India targets role in 'China+1' strategy, electronics in talks with Trump administration

President Donald Trump was sworn in as the President of the USA on January 20

With Trump assuming the presidency of the USA for the second time, India's IT ministry has critical policy areas for discussions chalked out, including how India can play a significant role in the 'China+1' strategy, said a senior government official.

On late January 20, Donald Trump was sworn in as the 47th President of the USA, marking a remarkable comeback to power after a gap of four years.

"We want to see what more exports we can do into the US. How, India can become a key player in the China+1 strategy," said the official on condition of anonymity. The "China+1" strategy is a business approach where companies diversify their supply chains by adding a second manufacturing or sourcing location outside China.

Other key areas of discussion, in the coming months would include figuring out avenues to boost India's electronics ecosystem, the official said.

"We want to look at ways in which America can help India develop its electronics ecosystem, in the same way Apple helped the mobile ecosystem in India. We can explore if other companies can do it," the official added.

Apple's entry into the Indian market played a significant role in the development of India's mobile ecosystem through the establishment of manufacturing facilities in India and creation of employment, particularly in the electronics sector.

Interestingly, for India, the H-1B visa issue has not raised any alarm bells. "We had asked the industry if there was any problem. The sense that we got from the industry was that it was not much of a problem," the official said adding that the dependency on H-1B visa was very low in the industry.

Also read: Dependence on H-1B visa among lowest in industry, 80% of US employees are locals, says HCLTech

Apart from that, the official said that India will looking for more avenues for fostering closer partnerships with the US government.

India also plans to take up with the Trump administration the restrictions on AI exports brought in by the previous Biden administration.

The US AI Diffusion Policy and Export Controls divide the world into three groups for reasons of exports. The first, comprising 20 countries such will have unrestricted access to AI chips. In contrast, 20, including China, and Russia will have no access. For the remaining nations, including India, there will be a country-specific cap on computing power.

Although the industry does not expect any impact on the ongoing Rs 10,738 crore IndiaAI mission, it anticipates long-term impacts on India's AI infrastructure ambitions if the rules remain unchanged.

Also read: Davos 2025: US AI export controls could harm both India and US, says Andrew Ng

“To begin with, we don’t expect an immediate problem. The limits they have prescribed should allow us to manage for a year or two. However, it will be crucial to assess the situation when the Trump administration takes over, and we’ll need to address this with the new administration,” a senior government official told Moneycontrol.