US export controls on chips under the Framework for Artificial Intelligence Diffusion rule, announced last week, are unlikely to derail India’s trajectory in AI hardware development, even as President Donald Trump begins his term today. The country is operating well within limits imposed by the previous Joe Biden administration, and it will be up to Trump to maintain these controls in their current form or make alterations. US companies are allowed to operate abroad under different quotas, which should address some of India’s rising chip demand. India provides critical research inputs to US chipmakers that could prove valuable when seeking import-limit enhancements. Finally, restrictions on China will redirect some AI development work toward India, presenting a significant opportunity for the country.India’s AI contribution is complementary to, not competitive with, US technological progress. Silicon Valley relies on Indian developers and consumers for faster AI diffusion. Hardware capacity is interconnected, and US export controls must remain dynamic, accounting for co-development and India’s indigenous growth. This will also need to incorporate India’s ambitions to become a base for semiconductor manufacturing. The country is only at the beginning of this journey and should have minimal impact on US concerns about re-export of advanced parallel-processing GNU chips to countries on its ban list. That New Delhi has not joined a Beijing-led Asia-Pacific free-trade bloc further strengthens its anti-proliferation credentials.
From its earliest stages, AI development has been driven by commercial interests, unlike other technologies such as nuclear energy or space travel, which evolved from strategic use. Proliferation must be addressed differently, with a greater focus on encouraging economic benefits while discouraging an AI arms race. Private companies and agencies will play a larger role, just as they do in the commercial exploitation of space. With Trump inviting Silicon Valley to Washington, India will have influential allies to lobby for its AI programme.
