The Economic Survey 2026 called for an urgent recalibration of India's global strategy amid a deepening U.S.-China tech and trade confrontation. Considering the situation a concern for India, the surveys suggest that the nation pursue a "strategic indispensability" to avoid risk amid rapidly reorganizing around AI, critical minerals, and semiconductors.

"Pax Silica" A Program To Control AI

The report states that "Pax Silica," a broad U.S.-led program that aims to control the AI value chain by controlling energy sources, rare earth materials, chip production, and software models, is at the center of this global realignment.

According to the Survey, this new order signifies the end of the oil and steel era and the start of a new one in which "compute" is the ultimate power lever.

US Leads The Global Tech Landscape

The global tech landscape is being deliberately redrawn by the United States. To prevent China from obtaining cutting-edge semiconductors and the equipment required to produce them, it has implemented stringent export regulations.

China has retaliated by limiting shipments of permanent magnets and rare earths, which are essential components of high-tech sectors, and by adding a number of foreign businesses to its "Unreliable Entities List."

China Engages In Internal Conflict

According to the Survey, they are proof of a full-fledged "strategic rivalry," in which both nations are eschewing efficiency-driven trade in favor of politically motivated economic choices.

Meanwhile, China is engaged in internal conflicts of its own. The survey presents a picture of economic stagnation characterized by deflation, weak domestic demand, and a collapsing real estate market.

China has relied more on exports and industry to sustain growth as its domestic engines slow. Beijing made a significant change in December 2025 when it opened a Free Trade Port experiment in Hainan to avoid foreign conflicts by easing investment and customs regulations.

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The United States, on the other hand, is working quickly to form an exclusive technology partnership. It is collaborating with "like-minded" countries through Pax Silica to establish a safe AI environment based on geopolitical alignment and robust supply chains.

According to the Survey, nations that control advanced materials, crucial APIs, and semiconductor production—those that become strategically indispensable—will gain power in this new order.

The survey emphasised that India cannot afford to play catch-up as it has to anchor itself in global value chains.