#152 Assessing Technology Denial Regimes
In this edition of Technopolitik, Arindam Goswami explores what makes a technology denial regime work or fail. This piece is based on Arindam’s latest discussion document, “A Strategic Assessment of Technology Denial Regimes”.
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In the summer of 1987, members of the United States Congress gathered on the White House lawn and smashed Toshiba radios and television sets with sledgehammers. Their anger was visceral and, in a narrow sense, understandable. Between 1982 and 1984, Toshiba Machine Company and Norway’s Kongsberg Vaapenfabrikk had secretly sold nine precision milling machines to the Soviet Union for roughly seventeen million dollars - machines that could carve submarine propeller blades to tolerances measured in microns. Soviet submarines had been so notoriously loud that American submariners called them “roaring cows,” detectable from a hundred miles away. After those nine machines, Soviet submarines became twenty times quieter. Detection range collapsed to about five miles. The US Department of Defense estimated it would cost thirty billion dollars to compensate through new detection systems and additional nuclear submarines. Seventeen million dollars in, thirty billion out: a strategic disadvantage ratio of nearly two thousand to one.
This episode - part Cold War thriller, part cautionary tale - sits at the centre of a question my recent research attempts to answer seriously: when do technology denial regimes actually work, and when do they quietly destroy themselves? The answer, as I argue in “A Strategic Assessment of Technology Denial Regimes” (Takshashila Discussion Document 2026-04), is more complicated and more ironic than policymakers typically acknowledge.
What Makes a Denial Regime Work, Or Fail
Technology denial regimes are as old as strategic competition itself, but their modern form - multilateral export controls, supplier cartels, sanctions regimes - took shape in the Cold War. The Coordinating Committee for Multilateral Export Controls, better known as CoCom, ran from 1949 to 1994, making it one of the longest technology control attempts in history. It was never a treaty. It operated as a gentlemen’s agreement, housed in a room in the US Embassy annex in Paris, unknown to most of the public, with no legal force and no enforcement mechanism. That structural informality proved fatal. When France sold ten machines similar to the Toshiba ones to the Soviets and faced essentially no consequences, the moral hazard was never addressed. If one member could defect without cost, why would any other hold the line?
My research identifies two axes that determine whether a technology denial regime succeeds or fails: the degree of supply chain control the imposing country exercises, and the depth of multilateral cooperation it can sustain. When both are high, you get what the paper calls the “Iron Gate” - the near-impenetrable barrier the Nuclear Suppliers Group constructed around uranium enrichment technology after India’s 1974 “Smiling Buddha” nuclear test. That test exposed a remarkable oversight: India had used plutonium from a Canadian research reactor and heavy water from the United States, both supplied for peaceful purposes, to build a bomb. The NSG was founded in direct reaction, and it works because both axes are genuinely strong - the nuclear fuel cycle is concentrated in a handful of countries, and major suppliers coordinate tightly.
When both axes are weak, you get what the paper calls the “Hollow Threat.” The 1990s attempt to restrict strong encryption is the defining example. The US treated robust cryptographic software as a munition subject to export controls. The effort collapsed almost immediately, because - as the paper puts it - cryptographic schemes are just mathematics, and any competent programmer can implement them. There were no chokepoints in the supply chain, no multilateral buy-in, and no realistic enforcement mechanism. Between these extremes sit the “Fragile Bloc” (strong supply chain control, weak coordination) and the “Paper Wall” (strong coordination, dispersed supply chains), each with its own characteristic failure modes.
For targeted countries, what matters, as the other framework in my research paper identifies, is indigenous capabilities of the country, which could be research and development (R&D) capabilities or manufacturing capabilities or any other which provides it ways to counter denial regimes. What is also important is the ability to form alternative partnerships which can help it overcome the impact of these controls, as we will see later in this essay.
And all of this will fail unless feedback loops are incorporated into the entire process. These feedback loops will assess a targeted country’s abilities and state of development, to recalibrate controls. This recalibration could also see the forthcoming of certain incentives to drive the expected behaviour from targeted countries. On the part of the targeted country, this means it should assess its own state periodically to understand whether it can achieve some amount of technological sovereignty which can help it overcome tech denial regimes. If it is not up to the mark, then there have to be strategic pivots towards more partnerships or negotiations.
The Paradox of Strategic Reversal
The most unsettling finding of this research is not that denial regimes fail - it’s the particular way they tend to fail, and who ends up stronger on the other side. The paper calls this pattern strategic reversal, and its most striking historical illustration predates CoCom by a year.
In 1950, the United States imposed the ChinCom embargo on China - a punishment for its entry into the Korean War that was even harsher than the CoCom controls applied elsewhere. US-China trade collapsed from around sixty million dollars in 1949 to less than a hundred thousand dollars by 1952: a 99.8% reduction in three years. The strategic logic was straightforward. China was technologically backward and had no serious industrial base. Isolate it and it would be contained. What actually happened is that the embargo pushed China directly and irrevocably into the Soviet Union’s arms. The Soviets responded with 156 major industrial assistance projects - factories, blueprints, trained engineers, entire knowledge systems transferred wholesale to Chinese institutions. When the Sino-Soviet split came in 1960 and Soviet support evaporated overnight, China had enough of a foundation to go it alone. By 1964, it had nuclear weapons. By 1970, it had put a satellite in orbit. ChinCom helped create the very threat it aimed to prevent.
There is a version of this paradox that recurs across eras with almost eerie consistency. When the Soviet Union launched Sputnik in 1957, the US responded by creating NASA, restructuring science education, and launching Apollo. The country that felt most threatened transformed itself more than the rival did. Today, anxiety about Chinese advances in AI and semiconductors has directly produced the CHIPS Act and a surge in federal research funding. The imposing country keeps getting changed by its own restrictions - often more profoundly than the targeted one.
India as Case Study: From Denial to Competitive Advantage
No country offers a richer empirical record of navigating technology denial than India. It has been on the receiving end of restrictions across nuclear, space, supercomputing, and defence sectors - simultaneously, for decades - and its adaptive responses across these domains are among the most instructive in modern technological history.
The nuclear case is sober. After the 1974 test triggered the NSG, India spent decades building the entire nuclear fuel cycle indigenously - uranium enrichment, heavy water production, reactor design, fuel fabrication - at enormous cost and opportunity. It worked, but slowly and expensively. By 2008, the US essentially acknowledged this reality by signing the Civil Nuclear Agreement, which brought India back into civilian nuclear commerce without it ever signing the Non-Proliferation Treaty. The denial regime didn’t stop India. It made India’s path longer and more expensive, and eventually the regime had to accommodate the reality India had created.
The space case is more optimistic, and more interesting. When the Missile Technology Control Regime cut ISRO off from key propulsion and launch technologies, India didn’t simply try to replicate what was denied. It innovated around the constraint. The result - low-cost satellite launch capabilities that now compete globally and undercut established providers on price - is a textbook example of what Clayton Christensen called disruptive innovation operating under constraint. India’s launch vehicles, developed initially from necessity, became a global competitive product. The limitation became the advantage. In my framework, India occupies the “Resilient Transformer” quadrant: a country with strong indigenous R&D that combines domestic capability with selective alternative partnerships to emerge from denial stronger than before.
The supercomputing case adds another layer. After the 1998 nuclear tests triggered American sanctions, India found itself largely cut off from international supercomputing capability at a moment when it needed it for weather modelling, scientific simulation, and defence applications. The response was slow, expensive, and - eventually - successful. India’s National Supercomputing Mission, launched in 2015 partly in response to these restrictions, has deployed 37 supercomputers totalling around 40 petaflops, with approximately 50% indigenous content. It is a long way from global leadership, but it is no longer dependent.
The Weapons No One Talks About
The conventional image of a technology war involves export control lists, licensing regimes, and customs enforcement - bureaucratic machinery designed to stop boxes from crossing borders. But the most consequential weapons being deployed today operate well beneath that radar.
Financial infrastructure is perhaps the most underappreciated. When Iran was disconnected from SWIFT - the Belgian cooperative that routes payment messages between banks globally - in 2012, it lost the bulk of its oil revenue almost immediately. Not because any technology was denied. Because the payment rails connecting it to global commerce were switched off. The same happened to Russian banks after the 2022 Ukraine invasion. The Committee on Foreign Investment in the United States operates with similar logic but more quietly. Expanded significantly by the 2018 FIRRMA legislation, it can now review minority stakes and joint ventures, operates in secrecy, rarely explains its decisions, and gives the President blanket authority to block transactions on national security grounds. It is, as the paper describes, one of the most quietly effective technology denial tools the US possesses - a scalpel that works without the political theatre of export control announcements.
Standards bodies represent another underappreciated battleground. The country or company that writes the technical standard - that gets its approach embedded into the international baseline - creates a form of de facto technology denial against anyone who wasn’t at the table. China’s aggressive entry into 3GPP, which sets 5G telecommunications standards, means technical requirements beneficial to its ecosystem are now embedded into the global baseline. Late movers face a binary choice: build to those standards or build a separate and incompatible ecosystem. Meanwhile, the Wassenaar Arrangement - which replaced CoCom in 1996 - has become a victim of its own consensus requirement. Any member can block updates to the controlled technology list. Adding new categories like advanced surveillance software has become extraordinarily difficult, meaning the control list perpetually lags behind the technology it’s supposed to govern. The architecture of multilateral cooperation, in other words, can itself become an asymmetric weapon for countries that benefit from institutional paralysis.
A Prediction on the US-China Semiconductor Confrontation
The current US-China technology confrontation in semiconductors and AI is, in several respects, unlike any previous denial regime. But history rhymes, and the frameworks developed in this research suggest a fairly clear trajectory.
On the semiconductor side, the US and its allies have correctly identified the most critical chokepoint: ASML, one Dutch company, makes the only machines in the world capable of manufacturing the most advanced chips using extreme ultraviolet lithography. By coordinating with the Netherlands, Japan, and South Korea to restrict ASML’s equipment exports to China, the alliance has created a genuinely effective short-term barrier. China cannot get those machines, and it cannot build them quickly. The tactical gains over the next three to five years are real.
But the semiconductor case is qualitatively different from nuclear technology denial. Semiconductors are not an end-use military capability with narrow civilian applications. They are central to virtually every dimension of modern economic life. This dual-use ubiquity imposes enormous economic costs on the denial regime - costs that will intensify as supply chains fragment and Western semiconductor firms bleed revenue from restricted Chinese market access. Public choice economics tells us that concentrated industrial interests usually outlast diffuse national security concerns in the policy arena, especially as strategic advantages become less visible and economic costs become more so.
And China, unlike most historical targets of denial, sits in what my framework identifies as the “Maximum Resilience” position: high indigenous R&D capability combined with high access to alternative partnerships. China is already pouring resources into neuromorphic computing, photonic processors, and quantum architectures - the next generation of computing that might render silicon-based manufacturing constraints entirely irrelevant. The US may have used its current chokepoint to catalyse the very technologies that make that chokepoint obsolete.
AI is even harder to contain. Unlike semiconductors, AI is largely software, algorithms, and the mathematical intuitions of researchers. Paul Romer’s endogenous growth theory captures why this matters: knowledge-based technologies have spillover effects built into their nature. You cannot put export controls on what someone learned during a PhD. When Meta released the weights of its LLaMA model publicly in 2023, those weights became permanently available to anyone with an internet connection and basic hardware. A single decision by one private American company effectively undermined a significant piece of US government AI containment strategy overnight.
What History Teaches
The overall conclusion of this research is genuinely humbling for anyone who believes technology denial is a reliable instrument of long-term strategic advantage. The most successful denial regimes in history are those that eventually transformed into cooperative frameworks - acknowledging the shifting distribution of technological capabilities and adjusting accordingly. The 2008 US-India Civil Nuclear Agreement is the clearest example: a recognition that the regime had not stopped India, but that bringing India into a cooperative framework still served both sides’ interests better than continued confrontation.
Technology denial works best when it is narrow, targeted at genuinely critical technologies, sustained by real multilateral cooperation, and built with adaptive feedback mechanisms that allow regular recalibration. It works worst when it is broad, unilateral, static, and aimed at technologies that are inherently difficult to control. The US-China confrontation in semiconductors and AI has elements of both - which is precisely why its trajectory is so difficult to predict, and so important to understand through frameworks grounded in historical evidence rather than geopolitical instinct.
The Toshiba scandal began with nine machines and ended with a thirty-billion-dollar liability. The lesson is not that technology denial is futile. The lesson is that the costs of getting it wrong are paid at a ratio of two thousand to one - and that the regimes which endure are those whose designers understood that lesson before they began.
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