Technically, the US government recognises a set of technologies that are of particular importance for the national interests of any country.

It includes technologies such as Advanced Computing, Artificial Intelligence, biotechnologies, Quantum Information Technologies, Renewable Energy Generation and Storage, to name a few. Globally, around 64 fields of technology are recognised under CETs.

The CET or new age technologies are recognised as the game changers that are going to shape the future, both socially and economically.

Technological innovation has been a key component of economic development and geopolitics for centuries. The accelerated rate of technological innovation now means that the global dynamics are poised to change even faster. 

China Taking Over Tech Research Leadership

The world is on the cusp of a global transition in the field of technological innovation.

This is underlined by the recent report on Critical Technology Tracker by the Australian Strategic Policy Institute that tracks research leadership across 64 CETs at a global scale. During 2003-07, China led in just 3 of the 64 CETs while the US led in 60 out of the 64 CETs. Presently, China leads in 57 of the 64 CETs while the US leads in only 7 of the CETs. 

The report quantifies a global inversion in technology development over the last two decades. The conventional ‘developed world’ comprising Europe and the USA has been fast losing ground on their hegemony over technological innovations. Meanwhile, China has emerged as a global leader.

The growing dominance of China in manufacturing and global production has now permeated R&D and technology development. The country is focused on securing its global dominance in trade and economics by future-proofing its economy via research in CETs.

America's Fight-Back & Repercussions On India

After taking due cognisance of this development, the US developed its National Strategy for Critical and Emerging Technologies in 2020, in which it recognised the threat from China and Russia (the latter especially on military technologies).

The US seeks to safeguard its national interests in these technologies via global treaties and multilateral cooperative engagements. The most important initiative in this regard is the US-India Initiative on Critical and Emerging Technologies (iCET). 

For India, the development of CET is an important matter given the newfound prowess of Indian entrepreneurship in some of these emerging technologies. The Critical Technology Tracker by the Australian Strategic Policy Institute recognises India as a global research powerhouse, ranking among the top five countries in 45 out of 64 critical technologies in 2023.

In AI, for instance, India ranks just behind the US and China in various key segments, ranging from advanced data analytics to advanced integrated circuit design and fabrication.

India is recognised as a ‘safe bet’ for collaborations on CET not only by the USA but also the UK, which too has engaged in a Technology Security Initiative (TSI) to strengthen cooperation in various areas of technology, including telecommunications, AI and biotechnology.

For India, such global treaties and collaborations on CETs are critical to supplement its capacities, especially in manufacturing, given the gap the country has in this regard. The global treaties are expected to ensure technology transfer and investment to augment the country's capabilities.

There are several challenges for India even under iCET that risk its benefit realisations under these treaties.

For example, low R&D expenditure (only 7 per cent of GDP), lower than even comparable countries such as Brazil or South Africa, and poor conditions of its state research monopolies like Defence Research and Development Organisation (DRDO) or Hindustan Aeronautics Limited (HAL) in developing military-tech, are important structural impediments the country has to address.

However, the biggest hurdles for India are regulatory barriers and diplomatic issues. American export control norms seriously hamper technology transfer from the USA to India.

Intellectual Property Rights (IPR) regulation is another area of contention, in which the US government insists Indian IPR protections are insufficient, while Indian counterparts argue US patent filing processes are expensive and tedious.

A bigger issue of concern is differences in position on critical geopolitical issues. For instance, India’s studied silence on the Russia-Ukraine war in the context of active American interventions is the type of political strain that may negatively affect technological transfers or investments.

India Has To Tread Carefully On CETs Under Trump 2.0

All these factors assume greater importance for India with the Trump Administration assuming power from January 2025.

Trump’s open tirade against Biden’s Policy on Responsible AI, and his expressed misgivings about a bipartisan programme using government investment to boost domestic chip production, are indicative of reversing many of the Biden Administration positions on CETs.

Perhaps, the Trump Administration may seek to revisit the iCET simply because it was established under the Biden Administration.

It must be noted that his relationship with Silicon Valley in his earlier outing was not exactly favourable. Even though this time around Silicon Valley seems to have ‘warmed up’ to Trump (mainly because the Biden Administration was heavy-handed on many of the tech companies, especially on merger and acquisition plans), how it plays out will be an interesting game to watch.

Two of the most important factors that may shape Trump’s policies are his openly stated distrust of China, and the presence of tech leaders like Musk in his team who have an active vested interest in the business of CETs.

Trump’s call for a regulation-free business environment, coupled with his preference for high tariff base trade balancing — to safeguard American interests in controlling global production bases — will determine how his administration works on the iCET agreements with India.

His call to "Make America Great Again” hinges on ‘wrestling’ manufacturing edge from other countries (especially China) back to America. What it means for technology transfer or investments to foster CET capacities in India is unclear.

More importantly, Trump is seen to prefer a ‘transactional relationship’ with every country in the world. So, a major factor in his decision-making will be how India ‘allies’ with US geopolitical policies.

Much of India’s expectations on developing its global leverage in CET are hinged on iCET and similar global collaborations. The changing dynamics of iCET under the new US administration may subdue some of these expectations in the medium to long run.

(The writer is a New Delhi-based economist with over a decade's experience in studying the digital sector. Views expressed are personal)