India Pursues US Mineral Agreement

TL/DR –

India’s trade minister, Piyush Goyal, has proposed a critical mineral partnership agreement with the United States as a catalyst for broader trade discussions. This comes after the two nations recently signed a preliminary agreement to bolster supply chains for critical minerals like lithium and cobalt, which are essential for electric vehicles and clean energy. However, the existing memorandum of understanding does not enable India to benefit from the US’s $7,500 electric vehicle tax credit, something that could be made possible through a more comprehensive minerals-focused trade deal.

India Proposes Critical Mineral Partnership with the United States

India’s trade minister has declared the country’s appeal for a critical mineral partnership deal with the United States. This move is in anticipation of broader trade discussions between the two nations. Trade Minister Piyush Goyal expressed the desire to evolve the existing memorandum of understanding (MoU) into a full critical mineral partnership that could serve as a starting point towards a Free Trade Agreement (FTA).

Earlier this month, India and the US inked an initial agreement to enhance supply chains in both countries for critical minerals like lithium and cobalt. These minerals are essential for manufacturing electric vehicles and are widely utilized in clean energy applications.

The current MoU does not allow India full benefits such as the $7,500 US electric vehicle tax credit. However, minerals-focused trade agreements are being viewed as lucrative opportunities by the US President Joe Biden’s administration. These deals aim to extend access for trusted allies to the EV tax credit, a key part of last year’s climate-centric Inflation Reduction Act.

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