With Southeast Asia developing into a significant focal point for global semiconductor and rare earth mineral industries, India has a chance to enhance its equity, perhaps even amid increasing trade tensions between the US and China. The Politeia Research Foundation (PRF) report does not say that any one action is going to overturn decades of a Chinese monopoly; however, through coordinated action with US defence funding, EU rules on the market, diplomatic diplomacy under JOGMEC from Japan, and through Indian exploration, the face of global supply is already evolving.
India’s efforts to renegotiate the ASEAN-India Trade in Goods Agreement (AITIGA) is aimed at expanding the benefits of trade with ASEAN, who now have contributed to an increasing trade imbalance that has widened India’s deficit with ASEAN to $43.57 billion in 2022-23 from $5 billion in 2010-11. With semiconductors making up a large share of imports, inducing a narrowing of the trade gap with ASEAN countries will be a significant development. Noteworthy partnerships such as the 2024 India-Singapore semiconductor ecosystem MoU and a deeper engagement with Malaysia, Vietnam, Thailand, and Indonesia will be key to reducing dependency on China.
The report also recommends India and ASEAN to make investments in Myanmar’s rare earth processing capacities by tapping into programs like the G7 Critical Minerals Action Plan to build regional infrastructure. As noted by PRF, this may diversify supply chains and reinforce ASEAN-India partnerships in the semiconductor age.
