In a significant step to strengthen critical mineral supply chains, India’s Commerce Minister Piyush Goyal and US Commerce Secretary Gina Raimondo have signed a Memorandum of Understanding (MOU). Signed during Minister Goyal’s visit to Washington, the agreement focuses on cooperation between the two countries to ensure the supply of essential minerals such as lithium and cobalt, which are critical for electric vehicles and clean energy technologies.
The US Commerce Department explained that the MoU was designed to enhance the resilience of these sectors in both countries. This collaboration will focus on identifying and developing tools, services, policies and best practices. It will support commercial development of critical mineral exploration, extraction, processing and refining, as well as recycling and recovery efforts in the United States and India.
Following the signing, Minister Goyal addressed the Center for Strategic and International Studies in Washington, where he elaborated on the broader implications of the MoU. He described the partnership as multidimensional, including open supply chains for materials, technology development and investment flows, all aimed at advancing green energy initiatives.
Goyal also stressed the need to expand this cooperation to include third countries, especially countries rich in mineral resources in Africa and South America. The intention is to create a more comprehensive supply network that can meet the growing demands of the clean energy sector.
The newly signed MOU, whose negotiations were initially reported on Monday, represents an important step towards a more comprehensive critical minerals trade agreement. However, this does not currently allow India to benefit from the US$7,500 electric vehicle tax credit. This incentive is part of the US strategy to reduce China’s dependence on mineral resources.
By comparison, Japan secured an agreement with the U.S. Trade Representative’s office last year that allows Japanese automakers to benefit more from electric vehicle tax credits. The US-Japan agreement also includes a commitment to reduce dependence on China and restrictions on bilateral export controls on several critical minerals, setting a precedent for international cooperation in this area.
Reuters contributed to this article.
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