Make India Great Again? MEGA Partnership to AI

India is strengthening its ties with the United States through the TRUST U.S.-India initiative, launched in 2025, to enhance collaboration in defence, technology, and AI. As both nations race for dominance in the global AI landscape and to counter China's rise, India is positioning itself as a key player in shaping the future of AI governance. This article explores what this growing partnership means for the technological rivalry with China and the global balance of power. 

A Crisis Watch Policy Brief by Vitória  Carvalho | Edited by Harshita Prashar | Research & Publications Division

Introduction

On February 13, 2025, Indian Prime Minister Narendra Modi, during a press conference at the White House, adopted Donald Trump's campaign slogan and declared his intention to "Make India Great Again." Modi emphasised that when the United States and India collaborate—that is, when MAGA (Make America Great Again) joins MIGA (Make India Great Again)—the result is MEGA, indicating a grand partnership for prosperity. In this context, Modi and U.S. President Donald Trump announced the launch of the TRUST U.S.-India initiative, designed to structure this mega partnership through technology.

The TRUST initiative, which stands for "Transforming U.S.-India Relations through Strategic Technology," aims to strengthen collaboration among governments, academia, and the private sector to advance the development and application of critical and emerging technologies. This initiative encompasses key areas such as defence, artificial intelligence, semiconductors, quantum computing, biotechnology, energy, and space exploration. Additionally, it seeks to encourage the use of trusted technology suppliers and ensure the protection of sensitive technologies.

This closer alignment between Washington and New Delhi, though rooted in historical necessity to counterbalance China, intensified after a deadly border clash between India and China in 2020. The violent encounter in the Galwan Valley, Ladakh region, resulted in the deaths of 20 Indian soldiers and four Chinese troops, prompting India to deepen its ties with the United States in pursuit of enhanced defence and security cooperation.

India-US’ Technological Engagement :

Highlighting the growing political and economic ties between the two nations, bilateral trade between the U.S. and India doubled over the last decade, reaching approximately $200 billion in 2024. American companies have played a significant role in India's economy, employing nearly 1.7 million people across the country. Meanwhile, the U.S. economy has also benefited from the vibrant Indian-American diaspora, comprising approximately five million people, 80% of whom hold university degrees. This highly skilled community has made significant contributions across various sectors, including technology, medicine, and education. With Donald Trump’s reelection, these ties are expected to strengthen further, particularly as his administration has been well-received in India. According to a survey conducted by the European Council on Foreign Relations, 84% of Indians believe that Trump’s second term will be beneficial for their country—the highest approval rating among all surveyed nations.

Both nations are deeply engaged in the "technology race," characterised by competition for supremacy in innovation, data control, and regulatory frameworks that will define global AI governance. India has initiated the acquisition of approximately 19,000 graphics processing units (GPUs), intending to offer them at subsidised costs to startups and researchers to bolster local technological development. Moreover, the country has aggressively promoted initiatives such as Aadhaar, a domestically developed digital identification system, while also subsidising semiconductor manufacturing plants.

Meanwhile, in the U.S., major technology firms, including OpenAI, SoftBank, Oracle, Microsoft, and Nvidia, have joined forces to develop artificial intelligence infrastructure for OpenAI within the country. Over the next four years, an estimated $500 billion investment will be directed toward a new enterprise named "Project Stargate," aimed at significantly expanding AI capabilities in the United States.
Partnership as a Reaction to Chinese Advancements :

Thus, while this technological alignment between India and the U.S. is unfolding amidst fierce global competition, it is also influenced by the techno-nationalism of Trump’s second term and India’s ambitions in AI governance. The emergence of DeepSeek, a low-cost AI model developed in China, has further disrupted the industry in early 2025. In January, the Chinese startup DeepSeek launched the open-source DeepSeek-R1 model, which not only rivals OpenAI’s most advanced models across various benchmarks but was also trained at an estimated cost of just $6 million—a fraction of the investment required for similar models in the U.S. The open-source nature of DeepSeek allows developers to build on previous iterations easily, raising concerns that OpenAI’s competitive edge could be at risk.

Days after DeepSeek's release, the Indian government announced its decision to develop its own large language model as part of the IndiaAI Mission, backed by an investment of 10,372 crore rupees. India’s Minister of Information Technology, Ashwini Vaishnaw, revealed that the government had selected 10 companies to supply 18,693 GPUs for the initiative. In response, the U.S. government began evaluating the national security implications of these technological advancements while reinforcing its rhetoric to maintain global AI leadership.

As a result, the U.S.-India TRUST initiative is largely a reaction to the need to curb China’s rapid advancements in AI and semiconductor technology. This cooperation extends to the "chip war"—the ongoing battle between the United States and China for semiconductor production dominance—where India has positioned itself since 2014 as an alternative manufacturing hub for global companies seeking to diversify their supply chains. Although India still lags behind major semiconductor suppliers such as China and Taiwan, industry experts predict that by 2028, India will manufacture 25% of the world’s iPhones.

In this regard, the 2024 U.S.-India semiconductor pact—hailed by both nations as a "landmark agreement"—aims to establish a semiconductor fabrication plant dedicated to producing chips for national security, next-generation telecommunications, and green energy applications. This marks India's first such collaboration with the U.S., through which the country will supply chips to the U.S. military, allied forces, and the Indian armed forces.

Furthermore, the announcement of the U.S.-India TRUST initiative casts doubt on a Biden-era proposal concerning AI hardware exports, which could have significant implications for India’s AI ambitions. Under the "Interim Final Rule" titled "Framework for Artificial Intelligence Diffusion," the Biden administration sought to classify countries into three tiers with specific export restrictions on AI chips and GPUs. India was placed in the intermediate tier, meaning it would face limitations on the number of GPUs it could import from the U.S.

It remains uncertain whether President Trump intends to uphold these restrictions. If he chooses to revoke them, it would be a strategic victory for India, granting the country greater access to cutting-edge technology and accelerating its AI development plans.

India and the Construction of Global AI Governance:

The deepening technological cooperation between India and the United States not only reflects their bilateral interests but also plays a fundamental role in shaping a more inclusive and balanced global AI governance framework. India, with its diplomatic influence and history of leadership in the Global South, is positioning itself as a key player in shaping the governance of emerging technologies, ensuring that structural challenges faced by developing nations are addressed equitably.

Historically, India has been instrumental in forming coalitions of developing nations to ensure their perspectives are adequately represented in international negotiations. In the context of AI, India faces significant structural inequalities, including a lack of advanced computing infrastructure, high-quality datasets, and investment capital. As such, the country seeks to ensure that global AI governance frameworks consider these disparities.

Way Forward:

To this end, India has demonstrated leadership in multilateral platforms such as the G20 and the Global Partnership on AI (GPAI), reinforcing its commitment to shaping AI governance. Co-chairing the AI Action Summit in February 2025 alongside France, India is paving the way for a global governance model that prioritises equitable access to AI resources, risk mitigation, and international cooperation. The IndiaAI mission, launched in March 2024, further solidifies this commitment, with initiatives aimed at expanding access to computing power, improving data quality, and fostering AI capabilities in developing nations.

Thus, as India and the United States deepen their collaboration, even as a countermeasure to China’s technological rise, India is emerging as a central advocate for a fair and equitable global AI governance structure. With its track record of diplomatic leadership and growing influence in AI governance, India is uniquely positioned to ensure that future technologies serve humanity as a whole, upholding principles of equity, justice, and inclusion.

As Amitabh Kant, former CEO of NITI Aayog and one of India’s leading economic strategists, emphasised, the global technology race is only beginning, and India is well-positioned to emerge as a powerhouse in this new era. According to Kant, India has the potential to transform global governance by driving AI innovation, accessibility, and sustainable development, establishing itself as a crucial voice for the Global South. Beyond technological advancement, India aims to ensure that the digital revolution benefits a broader spectrum of nations, reducing existing structural inequalities and fostering inclusive progress.

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