The United States’ recent decision to tighten controls on AI chip exports is poised to significantly impact India’s burgeoning tech landscape. Ashok Chandak, President of the Indian Electronics and Semiconductor Association (IESA), warns that these regulations could pose substantial challenges for India’s AI ambitions.
Chandak explained that under the new tiered approach, India requires a national end-user licence for AI chip imports. He stated, “For India, the national validated end-user licence is capped at 100,000 units for 2025, 270,000 for 2026, and 320,000 for 2027.” He said these limitations could hinder the growth of AI initiatives, particularly affecting startups and academic institutions that rely on access to advanced technology.
He added, “This limit would soon become a deterrent going forward,” highlighting concerns that the restrictions could stifle innovation. Many Indian corporations are eager to expand their AI capabilities, and Chandak noted, “Several Indian corporates would have a desire to expand the development and deployment of AI-related engines.”
Chandak also pointed out the broader implications of the US policy, stating, “While the US aims to protect its national interests, the way it has been formulated looks like a double-edged sword.” He warned that the approach could lead to economic and geopolitical consequences, especially as India invests ₹10,000 crore in its AI mission.
He further explained the tiered access system, saying, “Tier 1 includes 18 so-called friendly countries that get full access to chips and AI model development.” In contrast, he noted that Tier 3 countries face complete restrictions, which raises concerns for India’s position in the global tech landscape.
As the 120-day comment period for feedback on these regulations unfolds, Chandak assured that Indian stakeholders are actively voicing their concerns: “One representation has already been made to MeitY.” This approach aims to address the challenges posed by US export controls.