Race Against the Cap: Will India Unlock More US GPUs for Its Tech Dreams?

India is seriously considering high-level dialogue with the United States to ease tough Biden-era curbs on the import of cutting-edge GPUs—essential hardware for AI and data center expansion. The US export controls, to become operational shortly, put India in a "Tier 2" group, limiting GPU imports to 50,000 units until 2027 and subjecting them to license requirements for bigger shipments, potentially holding back India's quest to become an AI hub.

 

Key Highlights:

 

The new American regulations, implemented towards the end of the Biden administration, restrict India's access to advanced AI chips, while 18 top US allies have no such restrictions imposed. India's AI mission, which seeks to create a 10,000-GPU ecosystem, could face increased expenses, delivery slowdowns, and licensing barriers if the cap stays the same.

 

The Indian government is considering the effect across ministries and is likely to open negotiations with the US to obtain exemptions or increased caps, particularly for government-sponsored projects and public-private partnerships propelling India's AI infrastructure.

 

There is also potential for government-to-government agreements to double the cap to 100,000 GPUs, and some institutions can seek special treatment to import as much as 320,000 GPUs over two years.

 

The terms are still not fixed and may be amended by the new US administration. Both nations have indicated desire to increase cooperation in AI, semiconductors, and tech supply chains, which gives rise to hope of a diplomatic solution.

 

With India fast-tracking its AI aspirations, the results of these negotiations might determine the country's future technology and competitiveness at the global stage.

 

Sources: Economic Times, Financial Express, Business Standard, Indian Express, TecEx