The US and India have reached an agreement to build semiconductor manufacturing plants in India

The United States and India have signed an agreement to jointly build a semiconductor plant in India to support Prime Minister Narendra Modi's manufacturing development plans.

Bloomberg reported that according to a statement released by the White House, US President Joe Biden and Modi reached an agreement after meeting in Delaware on Saturday (September 21), the planned plant will focus on the production of infrared, gallium nitride and silicon carbide semiconductors.

The construction of the plant will be supported by the India Semiconductor Mission and supported by Bharat Semi, 3rdiTech Inc. And strategic technical cooperation between the United States Space Forces."

According to Indian newspaper The Hindu, the plant will produce chips for military hardware, critical telecommunications networks and electronic equipment in both countries.

This is not only India's first semiconductor manufacturing plant, but also one of the world's first national security multi-material manufacturing plants. "This is the first time the US military has agreed to work with India on high-value technology and is a landmark moment comparable in importance to the US-India civil nuclear cooperation agreement."

The manufacturing facility will reportedly be named "Shakti" and will focus on three key areas: advanced sensing technology, advanced communication technology and high-voltage power electronics. These products will be widely used in the national security field.

"President Biden and Prime Minister Modi praised the landmark arrangement to establish a new semiconductor manufacturing plant that will focus on national security, next-generation telecommunications, and green energy applications in the areas of advanced sensing, communications, and power electronics," the joint statement said.

India's strategic geopolitical location in Asia has brought renewed attention to the country's opportunities in the technology sector. Over the past decade, Modi has repeatedly stated that he will position India as an alternative to China, and has begun to lure some manufacturing from Apple Inc and Samsung Electronics Co to India.

The two countries also announced that they will provide about $1 billion in funding through the International Bank for Reconstruction and Development to support projects that "catalyze the construction of India's domestic clean energy supply chain."

Modi is visiting the US for the Quadrilateral Security Dialogue (Quad) summit. During his three-day trip, he will hold bilateral meetings with world leaders, attend and address the United Nations General Assembly, as well as meet with Indian expatriates and U.S. tech executives.

On Sunday, Modi met with Sundar Pichai, chief executive of Google's parent company Alphabet, Jen-Hsun Huang, chief executive of Nvidia, And David Ricks, chief executive of U.S. pharmaceutical company Eli Lilly, among others, met and spoke at an event for the Indian diaspora on Long Island, New York.

The next Quadrilateral Security Dialogue is scheduled to be held in India in 2025.