Strengthening India-US Cooperation on Critical Minerals

Introduction

Critical minerals are a crucial part of the India-United States (US) bilateral partnership with developments such as the Initiative on Critical and Emerging Technologies (iCET) and the signing of the recent (October 2024) Memorandum of Understanding (MoU) on critical minerals supply chains. The MoU, which is one of few examples of India’s bilateral cooperation on critical minerals. It aims to leverage ‘the two countries’ complementary strengths to ensure greater resilience in the critical minerals sector’.

The India-US partnership is increasingly focused on developing closer ties through technology and clean energy cooperation in the critical minerals sector. Some priority areas of the MoU therefore include ‘identifying equipment, services, policies, and best practices to facilitate the mutually beneficial commercial development of US and Indian critical minerals’ along the global supply chains.

Growing demand for a clean energy transition is driving more countries to look for diversified supply sources for critical minerals. In the race to power a green economic future, critical minerals like lithium, cobalt, and rare earth elements are essential resources driving the global shift to clean energy, advanced technology, and defence innovation. Yet, the world faces a stark reality: China controls 60% of global rare earth mining and a staggering 80% of its processing capacity, creating an overdependence on a single nation. Recently, trade war tensions escalated between China and the US with the Biden administration’s crackdown on China’s semiconductor industry. In retaliation, Beijing banned exports of key critical minerals to the US, citing ‘dual-use’ concerns. This highlights the need to diversify supply chains to reduce reliance on a single dominant supplier.

As the second and third highest emitters global CO₂, both the United States (13%) and India (8%) are rapidly moving towards ensuring a green energy transition. For India, with its ambitious target of achieving 500 GW of renewable energy capacity by 2030 and electrifying 30% of its vehicles, the stakes couldn’t be higher. Meanwhile, the US, with over $17 million in investments to secure critical mineral supply chains, is ramping up efforts to counter China’s quasi-monopoly.

This is where an India-US partnership becomes not merely beneficial but a strategic imperative. The two nations can build a resilient and diversified supply chain for critical minerals. India’s ambition to become a global manufacturing hub is advancing rapidly, driven by its renewable energy goals. Meanwhile, the U.S. brings technological expertise and significant financial resources to the table. These strengths create the foundation for a strong and mutually beneficial partnership. Together, they can secure their energy transitions, boost bilateral trade (already at a record $191 billion in 2022), and create a powerful counterweight to China.

Together, they can secure their energy transitions, boost bilateral trade (already at a record $191 billion in 2022), and create a powerful counterweight to China.

The question, therefore, is less about why India and the US should partner on critical minerals—and more about finding ways of how they can turn this opportunity into a transformative partnership. After outlining the history of the India-US partnership, this article goes into laying out why the two should collaborate in the critical minerals sector, highlighting the 80% overlap between the lists of minerals for both countries. It discusses how critical minerals cooperation is and can be further embedded into the climate and energy partnership. It also gives some policy options to enhance collaboration in the sector.

Growing role of energy, tech and trade nexus in the India-US partnership

Critical minerals have emerged as a cornerstone of the growing India-US partnership, strengthening their energy, technology, and trade linkages. As India’s External Affairs Minister highlighted, both countries “value the strides we are making in our tech collaboration and economic partnership”.  This bilateral relationship is founded on shared interests, democratic values, strategic alignment, and economic potential, evolving into a robust partnership over three decades. Chietigj Bajpaee identifies three pillars: shared democratic values, countering China, and India’s economic growth.

India’s growing economy, projected to be the third largest by 2030, aligns with US ‘friendshoring’ strategies to reduce reliance on China. Shared goals include building resilient supply chains, expanding collaboration in emerging technologies like clean energy, semiconductors, and critical minerals, and tapping into India’s digital and information technology (IT) strengths. Despite challenges like infrastructure and protectionism, India’s aspirations as a manufacturing hub complement US interests, further strengthening this vital partnership. India’s growing influence in critical and emerging technologies also creates opportunities for collaboration with the US, particularly in high-value sectors like clean energy, semiconductors, and critical minerals.

India’s growing influence in critical and emerging technologies also creates opportunities for collaboration with the US, particularly in high-value sectors like clean energy, semiconductors, and critical minerals.

India and the US have witnessed a rapid evolution in their collaboration on energy, climate, and technology, driven by a convergence of strategic interests and shared global challenges. Key initiatives such as the U.S.-India Climate and Clean Energy Agenda 2030 Partnership and the Strategic Clean Energy Partnership (SCEP) reflect the growing alignment between the two nations on energy security and climate resilience. These frameworks emphasise joint efforts in clean energy innovation, decarbonisation technologies, and sustainable infrastructure, positioning the partnership as a critical pillar of bilateral cooperation. As both countries seek to mitigate supply chain vulnerabilities and reduce dependency on China for critical resources, this collaboration underscores the geopolitical importance of resilient, diversified supply chains in an increasingly multipolar world order.

A significant development reinforcing this trajectory is the Initiative on Critical and Emerging Technologies (iCET), launched in 2023. Designed to deepen bilateral ties in semiconductors, artificial intelligence, quantum computing, and critical minerals, iCET illustrates how technology-driven collaboration is central to ensuring economic security and strategic autonomy. By focusing on critical minerals, the initiative plays a vital role in enhancing supply chain resilience and fostering joint research and development efforts.

As the geopolitical landscape continues to shift, India and the US are well-positioned to leverage these growing areas of cooperation to enhance their influence in critical sectors shaping the 21st-century global economy. By aligning their priorities in critical mineral development, both nations are strengthening the foundation of their partnership and advancing shared goals in energy security, technological innovation, and economic growth.

Expanding India-US Collaboration on Critical Minerals

The partnership between India and the United States on critical minerals has evolved significantly, underscoring the importance of international cooperation in securing resilient supply chains. Despite shared ambitions for self-reliance, both countries have recognised that collaboration, not isolation, offers the best path to meeting the rising global demand for these strategic resources.

There are four factors driving India-US cooperation on critical minerals: (1) America’s deepening international partnerships in this sector, (2) the 80% overlap between the critical minerals identified by India and the US, (3) the shared history of India-US clean energy partnerships, and (4) the developing national security and technology collaborations between the two partners.

American policy thinking on critical minerals can be seen to develop after the 2010 Chinese export ban on Japan of crucial minerals needed for semiconductors and automobiles over maritime disputes. The 2010 incident can be considered the lynchpin that set off the strategic thinking and highlighted the policy need for ensuring reliable and secure access to critical minerals.

Policy development picked up more wind as the need for critical minerals became more apparent as did concerns over Chinese monopoly of supply chains. America has significantly focused on developing its domestic capacity on mineral mapping, mining, and processing. While much of the developments have focused on ensuring domestic capacity and stockpiling of critical minerals, at the same time, the US has also been on the front foot in recognising the significance of international cooperation for critical minerals (see Table 2). Not only has it inked various bilateral partnerships (e.g. Canada, Australia, Japan, South Korea, and India), the US has also been the shaping international cooperation frameworks such as the Minerals Security Partnership.

Out of the 50 critical minerals identified by the US in its list of critical minerals (2022), 40 of them overlap (see Figure 1) with India’s list of critical minerals (2023). There is an 80% overlap between minerals identified by both countries showcasing potential for cooperation, especially in third geographies such as Africa. This is because many of the minerals identified are Platinum Group Metals or Rare Earth Elements (REEs), which are geographically located in Africa. India also has deposits of various REEs such as thorium and light REEs such as neodymium, praseodymium, dysprosium, and terbium. International collaborations, such as the one between Indian Rare Earth Limited (IREL) and Toyotsu Rare Earth India Limited (subsidiary of Toyoto Tsusho Corporation, Japan), has significant potential for India and the US to further strengthen collaboration for mutual benefit.

Figure 1: Common minerals between India and US list of critical minerals
(also see Table 3 in Annex)

Source: Authors compilation based on Final list of critical minerals 2022, US Geological Survey, Department of Interior and India’s list of critical minerals 2023.

*Iridium, Palladium, Platinum and Ruthenium are listed under Platinum Group Metals in India’s 2023 list of critical minerals

** Cerium, Dysprosium, Erbium, Europium, Gadolinium, Holmium, Lanthanum, Lutetium, Neodymium, Praseodymium, Samarium, Scandium, Terbium, Thulium, Ytterbium, Yttrium are listed under Rare Earth Elements in India’s 2023 list of critical minerals

The US and India have a long history of collaboration on clean energy and climate projects, built on shared goals of energy security, sustainable development, and combating climate change (see Table 1). This established synergy in clean energy provides a strong foundation for deeper collaboration on critical minerals. As the building blocks for clean technologies like solar panels, electric vehicles, and semiconductors, critical minerals are essential to achieving net-zero targets.

This is reflected in the India-U.S. MoU on Critical Minerals Supply Chains (2024) and the India-US Initiative on Critical and Emerging Technologies (iCET). As well as through joint initiatives under the Minerals Security Partnership (MSP) such as the MSP Finance Network and Quad Principles on Clean Energy Supply Chains. With their shared experience in clean energy cooperation, strong bilateral frameworks, and complementary capabilities, the US and India are well-positioned to become strategic partners in ensuring global critical mineral security.

With their shared experience in clean energy cooperation, strong bilateral frameworks, and complementary capabilities, the US and India are well-positioned to become strategic partners in ensuring global critical mineral security.

Expanding cooperation in sectors like emerging technologies and artificial intelligence (AI) also underscores the involving cooperation on critical minerals. The iCET, which has been identified as a crucial policy development in furthering the India-US strategic partnership, is chaired by the key players in the national security establishment in the two countries. Showcasing that strategic thinking on critical minerals spills over into sectors beyond clean energy. Exemplifying this, India’s National Security Advisor, Ajit Doval has stated that there is “immense potential that is yet to be explored and harnessed in terms of deeper technology cooperation” between India and the US.

Table 1: Timeline of key India-US collaborations on climate change and clean energy

Source: Authors compilation based on various sources. Not exhaustive.

Ways Forward: Navigating Challenges

India-US cooperation on critical minerals is one of the most advanced bilateral policy frameworks India has in the critical minerals space. Despite the promising trajectory of India-US collaboration on critical minerals, several challenges could complicate their efforts. One key obstacle is their differing approaches, while the US prioritises extraction and mining (see Table 2), India focuses on research, recycling, and sustainable alternatives due to its limited domestic reserves (interviews with officials). These differences could require careful coordination to ensure mutually beneficial outcomes.

China’s dominance in the global critical minerals market poses a shared challenge, but diversifying supply chains will demand significant investments in infrastructure and technology. India’s evolving policy framework and potential US domestic resistance to prioritising foreign collaborations could hinder progress without clear funding and technology-sharing agreements.

Regulatory and environmental concerns also present hurdles. The US has stringent environmental laws that can slow down mining and processing projects, while India must balance industrial expansion with its climate commitments and domestic socio-environmental concerns.

To further build on the existing policy frameworks and address some of these challenges, the following steps can be considered.

• Diversification of sources: Identify and jointly invest in resource-rich third countries such as Australia, Canada, and South Africa, which are politically stable and resource-abundant. Initiatives like the Minerals Security Partnership (MSP) can be leveraged to co-develop mines and processing facilities in these regions. India’s experience with Khanij Bidesh India Limited (KABIL) in securing resources in Latin America and its expanding footprint in Africa can be complemented by US technical expertise and financial backing for joint exploration and production.
• Strengthening domestic capabilities: Developing local mining and processing capabilities in both countries by exchanging knowledge on advanced extraction and processing technologies, while focusing on reducing environmental impact. Joint research and development projects can be established under frameworks like the Strategic Clean Energy Partnership (SCEP) to explore new technologies for mineral recycling, substitutes, and processing efficiency. The US’s expertise in lithium extraction can be modelled in India to develop better resource processing for its own reserves.
• Building secure and transparent supply chains: Collaborate to develop systems to track the origin, transit, and processing of critical minerals, ensuring ethical and conflict-free sourcing. India and the US can replicate the EU-US Trade and Technology Council’s work on supply chain transparency. This work could be undertaken under the iCET.
• Harmonising standards and establishing norms: Important to reduce trade barriers though bilateral discussion and other cooperation frameworks. Multilateral forums like the Quad and the MSP, among others, can be utilised to harmonise sustainable mining practices, customs procedures, data-sharing, and logistics networks for critical minerals. The US-India MoU (2024) could evolve into or push for the development of a comprehensive trade framework that addresses export-import policies for critical minerals.
• Promoting trilateral cooperation: Collaborate on infrastructure development and capacity-building projects in resource-rich countries in Africa and Latin America, ensuring fair revenue-sharing and ethical practices. The India, US and Tanzania are already working to accelerate renewable energy development in Tanzania. The US-India Roadmap to Build Safe and Secure Global Clean Energy Supply Chains can be leveraged to create joint mining infrastructure in Zambia or Chile, where India’s diplomacy and US financing can complement each other.
• Establishing shared innovation platforms: Joint innovation platforms focused on emerging technologies such as AI-based resource mapping, geothermal brine extraction, and direct lithium extraction can be developed and promoted. Under the Renewable Energy Technology Action Platform (RETAP), lab-to-lab collaborations are already established and these networks can be further leveraged to co-develop innovative solutions for the clean energy and critical minerals space. India’s growing start-up ecosystem could collaborate with Silicon Valley firms on mining tech solutions.
• Promoting circular economy: Focus on investing  in recycling and repurposing technologies to recover critical minerals from electronic waste (e-waste) and industrial by-products. Can consider establishing joint research hubs under programs like the iCET to develop cutting-edge recycling systems and make supply chains less reliant on primary mining. The US can share its expertise in e-waste management, while India can scale up recycling facilities using its cost-effective manufacturing ecosystem.

Annex:

Table 2: US Policies on critical minerals

Source: International Energy Agency critical minerals policy tracker database and other sources based on author’s compilation. Not exhaustive.

Table 3: India and US list of critical minerals – identifying common minerals                     

Source: Authors compilation based on Final list of critical minerals 2022, US Geological Survey, Department of Interior and India’s list of critical minerals 2023.

Note: The author would like to thank Dr Constantino Xavier, Senior Fellow, CSEP for his insightful feedback and comments.