Geopolitics of High-tech

The US-Ukraine minerals deal, signed on April 30, once again highlights the twinning of high technology with geopolitics in today’s world. As nations vie for supremacy in critical and emerging technologies, it’s essential to understand how geopolitics and high-tech innovations intersect to shape global dynamics. Technological advances, from artificial intelligence to space exploration, not only revolutionise industries but redefine global power and strategic alliances. 

In this edition we look back at the government support received by India’s nascent high-tech manufacturing including its semiconductor ecosystem, how viable is an Indo-US SMR (small and modular nuclear reactors) partnership, how the Trump administration and Elon Musk’s DOGE are throwing a proverbial wrench in the works, and how China social engineers desirable behaviour in its population.

India’s story so far: first steps towards semiconductor manufacturing

The fiscal support agreement Tata group signed with the national semiconductor mission on March 5, 2025, covers Tata Electronics and the country’s first ever commercial semiconductor fabrication facility in Gujarat’s Dholera. Things are moving at a clip after supply-chain disruptions triggered by the pandemic forced New Delhi to recognise its critical vulnerabilities. Global shortage of semiconductor chips spurred a policy push to develop India’s modern semiconductor ecosystem. 

The Centre has allocated “Rs 76,000 crore for the development of a sustainable semiconductor and display ecosystem in 2021”. The Indian government has pledged to cover up to 50% of project costs for semiconductor fabrication plants (fabs) and provide support chip design, packaging, and compound semiconductor manufacturing. 

Dialogue with leading nations and companies throughout 2022 underscored India’s strengths as a semiconductor manufacturing hub. The most important bilateral high-tech alliance India has signed in recent decades — the US-India Initiative on Critical and Emerging Technology (iCET) — was announced in May 2022. Under iCET the more focused subsector of defence manufacturing and applications related semiconductor chips has seen a direct boost.

Government-led Semicon India conference in 2023 was key to negotiations for global players like the Tata Group, Micron Technology and Applied Materials. A Memorandum of Cooperation was also signed between India and Japan on developing a semiconductor supply chain.

By 2024, Tata Group’s Tata Electronics entity, barely in its fourth year of existence, had a partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to set up India’s first semiconductor fab, likely to come online in 2026.

Indo-US SMR partnership on the horizon?  

Nearly two decades after India’s civil nuclear agreement with US, Washington authorised Holtec International to transfer its SMR-300 technology to three Indian entities: Larsen & Toubro, Tata Consulting Engineers, and Holtec Asia. Though early days yet, this could develop into a major bilateral energy cooperation. 

Question is, while Union Budget 2025 announced a Rs 20,000 crore Nuclear Energy Mission, can the US and Indian firms actually build something together, especially under the still theoretical Bharat Small Reactors initiative?

The Holtec SMR-300, a pressurised light-water reactor designed to be deployed in modular pairs, is pitched as ideal for India — air-cooled, standardised, and requiring just 25 acres to house two units. According to a report in World Nuclear News, however, the US Department of Energy has so far only authorised technology transfer to private entities — none of India’s central players in nuclear energy such as NPCIL, NTPC, or even BARC have been included yet. The process to add them is reportedly stuck due to pending negotiations over political assurances Washington expects from New Delhi. 

This is not the first time a promising civil nuclear project between the two countries has run aground. The Westinghouse project at Kovvada in Andhra Pradesh remains frozen nearly a decade after it was proposed, with the original techno-commercial offer now obsolete. The sticking point, much like before, is India’s Civil Liability for Nuclear Damage Act, which allows plant operators to seek recourse against suppliers in the event of an accident — something most Western firms are unwilling to accept. 

Despite the symbolic value of the Holtec deal, progress will remain slow unless India undertakes legislative reform. As of now, the project exists more as a political signal than an engineering reality. Without full participation of India’s state-owned nuclear entities and a resolution on liability and ownership laws, progress on this partnership remains unclear.

Furthermore, Russia has an MoU with Maharashtra’s state government to study how SMRs powered by India’s thorium reserves can be developed and deployed. Russia already has a significant foothold in India’s nuclear energy landscape thanks to the Kudankulam nuclear power plant. It is to be seen if the competition to build SMRs in India ends up as another great power competition between the US and Russia — and whether India can optimise its national interest while Moscow and Washington vie for its favour. 

States amp up: How government incentives nurture India’s hightech manufacturing

State governments have stepped up to help move the needle on high-tech manufacturing. While Centre’s focus has been on boosting battery technology, semiconductors and AI particularly though the Production Linked Incentive(PLI) schemes, as accounted for in the latest union budget, there are some far-reaching incentive programmes at the state-level too.

• SPECS: The scheme for promotion of manufacturing of electronic components and semiconductors provides a 25% incentive on capex for manufacturing electronic components including semiconductors. According to a press release from last December, Meity approved nine projects in FY2024 with an investment value worth Rs 7,960 crore.

• Tamil Nadu’s 2020 electronics hardware manufacturing policy offers capital subsidies up to 30% of project cost. 

• Karnataka’s 2017 electronics system design & manufacturing(ESDM) policy offers up to 10% (maximum of Rs 10cr) in capital subsidies.

• Telangana’s 2016 electronics policy offers up to 20% of capital cost reimbursement with a cap of Rs 30cr and 60% of land rebate.

• UP’s 2020 electronics manufacturing policy promises up to 15% subsidy on capital investment.

DOGE a wrench in the works

Musk-led department of government efficiency in Trump administration has cut thousands of jobs across the US government and is reviewing many programmes put in place by predecessor Joe Biden. It’s given rise to near catastrophic situations, that could lead to loss of capabilities essential for even strategic functions.

In his first address to the US Congress in March 2025, Trump also criticised the 2022 CHIPS Act, a key achievement of the Biden administration to shore up semiconductor manufacturing, research and workforce development in the US for Washington to compete with China in high-tech sectors of strategic significance.

According to a March 31 press release by White House, a new entity has been setup in the US Department of Commerce called the United States Investment Accelerator that will oversee functions outlined under the CHIPS Act. The new entity is officially mandated to lower the regulatory burden and make it easier to set up semiconductor facilities on US territory. The new entity will aim to specifically facilitate investments upwards of $1billion per the press note.

DOGE even fired hundreds of US Department of Energy workers in charge of US nuclear weapons stockpile’s upkeep and safety. While the decision was ultimately overturned according to AP, some of the employees couldn’t be contacted — it remains unclear as of April 2025 if any substantive capability loss actually occurred. However any disruption no matter how minor in a sphere as sensitive as a country’s nuclear weapons stockpile’s support infrastructure is likely to become a cautionary tale for any serious policy making.

Musk’s government avatar impacted his own businesses too, with Tesla Motors and Space X bearing the brunt. Tesla suffers vandalism in the US. Space X’s Starlink satellite internet service is no longer a reliable choice for European governments. Much of Europe is instead looking for alternatives such as Eutelsat OneWeb, a British-Indian owned company that has a much smaller satellite constellation but offers a serviceable alternative. 

While Musk announced he is “reducing time allocation” for DOGE, his influence is likely to affect policy in the Trump administration in at least the short term.

Dystopia gamified: China’s uses technology to social engineer desirable behaviour in its population. 

In the digital age, while societies enabled by global connectivity have been instrumental in providing their populations with relatively better standards of living, education and employment opportunities — it has been a downward trajectory for individual agency and privacy. Governments embracing technology has also resulted in unprecedented increases in state surveillance and control over people’s everyday lives. 

Beijing runs several programmes that not only surveil but also social engineer population behaviour. The latest trick is a narrative video game called Blast, owned by the Ant group — better known for its Aliexpress online marketplace. The game is similar to graphic novels popular in Japan and the West and incorporates microtransactions to advance the story. However, instead of lining the pockets of the developers as is the norm in Japan and the West, the money from these microtransactions is reportedly going into savings for the players themselves.

China is believed to have a centralised national Social Credit System that blends elements of mass surveillance, Know Your Customer (KYC) and fiscal credit rating systems. Outlines for the programme can be found in policy framework documents going as far back as 2015. However the level of success and enforceability of consequences for citizens that accrue a low score — reportedly judged basis a wide variety of factors but including not engaging in illegal or grey area activities at any point — is unclear. 

Reportedly, Chinese nationals with low scores can be excluded from benefiting from state or privately funded programmes or services. It is reportedly similar to how services can be denied to any individual unable to prove their identity or substantiate information provided during a KYC process. But the connotations of constant surveillance and record keeping inherently infringes on individual liberties, a marker of free societies. 

Check these out:

1. US Space Force Capstone Doctrine Document – US DoD

2. The US needs ‘weapons in space,’ SPACECOM head says -Defence One

3. Unmarked Vans. Secret Lists. Public Denunciations. Our Police State Has Arrived. – New York Times

4. Do technology advances allow missile defences to make up ground? – Journal of Strategic Studies

5. UNIDIR Global Conference on AI, Security and Ethics 2025 -UNIDIR on Youtube

6. Global Compendium on Responsible Cyber Behaviour – RUSI

7. Implementing Positive Gaming Interventions: A Toolkit for Practitioners – RUSI

Thank you for reading Ananta’s Geopolitics of High-tech newsletter. Stay tuned for our next edition.