India and the United States are expected to sign an initial agreement on cooperation in the critical minerals sector this week, according to two Indian government sources. The agreement is set to be formalized during Indian Trade Minister Piyush Goyal's visit to Washington, aimed at strengthening trade ties between the two nations despite diplomatic challenges.
Goyal is scheduled to be in the US this week to discuss methods to enhance overall bilateral trade relations, just weeks before the White House prepares for a leadership transition following the upcoming presidential election. During his visit, Goyal is expected to meet with US Commerce Secretary Gina Raimondo and US Trade Representative Katherine Tai.
Earlier this month, Indian Prime Minister Narendra Modi and President Joe Biden held a bilateral meeting in Delaware, as part of the Quad grouping that also includes leaders from Australia and Japan. The initial agreement on critical minerals is anticipated to facilitate the development of supply chains, exchange technical expertise, and foster collaboration between Indian and American businesses in the sector, according to one of the sources.
The Indian federal trade ministry has not yet responded to a request for comment from Reuters. The ministry stated on Sunday that the two sides are negotiating a Memorandum of Understanding (MoU) aimed at enhancing bilateral collaboration to increase and diversify essential critical mineral supply chains and leverage their complementary strengths.
In June, Reuters reported that state-run Coal India Ltd is exploring lithium blocks in Argentina in partnership with a US company to secure battery material supplies. India has also proposed a separate critical minerals trade deal with the United States, which would prohibit the imposition of tariffs by both countries and is similar to a pact with Japan that grants Japanese automakers broader access to US electric vehicles tax credits.
India is a member of the US-led Minerals Security Partnership, which focuses on ensuring adequate supplies of minerals necessary for achieving zero-carbon goals. Last year, Modi's government identified 30 minerals, including lithium and nickel, as critical for driving the adoption of clean energy. Bilateral trade between India and the United States in the 2023-24 fiscal year reached nearly $120 billion, a record high. Under the Biden administration, the two nations have mutually resolved all their disputes at the World Trade Organisation, a development India termed 'historic'.
