India-US spark stands defused?
Joe Biden's administration released 'Framework for Artificial Intelligence Diffusion', which aims to establish export and security regulations for the global AI market. It divides countries in three groups based on the trust they enjoy with the US. While this is an outgoing US president's rule-making, it reflects behavioural elements of the new Donald Trump administration's transactional foreign policy approach.
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India might have expected a more favourable classification — perhaps alongside Britain and Australia (tier-1). While US companies face no restrictions on deploying computing power in tier-1 countries, tier-2 nations will encounter limits on how much they can import unless the computing power is hosted in secure environments. For India, this could mean restrictions on importing GPUs, potentially affecting its plans to procure 10,000 GPUs to bolster domestic computing capacity. Meanwhile, tier-3 countries like Russia, China, Libya and North Korea face an almost total ban on US tech exports.
India's tier-2 status suggests two possibilities:
India is seen as a potential competitor to the US in AI. Or, the classification serves as leverage in trade and diplomatic negotiations, pressuring India to grant greater access to US firms. Now, Indian firms will have to navigate General Validated End User (VEU) programme, a system that explicitly ties
