Tech diplomacy

Multiple deals will test India's capabilities

Prime Minister Narendra Modi’s state visit to the US unambiguously signals another reset in relations between India and the world’s sole superpower. The shift was in evidence in the Biden administration’s invitation for a state visit, including an address to Congress, despite India’s refusal to condemn Russia’s invasion of Ukraine and decisions to buy increasingly larger quantities of Russian oil and the S400 defence shield. The liberalised renewable visa regime for Indian professionals and the decision to end six trade disputes at the World Trade Organization with India lifting retaliatory tariffs point to a greater proclivity for forbearance and cooperation on both sides.

This shift in diplomatic atmospherics has been enhanced by the slew of technology agreements between the two countries. In terms of government-led initiatives the $3 billion purchase of MQ-9 Reaper SkyGuardian and SeaGuardian drones is expected to enhance India’s surveillance capabilities in the Indian Ocean and along the long frontier with China. The headline-grabbing deal is the agreement between General Electric and state-owned Hindustan Aeronautics Ltd (HAL) to make the F414 engine for the Tejas light combat aircraft. India has also signed the Artemis Accords on space research. Idaho-based Micron Technology, which is led by an Indian-origin chief executive officer incidentally, has announced plans to set up a memory chip assembly and test facility in Gujarat in a joint venture with the Indian government and the government of Gujarat.

This is an impressive haul of agreements that build on the 2022 Initiative for Critical and Emerging Technologies (iCET) announced in 2022 and led by the National Security Advisors of both countries. It marks a re-start after the stagnation following the historic Indo-US Nuclear deal of 2008, under former Prime Minister Manmohan Singh, as a result of poorly drafted investment laws. If the nuclear deal comprehensively puts behind the long regime of technology denial, starting from the 1960s, the current crop takes the relationship ahead. Equally, these deals present challenges to India in terms of maximising project execution, technology absorption, and balancing diplomacy. The F414 deal, for instance, covers an unprecedented 80 per cent transfer of technology — including 11 “critical technologies” — and requires HAL to absorb technology and start manufacturing within three years. This will be a major test for HAL, given its limited success in design and manufacturing capabilities so far. Micron Technologies’ proposal may also be constrained by uncertainties over India’s ability to set up an ultra-high-tech facility, given the country’s unhappy history with semiconductor manufacture in the 1980s. Also, India is a very late entrant in a field now aggressively dominated by East Asia (led by Taiwan, South Korea, and China), which currently produces 90 per cent of the world’s memory chips.

Finally, there are diplomatic considerations. The drone deal explicitly targets Chinese regional hegemony but the signing of the Artemis Accords could be another pressure point. It is notable that China and Russia, the two other major space powers, have not signed this accord, which essentially enables US-led interests in space. India already collaborates with Russia in space projects, including its Gaganyaan mission. As with the troubled relationship over defence supplies, this project too could become moot, given Moscow’s occupation with Ukraine. Like the Quad, the Artemis Accords could be a new testing point for India.