U.S., India Announce Interim Trade Deal, Cut Tariffs and Expand Market Access
The United States and India have announced an interim trade framework aimed at expanding bilateral market access and reducing tariff barriers, following a call between U.S. President Donald J. Trump and Indian Prime Minister Narendra Modi. Under the agreement, Washington will lower its reciprocal tariff on Indian imports from 25% to 18% and remove an additional 25% duty after India committed to stop purchasing Russian oil. India, in turn, will eliminate or reduce tariffs on a wide range of U.S. industrial and agricultural products, including grains, tree nuts, fruit, soybean oil, wine and spirits, and will work to address non-tariff barriers that restrict U.S. exports. Both sides also agreed to negotiate rules of origin and digital trade provisions and to strengthen cooperation on technology, supply chains, and investment reviews as part of broader negotiations toward a full Bilateral Trade Agreement (BTA).
The deal also includes India’s intention to increase purchases of U.S. energy, information and communication technology, coal, and other products, with the United States saying the framework would help correct what it views as longstanding trade imbalances and protectionist practices. Officials said negotiations will continue on issues such as customs facilitation, services, intellectual property, labor and environmental standards, and state-owned enterprise practices. For non-Indian companies, the agreement is relevant because it signals a shift toward lower tariffs and more predictable trade rules in one of the world’s largest markets, potentially intensifying competition from U.S. exporters while also creating opportunities for multinational firms integrated into U.S.-India supply chains in sectors such as energy, technology, agriculture, and logistics.
Editor’s Note: The U.S. and India have announced an interim trade deal that lowers tariffs, expands market access, and strengthens cooperation on technology, supply chains, and investment reviews. India will cut duties on U.S. industrial and agricultural goods while boosting purchases of American energy and ICT, signaling a shift toward more predictable trade rules and opportunities for multinational firms.
India Tapes Out Seven Advanced Chips Under DLI Scheme, Including AI and 5G Designs
Seven advanced semiconductor chip designs have been successfully taped out under India’s Design Linked Incentive (DLI) scheme, including one fabricated on a 12-nanometre node in collaboration with Taiwan Semiconductor Manufacturing Co (TSMC). The chips span applications in artificial intelligence, telecom, and edge computing, with key contributions from Netrasemi Pvt. Ltd., which has developed a machine-learning acceleration chip delivering 64 TOPS of performance for robotics, drones and industrial automation, as well as a high-end Edge-AI system-on-chip with integrated video analytics. Other participating firms include Saankhya Labs Pvt. Ltd., which is building a 5G baseband SoC, Mindgrove Technologies Pvt Ltd, which has developed a vision SoC based on the Shakti processor, and Calligo Technologies Pvt. Ltd., which is working on a RISC-V and POSIT coprocessor-based accelerator card. The projects are part of the government’s broader push to strengthen domestic chip design across AI, IoT, networking, and strategic sectors such as automotive, energy, space and defence.
Union Minister for Electronics and IT Ashwini Vaishnaw reviewed the progress of DLI-supported companies in New Delhi in January 2026, reiterating the government’s commitment to building an indigenous semiconductor design ecosystem under the Semicon India Programme. According to the Ministry of Electronics and Information Technology (MeitY), academia has taped out 122 designs, with 56 chips fabricated at the SCL Mohali facility, while startups have completed 16 tape-outs at advanced foundry nodes; together they have filed 85 patents. The programme has also enabled access to advanced electronic design automation tools, accounting for about 22.5 million tool-hours and involving more than 67,000 students and over 1,000 startup engineers. For non-Indian companies, the development is relevant as it signals India’s growing role in upstream chip design and IP creation, potentially creating new partnership, licensing and supply-chain opportunities for global semiconductor firms, tool vendors and system manufacturers seeking to diversify beyond traditional East Asian design hubs.
Editor’s Note: India has successfully taped out seven advanced semiconductor designs under the DLI scheme, including AI, 5G, and edge computing chips, with one fabricated on a 12nm node via TSMC. The program has enabled 122 academic designs, 85 patents, and extensive EDA tool access, signaling India’s growing role in upstream chip design and creating new partnership opportunities for global semiconductor firms.
India Unveils Roadmap to Secure Digital Infrastructure Against Quantum Cyber Threats
India is moving to future-proof its digital and national security systems against quantum-enabled cyber risks through a strategic roadmap developed by a task force under the National Quantum Mission. The plan warns that advances in quantum computing could eventually break widely used cryptographic algorithms, exposing government networks, financial systems and critical infrastructure to “harvest now, decrypt later” attacks. Led by Rajkumar Upadhyay, the task force has recommended accelerated adoption of post-quantum cryptography (PQC) for high-risk sectors such as defence, telecom, energy and core government systems by 2027, with nationwide transition targeted by 2033. It also calls for mandatory cryptographic inventories, crypto-agile system design, early integration of quantum-safe requirements into procurement, and the development of hybrid security models combining PQC with quantum key distribution for sensitive communications.
The roadmap proposes a national, tiered testing and certification framework to validate quantum-safe products based on risk and criticality, supported by upgraded domestic laboratories and interim approval mechanisms to avoid slowing early adoption. Priority sectors are expected to modernise public key infrastructure and key management systems, while non-critical enterprises are given longer timelines but urged to begin structured preparation by 2028. The task force also stresses the importance of indigenous solutions aligned with India’s self-reliance strategy and stronger governance to manage the long transition from classical cryptography. For non-Indian companies, the initiative is significant because it signals the emergence of India-specific quantum-safe compliance and certification expectations, potentially affecting global technology vendors, cloud providers and telecom equipment makers supplying the Indian market, while also opening opportunities for collaboration in testing, standards development and secure communications technologies.
Editor’s Note: India has unveiled a quantum cybersecurity roadmap under the National Quantum Mission, warning that advances in quantum computing could break current encryption and expose critical systems to “harvest now, decrypt later” attacks. The plan calls for adopting post-quantum cryptography in high-risk sectors by 2027, nationwide transition by 2033, and building indigenous quantum-safe solutions, creating new compliance expectations and collaboration opportunities for global technology providers.
India Weighs Joining US-Led Pax Silica Pact as Global Race for Critical Minerals and AI Intensifies
The global politics of rare earths and critical minerals is entering a phase of heightened strategic competition, driven by their central role in clean energy, advanced manufacturing and national security. On 4–5 February 2026, External Affairs Minister S. Jaishankar discussed the issue at a ministerial meeting convened by US Secretary of State Marco Rubio, with reports indicating India may join the US-led Pax Silica grouping by the end of February. Launched in December 2025, Pax Silica brings together partners including Australia, Japan, South Korea, the UK, Singapore, Israel, Greece, the Netherlands, the UAE and Qatar, with Canada, the EU, Taiwan and India invited to join. The initiative seeks to align trusted partners on artificial intelligence and supply-chain security, reduce reliance on China for critical minerals and advanced technologies, and shape global standards for AI, data and strategic materials.
India’s possible entry comes as it accelerates domestic efforts to secure critical resources and reduce import dependence, particularly on China, which dominates global rare-earth processing. In the Union Budget 2026–27, Finance Minister Nirmala Sitharaman announced Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu, anchored in the existing extraction and refining base of IREL (India) Limited, alongside a ₹7,280-crore scheme to build integrated rare-earth permanent magnet capacity. While Pax Silica could help India access advanced AI ecosystems and secure mineral supply chains, analysts note risks to strategic autonomy and to its engagement with China, Russia and the Global South. For non-Indian companies, the developments are significant because they signal tighter coordination among a US-aligned bloc on AI standards and mineral supply chains, potentially reshaping sourcing strategies, technology compliance requirements and investment decisions for global automakers, electronics firms, clean-energy manufacturers and mining companies operating across Asia, Europe and the Middle East.
Editor’s Note: India is considering joining the US-led Pax Silica pact, which aligns trusted partners on AI and critical mineral supply chains to reduce reliance on China. The move comes as India launches domestic rare-earth corridors and a ₹7,280-crore scheme for permanent magnet capacity, though analysts warn of risks to strategic autonomy and ties with China, Russia, and the Global South.
Nvidia CEO Says Data Centres Can Drive Internet-Scale Job Creation in India
Nvidia CEO Jensen Huang has said that the expansion of data centres in India could replicate the scale of employment generated when the internet took off in the country. Speaking days after the Union Budget announcements, Huang said India should not only welcome global data-centre operators but also encourage Indian companies to build such infrastructure. “The actual building of the data centre is maybe 5,000 people, 10,000 people, and there are electricians and plumbers and construction; the upstream as well as the downstream implication of having and then enabling technology infrastructure is incredible,” he said, adding that artificial intelligence would create jobs across supply chains in much the same way as the internet did.
His remarks follow Budget 2026 proposals by Finance Minister Nirmala Sitharaman to offer a tax holiday until 2047 to foreign companies providing cloud services globally using data centres located in India, provided they serve Indian customers through a domestic reseller entity. Officials clarified that profits from domestic economic activities will remain taxable like any other Indian company, including income earned by resident data centres and by Indian resellers of cloud services, though a 15% safe-harbour margin will apply where the Indian data centre is a related entity of a foreign firm. For non-Indian companies, the policy creates incentives to locate data and AI infrastructure in India while requiring local commercial linkages, potentially lowering operating costs and expanding access to India’s digital market, but also introducing compliance and structuring considerations for global cloud and technology providers.
Editor’s Note: Nvidia CEO Jensen Huang said India’s growing data centre sector could replicate the internet-era scale of job creation, with AI driving employment across supply chains. His remarks follow Budget 2026 proposals offering tax holidays to foreign cloud providers using Indian data centres, creating incentives for global firms while introducing compliance requirements for local linkages.
India Approves 10 Semiconductor Projects Worth ₹1.6 Lakh Crore, Two Fabs Among Key Investments
Union Minister of State for Electronics and IT Jitin Prasada has informed Parliament that India has approved 10 major semiconductor projects with expected investments of about ₹1.6 lakh crore, comprising two fabrication plants and eight packaging and assembly units. Among the largest projects is Micron Technology’s ₹22,516-crore facility in Gujarat for DRAM and NAND assembly and testing, and Tata Electronics’s proposed fab in Gujarat with an investment of ₹91,526 crore in technology partnership with Taiwan’s PSMC. Tata is also setting up a large semiconductor packaging unit in Assam, while other projects include facilities by CG Power and Industrial Solutions Limited in partnership with Renesas Electronics, Kaynes Technology in Gujarat, and Vama Sundari Investments in Uttar Pradesh in a joint venture with Foxconn. Additional investments include plants by 3DGlass Solutions Inc and SiCSem in Odisha, CDIL in Punjab, and Advanced System in Package Technologies in Andhra Pradesh, covering areas from silicon carbide wafers and power devices to advanced packaging and 3D integration.
The government said these projects together will create a large domestic ecosystem spanning wafer fabrication, advanced packaging and power electronics, with capacities ranging from tens of thousands of wafers per month to hundreds of millions of chips annually. In parallel, the ministry has supported 24 chip-design projects through startups, of which 16 have completed tape-outs and 13 have secured venture capital funding. For non-Indian companies, the approvals signal India’s intent to emerge as a significant node in global semiconductor supply chains, opening opportunities for equipment suppliers, materials firms and design houses to partner with Indian fabs and packaging units, while also indicating that future sourcing strategies in Asia may increasingly factor in India alongside established hubs in Taiwan, South Korea and Southeast Asia.
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Editor’s Note: India has approved 10 semiconductor projects worth ₹1.6 lakh crore, including two fabs and eight packaging units, with major investments from Tata Electronics, Micron, and partners like Foxconn and Renesas. Together with 24 supported chip-design projects and growing startup activity, these initiatives aim to build a domestic ecosystem across fabrication, packaging, and power electronics, positioning India as a new node in global semicond