Policy Update
Aditi Bisht
(Picture Source: Mint)
Background
The relationship between the United States and India has entered a new era, where Artificial Intelligence (AI) and the digital economy are becoming the key drivers of cooperation. The Government of India initiated the National AI Mission in March 2024, with a budget of ₹10,300 crore. The mission aims at the development of a large-scale computing infrastructure, the development of in-country created models of Artificial Intelligence like Bharat Gen, the development of semiconductor manufacturing, and the nurturing of Artificial Intelligence talent through the IndiaAI Future Skills programme.
The TRUST initiative (Transforming the Relationship Utilising Strategic Technology) was initiated on February 13, 2025, when President Donald Trump and Prime Minister Narendra Modi presented it. The new framework substituted the prior iCET initiative and placed Artificial Intelligence (AI) at the centre of the bilateral relationship, but added semiconductors, critical minerals, biotech, quantum computing, and clean energy into the coverage.
Functioning
The TRUST framework commits the two countries to cooperatively preparing a U.S.–India Roadmap on Accelerating Artificial Intelligence Infrastructure with the following three priorities:
- Developing U.S.-origin AI infrastructure in India through partnerships and investment.
- Managing challenges of financing, power supply, and regulation.
- Actively promoting the development of new AI models and applications.
In a Track 1.5 conversation organised by Carnegie India on April 10, 2025, officials, private business leaders, and experts discussed challenges, and the conversation laid bare worries about the AI Diffusion Rules passed under the previous U.S. administration that placed India in a “Tier 2” category. It inhibits the import of high-tech chips (such as NVIDIA H100 and B200 GPUs), preventing the import and production of mass-scale AI infrastructure. Energy shortages, differential regulations, and inhibitive data norms were also identified as chief roadblocks.
Performance
The performance of India–U.S. collaboration on artificial intelligence and digital economy can be evaluated in two phases: the foundation laid under the Initiative on Critical and Emerging Technologies (iCET, 2023–24) and the inaugural year of the TRUST initiative (2025).
- Pre-TRUST foundation work (iCET, 2023–2024):
iCET established formal working groups on semiconductors, AI, quantum, 5G/6G, and biotechnology, which provided the institutional basis for TRUST.
In 2023, India and the United States resolved seven chronic WTO disputes through the Trade Policy Forum (TPF), clearing trade bottlenecks and facilitating easier technology collaboration.
- TRUST Initiative (2025 – First Year):
Released in February 2025, TRUST placed AI infrastructure as a flagship initiative of bilateral collaboration. The pledge to develop a U.S.–India Roadmap on Accelerating AI Infrastructure by the end of 2025 is one of the priority deliverables currently underway.
The Carnegie India Track 1.5 Dialogue (April 2025) offered the inaugural formalised consultation with government, industry, academia, and civil society. It underscored urgency areas such as: GPU availability shortages due to U.S. export controls (50,000 units per year). Unreliable power supply for India’s increasing data centres. Regulatory roadblocks in the form of delays in issuing licenses and fragmented cybersecurity standards.
On trade, both governments launched Mission 500, with a target of USD 500 billion two-way trade by 2030, and committed to start negotiations for a Bilateral Trade Agreement by 2025.
- Constraints and Data Gaps:
India has nearly 153 working data centres (2025), whereas the U.S. has more than 5,000, which is indicative of the infrastructural gap that needs to be bridged by TRUST.
No TRUST-specific programme dashboards, budget disclosures, or CAG/committee reviews have appeared in the published record to date. This renders a quantitative assessment premature for now.
Impact
Technology and AI Infrastructure
By putting artificial intelligence at the core of bilateral cooperation, TRUST has decisively turned the policy focus to developing a common digital economy framework. The publicising of the U.S.–India Roadmap on Accelerating Infrastructure (to be completed by the end of 2025) is a clear direction in this regard. The Carnegie India Track 1.5 Dialogue (April 2025) reflected the effect of this effort in bringing together government, industry, and civil society to discuss impediments like GPU shortages, power reliability for data centres, and regulatory challenges. While the consultations reflect momentum, reliable data on GPU installation, new infrastructure, or investment inflows is not yet public.
Critical Minerals and Value Chains
The Joint Strategic Mineral Recovery Initiative of 2025 is a future-thinking move designed to achieve access to lithium, cobalt, and the rare earths. Its strategic benefit is to establish the policy framework for robust supply chains. But operational specifics like the volume of recovery, capacity to process, or the joint projects remain awaited.
Trade and Economic Relations
The two nations under the Trade Policy Forum concluded seven WTO disputes in the year 2023 and embarked upon the ambitious Mission 500 vision of USD 500 billion trade by the year 2030. These steps created a positive background for TRUST, but direct economic benefit from the initiative is yet unreported. The impact of TRUST so far is directional and strategic – it has established frameworks, initiated dialogues, and strengthened faith in India–U.S. tech partnerships. To have a complete picture, the future stage needs to deliver publicly accessible programme MIS data, budget rationales, and implementation reports. Until then, the initiative’s impact should be accounted for as institutional preparation and not measurable outcomes.
Emerging Issues
1. Limitations Under U.S. AI Diffusion Guidelines
- The annual cap of 50,000 units for advanced GPUs halts AI infrastructure scaling in India.
- Recommendation: The two governments could negotiate a more reasonable cap system based on trust, strategic partnership considerations, and diversion safeguard measures.
2. Energy Supply for Data Centres
- Expanding data centres in India faces challenges like an unreliable power supply, low adoption of renewable energy sources, and high costs.
- Recommendation: Develop a dedicated power infrastructure that includes public–private partnerships and focused alternative energy investments, like geothermal or natural gas partnerships, expanding U.S.–India collaboration.
3. Regulatory Bottlenecks
- Multiple approvals and fragmented cybersecurity licensing governance, AI infrastructure expansion.
- Recommendation: Create a hub for data centre and AI project permits and approvals, issuing single-window clearances while harmonising telecom and cybersecurity regulatory frameworks.
4. Limited Private-Sector Financing
- Investment in minerals and their AI infrastructure is still in its infancy due to sky-high capital needs and ambiguous regulations.
- Recommendation: Strengthen funding capabilities with the U.S. Development Finance Corporation (DFC), public sector banks in India, and coordinated venture capital collectives for robust technology infrastructure funding.
Way Forward
The India–U.S. TRUST program, initiated in 2025, is a historic move in placing artificial intelligence and the digital economy at the core of bilateral relations. Its main goals, driving AI infrastructure growth, making supply chains resilient, advancing research and development, and strengthening trade and technology interlinkages, are well aligned with India’s larger national aspiration to become a knowledge-based, innovation-driven economy.
At the policy level, the initiative has already made a good institutional foundation. The proposed U.S.–India AI Infrastructure Roadmap, the Strategic Mineral Recovery Initiative, and the upcoming Bilateral Trade Agreement aim to establish a long-term basis for technology collaboration. These results are not simply bilateral deliverables; they feed straight into India’s Digital India, Atmanirbhar Bharat, and economic self-reliance objectives in key technologies.
To India, the overall contribution comes through speeding up its transition to a New India: a technologically powered economy, safe access to vital resources, universal digital infrastructure, and augmented global competitiveness. TRUST, hence, is not merely a bilateral effort but also a step towards forging India’s position as a world technology power and a principal player in the emerging digital economy.
References
About the Contributor: Aditi Bisht is a Research Intern at IMPRI. She holds a bachelor’s degree in Journalism and Mass Communication from Vivekananda Institute of Professional Studies (VIPS). Her research interests lie in government policy and economics
Acknowledgment: The author sincerely thanks Ms. Aasthaba Jadeja and the IMPRI team for their valuable support.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization.
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