India and the US on Friday signed an MoU to strengthen co-operation in the semiconductor sector.

The MoU aims to establish a semiconductor supply chain and strengthen innovation, under the framework of India-US Commercial Dialogue, which resumed after three years on Friday.

Commerce and industry minister Piyush Goyal and visiting US commerce secretary Gina Raimondo discussed possibilities to unlock trade and investment opportunities between the two countries.

The MoU seeks to establish a collaborative mechanism between the two governments on semiconductor supply chain resiliency and diversification — under US’s Chips and Science Act and India’s Semiconductor Mission.

The chips act was signed by US President Joe Biden in 2022 to boost funding for the American semiconductor industry.

The MoU also envisages mutually beneficial R&D, talent and skill development.

“We see India as a trusted technology partner, and we want to continue to deepen our technological relationship with India...We hope to work more closely with India and the private sector around those technologies,” Raimondo said.

Raimondo’s visit to New Delhi comes amid increasingly tight US export restrictions on chipmaking technology to China which Washington says are aimed at hobbling Beijing’s ability to expand its chip industry and enhance its military capabilities.

India has been seeking to attract more investment in the chipmaking and display sector under a $10 billion incentive plan. Last year, the government said it would cover 50 per cent of the project cost of new local semiconductor facilities.

Raimondo said India’s ambitions to expand its tech sector were “totally aligned with the United States’ desire and goal to make our supply chain more resilient”.