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

A quiet but significant shift is taking place in global geopolitics, and it has little to do with borders or militaries. The new battleground is supply chains. The US’s recently announced Pax Silica initiative signals a move that will transform control over technology supply chains into strategic power and shape who will make the rules in the age of artificial intelligence. India is not in the first group. This is important, not because of symbolism, but because it reveals where the leverage will be in the next technological order.

Pax Silica brings together eight U.S. 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 most difficult inputs shape standards, pricing, and access for everyone else.

For India, this is not a story of exclusion. It reminds us how to organize power.

Why These Eight Countries?

Each member of the Pax Silica group represents an important gateway in the technology supply chain. Japan and South Korea provide advanced manufacturing power. The Netherlands controls highly specialized chip production equipment that very few people can produce. Singapore combines global port access with a strong semiconductor base. Australia brings depth to critical minerals. The UK, Israel and the UAE are adding capital-backed ambition for supply chain security, advanced defense and cyber technologies and AI infrastructure.

Together they cover the earliest and most sensitive links in the technology chain. When these connections are in a small, trusted circle, trading becomes based on trust rather than price. Market access begins to depend on membership.

Such coalitions are not just 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 Is India’s Absence Misunderstood?

India is not included in the first grouping. Some see this as diplomatic levity. Others argue that it is unimportant. Both views miss the point. The question is not whether India is invited, but whether it is moving up the supply chain ladder fast enough to be seen as a partner rather than a customer.

India is far from marginal in the semiconductor world. It is already indispensable in chip design. Almost 20 percent of the world’s chip design engineers are based in India, and global firms operate large design centers across the country. This is not a capacity that can shift quickly, regardless of political changes. This is why design work continues to flow to India even as geopolitics gets tougher.

Where India Is Making Progress

India is also starting to gain strength in areas that are more important than they seem. The government has approved ten semiconductor projects covering outsourced assembly and testing (OSAT) and advanced packaging in six states. These are not headline-grabbing stories, but they are critical connections. Design creates intelligence; Packaging and testing make chips available at scale.

This is where India can fill the gaps. Design capability combined with back-end capability reduces concentration risk for global supply chains. These are practical crossing points and India is starting to occupy them.

This progress is not theoretical but real. It would therefore be a mistake to characterize Pax Silica as irrelevant.

Real Risk: Being Outside the Inner Circle

Supply chain groupings can quickly become instruments of power. In a crisis, those inside are protected first. Foreigners face delays, conditions, and uncertainty. Rules are formed within small groups, while others are left to follow them unaffected.

India’s exposure is unique. It is both a vast market of the future and a growing hub of talent. Markets welcome. Skill nodes are located on the table. Pax Silica underlines why India needs to become more of the latter.

Ability precedes membership. The purpose is not the entry itself, but a powerful enough lever to make the entry meaningful.

Where India Can Move Fastest

India’s strongest gains over the next two to three years will be on the upside.

First, the processing and recycling of critical minerals. India approved a Rs 1,500-crore stimulus plan in October 2025 and issued operational guidelines. Processing takes advantage of speed and reduces vulnerability to external bottlenecks. This also makes India useful for any group looking to diversify supply and move away from single-country dominance.

Second, advanced packaging and OSAT. Clusters like Sanand in Gujarat are already emerging. Strengthening the broader packaging ecosystem will allow it to become indispensable to India’s most advanced manufacturing hubs without claiming to be able to leapfrog overnight.

Playing the Long Game

Diplomatically, India should engage with Pax Silica as a talent contributor and not as a latecomer seeking concessions. Entering later when leverage increases is not a failure.

There is a precedent. The Minerals Security Partnership was launched in June 2022 and India joined a year later in June 2023. The lesson is clear: build power first, and membership with better terms will follow.

Pax Silica is not a rejection of India. This is a map of where power lies in the tech economy. The task now is to ensure that India occupies more of these positions, so that when the doors open it will come in as a partner and not as a petitioner.