The October agreement aimed to strengthen supply chain resilience for critical minerals such as lithium and cobalt. While India ranks third in the world for rare earth reserves, the US holds the seventh position. In January, India unveiled its own ₹34,300 crore critical minerals mission to achieve self-reliance in critical minerals.
Discussions on modifying the minerals pact have picked up as work on a Bilateral Trade Agreement (BTA) gains momentum, one of the two people cited above said. “New Delhi is pushing to upgrade the existing Memorandum of Understanding (MoU) into a full-fledged partnership agreement, aiming to integrate it into broader trade negotiations,” this person said on the condition of anonymity.
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Signed by India’s commerce minister Piyush Goyal and US commerce secretary Gina Raimondo in the Joe Biden administration, the agreement sought to leverage complementary strengths and facilitate mutually beneficial development of Indian and US critical minerals exploration, extraction, processing, recycling, and related activities.
“Though the existing MoU is an important step in US-India cooperation on critical minerals, it is not a full trade agreement. As a result, India does not qualify for benefits like US electric vehicle tax credits, which are generally available only to countries with a comprehensive trade pact with the US,” the second person added.
Electric car buyers in the US get a tax credit of up to $7,500 for purchasing a new EV and up to $4,000 for a used EV under the country’s Inflation Reduction Act (IRA) of 2022. Since India does not have a full trade agreement with the US, its minerals do not qualify, preventing Indian-made EVs or batteries from benefiting from these tax credits.
Queries emailed to the spokesperson of the ministries of commerce, external affairs and United States Trade Representative (USTR) remained unanswered.
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Countries, including India, are keen to form bilateral trade agreements with the US, at a time when the Donald Trump administration wields the tariff weapon to secure economic and foreign policy objectives. An Indian delegation visited the US from 4-8 March to discuss the contours of a trade deal proposed to completed by the fall of 2025.
However, a trade expert said since both nations depend on third countries for sourcing critical minerals, modifying the MoU will have little impact.
“Besides this, the focus should be on providing subsidies for the critical minerals processing sector, boosting research and development, and establishing favourable trade agreements to secure raw materials from other mineral-rich countries,” said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI) and a former India Trade Service officer.
Critical minerals such as lithium, cobalt, chromium and graphite find use in a range of goods such as smartphones, EV batteries and even medical devices, making them indispensable across various industries. Despite having significant reserves of rare earth elements and other essential minerals, India’s lack of commercial processing facilities forces it to rely heavily on imports. India imports up to 95% of its lithium, cobalt, and graphite needs from Australia, Chile, and China. While cobalt is sourced primarily from the Democratic Republic of Congo (DRC), 90% of rare earth elements are sourced from Myanmar and Vietnam.
Also read | Budget 2024: Why Nirmala Sitharaman waived import duty on critical minerals
In January 2025, just before Trump’s inauguration as president, the US lifted restrictions on the Bhabha Atomic Research Centre (Barc), the Indira Gandhi Centre for Atomic Research (IGCAR), and Indian Rare Earths Ltd (IREL) to strengthen bilateral ties and energy cooperation, This decision comes nearly two decades after the landmark 2008 U.S.-India Civil Nuclear Agreement.
“Mutual consent is a critical aspect of any bilateral trade deal, and India and the US are moving toward a mutually agreed BTA. A comprehensive trade pact on critical minerals will benefit both countries, as India has significant resource potential and growing demand for these minerals, while the US seeks to diversify its supply chains and reduce dependence on dominant suppliers like China,” said Dr. Dattesh Parulekar, assistant professor of International Relations at Goa University.
On 26 October 2024, Mint reported that India is planning to secure access to critical minerals by acquiring majority stakes in overseas companies. This move comes as China dominates the global critical mineral supply chain.
“India has significant titanium mineral deposits in Odisha, Andhra Pradesh and Tamil Nadu; yet, we remain heavily reliant on imports due to limited exploration and a shortage of skilled manpower,” said P.R. Sinha, head of regulatory affairs at Trimex Industries, a mineral processing and trading company. “To unlock this potential, we need policy reforms that encourage large-scale exploration, mining, and skill development. A collaborative effort between the government and industry stakeholders is essential to create a conducive investment environment. With the right policies in place, India can reduce import dependence, boost domestic production, and establish itself as a key player in the global titanium market,” Sinha said.
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India has identified 30 critical minerals essential for self-reliance, technological progress, and economic growth, crucial to sectors like space, electronics, communications, energy, and electric batteries. Lithium and cobalt are essential for lithium-ion batteries, which power electronics and electric vehicles, supporting advancements in sustainable energy.
Graphite is widely used in battery production and also serves as an effective lubricant in industrial applications. Gallium and germanium play critical roles in electronics and solar panel manufacturing, contributing to high-efficiency semiconductors and photovoltaic cells. Rare earth elements (REEs) are crucial for producing strong magnets, indispensable in wind turbines, electric vehicles, and various defense technologies, highlighting their importance in clean energy and national security applications.
However, a trade expert said since both nations depend on third countries for sourcing critical minerals, modifying the MoU will have little impact.
These minerals include Antimony, Beryllium, Bismuth, Cadmium, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, Platinum Group Elements (PGE), Phosphorus, Potash, Rare Earth Elements (REE), Rhenium, Selenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium.
According to commerce ministry data, India’s import of lithium increased from $8.7 million in FY22 to $22.3 million in FY23 and $24.6 million in FY24. Also, graphite import increased from $34.3 million in FY22 to $34.9 million in FY23 and $37.3 million in FY24. In addition, imports of bauxite and alumina essential for aluminium production have also jumped from $254.7 million in FY22 to $294.6 million in FY23 and $340.6 million in FY24.
Also read | International Solar Alliance in talks with member states for securing critical minerals, says DG Ajay Mathur
The October agreement aimed to strengthen supply chain resilience for critical minerals such as lithium and cobalt. While India ranks third in the world for rare earth reserves, the US holds the seventh position. In January, India unveiled its own ₹34,300 crore critical minerals mission to achieve self-reliance in critical minerals.
Discussions on modifying the minerals pact have picked up as work on a Bilateral Trade Agreement (BTA) gains momentum, one of the two people cited above said. “New Delhi is pushing to upgrade the existing Memorandum of Understanding (MoU) into a full-fledged partnership agreement, aiming to integrate it into broader trade negotiations,” this person said on the condition of anonymity.
Signed by India’s commerce minister Piyush Goyal and US commerce secretary Gina Raimondo in the Joe Biden administration, the agreement sought to leverage complementary strengths and facilitate mutually beneficial development of Indian and US critical minerals exploration, extraction, processing, recycling, and related activities.
“Though the existing MoU is an important step in US-India cooperation on critical minerals, it is not a full trade agreement. As a result, India does not qualify for benefits like US electric vehicle tax credits, which are generally available only to countries with a comprehensive trade pact with the US,” the second person added.
Electric car buyers in the US get a tax credit of up to $7,500 for purchasing a new EV and up to $4,000 for a used EV under the country’s Inflation Reduction Act (IRA) of 2022. Since India does not have a full trade agreement with the US, its minerals do not qualify, preventing Indian-made EVs or batteries from benefiting from these tax credits.
Also read | Mint Primer | Mining minerals: Could cement & steel get dearer?
Queries emailed to the spokesperson of the ministries of commerce, external affairs and United States Trade Representative (USTR) remained unanswered.
Countries, including India, are keen to form bilateral trade agreements with the US, at a time when the Donald Trump administration wields the tariff weapon to secure economic and foreign policy objectives. An Indian delegation visited the US from 4-8 March to discuss the contours of a trade deal proposed to completed by the fall of 2025.
However, a trade expert said since both nations depend on third countries for sourcing critical minerals, modifying the MoU will have little impact.
Mutual consent is a critical aspect of any bilateral trade deal, and India and the US are moving toward a mutually agreed BTA.
—Dr. Dattesh Parulekar
“Besides this, the focus should be on providing subsidies for the critical minerals processing sector, boosting research and development, and establishing favourable trade agreements to secure raw materials from other mineral-rich countries,” said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI) and a former India Trade Service officer.
Critical minerals such as lithium, cobalt, chromium and graphite find use in a range of goods such as smartphones, EV batteries and even medical devices, making them indispensable across various industries. Despite having significant reserves of rare earth elements and other essential minerals, India’s lack of commercial processing facilities forces it to rely heavily on imports. India imports up to 95% of its lithium, cobalt, and graphite needs from Australia, Chile, and China. While cobalt is sourced primarily from the Democratic Republic of Congo (DRC), 90% of rare earth elements are sourced from Myanmar and Vietnam.
And read | Miners cold to critical minerals prompt govt to rethink licensing
In January 2025, just before Trump’s inauguration as president, the US lifted restrictions on the Bhabha Atomic Research Centre (BARC), the Indira Gandhi Centre for Atomic Research (IGCAR), and Indian Rare Earths Ltd (IREL) to strengthen bilateral ties and energy cooperation, This decision comes nearly two decades after the landmark 2008 U.S.-India Civil Nuclear Agreement.
“Mutual consent is a critical aspect of any bilateral trade deal, and India and the US are moving toward a mutually agreed BTA. A comprehensive trade pact on critical minerals will benefit both countries, as India has significant resource potential and growing demand for these minerals, while the US seeks to diversify its supply chains and reduce dependence on dominant suppliers like China,” said Dr. Dattesh Parulekar, assistant professor of International Relations at Goa University.
On 26 October 2024, Mint reported that India is planning to secure access to critical minerals by acquiring majority stakes in overseas companies. This move comes as China dominates the global critical mineral supply chain.
India has identified 30 critical minerals essential for self-reliance, technological progress, and economic growth, crucial to sectors like space, electronics, communications, energy, and electric batteries.
“India has significant titanium mineral deposits in Odisha, Andhra Pradesh and Tamil Nadu; yet, we remain heavily reliant on imports due to limited exploration and a shortage of skilled manpower,” said P.R. Sinha, head of regulatory affairs at Trimex Industries, a mineral processing and trading company. “To unlock this potential, we need policy reforms that encourage large-scale exploration, mining, and skill development. A collaborative effort between the government and industry stakeholders is essential to create a conducive investment environment. With the right policies in place, India can reduce import dependence, boost domestic production, and establish itself as a key player in the global titanium market,” Sinha said.
India has identified 30 critical minerals essential for self-reliance, technological progress, and economic growth, crucial to sectors like space, electronics, communications, energy, and electric batteries. Lithium and cobalt are essential for lithium-ion batteries, which power electronics and electric vehicles, supporting advancements in sustainable energy.
Graphite is widely used in battery production and also serves as an effective lubricant in industrial applications. Gallium and germanium play critical roles in electronics and solar panel manufacturing, contributing to high-efficiency semiconductors and photovoltaic cells. Rare earth elements (REEs) are crucial for producing strong magnets, indispensable in wind turbines, electric vehicles, and various defense technologies, highlighting their importance in clean energy and national security applications.
Read this | Mint Explainer: Why India needs to look for new battery minerals other than lithium
These minerals include Antimony, Beryllium, Bismuth, Cadmium, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, Platinum Group Elements (PGE), Phosphorus, Potash, Rare Earth Elements (REE), Rhenium, Selenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium.
According to commerce ministry data, India’s import of lithium increased from $8.7 million in FY22 to $22.3 million in FY23 and $24.6 million in FY24. Also, graphite import increased from $34.3 million in FY22 to $34.9 million in FY23 and $37.3 million in FY24. In addition, imports of bauxite and alumina essential for aluminium production have also jumped from $254.7 million in FY22 to $294.6 million in FY23 and $340.6 million in FY24.
https://www.livemint.com/industry/new-delhi-critical-minerals-trade-us-tax-coal-lithium-joe-biden-piyush-goyal-commerce-ev-trump-tariff-11742725587144.html
