The US and China hold the technology and manufacturing poles. India is the indispensable third pole, supplying critical human resources. Without India’s demographic weight and strategic positioning, Pax Silica would risk collapsing.
Our world is characterised by complexity. Relationships between countries are shaped by long-term interests pursued through medium-term engagement. Such engagement can yield short-term economic and strategic gains, alongside broader improvements in citizens’ quality of life.
Central to a country’s economic growth are its essential, profitable and strategic supply chains. In the bipolar era (1945–1991) and the subsequent unipolar era (1991–2008), a major power could control entire supply chains for indispensable products or services—from securing raw materials and manufacturing components to assembling finished products and managing logistics. Even when production nodes were geographically dispersed, hegemonic powers exercised influence over transportation networks, controlled market access and pricing, and benefited economically at the expense of others.
Supply chains during this period were designed primarily for efficiency under a “just-in-time” model, where time equated to money and operational precision was closely guarded. Following the collapse of the Soviet Union, the United States emerged as the dominant global power, exercising unparalleled influence over global supply chains while most other countries occupied subordinate positions within the international economic order.
China’s emergence as a major economic and military power has fundamentally altered this landscape, giving rise to what many describe as a Second Cold War between Beijing and Washington. Some analysts have even characterised the present international environment as the early stages of a Third World War, albeit one fought through multiple instruments rather than conventional military campaigns alone.
Modern conflicts increasingly combine military action with economic, technological, informational, social and psychological competition. Within this multipolar order, regional powers such as India and Russia, alongside the European Union, the United Kingdom, Australia and Japan, have become participants in numerous regional and global contests.
As American dominance has relatively declined, supply chain management has shifted away from maximising efficiency towards prioritising resilience and robustness. The global economy has moved from a “just-in-time” approach to a “just-in-case” model. Governments now seek insurance against disruptions affecting critical supply chains in an increasingly volatile international environment characterised by Volatility, Uncertainty, Complexity and Ambiguity (VUCA).
Without a single hegemon guaranteeing global logistics, communications and financial systems, predictability has given way to unexpected shocks, often described through concepts such as grey rhinos, black swans and dragon kings.
Two commodities have emerged as central to the modern geopolitical landscape: semiconductors and critical minerals.
The semiconductor industry consists of three interconnected stages—design, fabrication, and packaging/testing—each requiring distinct combinations of human expertise, specialised materials and capital investment. The United States continues to occupy a dominant position across much of the semiconductor ecosystem and has historically resisted attempts by competitors, including Japan and now China, to challenge that leadership.
China, meanwhile, has invested heavily in developing indigenous semiconductor capabilities. Taiwan’s TSMC and the Netherlands’ ASML occupy particularly strategic positions within the global semiconductor supply chain, making both companies key focal points of US-China competition. Unsurprisingly, Washington and Beijing have increasingly imposed export controls and technology restrictions on one another, turning semiconductor access into a central instrument of economic warfare.
Supporting this entire ecosystem are critical minerals and rare earth elements, which have become indispensable to semiconductor manufacturing. While silicon forms the basic substrate, elements such as gallium, germanium and hafnium enhance conductivity, heat management and advanced chip performance.
The supply chains for these minerals represent significant geopolitical bottlenecks because extraction is difficult, processing is technologically demanding and production remains geographically concentrated, particularly in China. If silicon forms the foundation of semiconductor technology, rare earth elements provide the specialised capabilities that enable miniaturisation, artificial intelligence and 5G technologies.
This has created a form of resource concentration in which technological leadership increasingly depends upon access to a relatively small group of critical elements, including lanthanum, copper, indium, cobalt and palladium. These materials correspond to geographic, technological and economic choke points of growing strategic importance.
Consequently, semiconductor and critical mineral supply chains have become inseparable. Rather than attempting to disentangle them, greater interconnectedness may actually benefit countries such as India by creating leverage at critical points within global production networks. Control over specific stages of a complex supply chain can function much like control over strategic maritime chokepoints such as the Strait of Hormuz or the Strait of Malacca.
Artificial Intelligence has emerged as another strategic commodity built upon these same foundations. AI increasingly commodifies computing itself while raising broader questions about technological influence over human decision-making and society.
Its development depends upon five interconnected pillars: energy, semiconductors, infrastructure, AI models and practical applications. The first three rely directly upon supply chains involving semiconductors and critical minerals such as copper and rare earth elements. As a result, semiconductor, critical mineral and AI supply chains have become deeply intertwined.
The 2026 India AI Impact Summit in New Delhi highlighted these evolving realities. The summit reflected growing international recognition that AI governance requires cooperation despite broader geopolitical rivalry. By endorsing the New Delhi Declaration on AI Impact, both the United States and China signalled an unusual willingness to cooperate on aspects of AI development while continuing to compete fiercely in semiconductor manufacturing and technology.
For Washington, China’s participation created opportunities to develop common technical standards despite ongoing strategic rivalry. Within the AI domain, at least, competition appeared to soften in favour of limited pragmatic cooperation.
Subsequent discussions under the Pax Silica framework in Washington reflected a similar strategic calculation. The United States increasingly recognises the advantages of distributing elements of semiconductor production across trusted partner countries rather than attempting to retain overwhelming control over every stage of the supply chain.
Expanding collaboration with countries such as South Korea, Japan, India and even China in selected areas has become strategically necessary if Washington hopes to maintain its long-term technological advantage.
Pax Silica represents a potential successor to earlier geopolitical orders often described as Pax Britannica, Pax Americana and Pax Sinica. It envisions a world in which geopolitical influence depends less upon conventional military dominance and increasingly upon control over semiconductor production, critical mineral processing and AI ecosystems.
Within this emerging order, the United States and China represent the principal technological and manufacturing poles. India occupies a distinct and indispensable position through its vast human capital. Its large pool of semiconductor designers, software engineers and technology professionals, combined with a rapidly expanding domestic market, makes India uniquely positioned to balance both superpowers while offering a democratic alternative within global technology supply chains.
Indian expertise already plays a significant role in semiconductor design, while domestic manufacturing capabilities—from wafer fabrication to packaging and testing—continue to expand. Without India’s demographic scale and strategic positioning, Pax Silica would risk becoming an unstable bipolar competition rather than a broader cooperative framework.
The New Delhi summit demonstrated India’s growing importance within the emerging digital world order. While the United States and China remain locked in strategic competition over chip fabrication and critical minerals, the New Delhi framework emphasised building secure, shared technological capabilities.
With investment commitments reportedly reaching $250 billion, the summit suggested that even in an increasingly uncertain global environment, technological competition must occasionally give way to diplomatic pragmatism and cooperative management of complex global supply chains.
The discussions ultimately reflected a broader transition—from scientific and technological collaboration alone towards geopolitical strategy—underscoring that the future of artificial intelligence is no longer simply a bilateral contest but an interconnected global struggle centred on silicon, supply chains and technological stability.
G.R. Desiraju is at the Indian Institute of Science, Bengaluru.
D. Bhattacharya is a Delhi-based lawyer. The opinions expressed are personal.
