Silicon Compact

India’s decision to sign the Pax Silica declaration marks an explicit choice about where the country intends to sit in the emerging hierarchy of global power. As artificial intelligence supplants oil as the strategic resource of the age, alliances are being recast around minerals, chips and data. With this move, India has now stepped decisively into that architecture.

The declaration was signed at the India AI Impact Summit, with senior US diplomatic and economic officials and the world’s most influential technology executives all in attendance. But symbolism aside, the act binds India to a US-led coalition that seeks to re-engineer the foundations of the global technology economy. Pax Silica is not a trade pact or a research forum but an attempt to construct a parallel technological order designed explicitly to dilute China’s leverage over the inputs that will power economic growth and military strength for decades. Beijing’s near-monopoly over rare-earth processing has long been recognised as a strategic vulnerability. It became impossible to ignore when exports were briefly curtailed amid trade tensions. India learned the lesson the hard way when automakers were forced to cut output and strip features as supplies of rare-earth magnets dried up. Relief had come only after firms accepted intrusive licensing conditions.

Against this backdrop, India’s inclusion in Pax Silica is both pragmatic and revealing. Its absence from the founding list last December had raised eyebrows in New Delhi. That omission has now been corrected, reflecting Washington’s belated recognition that any credible alternative to China must include India and not merely as a market, but as a producer. The coalition covers the full technology stack, from rare-earth minerals and energy to chipmaking, data centres, fibre networks and frontier AI. Its members control the system’s key chokepoints: Australia’s mines, South Korea’s memory chips, Japan’s manufacturing depth, and the Netherlands’ monopoly on advanced lithography through ASML.

India’s appeal lies in potential rather than present capability. It holds vast rare-earth reserves that remain under-exploited. It has become a serious hub for semiconductor design, even as fabrication remains nascent. Global firms are already designing cutting-edge chips from Indian centres. For Pax Silica, India offers scale, engineering depth and a degree of political alignment. For India, the prize is access to process know-how and the GPU infrastructure that remains tightly controlled by the United States and its partners.

The strategic bargain is not cost-free. Pax Silica formalises a division of the technological world into trusted and untrusted networks. Deeper integration into US-led supply chains limits India’s freedom to hedge. For a country that prizes strategic autonomy, this poses an uncomfortable question that while alignment brings security and investment, it also constrains choice. But standing apart risks marginalisation, leaving India’s ambitions hostage to technological dependence. By signing on, India has accepted the premise of this new order. The harder task now is to ensure that it is not merely a participant in the silicon compact, but one of its architects.