The looming classification of India as a Tier 2 country leaves chipmakers, resellers, purchasers, and importers with limited time to ship US-made GPUs to India ahead of the new export controls. This means importers will have limited time to capitalize on India’s thriving tech trade market.
While May 14 might sound far in the future, shipping GPUs to India involves navigating a complicated import regulation landscape, high import duties, and frequent customs clearance delays.
Additionally, dual-use goods face import restrictions and require additional certifications or permits, which are difficult and time-consuming to obtain. Firstly, an Import Export Code (IEC) must be obtained from the Directorate General of Foreign Trade. Additionally, a Bureau of Indian Standards (BIS) Certificate is crucial for tech imports. An Extended Producer Responsibility (EPR) Certificate is also vital for Electrical and Electronic Equipment importers.
The application timelines for each of the above requirements and other compliance documents can be up to one month. Even once goods arrive in India, congestion is common at seaports, airports, railways, and roads and can cause delays of up to 3 weeks.
When racing against time to ship GPUs to India, it’s easy to make a mistake if you aren’t an import expert. A missing document can delay your shipment by up to two weeks, and a mistake in your customs documents can render your VAT unreclaimable, causing a significant loss of time and money. India imposes up to 28% VAT/GST, making VAT recovery crucial.
Ship Your GPUs to India Before May 14
The TecEx Control Tower allows us to fast-track your logistics and fulfil your import compliance requirements with our end-to-end supply chain service.
We will cater to your unique circumstances, source your permits and certifications, arrange competitive freight, ensure seamless customs clearance, insure your shipment at 110% of the replacement value, safeguard VAT recovery, and maintain transparent shipment tracking from pickup to delivery.
This solution will reduce your shipping timeline as we can use our existing permits for your shipment, complete an in-depth compliance sweep to prevent delays, and ensure first-time customs clearance.
Safeguard VAT Reclaim
Shipping high-value goods to India carries a high risk of sunk costs, as VAT/GST rates can be up to 28%, and VAT reclaim is a complex process. This means that a $100 million shipment of GPUs would incur a VAT of $28 million, and the slightest mistake on your import documents can render this amount completely unrecoverable. What’s more, VAT can only be reclaimed by the owner of the goods – we will structure your GPU shipment to have a local invoice to enable the end-user to reclaim VAT.
Don’t miss out on India’s tech market because of US export controls, and don’t risk losing 28% of your hardware value due to a simple error on your customs documents.
AI Diffusion Export Controls on US GPUs
Until now, US export controls on semiconductors have had enough loopholes for countries like China to access US AI chips.
In one of its final acts, the Biden administration proposed the “Export Control Framework for Artificial Intelligence (AI) Diffusion” to protect advanced AI models and prevent their illicit application by geopolitical adversaries. Trump has yet to rescind or enact the framework, but here’s how the export controls may look:
- Country-specific caps would be placed on GPU exports from the US to prevent countries of concern from accessing and training advanced AI models, possibly limiting individual shipments as well as total shipments to a location based on GPU computational power,
- Shipments of advanced closed-weight AI models that require 1026 computational operations for training would require authorization,
- GPU shipments will not require a license or count towards the caps if their computation power is below or equal to 1,700 of the most advanced GPUs, currently Nvidia’s H100 Tensor Core GPU,
- 18 Tier 1 (T1) countries, covering close allies and semiconductor key players, would be exempt from the law,
- Around 150 Tier 2 (T2) countries, including India, would be limited on the US-origin GPUs they can import, and most shipments would require US authorization,
- Tier 3 (T3) countries consisting of Group D5 and Macau, including China, North Korea, Russia, and Iran, would be strictly forbidden from importing US-origin GPUs, and
- T1 and T2 governments and companies could apply for Universal Verified End User (UVEU) status, National Verified End User (NVEU) status, or obtain specific licenses to be granted certain exemptions for shipping US GPUs.
With these export controls, Rules of Origin will be more critical than ever to ensure countries and companies comply with stringent import limits and avoid the confiscation of high-value shipments.
Now is the time to expedite your GPU shipments to India. TecEx can streamline your shipments to get your GPUs to India before the export controls take effect, from quickly preparing your India import permits and customs documents to optimizing your logistics and safeguarding your VAT reclaim.
Case Study | Importing GPUs to Indian Data Centers
Shipping GPUs to India from the US presents significant challenges due to stringent regulations and complex compliance requirements. A global web hosting service provider faced difficulties importing over $2 million worth of server racks into India, primarily due to the heavily regulated nature of data center networking equipment and the high risk of customs revaluation, which can unpredictably alter costs and affect profit margins. Additionally, permit requirements for wireless goods can significantly extend lead times.
To address these challenges, the company partnered with TecEx, which took on the import risk and managed all aspects of the import process. This included obtaining necessary permits and licenses, coordinating with manufacturers in the US and Taiwan, and navigating global supply chain issues such as chip shortages. TecEx’s expertise ensured compliance with local regulations, facilitated smooth customs clearance, and enabled timely delivery to multiple locations across India. Read the full case study here.
Opportunities for US-India Tech Trade
In the recent press conference between President Trump and Prime Minister Modi, Trump announced that “India and the U.S. will jointly work in areas of artificial intelligence, semiconductors, quantum, biotechnology, and several other technologies.” Their joint statement summarizes three key topics affecting trade, which may pave the way for the future of semiconductor and AI trade between the US and India, potentially making it an ideal time to ship GPUs to India.
US-India Trade and Investment
Under the new “Mission 500,” the US and India aim to double total bilateral trade by 2030 to reach $500 billion and propel growth for both parties. Through a Bilateral Trade Agreement, the US and India strive to open market access and reduce trade barriers while entrenching supply chain integration.
The two countries strive to improve their trade relationship in a way that ensures fair trade, protects national security, and creates jobs. Furthermore, India has recently lowered tariffs on certain goods, like ICT products. These investments and open trade will likely streamline shipping GPUs to India from the US.
US-India Technology and Innovation
The US and India are launching the TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative to facilitate collaboration in critical emerging technologies. At the same time, they will promote “the use of verified technology vendors” and the protection of sensitive technologies. This initiative will also encourage the creation of resilient supply chains for goods like semiconductors.
In addition, the US and India will create a Roadmap for Accelerating AI Infrastructure, which aims to:
- Promote industry partnerships and investments in data centers,
- Facilitate cooperation on the development and accessibility of AI technology, models, and applications,
- Apply the protections and controls needed to protect this advanced technology, and
- Reduce non-tariff regulatory barriers.
Furthermore, the US and India have recognized critical minerals (such as lithium and cobalt) as strategically important for advanced technologies and manufacturing. With the Strategic Mineral Recovery initiative, the US and India will cooperate in utilizing, processing, and recycling critical minerals.
The US National Science Foundation will collaborate with the Indian Anusandhan National Research Foundation to research emerging technologies. The partnership stems from ongoing collaborations in areas ranging from semiconductors to machine learning and telecommunications.
President Trump and Prime Minister Modi agreed “to address export controls, enhance high technology commerce, and reduce barriers to technology transfer between [the] two countries, while addressing technology security.”
US-India Multilateral Cooperation
The US and India are committed to increasing cooperation across the Indian Ocean and have launched the Indian Ocean Strategic Venture to facilitate coordinated investments in economic developments.
Meta has announced an undersea cable project to connect five continents, and India has shared its intention to invest in their financing, maintenance, and repair. This investment and cross-continent connectivity could make India an attractive destination for data centers and colocation.
Artificial Intelligence AI in India
India’s ever-growing tech sector and the recent press conference between American President Trump and Indian Prime Minister Modi show a bright future for its tech sector. Upcoming US-India partnerships promise to enhance tech sectors, notably for semiconductors and Artificial Intelligence.
India’s AI market is expected to be worth $28.37 billion by 2030. Sam Altman, CEO of OpenAI, stated, “India should be one of the leaders of the AI revolution.” Companies like Microsoft have seen the country’s AI potential. The tech giant recently announced a $3 billion investment in India’s cloud and AI infrastructure and upskilling, aiming to train 10 million citizens by 2030.
Nvidia CEO Jensen Huang described India’s IT expertise as an “amazing natural resource” and believes “India’s technical talent is unmatched.” However, technology analyst Prasanto Roy explained to the BBC that he and others don’t see India producing a product like DeepSeek on the horizon yet. According to the ITA, this comes from challenges like data privacy concerns, infrastructure constraints, and skills shortages. This is why the agreed cooperation between President Trump and Prime Minister Modi may be a welcome catalyst for an Indian AI tech revolution.
However, while even US-based Nvidia has partnered with a range of India’s tech giants to upskill developers, the future of high-tech trade between the United States and India remains clouded by the contradiction between emerging partnerships and protectionist policies.
Safeguard your competitive advantage and ship your graphics cards to India before May 14.
What Does The Future Hold For US-India AI Tech Trade?
While the recent agreements between the US and India suggest an idyllic future with seamless US-India market access to the latest advanced technologies, it is well-known that national security is one of Trump’s primary concerns. Only time will tell how many barriers he’s willing to lift to boost technology shipments to India.
The Trump administration’s recent America First Trade Policy promises to enhance America’s technological competitive edge and defend its national security. This involves fortifying loopholes in export controls to prevent dual-use goods and technologies from reaching their strategic rivals. Whether US-India collaboration or American protectionism prevails is difficult to ascertain, as export controls could affect US chipmakers’ ability to ship GPUs to India.
Additionally, Trump’s looming threat of reciprocal country-based tariffs or a blanket tariff of 10% on all nations creates uncertainty for the future of US-India trade relations.