India evaluates impact of US proposal on AI chip export restrictions

India is evaluating the impact of the US proposal to impose restrictions on AI chip exports, as the move could have implications on the development of emerging technologies here, official sources said on Thursday.

The US administration has proposed a new framework that restricts the import of artificial intelligence chips due to national security concerns about the technology and economic interests of producers and other countries.

The proposal has no restriction for 18 key allies of the US, which have been clubbed under Group 1, but there are restrictions on the quantity that can be exported to other countries under Group 2, including India.

Sources, who did not wish to be named, said ministries, including commerce and industry and electronics and information technology, are looking into it.

"We are evaluating the impact," they added.

The semiconductor industry body IESA has stated that the proposed restrictions will challenge the country's plan for AI hardware, crucial for the local development of emerging technologies.

India's National AI Mission aims to develop infrastructure with over 10,000 GPUs (graphics processing units) through public-private partnerships, supported by a Rs 10,000 crore investment over five years.

"In the short term, the new export controls may not significantly impact India. However, the uncertainty of securing licenses and trade negotiations could challenge India's ambitions for large-scale AI hardware deployment," India Electronics and Semiconductor Association (IESA) President Ashok Chandak has said in a statement.

He said the export controls are set to take effect in 120 days, allowing the incoming administration under President-elect Donald Trump to potentially amend these rules.

The proposed framework completely bars exports of AI Chips to countries in Group 3, which includes China, Russia, Iran, and Iraq.