used for the Indian-made Light Combat Aircraft (LCA) Tejas Mk-II fighter aircraft.

Related publications commented that with this agreement, “India will become the 5th country in the world to produce aircraft engines”, after the USA, Russia, France and Britain.

In this context, the two sides also discussed the further strengthening of the Quad scheme (USA, India, Japan, Australia), which – as the American President asserted – “can ensure that the vital Indo-Pacific region remains free , open, prosperous and safe”. Behind the standard reference to a “free” and “open” Indo-Pacific is actually the intensifying confrontation with Beijing’s designs and claims in the same region.

High on the agenda of the Biden-Modi meeting was the new “I2U2” scheme (where India and the US work with Israel and the United Arab Emirates), with which they seek to “build regional connections in the Middle East and develop science-based solutions” for ” global challenges, such as food security and clean energy”.

With an eye on Russia and China

The upgrading and expansion of India’s cooperation with the US does not negate the strong ties that New Delhi maintains with Moscow .

Not coincidentally, and despite intense “Western” pressure, India has not adopted the barrage of sanctions imposed by the Euro-Atlantic bloc on Russia, particularly after the invasion of Ukraine.

In fact, it not only did not limit but expanded its economic relations with Moscow, taking advantage of precisely these sanctions: It is characteristic that after the start of the war, there were months when up to 40% of Russian oil exports ended up in India…

New Delhi, moreover, remains consistently one of the most important customers for Russia’s military industries. Based on the latest data, 20% of orders in Russian industries are for Indian buyers…

Close US-India relations do not invalidate India’s choice not to escalate tensions with China either. Despite the serious contrasts and differences (even territorial ones) that the two powerful Asian countries have, they still coexist in schemes such as the BRICS, but also others that are upgrading their role, such as the Shanghai Cooperation Organization (SCO).

In any case, adding new chapters to the US-India “global strategic partnership,” as Modi has described it, cannot help but interact and affect New Delhi’s relations with Moscow and Beijing.

*Note: Article originally published in the June 1-2 2023 issue of ‘Rizospastis’, the organ of the Communist Party of Greece (KKE) Central Committee.