The deal will improve supply chain of crucial minerals used for EV batteries
India and the United States have formalised a new agreement aimed at bolstering supply chains for critical minerals essential for electric vehicles and clean energy technologies. The Memorandum of Understanding was signed by India’s Trade Minister Piyush Goyal and U.S. Commerce Secretary Gina Raimondo during Goyal’s visit to Washington.
The agreement focuses on fostering cooperation in the exploration, extraction, processing, and recycling of vital minerals like lithium and cobalt, which are crucial for EV batteries and renewable energy applications.
The U.S. Department of Commerce emphasised that the agreement is designed to enhance resilience in critical mineral supply chains for both countries. By identifying key areas such as equipment, services and policies, the MOU seeks to facilitate commercial development in these sectors. The initiative is expected to benefit industries in both nations by streamlining supply chains and promoting best practices in mineral resource management.
Goyal highlighted the multi-faceted nature of the partnership, pointing out that beyond ensuring open supply chains for raw materials, the collaboration would extend to technology development and investment in green energy. He also noted that both countries plan to expand their engagement to include partnerships with mineral-rich nations in Africa and South America, aiming to diversify the sources of critical minerals and reduce global reliance on China.
Although the agreement signals a growing collaboration between India and the U.S. in the green energy sector, it falls short of a full-fledged trade deal. This means India will not yet qualify for benefits such as the $7,500 U.S. tax credit for electric vehicles, which Japan secured through a separate agreement. Nevertheless, the MOU sets the stage for deeper cooperation in the future and marks a significant step in strengthening global supply chains for minerals crucial to clean energy transitions.
