Strategic alignment: India joining Pax Silica could secure supply chains

India has joined Pax Silica, the United States-led technology and supply-chain coalition. This formally brings India into a grouping launched in December 2025 to secure supply chains in semiconductors, artificial-intelligence (AI) infrastructure, and critical minerals, and reduce reliance on China, particularly in rare-earth processing and semiconductor manufacturing. Pax Silica seeks to coordinate investment from mineral extraction and processing to chip fabrication, data infrastructure, and advanced computing among members, which include the United States (US), Japan, South Korea, the United Kingdom, Singapore, Israel, the Netherlands, Australia, the United Arab Emirates, Qatar, and Greece, with Canada, the European Union, and Taiwan participating as observers.

 

For India, the strategic rationale is evident. China accounts for over 90 per cent of global rare-earth processing capacity. India imports 80-90 per cent of its rare-earth magnets and related materials from Chinese suppliers. Recent export controls and licensing conditions have disrupted domestic automobile and electronics production, underscoring the risks of concentrated dependence. Participation in Pax Silica opens up the possibility of diversified sourcing, processing partnerships, and coordinated stockpiling. The move also aligns with India’s domestic industrial push. The government has approved semiconductor projects worth about ₹1.6 trillion, backed by incentives of around ₹76,000 crore. Fabrication units, compound semiconductor plants, and design initiatives are under way, with global firms such as Micron and domestic players, including the Tata group, committing investment. In the Union Budget 2026-27, the government announced “Rare Earth Corridors” in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu, alongside a ₹7,280 crore “Rare Earth Permanent Magnet” scheme aimed at building 6,000 tonnes per annum of integrated magnet capacity. These measures build on the existing capabilities and seek to integrate mining, processing, research, and manufacturing. Pax Silica also extends beyond minerals and chips. It encompasses AI infrastructure, data centres, fibre networks, and foundational models. India’s large digital public infrastructure, an expanding AI market, and a substantial engineering-talent pool strengthen its value proposition within such a framework.

 

Yet entry into the grouping carries tradeoffs. As supply chains bifurcate between China-led and Pax Silica-led systems, expectations on export controls, technology standards, and investment-security practices may intensify. There is also the risk of substituting one dependency with another. Advanced lithography equipment, high-end AI chips, and computing hardware remain concentrated within US-aligned ecosystems. The US has withdrawn from a record number of global agreements, including the India-led International Solar Alliance, raising questions about the durability of Washington’s multilateral commitment. Pax Silica, too, must be viewed in that light. While it offers opportunities of cooperation in AI and critical minerals, it is ultimately a US-led initiative designed to advance American economic-security objectives. Thus, India’s participation should be guided by a realistic assessment of long-term reliability, policy flexibility, and strategic autonomy. Membership in Pax Silica can provide access to capital, technology, and markets. Whether it translates into durable economic security will depend on infrastructure readiness, regulatory clarity, environmental safeguards, and sustained investment in research and manufacturing.