Seismic Shift

Economic Growth and Strategic Alignment Between the Bay Area and India


The San Francisco/Silicon Valley Bay Area has long benefited from a unique relationship with India. In November 2009, the Bay Area Council Economic Institute produced its first report on India, Global Reach: Emerging Ties between the San Francisco Bay Area and India, which documented the historic relationship between the two economies, the economic contributions of Indian Americans, and emerging fields of business opportunity. Ten years later in June 2019, a second report, The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age, carried the story forward, focusing on economic initiatives by the Modi Administration, accelerating digitalization, and the business opportunities these developments present. This report updates the narrative again, as India’s economic growth continues, spurred by an explosion of startups and venture investment, and as strategic imperatives have deepened political ties. As the alignment between India and the United States grows, the Bay Area will continue to hold center stage as both countries build closer ties through technology, innovation, and investment.

Once distant, U.S.-India relations have drawn progressively closer. New economic reforms have created large markets and reduced barriers to foreign investment. This economic engagement parallels a growing strategic alignment between the two countries, driven by the shared perception of a growing threat from China. Alignment is built on a foundation of shared democratic values, the rule of law, and economies built on market principles. In this new environment, India is not an ally in the formal sense—there is no mutual defense treaty between the U.S. and India—and it continues to protect its ability to maneuver as an independent actor. But on a practical level, the interests and challenges shared by the United States and India are drawing both nations more closely together.

Synergies between the Bay Area and India’s robust innovation ecosystem suggest a wide range of opportunities for collaboration. Key thematic areas include defense, critical and emerging technologies (enabled by iCET), standards, state-level collaboration on climate and energy, cross-national support for startups, AI and digital development, skilled immigration, trade, and supply chain integration.

The US-India relationship builds on trust, shared interests, and opportunity. The challenge and opportunity on both sides is how to develop deeper research and industrial collaboration, with shared networks and resources, that builds a pipeline of innovative technologies and applications. A strong innovation corridor between India and the United States—in which the Bay Area will play a key role—is critical to achieving this goal. As India shifts from being a global back office to a technology co-creator, the partnership that could result represents one of the great economic opportunities of the coming decade.


Read the Report (PDF)