India examining impact of proposed American sanctions on AI chip exports

India is in the process of examining the impact of proposed sanctions by the United States on Artificial Intelligence (AI) chip exports. Government sources told CNBC-TV18 that the Ministries of Commerce and Industry, and Electronics & Information Technology, are assessing the potential impact of these restrictions on the development of emerging technologies in India, including AI hardware.

India’s National AI Mission is supporting investments worth ₹10,000 crore to develop infrastructure for producing over 10,000 GPUs (graphics processing units) in a public-private partnership (PPP) mode. The initiative aims to boost manufacturing and employment in the country.

The American proposal cites concerns related to national security and the economic interests of AI chip exporters to justify its recommendations. The proposal groups countries into three categories:

• The first group includes 18 US allies, from which imports are not recommended to be restricted.

• The second group, which includes India, faces proposed import volume restrictions for AI chips.

• The third group, comprising China, Russia, Iran, and Iraq, is subject to a complete ban on AI chip imports.

The American proposal is expected to take effect in four months, by which time Donald Trump is expected to have been sworn in as the new US President.

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