India and the United States have advanced their Initiative on Critical and Emerging Technology semiconductor cooperation track, with agreements covering semiconductor equipment export licence facilitation, joint chip design research grants, and a framework for US companies to supply advanced equipment to Indian ISM-approved fabs without standard third-country diversion restrictions. The ICET semiconductor track positions India alongside Japan, South Korea, and the Netherlands as a trusted semiconductor equipment recipient.
Semicon Hunt -> partnership -> India-US Government
2026-10-12
The semiconductor cooperation track of the India-US Initiative on Critical and Emerging Technology has produced a substantive set of agreements that meaningfully improve the terms on which US semiconductor equipment and technology can flow to Indian manufacturing facilities. The agreements cover three primary areas: streamlined export licence processing for semiconductor equipment destined for India Semiconductor Mission-approved facilities, a joint research funding programme for semiconductor process technology, and a framework that exempts ISM-approved Indian fabs from standard equipment diversion restriction clauses that have historically treated India differently from established US chip-making allies such as Japan, South Korea, and the Netherlands. The outcome positions India as a trusted partner in the US semiconductor technology ecosystem, a status that has strategic implications beyond the practical trade facilitation benefits.
US semiconductor equipment companies including Applied Materials, Lam Research, KLA, and Axcelis must obtain export licences from the US Department of Commerce for many of their products before shipping them to overseas customers. For established markets such as Taiwan and South Korea, blanket authorisation mechanisms and long-standing validated end-user arrangements reduce the administrative burden to near zero. India has historically required individual licence applications for many equipment categories, creating delays of weeks to months that complicated fab construction timelines. The ICET agreement establishes a validated end-user framework for ISM-approved Indian facilities, allowing US equipment companies to ship to these sites under a pre-approved authorisation rather than applying for individual licences. This change is immediately relevant for the Dholera fab equipment procurement programme and will benefit all future US equipment shipments to ISM-approved Indian facilities.
The ICET semiconductor track establishes a joint India-US research programme funded by both governments to support collaborative research at the intersection of semiconductor process technology, materials science, and AI-driven manufacturing optimisation. Research grants will be available to teams involving at least one Indian institution and one US institution, covering topics including new semiconductor materials, advanced packaging process development, yield enhancement algorithms, and semiconductor workforce training methodologies. US institutions involved in semiconductor research, including MIT Lincoln Laboratory, Georgia Tech, and Arizona State University, have expressed interest in collaborating with IITs, IISc, and other Indian research universities through this programme. The joint grants mechanism provides a sustained funding source for semiconductor research collaboration that outlasts individual government leadership changes and deepens the long-term technical ties between the two countries' semiconductor research communities.
The ICET semiconductor agreements are situated within a broader effort by the United States to build a network of like-minded countries with trusted semiconductor supply chains that are not dependent on regions of geopolitical concern. India's inclusion in this framework alongside Japan, the Netherlands, South Korea, and Australia reflects its growing importance to US semiconductor supply chain strategy. For India, the practical benefits of equipment access and research collaboration are accompanied by the signal benefit of recognition as a trusted technology partner, which improves India's attractiveness to semiconductor companies from both the US and third countries that prefer to invest in locations integrated into the trusted chip technology ecosystem rather than those outside it.
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