Opinion | India's Exclusion From US' Pax Silica Club Isn't A Snub - But It Matters

A new geopolitical contest is underway, and the battlefield is supply chains. The Pax Silica initiative, announced recently, is a US move to turn supply chains into strategy, locking in trusted access across the AI stack, from minerals and chips to security and logistics.

It matters for India because this is how the next tech order will be built: small groups first, chokepoints next, and market access later. Put simply, the countries that control the hard inputs will shape the rules for everyone else. India should read Pax Silica as a map of where leverage will sit.

What Each Member Offers

Pax Silica brought together eight US partners, each with a chokepoint to offer. Japan and South Korea add manufacturing muscle. The Netherlands controls specialised chipmaking machines that are extremely hard to replace. Singapore is a global hub port and a major semiconductor production node. Australia brings critical minerals depth. And the UK, Israel and the UAE add supply-chain security focus, security-tech innovation, and capital-plus-energy ambition for AI infrastructure.

It is a carefully chosen group covering the early links of the tech supply chain, from minerals and chipmaking to shipping and financing. When key parts of a supply chain sit inside one club, trade stops being just business. It starts depending on trust and membership. Think of it like this. When a small group holds the keys to the warehouse, everyone else has to follow their entry rules.

At the same time, coalitions like this are not just power plays. They can help partners coordinate standards, reduce single-point dependencies, and build resilience against shocks.

Missing The Point

India is not part of the initial grouping. Some see this as a snub. Others say it does not matter. Both reactions miss the point. The issue is not optics. It is whether India is moving fast enough up the chokepoint ladder to be treated as a partner rather than a customer.

But it is equally important to be clear that India is not outside the semiconductor ecosystem. For chip design, India is already a critical node. It is home to nearly 20% of the world's chip design engineers, with numerous firms running global capability centres. That is why global chip firms keep designing in India even when geopolitics shifts. You cannot shift thousands of engineers and years of know-how overnight.

India's Strengths

India is also building traction in areas where it can become relevant sooner than many assume.

Ten projects across six states have been approved, spanning everything from OSAT - outsourced assembly and testing - to advanced packaging. These are not glamorous, but they are key chokepoints in modern hardware. If design is the brain, packaging and testing are what make the brain usable in the real world. India can add what this club lacks at scale, design talent and back-end capacity that reduces concentration risk.

This progress is no longer hypothetical. India's design base and back-end push are real. But dismissing Pax Silica as background noise would be a strategic mistake.

The Inner Circle

The real risk is geopolitical. Supply-chain coalitions can become tools of power. Access becomes conditional unless you are in the trusted circle. In a crisis, insiders get protected first and everyone else discovers that markets do not override politics. Rules get written inside smaller groups, while outsiders end up complying with frameworks they did not shape. In the real world, that can mean delays, extra paperwork, higher costs, and uncertainty at the worst possible time.

India is particularly exposed because it is both a huge future market and a big capability base. In supply-chain politics, markets get courted, but capability nodes get seats. Pax Silica is a reminder that India must become more of the second and less of the first.

Capability is the priority. Membership is the consequence, not the prize. India needs to climb the chokepoint ladder so that entry, when it is sought, is negotiated from strength.

Latecomer's Advantage

The fastest strategic payoff for India over the next two to three years comes from moving up in two upstream areas. First, critical minerals processing and recycling. India has already approved a ₹1,500 crore incentive scheme and issued operational guidelines in October 2025. The geopolitical value is simple. Processing and recycling create leverage fast. They also make India useful to any coalition looking to diversify away from single-country dominance. The more India can process at home, the less it has to worry about sudden bottlenecks elsewhere.

Second, in a Pax Silica world, packaging is a practical way to become indispensable without pretending that India can leapfrog the most advanced fab ecosystems. Sanand in Gujarat is emerging as an OSAT cluster, and India should accelerate the wider packaging ecosystem that makes such clusters competitive.

Diplomatically, India should engage with Pax Silica as a capability contributor, not as a latecomer seeking exceptions. Late entry is not a failure if your leverage is higher. There is a precedent. The Minerals Security Partnership was formed in June 2022, and India joined in June 2023. The point is simple. Build capability now, and India can join later on terms that strengthen autonomy, not shrink it.

(The writer was a Permanent Representative of India to the UN and now serves as Dean, Kautilya School of Public Policy)

Disclaimer: These are the personal opinions of the author