Agreement on Supply Chain Cooperation

By David Lawder

WASHINGTON (Reuters) – Indian Trade Minister Piyush Goyal and U.S. Commerce Secretary Gina Raimondo signed an agreement on Thursday to cooperate on strengthening supply chains in the two countries for lithium, cobalt, and other critical minerals used in electric vehicles and clean energy applications.

The Commerce Department stated that the memorandum of understanding (MOU), signed during Goyal's visit to Washington, aims at building resilience in the sector for each country.

"Priority areas of focus include identifying equipment, services, policies, and best practices to facilitate the mutually beneficial commercial development of U.S. and Indian critical minerals exploration, extraction, processing and refining, recycling, and recovery," Commerce said.

Goyal, speaking at the Center for Strategic and International Studies in Washington after the signing, described the MOU as a multi-dimensional partnership that would include open supply chains for materials, technology development, and investment flows to promote green energy.

He also mentioned that the U.S. and India would include third countries in their engagement, particularly mineral-rich countries in Africa and South America.

The MOU, which Reuters first reported was in the works on Monday, falls short of a full critical minerals trade deal that would allow India to benefit from the $7,500 U.S. electric vehicle tax credit.

Japan signed a deal with the U.S. Trade Representative's office last year that allows Japanese automakers to participate more fully in the credit, aiming to reduce U.S.-Japanese mineral dependence on China, and prohibits bilateral export controls on lithium, nickel, cobalt, graphite, manganese, and other minerals.