Semiconductor Diplomacy: India-Netherlands Partnership and Global Tech Rivalry

Indian Express - Opinion · 20 May 2026 · 2 min read
Prelims · International relations Mains · GS2 International relations High relevance

PM Modi's Netherlands visit focused on semiconductor collaboration with ASML, highlighting India's strategic push for technological self-reliance amid US-China tech rivalry and global supply chain restructuring.

Key points

ASML dominates the semiconductor supply chain as the sole producer of EUV lithography machines, making the Netherlands a critical player in global tech geopolitics.

India Semiconductor Mission aims to build a domestic ecosystem with $11 billion investment in Tata's Dholera fabrication plant, aligning with Make in India and Digital India initiatives.

[GS3-Economy] The US-China tech war and export controls are reshaping global semiconductor supply chains, creating opportunities for India as a 'China-plus-one' manufacturing destination.

Technology Diplomacy marks a shift in Indian foreign policy from traditional trade/politics to strategic tech partnerships, as seen in the Tata-ASML MoU for Dholera plant.

Structural Challenges include infrastructure gaps, power reliability, talent shortages, and import dependence on semiconductor-grade materials despite government subsidies.

[GS2-International Relations] The Netherlands' alignment with US strategic preferences on tech exports to China complicates deeper technology transfers to India.

Semiconductor Innovation Ecosystem in the Netherlands offers India access to research universities, photonics clusters, and design capabilities beyond low-cost assembly.

Way Forward: India should establish specialized semiconductor education institutes, incentivize R&D tax credits for chip design firms, and negotiate bilateral tech transfer agreements outside US export control frameworks.

Key terms

Extreme Ultraviolet (EUV) Lithography

ASML's proprietary technology using 13.5nm wavelength light to etch microscopic circuits on silicon wafers. Its geopolitical significance stems from being the only technology enabling sub-7nm chip manufacturing, critical for AI, quantum computing, and advanced weapons systems.

China-plus-one Strategy

Global supply chain diversification approach where companies reduce reliance on China by establishing alternative production bases. For India, this presents a $1 trillion opportunity in electronics manufacturing by 2030 under PLI schemes.

India Semiconductor Mission

A Rs 76,000 crore initiative launched in 2021 to establish India as a global hub for semiconductor design and manufacturing. It offers 50% fiscal support for fabrication units under ISM guidelines, addressing strategic vulnerabilities exposed during chip shortages.

Technology Diplomacy

The integration of technological cooperation into foreign policy, exemplified by India's semiconductor partnerships. This represents a paradigm shift from Nehruvian non-alignment to Modi's 'strategic autonomy' in critical technologies under Atmanirbhar Bharat.