Pax Silica Explained: Why the Global Tech Economy Is Being Rewired Around Chips, AI and Rare Earths — and Where India Fits In

The global economy today is shaped as much by long-standing inequalities as by rapid technological shifts. While the North–South divide in income and resource consumption endures, new frontier technologies — semiconductors, Artificial Intelligence (AI), and advanced digital infrastructure — are emerging as the decisive engines of growth and power. At the heart of this transition lies a less visible but critical factor: control over Rare Earth Elements (REEs) and the manufacturing ecosystems that convert them into strategic technologies. It is against this backdrop that the United States convened the first-ever Pax Silica Summit in December 2025.

What is Pax Silica and why was it launched?

On December 12, 2025, the United States brought together a select group of technologically advanced and resource-rich countries to launch the Pax Silica initiative. The name is deliberately symbolic: “Pax” means peace in Latin, while “Silica” refers to a foundational material in semiconductor manufacturing. Together, they signal an ambition to anchor peace and prosperity in secure, trusted technology supply chains.

The Pax Silica Declaration emphasised three goals — reducing coercive dependencies, securing global technology and AI supply chains, and building trusted digital infrastructure. In essence, Pax Silica seeks to ensure that the materials and manufacturing processes powering the digital age are insulated from geopolitical disruption and political leverage.

Who are the key players in the Pax Silica grouping?

The initial composition of Pax Silica reflects a careful blending of technological capability, resource endowment, and financial muscle. Japan and the U.S. anchor the group’s advanced technology base. Australia plays a crucial role as a leading exporter of lithium and a country with substantial REE reserves.

The Netherlands contributes through firms such as ASML, whose lithography systems are indispensable for advanced chip manufacturing. South Korea brings its global dominance in memory chip production, while Singapore adds decades of experience as a semiconductor manufacturing hub closely integrated with U.S. firms.

Beyond hardware, Israel stands out for its strengths in AI software, defence technologies and cybersecurity. The United Kingdom, with the world’s third-largest AI market, contributes a dense innovation ecosystem of research labs and start-ups. Qatar and the United Arab Emirates bring sovereign capital and ambitious plans to build world-class AI ecosystems.

Entities such as European Union, OECD, Canada and Taiwan participated as observers, leaving open the possibility of future expansion.

The China factor: why rare earths have become geopolitical

At its core, Pax Silica is a response to China’s dominance in the REE supply chain. Over the years, China has emerged as the principal supplier and processor of rare earths, giving it the ability to influence global flows of critical materials.

This leverage has increasingly been used strategically. In response to tariff measures announced by U.S. President Donald Trump, China suspended REE exports to the U.S. and other countries. India, too, faced disruptions in the supply of rare-earth magnets — essential for automobiles and electronics — until firms complied with stringent Chinese licensing conditions, including assurances that the materials would not be used for defence or dual-use purposes.

The COVID-19 pandemic had already exposed the fragility of supply chains dependent on a single country. Pax Silica builds on earlier efforts such as the Supply Chain Resilience Initiative launched by India, Japan and Australia in 2021, and the Quad Critical Minerals Initiative announced in Washington in 2025.

Why India was missing — and why that may change

Despite being part of several supply-chain resilience frameworks, India was notably absent from the inaugural Pax Silica Summit. This raised questions, given India’s growing technology market and strategic importance.

However, on January 12, the new U.S. Ambassador to India, Sergio Gor, indicated that India would soon be invited to join. If that happens, India would become both the first developing country and the first non-ally — though strategic partner — of the U.S. within Pax Silica.

What India brings to the Pax Silica table

India’s strengths lie less in current scale and more in potential. Indian and American firms have a long history of collaboration in information technology. India possesses robust digital public infrastructure and a rapidly expanding AI market, with growing enterprise adoption.

While India’s semiconductor and AI ecosystems lag behind those of existing Pax Silica members, the government has launched dedicated Semiconductor and AI Missions with significant financial allocations. Private players such as the Tata Group have entered chip manufacturing, while firms like Micron have announced investments in India.

India is also producing a large pool of advanced talent. Thousands of Indian students pursue graduate and doctoral studies in computer science and allied fields in the U.S. If restrictive visa regimes persist, many are likely to return, strengthening India’s domestic talent base. Meanwhile, India is already working with countries like Japan and Singapore to build resilient semiconductor supply chains, and Indian firms are collaborating with Israeli partners on fabrication projects.

The strategic and policy dilemmas India must navigate

Joining Pax Silica would not be without challenges. The grouping largely consists of high-income U.S. allies with mature technology ecosystems. India’s developmental priorities differ. As an emerging economy, New Delhi will want policy space to protect and nurture domestic semiconductor and AI industries through subsidies, public procurement preferences and calibrated import controls.

This could create friction, particularly with Washington’s current scepticism toward industrial policy. India will also be keen to ensure that participation does not dilute its strategic autonomy or force alignment on security issues where its positions diverge in nuance.

A future of competing tech blocs?

Looking ahead, the global economy may well see the emergence of two parallel REE and technology supply chains — one centred on China and the other around Pax Silica. Beijing has shown little inclination to accommodate the development needs of emerging economies within its REE framework, strengthening the appeal of alternative arrangements.

Given its long-standing collaboration with Western technology firms, India may ultimately lean toward Pax Silica. Yet, amid strains in India–U.S. economic ties, New Delhi is likely to proceed cautiously, seeking clarity on how Pax Silica evolves and how inclusive its rules will be.

In a world where chips, AI and minerals are fast becoming the new currency of power, Pax Silica marks an early attempt to reshape the global tech order — and India’s choices will significantly shape how that order unfolds.