Industry News

United States and India Agree to Deepened Relationship

Jun, 30, 2023
By: Chaney A. Finn


At the end of June Indian Prime Minister Narendra Modi made an official state visit to the United States. This visit was momentous, in part, because it resulted in the announcement of plans for greater economic and military collaboration between the two countries. The parties described the plans as consisting of five pillars:

·  A Technology Partnership for the Future;

·  Next-Generation Defense Partnership;

·  Shared Prosperity and Delivering for our Peoples;

·  Leading on the Global Stage; and

·  Partnership for Sustainable Development and Global Health

From an international trade perspective the most substantial of the five pillars is the first. This pillar, among other things, incentivizes economic investment into critical industry in India. Several investment deals were specified in the announcement including, $800 million toward a new $2.75 billion semiconductor assembly and test facility in India by  Micron Technology, Inc.; construction of a Semiconductor Centre for Commercialization and Innovation in India for semiconductor supply chain diversification by Applied Materials; and the training of 60,000 Indian engineers to accelerate semiconductor education and production by Lam Research.

India will also be designated as a partner in the Minerals Security Partnership (MSP) to further accelerate development of semiconductor development “through targeted financial and diplomatic support of strategic projects along the value chain.” This partnership currently consists of India, the European Union, and twelve other countries. The focus of the MSP is information sharing regarding critical mineral opportunities for private sector investment and establishing environmental standards. In light of India’s accession to the MSP, a $650 million synthetic graphite anode processing facility will be established in the United States. The facility is expected to hire over 500 employees over the course of five years, making it the largest Indian investment in the U.S. electric vehicle battery industry.

On the same day as the announcement from the White House, the United States Trade Representative also announced a deal that would end the retaliatory tariffs India placed on U.S. goods that were prompted by the Section 232 steel and aluminum tariffs the U.S. placed on most other countries, including India. Under this deal, six disputes taken to the World Trade Organization by both the U.S. and India against each other would be dropped. U.S. Trade Representative, Katherine Tai stated, “Today’s agreement represents the culmination of intensified bilateral engagement over the last two years, including through the U.S.-India Trade Policy Forum, to deepen our economic and trade ties. As a result of our work, U.S. agricultural producers and manufacturers will now enjoy renewed access to a critical global market and we will strengthen our trade relationship with one of our closest partners.”

Should you have any questions on trade agreements, supply chain sourcing, or any other trade-related questions, please contact any attorney at Barnes, Richardson & Colburn LLP.