The global economy today is shaped by a mix of deep continuities and sharp transitions. While the North–South divide in income and resource consumption persists, frontier technologies such as semiconductors and Artificial Intelligence (AI) are rapidly becoming the new engines of growth and power. As these technologies permeate everyday life, access to Rare Earth Elements (REEs) and advanced manufacturing capabilities has emerged as a strategic imperative. It is against this backdrop that the United States convened the first Pax Silica Summit in December 2025, signalling a new phase in technology-driven geopolitics — and posing important choices for India.
What is Pax Silica and why it matters
The Pax Silica initiative, launched by the United States, seeks to secure critical mineral supply chains and strengthen advanced manufacturing ecosystems essential for semiconductors and AI. The term itself is symbolic: “Pax” denotes peace, while “Silica” refers to the foundational material for chipmaking. Together, they convey an ambition to build technology supply chains that promote stability, prosperity, and resilience.
According to the Pax Silica Declaration, the grouping aims to reduce coercive dependencies, ensure secure global tech and AI supply chains, and develop trusted digital infrastructure. In essence, it is an attempt to shape the rules and architecture of the next technological era before vulnerabilities become systemic.
The emerging coalition behind Pax Silica
The composition of Pax Silica reflects a deliberate alignment of technological capability, resource access, and financial strength. Alongside the U.S. and Japan, both leaders in high-end technology, Australia brings its status as a major lithium exporter and holder of substantial REE reserves. The Netherlands plays a critical role through firms like ASML, which dominate advanced chip lithography.
South Korea contributes manufacturing expertise in memory chips, while Singapore offers a long-established semiconductor manufacturing base. Israel adds strengths in AI software, defence technologies, and cybersecurity. The United Kingdom, with one of the world’s largest AI markets, complements this ecosystem with research depth and start-up culture. Meanwhile, Qatar and the United Arab Emirates bring capital through sovereign investment funds aimed at building AI ecosystems.
Other actors — including European Union, OECD, Canada, and Taiwan — participated as observers, suggesting the grouping may expand over time.
The China factor behind Pax Silica
At its core, Pax Silica is a response to China’s dominance over REE supply chains. China currently controls a significant share of global REE mining, processing, and downstream manufacturing, giving it the ability to influence global markets. In recent years, Beijing has demonstrated its willingness to weaponise this leverage, including restricting REE exports in response to U.S. tariff measures.
India has also felt the impact. Disruptions in rare-earth magnet supplies from China affected its automobile and electronics sectors, with exports resuming only after Indian firms complied with strict Chinese licensing conditions, including assurances against defence or dual-use applications. These episodes, along with pandemic-era supply shocks, have reinforced the risks of overdependence on a single supplier.
India’s existing efforts on supply chain resilience
Even before Pax Silica, India had begun addressing supply chain vulnerabilities. In 2021, it joined Supply Chain Resilience Initiative with Australia and Japan. It has also worked within the Quad framework, culminating in the Quad Critical Minerals Initiative launched in 2025.
Despite this track record, India was not invited to the inaugural Pax Silica Summit. However, the new U.S. Ambassador to India, Sergio Gor, has indicated that New Delhi will soon receive an invitation, opening the door to India’s participation.
What India brings to Pax Silica
India’s strengths lie less in cutting-edge fabrication today and more in scale, talent, and long-term potential. Indian and American firms have a history of collaboration in information technology and digital services. India’s digital public infrastructure is robust, and its AI market is expanding rapidly, with growing enterprise adoption.
While India’s semiconductor and AI ecosystems lag behind those of current Pax Silica members, recent policy initiatives — including national AI and Semiconductor Missions — signal intent. Investments by Indian conglomerates like the Tata Group, alongside U.S. firms such as Micron Technology, indicate early momentum. Additionally, the return of highly trained Indian engineers from the U.S., shaped by evolving visa regimes, could significantly bolster domestic capabilities.
The strategic and policy dilemmas for India
Joining Pax Silica would place India in unfamiliar territory. It would be the first developing country — and the first non-U.S. ally — in a grouping otherwise composed of high-income allied states. This creates the risk of an “expectation gap”, particularly on issues of security alignment and industrial policy.
India will seek to preserve strategic autonomy and protect its nascent semiconductor and AI sectors through subsidies, public procurement, and calibrated trade regulations. Such measures may sit uneasily with the preferences of some Pax Silica members, especially if the grouping evolves toward common export controls or regulatory standards.
Two supply chains, one global economy
Looking ahead, the global economy may see the consolidation of two parallel REE and technology supply chains — one centred on China, the other around Pax Silica. Given India’s long-standing ties with Western technology ecosystems, alignment with Pax Silica appears likely. Yet, ongoing economic frictions with Washington and uncertainties about the grouping’s future rules mean New Delhi will proceed cautiously.
What to note for Prelims?
- Pax Silica initiative and its objectives.
- Role of Rare Earth Elements in semiconductors and AI.
- China’s dominance in REE supply chains.
- India’s participation in supply chain resilience initiatives.
What to note for Mains?
- Geopolitics of critical minerals and emerging technologies.
- Strategic autonomy versus technology alliances for India.
- Challenges for developing countries in high-tech supply chains.
- Implications of fragmented global technology ecosystems.
