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627: INVOLVEMENT OF THE PRIVATE SECTOR IN INDIAN FIGHTER JET PRODUCTION

 

My Article published on the Chanakya Forum Website

on 24 Mar 25.

 

A recent Indian defence committee has recommended increasing private sector participation in military aircraft manufacturing to enhance the Indian Air Force’s capabilities. The committee, led by the defence ministry’s top bureaucrat, submitted its report to Defence Minister Rajnath Singh, who has directed that the recommendations be implemented promptly. The report emphasises the need for private companies to work alongside Defence Public Sector Undertakings (DPSUs) and the Defence Research and Development Organisation (DRDO) to achieve self-reliance in aerospace manufacturing. It suggests implementing short-, medium–, and long-term measures to expedite the production of Light Combat Aircraft (LCA) variants, including Mk-1, Mk-1A, and Mk-2, to address delays and strengthen the IAF’s operational readiness.

India’s aerospace and defence sector has undergone significant transformation in recent decades, evolving from a predominantly state-controlled domain to increasingly embracing private sector participation. Fighter jet production, a critical component of national defence, has traditionally been the preserve of public sector undertakings (PSUs) like Hindustan Aeronautics Limited (HAL). However, with the government’s push for indigenisation, self-reliance, and modernisation under initiatives like “Make in India,” the private sector is emerging as a vital player in this high-stakes industry. This article examines the intricacies of how private companies contribute to India’s defence capabilities and what lies ahead for this evolving partnership.

 

Historical Context

India’s journey into fighter jet production began in the mid-20th century, heavily reliant on foreign technology and licensing agreements. The 1960s saw HAL commence production of the Soviet-designed MiG-21 under license, marking the start of India’s aircraft manufacturing journey. Over the years, HAL expanded its portfolio, producing aircraft like the Jaguar, Mirage 2000, and Su-30 MKI, all under similar arrangements with foreign OEMs. These efforts established HAL as the cornerstone of India’s defence aviation industry, supported by other PSUs and the Defence Research and Development Organisation (DRDO).

The push for Indigenous fighter jet development gained momentum with the HF-24 Marut, designed by German engineer Kurt Tank in the 1960s. However, the Light Combat Aircraft (LCA) Tejas program, initiated in the 1980s by the Aeronautical Development Agency (ADA) with HAL as the production partner, represented a significant leap towards self-reliance. The Tejas, inducted into the Indian Air Force (IAF) in 2016, showcased India’s ability to design and build a modern fighter jet, albeit with substantial reliance on imported components.

Historically, private sector involvement in fighter jet production was minimal. The defence sector’s strategic importance, high capital requirements and restricted access to advanced technology confined manufacturing to PSUs. While effective in establishing a foundational aerospace industry, this PSU-centric model faced limitations in scalability, innovation, and meeting the IAF’s growing demands, setting the stage for private sector inclusion.

 

Policy Changes Enabling Private Sector Participation

A series of progressive policy reforms have driven the shift towards private sector involvement in defence manufacturing, including fighter jets. Launched in 2014, the “Make in India” initiative sought to bolster domestic manufacturing and reduce import dependency, with defence identified as a priority sector. This program encouraged private companies to participate in defence production by fostering a conducive business environment and promoting collaborations with global players.

A pivotal policy change was the liberalisation of Foreign Direct Investment (FDI) in defence. Previously capped at 26%, the FDI limit was raised to 74% under the automatic route in 2020, with provisions for up to 100% on a case-by-case basis for critical technologies. This opened doors for foreign OEMs to invest in India, often in partnership with private Indian firms, facilitating technology transfer and capacity building.

The Strategic Partnership (SP) Model, introduced in the 2017 Defence Procurement Procedure (DPP), marked another milestone. Designed to foster long-term collaborations between private Indian companies and foreign OEMs, the SP Model identifies private firms as Strategic Partners in manufacturing major defence platforms, including fighter aircraft. The selection process emphasises financial stability, technical expertise, and manufacturing capabilities to create a robust domestic defence industrial base.

Revisions to the DPP further supported this shift. The DPP 2016 introduced the “Buy (Indian-IDDM)” category—Indigenously Designed, Developed, and Manufactured—prioritising equipment with at least 40% Indigenous content. Offset clauses in defence contracts, mandating foreign vendors to invest a percentage of the contract value in India, have also incentivised partnerships with private companies. These policies collectively signal a departure from the PSU monopoly, inviting private sector innovation and investment.

 

Current Involvement of the Private Sector

The private sector’s role in Indian fighter jet production is multifaceted, spanning manufacturing, supply chain contributions, and support services. While HAL remains the primary assembler of fighter jets like the Tejas, private companies are increasingly integrated into the production ecosystem.

Supply Chain Contributions. In the Tejas program, private firms supply critical components and sub-systems. Dynamatic Technologies, for instance, manufactures the front fuselage of the Tejas, demonstrating the precision and reliability private players can offer. Larsen & Toubro (L&T) contributes to various aerospace projects, leveraging its engineering expertise, while Tata Advanced Systems Limited (TASL) participates in component manufacturing and assembly processes. These collaborations reduce HAL’s burden and enhance production efficiency, paving the way for a more robust and agile production ecosystem.

Offset Obligations.  Major defence deals have catalysed private sector involvement. The 2016 Rafale deal with France’s Dassault Aviation, involving 36 fighter jets, included offsets worth billions. Reliance Defence and Engineering partnered with Dassault to fulfil these obligations, producing components and establishing a manufacturing facility in Nagpur. Such partnerships generate business for private firms, facilitating skill development and technology absorption.

Maintenance, Repair, and Overhaul (MRO). Beyond production, private companies are making inroads into MRO services, which are essential for maintaining fighter jet fleets. TASL has established advanced MRO facilities that service military and civilian aircraft, while Mahindra Defence Systems supports aerospace equipment. These services ensure operational readiness, a critical factor given the IAF’s ageing fleet.

Emerging Technologies. Some private firms are exploring adjacent fields like Unmanned Aerial Vehicles (UAVs). Companies like TASL and Adani Defence & Aerospace are developing drones and building aerospace expertise that could eventually support fighter jet programs. While UAVs differ from manned fighters, the technological overlap strengthens the private sector’s aerospace capabilities.

Technology Transfer and Innovation. Technology transfer remains a cornerstone of private sector growth. Collaborations with foreign OEMs provide access to advanced systems, such as radar and propulsion technologies, while joint ventures encourage co-development. Private firms also invest in innovation, exploring additive manufacturing (3D printing) and artificial intelligence to streamline production and reduce costs. Over time, these efforts could lead to fully indigenous fighter jet designs.

Role of MSMEs. Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the aerospace supply chain. These firms produce smaller components—fasteners, wiring harnesses, and sub-assemblies—supporting larger private companies and PSUs. By integrating MSMEs, the industry can enhance efficiency and scalability, fostering a broader industrial ecosystem and providing opportunities for growth and innovation.

 

Key Defence Production Private Companies. Several private companies have shown interest in participating in fighter jet manufacturing, either independently or in collaboration with HAL and foreign OEMs.

    • Tata Advanced Systems Limited (TASL) has emerged as a leader in India’s private aerospace sector. Its joint venture with Lockheed Martin to produce aero structures, including wings for the C-130J Super Hercules, showcases its manufacturing prowess. Although the F-16 production proposal did not materialise, TASL’s capabilities position it for future fighter jet projects.
    • Mahindra Defence Systems. Mahindra has leveraged its automotive expertise to enter defence manufacturing, supplying aircraft components and expressing interest in the SP Model. Its partnership with Airbus for helicopter components reflects its ambition to expand into fighter jet production.
    • Larsen & Toubro (L&T). L&T’s decades-long experience in defence engineering includes contributions to the Tejas and other platforms. Its advanced manufacturing facilities and focus on precision engineering make it a strong contender in aerospace production.
    • Adani Defence & Aerospace. It aims to enhance India’s self-reliance in defence manufacturing. While active in UAVs, avionics, and MRO, it seeks partnerships for fighter jet production but lacks an indigenous fighter aircraft program.

 

Challenges Faced by Private Companies

Private companies face significant hurdles in entering fighter jet production despite growing involvement.

    • High Capital Investment. Aerospace manufacturing demands substantial upfront investment in infrastructure, technology, and skilled manpower. The long gestation periods before returns materialise deter many firms, particularly more minor players.
    • Technological Barriers. Fighter jet production requires mastery of complex technologies—avionics, propulsion, and materials science—that PSUs like HAL have developed over decades. Private companies often lack this expertise, relying on foreign partnerships that may limit technology transfer.
    • Bureaucratic Procurement Processes. The defence procurement system is notoriously complex, with lengthy tendering, evaluation, and approval stages. This can discourage private firms accustomed to faster commercial cycles.
    • Competition with PSUs. HAL’s entrenched position and government backing create an uneven playing field. Private companies must compete with HAL’s economies of scale and establish relationships with the IAF.
    • Quality and Certification. Fighter jets demand uncompromising quality and safety standards. Private firms must navigate rigorous certification processes, such as those mandated by the Centre for Military Airworthiness and Certification (CEMILAC), adding time and cost.

 

Future Prospects

The private sector’s role in Indian fighter jet production is set for significant expansion, driven by policy continuity, market demand, and technological advancements. Government initiatives such as Atmanirbhar Bharat and the Defence Acquisition Procedure (DAP) foster a stable investment climate, encouraging private firms to engage in aerospace manufacturing. Policy measures like strategic partnerships and increased foreign direct investment (FDI) limits further enhance private sector participation.

Market demand is another key driver. The Indian Air Force (IAF) is undergoing rapid modernisation, with plans to replace ageing aircraft and induct advanced fighters. Additionally, India’s ambition to become a defence exporter presents lucrative opportunities for private companies. Countries in Southeast Asia, the Middle East, and Africa could become potential buyers, bolstering the case for increased private production.

Technological advancements are also reshaping the industry. Additive manufacturing, artificial intelligence, and advanced materials reduce entry barriers and enable new players to contribute. Collaborations with global aerospace firms can further accelerate technology absorption.

However, for private firms to succeed, key enablers must be addressed. Streamlining procurement processes, enhancing R&D funding, and developing a skilled workforce are critical. Bureaucratic hurdles and financial constraints have historically hindered private participation, but targeted reforms could unlock their full potential. If these challenges are managed effectively, private companies could be pivotal in next-generation fighter projects like the Advanced Medium Combat Aircraft (AMCA). This would strengthen India’s defence manufacturing ecosystem and enhance its strategic autonomy in aerospace technology.

Conclusion

The involvement of the private sector in Indian fighter jet production marks a paradigm shift from a PSU-dominated landscape to a collaborative ecosystem. While challenges like capital intensity and technological gaps persist, the opportunities—driven by policy reforms, IAF requirements, and global partnerships—are immense. Companies like TASL, Mahindra, and L&T exemplify the potential of private enterprises to enhance India’s defence capabilities. As the nation strives for self-reliance, the private sector’s role will be pivotal in shaping a robust, innovative, and competitive aerospace industry, ensuring that India’s fighter jets soar not just in the skies but also as symbols of industrial prowess and strategic autonomy.

 

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INVOLVEMENT OF THE PRIVATE SECTOR IN INDIAN FIGHTER JET PRODUCTION

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References and credits

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Disclaimer:

Information and data included in the blog are for educational & non-commercial purposes only and have been carefully adapted, excerpted, or edited from reliable and accurate sources. All copyrighted material belongs to respective owners and is provided only for wider dissemination.

 

References:-

  1. Singh, Abhijit. “Public-Private Partnership in Indian Defence Manufacturing: A Strategic Perspective.” Journal of Defence Studies, vol. 16, no. 2 (2023): 51-78.
  1. Raghavan, Ramesh. “The Role of Private Companies in Defence Production: Lessons from Global Models.” Strategic Analysis, vol. 45, no. 1 (2022): 29-50.
  1. Mehta, Sameer. “India’s Quest for Fighter Jet Autonomy: Challenges and Opportunities for the Private Sector.” Air Power Journal, vol. 17, no. 3 (2022): 12-35.
  1. Sharma, Arvind. “HAL and the Evolving Role of Indian Private Defence Firms.” Journal of Defence Research and Development, vol. 19, no. 4 (2023): 88-105.
  1. Kapoor, Deepak. India’s Defence Industry: Evolution, Challenges, and Prospects. Pentagon Press, 2021.
  1. Chakrabarti, Rajesh. Defence Economics in India: The Transition to a Military-Industrial Complex. Oxford University Press, 2020.
  1. Sinha, Rakesh. Privatisation and Defence Manufacturing in India: The Road Ahead. Routledge, 2019.
  1. Pandit, Rajat. “HAL and the Private Sector: A New Era in Indian Fighter Jet Production.” The Times of India, March 10, 2023.
  1. Peri, Dinakar. “Adani and Tata’s Role in India’s Advanced Medium Combat Aircraft (AMCA) Project.” The Hindu, August 12, 2023.
  1. Unnithan, Sandeep. “How Private Players Are Transforming Indian Defence Manufacturing.” India Today, November 15, 2022.
  1. Singh, Rahul. “India’s LCA Tejas and the Private Sector: The Growing Role of Private Industry in Aerospace.” Hindustan Times, July 20, 2023.
  1. Mitra, Joydeep. “The Rafale Offset Deal: How Private Companies are Gaining from India’s Fighter Jet Deals.” Business Standard, September 25, 2023.
  1. Centre for Air Power Studies (CAPS). The Future of India’s Indigenous Fighter Jet Development: Role of Private Sector. CAPS Report No. 231, 2023.
  1. Observer Research Foundation (ORF). Public-Private Collaboration in Indian Defence: Global Lessons and Local Challenges. ORF Special Report, 2022.
  1. Institute for Defence Studies and Analyses (IDSA). Self-Reliance in Indian Defence: Evaluating the Private Sector’s Role. IDSA Monograph No. 82, 2023.
  1. Carnegie India. India’s Fighter Jet Ecosystem: Bridging the Capability Gap through Private Sector Involvement. New Delhi: Carnegie India, 2023.
  1. Kumar, Rohit. “The Evolution of the Tejas Fighter Jet: Indigenous Capability and the Role of Private Sector.” Defence and Security Review, vol. 24, no. 3 (2022): 15-37.
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625: F-35 DILEMMA REVISITED: BALANCING AFFORDABILITY, CAPABILITY AND TRADE-OFFS.

 

My Article published on the EurasianTimes Website on 19 Mar 25.

 

In an interesting development, Portugal, Canada, and Germany are hesitating over the F-35. These developments can be both a challenge and an opportunity for India, whether India should jump into the fray and take the risk or stay away.

 

Indian Worries. India’s worries include operational and maintenance challenges, US policy uncertainty and technology transfer issues. Countries reconsidering their F-35 purchases usually cite concerns about high operational costs, maintenance complexities, and reliability issues. If a country like Canada, with a strong NATO supply chain, has problems, India, without an established F-35 ecosystem, could face serious logistics nightmares. India has historically struggled with restrictive American defence deals (e.g., CAATSA concerns with Russia). If Canada and Portugal are reconsidering under U.S. influence, India’s potential F-35 deal might come with diplomatic strings attached. Moreover, the U.S. is unlikely to share deep tech integration rights.

 

Opportunity. On the bright side, the cancellations by these countries could open up production slots, potentially leading to expedited deliveries if India proceeds with an F-35 deal. Furthermore, under these circumstances, Lockheed Martin may be more accommodating in pricing or support agreements with India. A limited number of F-35s could act as a stepping stone to India’s indigenous AMCA program, providing valuable 5th-gen combat experience until India develops its own.

 

Balancing Affordability and Capability.  Balancing affordability and capability in fighter acquisition programs is a complex and intellectually stimulating challenge in defence procurement. Modern fighter jets, with their advanced avionics, stealth technology, and weapons systems, are not just engineering marvels but also strategic assets that can dominate air, land, and sea. However, these capabilities come at a steep cost, and governments must grapple with budgetary constraints while ensuring their air forces remain capable of addressing current and future threats.

 

Trade-offs. Understanding and navigating the myriad trade-offs in fighter aircraft acquisition programs are a cornerstone of defence procurement. Balancing performance, cost, operational requirements, and strategic objectives is a complex task that governments and military planners must master to ensure optimal capability within the constraints of their resources. This knowledge empowers decision-makers and enhances the effectiveness of defence strategies.

 

Trade-Offs for Consideration in Fighter Acquisition Programs

Cost vs. Capability. A fundamental trade-off in fighter acquisition is between cost and capability. High-end fifth-generation fighters like the F-35 and the F-22 offer unparalleled performance but come at an exorbitant price. More cost-effective alternatives, such as the F-16 or the Gripen, may lack some advanced features but remain viable options for many air forces. Nations must decide whether to prioritise cutting-edge technology or opt for a more extensive fleet with slightly reduced capabilities.

 

Multirole Flexibility vs. Specialisation. Many modern fighters, such as the F-35 and Rafale, are designed as multirole platforms capable of performing air-to-air, air-to-ground, and electronic warfare missions. This flexibility reduces fleet diversity but may lead to compromises in specific roles. In contrast, specialised aircraft like the A-10 Thunderbolt II excel in close air support but lack air superiority capabilities. Decision-makers must weigh whether a single multirole platform meets their needs or if specialised aircraft are necessary.

 

Short-Term vs. Long-Term Investment. Some nations prioritise acquiring proven, off-the-shelf platforms that provide immediate operational capability, while others invest in the long-term development of next-generation aircraft. The former minimises short-term risks but may become outdated sooner. The latter approach, seen in programs like the Tempest and NGAD, is high-risk but ensures future technological superiority.

 

Fleet Size vs. High-End Technology. Budget constraints often force militaries to choose between a more extensive fleet of less advanced fighters or a smaller number of top-tier aircraft. A more comprehensive fleet provides more coverage and sortie rates, while a smaller fleet of high-end fighters offers superior combat capability. For instance, many nations supplement their fleets of expensive stealth aircraft with cheaper fourth-generation fighters to maintain numbers.

 

Capability vs. Quantity. Nations must decide between procuring fewer advanced jets or a more extensive fleet of less capable aircraft. For instance, the U.S. chose to supplement its high-end F-22 fleet with the more affordable F-35, while countries like China and Russia have emphasised quantity to ensure strategic depth.

 

Indigenous Development vs. Foreign Procurement. Countries face a strategic choice between developing domestic fighter programs and purchasing from foreign suppliers. Indigenous programs, such as India’s Tejas/AMCA or South Korea’s KF-21, promote self-sufficiency but require significant research and industrial infrastructure investment. Buying foreign jets ensures immediate capability but can lead to dependency on external suppliers.

 

Indigenous Fighter Development for Cost-Effectiveness. India’s HAL Tejas was developed to reduce reliance on foreign fighters while maintaining affordability. Designed with modular upgrades in mind, the Tejas has gradually improved with better radar, weapons integration, and avionics. Despite delays in development, its affordability compared to Western counterparts has made it an attractive option for India’s long-term air power strategy.

 

Balancing Affordability and Capability

Balancing affordability and capability in fighter acquisition programs is a complex but essential task for modern air forces. Governments must ensure that their aircraft provide operational effectiveness without exceeding budgetary constraints. The following best practices help achieve this balance.

 

Comprehensive Lifecycle Planning. A fighter jet’s cost extends far beyond its initial acquisition price. Governments must consider long-term expenses, including operation, maintenance, upgrades, and eventual disposal. Comprehensive lifecycle cost analysis, which involves estimating all costs associated with a system over its entire life, helps mitigate budgetary surprises and ensures financial sustainability over decades of service.

 

Incremental Upgrades. Modern fighter jets should have modular systems and open architectures to accommodate incremental upgrades. This approach extends an aircraft’s service life while spreading costs over time. The F-16 Fighting Falcon, introduced in the 1970s, remains operational due to continuous upgrades in avionics, radar, and weapons. This strategy prevents obsolescence while reducing the need for costly new aircraft acquisitions.

 

Focus on Multi-Role Capability. Multi-role fighters provide greater operational flexibility by performing various missions with a single platform. The Dassault Rafale exemplifies this concept, capable of air-to-air combat, ground attack, and reconnaissance missions. This versatility allows air forces to reduce the number of specialised aircraft types, simplifying logistics and maintenance while lowering overall costs.

 

Prioritising Export Potential. Designing fighter jets with exportability in mind helps amortise development costs and reduce per-unit expenses. Countries that successfully market their fighters to foreign buyers can reinvest revenues into further technological advancements.

 

Emerging Trends and Technologies. Technological advancements are reshaping how air forces balance affordability and capability. The following emerging trends offer cost-effective solutions while enhancing combat effectiveness.

 

Unmanned Systems. Unmanned aerial vehicles (UAVs) and ‘loyal wingman’ drones, which are autonomous aircraft that operate alongside manned aircraft, complement traditional fighter jets by taking on high-risk missions at a lower cost. These platforms can conduct reconnaissance, electronic warfare, and combat operations without endangering pilots. Programs like the Boeing MQ-28 Ghost Bat highlight the growing role of UAVs and ‘loyal wingman’ drones in modern air combat.

 

Artificial Intelligence. AI-powered systems improve decision-making, enhance situational awareness, and reduce pilot workload. Advanced AI integration enables autonomous operations, making fighters more effective while potentially reducing crew training costs. AI-driven mission planning and adaptive combat algorithms are key to next-generation fighter capabilities.

 

Conclusion

Balancing affordability and capability in fighter acquisition programs is a complex but essential endeavour. As nations face evolving threats and fiscal constraints, the ability to make strategic trade-offs will determine their air power’s effectiveness. By embracing innovative technologies and fostering international collaboration, governments can achieve an optimal balance that ensures operational readiness and financial sustainability.

 

India traditionally prefers non-restrictive platforms like the Rafale and Su-30MKI that allow customisation. The F-35, despite its advanced stealth and networking, is deeply tied to U.S. control mechanisms. If Germany, Canada, and Portugal, NATO allies with solid U.S. interoperability, are hesitating, India must be doubly cautious before signing anything. The Big Question, however, remains whether India should even consider the F-35. After analysing the factors mentioned earlier, the current answer is negative (even with faster delivery schedules).  

 

For considering the F-35 as a potential option for India, several critical concerns must be addressed to make it a viable choice. Foremost among these is the issue of technology transfer and support to Indigenous aircraft development. Operational sovereignty is essential, as any restrictions imposed by the U.S. could limit India’s ability to integrate indigenous systems and conduct independent upgrades. Cost considerations (including procurement, maintenance, and lifecycle expenses) must be carefully weighed against alternative platforms. Geopolitical reliability is another key factor, given past U.S. sanctions and export restrictions that could impact fleet sustainability. Finally, interoperability with India’s existing fleet and infrastructure must be thoroughly assessed to ensure seamless integration without excessive logistical burdens. Addressing these concerns through ironclad agreements and long-term strategic assurances would be essential for India even to consider the F-35 option (in limited numbers).

 

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617: INPUTS FOR QUESTIONNAIRE ON INDIA-TAIWAN RELATIONS

 

1: How important are semiconductors between the India-Taiwan bilateral ties?

    • Taiwan dominates semiconductor manufacturing, and India aspires to initially become self-reliant and a semiconductor hub in the long run.
    • Semiconductor cooperation can be a key element in India-Taiwan’s bilateral relations.
    • Taiwan is home to TSMC (Taiwan Semiconductor Manufacturing Company), the world’s leading contract chip manufacturer, and other key semiconductor firms like UMC and MediaTek.
    • Taiwan accounts for over 60% of global semiconductor production, making it indispensable in the global semiconductor supply chain.
    • India strives to become a major semiconductor manufacturing and design player with government initiatives like the Semiconductor Mission and incentives under the PLI (Production-Linked Incentive) scheme.
    • However, India lacks advanced fabrication facilities and relies on imports for its semiconductor needs.
    • Taiwanese firms, including TSMC and UMC, have been in discussions about establishing semiconductor plants in India.
    • India and Taiwan have explored partnerships to set up semiconductor packaging and testing facilities.
    • The most prominent initiative in the past was Foxconn’s joint venture with Vedanta to set up a semiconductor fab in India. However, this project faced setbacks, and Foxconn later withdrew.
    • Taiwan’s MediaTek has R&D operations in India, and more companies are eyeing design and software collaborations.
    • Taiwan faces increasing pressure from China, while India has border tensions with Beijing. Strengthening semiconductor ties helps both nations reduce reliance on China.
    • Amid U.S.-China tech tensions, India is a potential alternative for Taiwan to de-risk its semiconductor supply chains. However, due to pressure from China, Taiwan’s firms may hesitate to invest heavily in India.
    • Semiconductor cooperation offers mutual benefits in economic growth, technological advancement, and strategic realignment.

 

2a: How’s the development of an AI-technology innovation ecosystem linked to semiconductors?

    • This relationship between AI and Semiconductors is symbiotic.
    • Developing an AI-technology innovation ecosystem depends on robust, specialised chips for computation. On the other hand, advances in AI drive semiconductor innovation.
    • AI is revolutionising the semiconductor industry.
    • AI workloads like machine learning (ML), deep learning, and generative AI require enormous computational capacity, which is powered by advanced semiconductor technologies like Graphics Processing Units (GPUs).
    • Application-Specific Integrated Circuits (ASICs) and custom chips (e.g., Google’s TPUs) are optimised for AI workloads, enhancing performance and efficiency.
    • Future AI applications would demand breakthroughs in semiconductor design (Neuromorphic & Quantum Chips), mimicking brain-like processing or leveraging quantum computing.
    • AI-enabled devices (smartphones, IoT, autonomous systems) require power-efficient chips for real-time AI inference.
    • A thriving AI ecosystem requires cutting-edge semiconductor technology, while AI drives semiconductor innovations.
    • Countries investing in AI are also focusing on semiconductor self-sufficiency.
    • To stay competitive, nations aiming to lead in AI must also invest in advanced semiconductor capabilities.

 

2b How’s Taiwan important for Indian AI?

    • Taiwan is Important for Indian AI development, and it can play a critical role in India’s AI ambitions due to its dominance in semiconductor manufacturing, expertise in AI hardware, and potential for technological collaboration.
    • Taiwan is home to TSMC, MediaTek, and other key players; India’s AI growth is closely linked to its semiconductor partnerships with Taiwan.
    • Taiwan’s MediaTek supplies AI-driven smartphone processors, the key to India’s mobile AI market.
    • Taiwan’s semiconductor firms could help India build chip fabrication and packaging infrastructure, supporting India’s AI industry.
    • Taiwan’s expertise in embedded AI, 5G chips, and smart sensors can enhance India’s AI-driven IoT industry.
    • Taiwan has top research institutions (e.g., Academia Sinica, ITRI) specialising in AI-chip co-development, with which India can collaborate.
    • India’s AI Software Strength – India excels in AI/ML software development, while Taiwan specialises in hardware. This complementary relationship can lead to co-innovation in AI applications.
    • Taiwan and India can expand cooperation in AI-powered automation, fintech, and healthcare solutions.
    • India relies on Taiwan for high-end GPUs and AI chips, which are essential for AI supercomputing and cloud AI services.
    • Taiwan is vital for India’s AI ecosystem due to its semiconductor leadership, AI hardware expertise, and potential investment in India’s chip industry.

 

2c  Is ‘AI bias’ one sphere in which India and Taiwan should collaborate? I think AI bias will be used in narrative warfare by China. So, it sounds logical that India will look towards Taiwan for it. That’s why this question.

    • Yes, AI bias is a critical area where India and Taiwan should collaborate, especially considering how China could leverage AI for narrative warfare, disinformation, and ideological control.
    • Given Taiwan’s experience in countering Chinese propaganda and cognitive warfare and India’s strength in AI software development, a partnership between the two could be mutually beneficial.
    • AI models learn from data, and if this data is manipulated, it can shape narratives in ways that serve geopolitical agendas. China has a history of AI-enabled information control.
    • Chinese AI firms develop models that filter, distort, or suppress certain narratives (e.g., Tiananmen Square and Uyghur issues).
    • AI-driven bot networks and deepfakes help China push state-controlled narratives globally.
    • AI-powered language models can spread biased historical or political perspectives on global platforms.
    • Given these threats, India and Taiwan must proactively develop AI systems that resist bias and manipulation to safeguard their information sovereignty.
    • India (with its AI research institutions like IITs, IIITs, and NITI Aayog) and Taiwan (via Academia Sinica, ITRI) can create joint frameworks for identifying and countering AI bias.
    • Instead of relying on U.S. or China-dominated AI models (GPT, ERNIE), India and Taiwan can work on regional AI models trained on neutral or diverse datasets.
    • Taiwan is already a leader in countering Chinese misinformation; India can integrate these capabilities into its AI-driven news verification systems.
    • India and Taiwan should limit dependency on Chinese AI tools, chips, and cloud services to avoid hidden biases and surveillance risks.
    • China can manipulate AI models. India and Taiwan must ensure independent, bias-resistant AI tools.
    • Both countries face Chinese psy-ops through TikTok clones, AI-driven chatbots, and misinformation on global platforms. Collaboration on AI-driven digital hygiene strategies is essential.
    • AI bias is not just a technical issue but a geopolitical weapon. Given China’s advancements in AI-enabled narrative control, India and Taiwan must collaborate to develop AI models that are transparent, unbiased, and resilient to manipulation.

 

3: Do you think Taiwan will determine the QUAD’s Indo-Pacific policy? Do you think Taiwan will be included in QUAD Plus?

    • Taiwan is strategically important for the Indo-Pacific.
    • Its inclusion in QUAD+ or any official QUAD policy is highly sensitive due to geopolitical constraints, primarily the One-China policy followed by QUAD members.
    • However, Taiwan is already a de facto part of the Indo-Pacific security architecture, and its role may increase informally without direct QUAD membership.
    • Taiwan plays a key role in significant aspects of the Indo-Pacific strategy.
    • India, Japan, and Australia have quietly increased economic, diplomatic, and military engagement with Taiwan.
    • The U.S. openly supports Taiwan’s defence and maintains strong military ties with Taiwan (e.g., arms sales, intelligence-sharing).
    • Joint statements focus on ‘peace and stability in the Taiwan Strait’, a veiled warning to China.
    • This suggests Taiwan is a silent but critical factor in QUAD’s Indo-Pacific strategy.
    • The idea of QUAD+ (expanded QUAD partnerships) includes countries like South Korea, Vietnam, the Philippines, and European allies. Taiwan’s inclusion is politically tricky but possible in indirect ways.
    • QUAD could integrate Taiwan into its semiconductor, AI, and cyber initiatives without direct military ties.
    • Taiwan is already working with the U.S. and Japan on cyber defence against China.
    • QUAD’s Indo-Pacific Economic Framework (IPEF) could involve Taiwan in trade and investment deals.
    • Taiwan’s inclusion could provoke Chinese military aggression, making regional stability harder to maintain.
    • India’s stance on Taiwan is cautious but evolving, with no diplomatic recognition (it follows the One-China policy but doesn’t reaffirm it actively), expanding economic & tech ties, and a measured stance on security issues (India doesn’t directly engage on Taiwan’s defence but is watching U.S.-China tensions closely).
    • Taiwan will likely play a more significant role in QUAD’s Indo-Pacific policy, but formal membership in QUAD+ is unlikely in the near future due to China’s geopolitical sensitivities.

 

4. Do you think,  that Taiwanese TSMC’s $100 billion investment in the US has any lessons for India-Taiwan bilateral ties?

Taiwan Semiconductor Manufacturing Company’s (TSMC) $100 billion investment in the U.S. offers several lessons for India-Taiwan bilateral ties, particularly in the semiconductor sector.

TSMC’s investment in the U.S. is not merely a business move but a strategic decision driven by geopolitical concerns, primarily supply chain resilience and U.S.-China tensions. Similarly, India must recognise the strategic value of deepening semiconductor cooperation with Taiwan, not just as an economic initiative but as a crucial aspect of national security and self-reliance (Atmanirbhar Bharat).

Taiwan seeks to diversify its semiconductor production due to concerns about a potential Chinese invasion. The U.S. has emerged as one alternative, and India could position itself as another. New Delhi can present itself as a stable and growing economy with skilled labour and a commitment to semiconductor self-sufficiency.

The U.S. successfully attracted TSMC by offering massive incentives under the CHIPS Act, including subsidies, tax breaks, and infrastructure support. Under its Semiconductor Mission, India is offering similar incentives, but the challenge is ensuring a competitive ecosystem, covering land acquisition, power supply, and water availability (all crucial for fabs). If India wants Taiwanese firms like TSMC or UMC to invest, it must streamline regulatory processes and enhance the ease of doing business.

 

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