U.S. and India set to announce flurry of deals spanning defense, chips and A.I.

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June 22, 2023
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U.S. President Joe Biden and First Lady Jill Biden (L) greet India’s Prime Minister Narendra Modi as he arrives at the South Portico of the White House in Washington, DC on June 21, 2023.

Mandel Ngan | Afp | Getty Images

The U.S. and India are set to announce a slew of defense and technology collaborations on Thursday during Prime Minister Narendra Modi’s state visit, U.S. officials said.

From deepening defense and military ties to greater collaboration on technology and diversification of supply chains, senior administration officials discussed a wide range of deals in a briefing with reporters.

“The nature, the depth and breadth of our deliverables for this is unprecedented,” said one of the officials.

India has overtaken China as the world’s most populous country and is set to become the third-largest economy in the coming years.

“India will be a critical strategic partner for the United States in the coming decades,” one official said.

“There is no partner more consequential now and into the future than India,” the person said adding that the bilateral partnership is “deeper and more expansive than it ever has been.”

“We now look instinctively to each other and work cooperatively to uphold a free and open Indo-Pacific,” the person said. “Our countries will shape the future, working towards a world that is open, prosperous, secure, stable and resilient.”

Modi is on his first state visit to the U.S., where he has met President Joe Biden and first lady Jill Biden as well as prominent business leaders including Tesla CEO Elon Musk and Bridgewater Associates founder Ray Dalio.

The Indian leader will join Biden in a press conference on Thursday where both leaders will be answering questions from journalists, the officials said. According to Reuters, Modi has not addressed a single press conference in India since he became prime minister in 2014, making this an extremely rare occasion.

Military cooperation

On the defense front, officials highlighted three announcements.

India and the U.S. are expected to announce a deal to jointly produce F414 jet engines in India, involving General Electric and Hindustan Aeronautics.

They are also expected to announce master ship repair agreements that will lead to cost and time savings for the U.S. military — enabling U.S. navy ships to be serviced and repaired in Indian shipyards.

Thirdly, the so-called India-U.S. Defense Acceleration Ecosystem will aim to integrate India’s growing private sector defense industry with the U.S. defense sector.

US President Joe Biden greets India’s Prime Minister Narendra Modi as he arrives at the South Portico of the White House in Washington, DC on June 21, 2023.

Mandel Ngan | Afp | Getty Images

Military agreements between the countries will help India secure its borders with China and Pakistan and hopefully, reduce the country’s heavy reliance on Russia for military supplies.

“India is actively engaged in diversifying away from Russian military equipment … It is not just the United States that is engaged in that effort of diversification. It’s our allies and partners in France, in Great Britain and Israel and elsewhere that are actively supporting efforts to secure India’s defense capabilities more generally,” senior administration officials said.

India is also widely expected to purchase MQ-9B SeaGuardian drones, a deal that has long been hampered by bureaucracy.

“I think the Indians, to be honest, have been surprised and thrilled by the steps that we’ve been able to take to remove bureaucratic roadblocks from achieving this goal. So I think we fully recognize that it’s going to be necessary to follow through,” one of the senior administration officials said.

Tech collaboration

Modi’s visit comes at a time when the U.S. is adopting a strategy of “friend-shoring” as it diversifies away from China and taps into the potential of other countries in the region.

On technology, the officials said U.S. and Indian companies will be partnering to build semiconductor facilities to promote supply chain diversification.

The two countries are also expected to announce agreements on strengthening critical minerals supply chains, advancing telecommunication capabilities and working on A.I. developments.

Officials said Applied Materials will also be announcing a new semiconductor center for commercialization and innovation in India.

“This is India’s time to drive incredible growth, and we are very much looking forward to working with the prime minister and everyone in India to achieve tremendous success together,” Applied Materials CEO Gary Dickerson said Wednesday in a video interview published on Modi’s official YouTube page.

“Many companies around the world see the trust and tremendous talent that is in India. I deeply believe this is India’s time to shine,” Dickerson said.

The U.S. is also facing burgeoning competition from China in its space race.

NASA and the Indian Space Research Organization will collaborate to work on a framework for human spaceflight cooperation this year.

Attracting more Indian talent

Indian students are “on pace to become the largest foreign student community in the United States with a 20% increase last year alone,” the officials said, adding that the U.S. government wants to welcome more Indian students and workers.

The U.S. issued 125,000 student visas to Indian nationals last year — or about one in every five student visas and more than what was issued to any other nationality, the U.S. Embassy in India said in June.

“This year, we will interview more students than ever before,” Brendan Mullarkey, acting minister counselor for consular affairs in India, said earlier this month.

The U.S. Department of State could also make changes to the way temporary work visas are renewed, senior administration officials said ahead of Thursday’s joint statement.

“The people dimension should not be underestimated,” an official said. “When we put forward the Quad educational initiative last year, we were overwhelmed with excellent Indian candidates.”

“The diaspora community that links India with the United States is involved, enthusiastic and engaged. So I would simply say that there are many factors … that have helped propel this relationship forward.”