On October 19, 2024, Indian Commerce Minister Piyush Goyal announced that India is actively seeking a critical minerals partnership agreement with the United States to strengthen trade relations. Goyal indicated that this memorandum of understanding (MoU) could potentially evolve into a free trade agreement (FTA) status, reflecting India's ambition to enhance its economic ties with the U.S. [0aebe292].
This initiative comes in the wake of a similar agreement signed by the U.S. and Uzbekistan on October 17, 2024, which aims to diversify global mineral supply chains and promote clean energy initiatives. The U.S. Embassy highlighted that this MoU is designed to attract U.S. investments into Uzbekistan's mining industry, further solidifying economic collaboration [a2620bc9].
Goyal's announcement also pointed to the influence of upcoming U.S. elections on the timeline for negotiations, suggesting that political dynamics could impact the pace of discussions [0aebe292]. India is looking to establish a partnership akin to Japan's 2023 agreement with the U.S., which provides subsidies under the Inflation Reduction Act. This Act offers tax credits of up to $7,500 for electric vehicles that meet domestic content requirements, emphasizing the importance of securing supply chains for critical minerals [0aebe292].
The recent MoU signed in Washington between the U.S. and Uzbekistan focuses on secure supply chains and cooperation in mineral extraction, highlighting a broader trend of nations seeking to bolster their positions in the critical minerals market. The U.S. has been proactive in addressing its reliance on foreign sources for essential minerals, particularly in light of China's dominance in this sector [8892e216].
In addition to these agreements, the U.S. is funding various projects, including the Kabanga Nickel Project in Tanzania and a cobalt refinery in Canada, which further illustrates its commitment to securing critical mineral resources globally [8b1fff27]. As the global demand for essential minerals is projected to increase significantly, the U.S. is working through initiatives like the Minerals Security Partnership (MSP) to ensure sustainable supply chains [8892e216].