India could help the U.S. to tech victory over China

The statement doesn’t mention China. But shared concerns about Beijing’s ambitions underpin the effort, the initiative on Critical and Emerging Technology, which was launched last January. “To put it bluntly and boldly, it’s first and foremost about derisking and diversification from China,” Rudra Chaudhuri, the director of Carnegie India, says in a phone interview.

Those concerns are well-founded. Over the past four decades, China has transformed itself into a science and technology powerhouse. According to the Australian Strategic Policy Institute, China leads the U.S. in research in 53 out of 64 critical and emerging technologies, including advanced aircraft engines, electric batteries, machine learning and synthetic biology.

In the Leiden global university science rankings, Chinese universities occupy 10 of the top 20 spots, while only five U.S. universities make the top 20. China in 2020 graduated 1.4 million engineers, seven times as many as graduated from U.S. institutions the same year.

Chinese tech companies, including CATL (electric batteries), BYD (electric vehicles) and Huawei (telecommunications), have global reach and global ambitions. “The old science world order, dominated by America, Europe and Japan, is coming to an end,” the Economist magazine declared recently.

Much of the U.S. response to China’s challenge depends on coordination with technologically advanced allies in Western Europe and East Asia. The U.S., for instance, is working with the Netherlands, home to the semiconductor chip manufacturing machine maker ASML, to ensure that the West retains its technological edge.

At first glance, India seems an unlikely technology partner. It counts only one university in Leiden’s top 200. It spends a fraction of what China and the U.S. spend on research and development. In the 2020-21 fiscal year, India’s government and private sector combined spent less on research and development than Huawei or Microsoft alone spent on R&D in 2021. Among the top 100 tech companies by market capitalization, not one is Indian; 58 are American, and nine Chinese. The Netherlands, with 1/80th of India’s population, has five companies in the top 100.

Yet Washington sees value in strengthening bilateral cooperation. In a phone interview, Sameer Lalwani, a scholar at the U.S. Institute of Peace, outlined three broad reasons. First, if the U.S. aligns its tech standards with India, it will become harder for Chinese companies to break into the Indian market and the so-called global south more broadly.

Second, the U.S. seeks to harness Indian tech talent. For decades, many of India’s best scientists have made a beeline for the U.S. But several factors make India’s domestic ecosystem worth engaging with as well, including the country’s vast pool of engineers, homegrown success in space exploration and digital infrastructure for electronic payments, and a burgeoning tech startup scene.

Third, the U.S. believes that technology collaboration will boost Indian military capabilities and deepen trust necessary for military cooperation in the Indo-Pacific. GE Aerospace and India’s Hindustan Aeronautics are negotiating to co-produce fighter jet engines that will enable India to deter Chinese border incursions. American MQ-9 drones in India’s arsenal could easily mesh with U.S. tracking of Chinese naval vessels in the Indian Ocean. Carnegie’s Mr. Chaudhuri says that using India as a manufacturing base for military equipment could enable the U.S. to export arms more cheaply to parts of Asia and Africa.

Optimism isn’t entirely unwarranted. In recent years, India has signaled that it wants to belong to a U.S.-aligned technology bloc. It has barred Chinese firms Huawei and ZTE from its 5G networks and participated in the U.S.-led “rip and replace” program, which removes suspect Chinese equipment from U.S. communications infrastructure. Apple subcontractors Foxconn and Pegatron have invested in India, and the Modi government is encouraging Tesla to follow suit.

India’s military maintains historically close ties with Russia, but the importance of that relationship has declined sharply. The Stockholm International Peace Research Institute estimates that only 36% of Indian arms imports between 2019 and 2023 were from Russia, down from 76% a decade earlier. Russia’s growing dependence on China will likely accelerate India’s quest to seek more reliable partners in the West.

Still, there’s no guarantee that the U.S.-India tech initiative will succeed. India expects the U.S. to treat it like an ally by waiving export controls on sensitive technologies, but critics in Washington point out that New Delhi doesn’t always behave like an ally. They point to India’s refusal to condemn the Russian invasion of Ukraine, an alleged Indian assassination plot against a New York-based Sikh separatist, and the Modi government’s clampdown on domestic critics. Mr. Lalwani of the U.S. Institute of Peace says Washington’s bet on New Delhi is based on the belief that “India is a positive international actor.” For the new tech collaboration to achieve its potential, India will need to reassure skeptics that its future lies with the democratic world.