India and the United States are set to sign an initial pact for cooperation on critical minerals this week, as part of efforts to strengthen trade ties despite recent diplomatic challenges. During Indian trade minister Piyush Goyal’s upcoming visit to Washington, an agreement is expected to be signed to partner and cooperate in the area of critical minerals, according to Indian government sources. Goyal will also be meeting with US Commerce Secretary Gina Raimondo and US Trade Representative Katherine Tai to discuss ways to enhance overall bilateral trade relations.
The signing of the initial pact on critical minerals is aimed at building supply chains, exchanging technical expertise, and fostering collaboration between Indian and American businesses in the sector. The memorandum of understanding (MoU) being negotiated between the two countries intends to increase and diversify essential critical mineral supply chains and leverage their complementary strengths. This move aligns with India’s strategic goal of securing critical mineral supplies to support the adoption of clean energy technologies.
State-run Coal India Ltd has been exploring lithium blocks in Argentina in partnership with a US company to ensure a stable supply of the battery material. In addition to the initial pact, India has proposed a separate critical minerals trade deal with the United States, which would prevent the imposition of tariffs and mirror a similar agreement with Japan that grants Japanese automakers greater access to US electric vehicle tax credits. India’s participation in the US-led Minerals Security Partnership underscores its commitment to ensuring an adequate supply of minerals to achieve zero-carbon goals.
The bilateral trade between India and the US reached nearly $120 billion in the 2023-24 fiscal year, marking a record high. Under the Biden administration, both countries have successfully resolved their disputes at the World Trade Organisation, a development that India hailed as “historic.” Prime Minister Narendra Modi and President Joe Biden recently held discussions in Delaware, both individually and as part of the Quad grouping, which includes Australia and Japan. The upcoming cooperation on critical minerals underscores the shared commitment of India and the US to deepen their economic partnership and collaborate on strategic initiatives.
The signing of the initial pact on critical minerals comes at a crucial time when global demand for these resources is on the rise, driven by the transition to clean energy technologies. By partnering with the US, India aims to secure a stable supply of critical minerals such as lithium and nickel, essential for the production of electric vehicles and renewable energy systems. The proposed agreement will not only facilitate the exchange of technical know-how between Indian and American companies but also create opportunities for joint ventures and investment in critical mineral projects.
As part of its strategic efforts to strengthen ties with the US, India is engaging in a series of trade initiatives to enhance collaboration and promote economic growth. The proposed critical minerals trade deal with the United States underscores India’s commitment to diversifying its mineral supply chains and supporting the transition to a sustainable, low-carbon economy. By aligning its efforts with global initiatives such as the Minerals Security Partnership, India is positioned to play a key role in securing critical mineral supplies and driving the adoption of clean energy technologies at a global level.
