"Semiconductors have become the new oil of geopolitics." Discuss with reference to US export controls on AI chips to China and their implications for India.

In the 20th century, power depended on who controlled oil. Today it depends on who controls advanced semiconductors. US House Speaker Mike Johnson has spoken of a "developing consensus" in Congress to tighten curbs on AI-chip exports to China [1]. This shows chips becoming a tool of statecraft, much as oil once was.

Why chips resemble oil

• Strategic chokepoint: advanced AI chips underpin China's fast-growing AI development, so denying them is a lever in the US–China technology rivalry [1].
• Dual-use nature: the same processors power commercial AI and military systems, so trading them is treated as a security matter, not just commerce.
• Bipartisan weaponisation: after a reported spy scandal at Nvidia, lawmakers from both parties now call US export policy "too weak" [1]. A law passed by Congress is harder to reverse than an executive rule.
• Step-by-step tightening: in April 2025 the US made exports of Nvidia's H20 chip to China and certain other countries subject to a licence. Nvidia said it expected charges of up to $5.5 billion [2].

Where the analogy strains

• Unlike oil, chips can be designed and built at home. Denial may speed up China's indigenisation, and US firms may lose markets permanently [2].
• Curbs can delay a rival with money and political will, but they cannot stop it.

Implications for India

• Vulnerability: India imports almost all its advanced GPUs. US rules aimed at China can also cover other countries [2], which puts the compute plans of the IndiaAI Mission at risk.
• Opportunity: the ₹76,000 crore Semicon India programme funds fabs and display units [3]. Twelve projects across six states carry investment commitments of about ₹1.64 lakh crore [4]. This positions India as a "trusted" node in chip supply chains.
• Leverage: India is a rich source of the chemicals, minerals and gases that chip supply chains need [5].
• Persisting gap: most approved units do packaging (ATMP/OSAT) or mature-node fabrication [4]. None makes frontier AI processors, so dependence on foreign suppliers continues.
• Diplomacy: India can use iCET/TRUST, the Quad and its Wassenaar Arrangement membership to secure assured access to chips.

Like oil, semiconductors have become both a chokepoint and a bargaining chip. India should spread its purchases across several suppliers and turn investment commitments into actual production. Strong technology partnerships would make India a trusted supplier rather than a target of controls. This would advance Atmanirbhar Bharat and SDG 9 (industry, innovation and infrastructure).