NEW DELHI: The curtain rises on a new act in the world of high-tech rivalry, and Southeast Asia is stealing the spotlight.
Once a quiet player, the region is now dazzling the audience in the global semiconductor and rare earth mineral drama. Meanwhile, India finds itself with a unique chance to join this grand production—a role partly shaped by the rising chorus of US tariffs and trade realignments that have everyone rethinking their supply chain scripts.
For decades, China’s mastery behind the scenes kept the rare earth show running. But suddenly, the stage is shifting. There’s no single magic wand to disrupt China’s command.
Instead, the combined bright lights of US defense support, EU market regulation, JOGMEC’s quiet but strategic overtures, and India’s own explorations are beginning to change the choreography. It’s not just about digging up minerals anymore—it’s about alliances, investment, and technology-sharing.
Forging new ground
According to a report from the Politeia Research Foundation, those who blend capital, creativity, and globally trusted standards have the best shot at thriving in this new rare earth era. Countries are vying to navigate these treacherous waters without getting tangled in a strategic web.
India, guided by both ambition and necessity, is now deep in talks to refresh its ASEAN-India Trade in Goods Agreement (AITIGA).
The old pact had left India exposed, having granted broad-duty concessions—71 per cent of tariff lines opened up—while some ASEAN partners, like Indonesia, offered far less.
The result? India’s trade deficit with ASEAN exploded from $5 billion in 2010–11 to a jaw-dropping $43.57 billion in 2022–23. The big culprit: semiconductors and other high-value tech imports.
No wonder India’s negotiators are sharper than ever this time. They’ve seen loopholes in the origin rules get exploited and watched as countries like Singapore, Malaysia, and Thailand reaped the rewards.
Now, the India-Singapore Comprehensive Strategic Partnership (signed just last September) is forging new ground, building a specific framework for sharing knowledge and growth in the semiconductor ecosystem.
Stakes are high
If the new deal clicks, it could help India sidestep China and open Singapore’s door to the booming Indian market.
Malaysia and Vietnam, meanwhile, loom as India’s trade titans in ASEAN—Malaysia exchanged $20 billion in goods just last year. Yet, the data tell the story: India wants more balance, and innovative new terms. Vietnam, with its bustling factories, is both a partner and a rival—a taste of the competition India faces as it races to become a global manufacturing powerhouse.
Behind the scenes, countries like Thailand and Indonesia are also adjusting their roles, angling for more influence as the world seeks alternatives to China-dominated supply chains.
The stage is crowded, the stakes are high, and every cast member is vying for top billing in a rapidly changing semiconductor landscape.
But it’s not just about chips. The rare earth mineral game is equally dramatic. Breaking China’s monopoly—especially in processing, and especially with tricky neighbors like Myanmar—is India’s next big opportunity.
If India and Southeast Asia can work together, invest smartly in Myanmar, and tap into global initiatives like the G7 Critical Minerals Action Plan, they could rewrite the script entirely.
In this unfolding saga, Southeast Asia rises as a power player, but India’s choices and alliances could help set the scene for a more balanced, dynamic future—one where the supply chains of tomorrow are built not on dependency, but on strategic strength and shared innovation.
