India and the US sign MoU to collaborate on critical battery mineral supply chains: Report

Goyal highlighted that the MoU will promote open supply chains for materials, technology development, and investment flows to support green energy.

India’s Minister of Commerce and Industry, Piyush Goyal, and U.S. Commerce Secretary, Gina Raimondo, signed an agreement on Thursday, October 3, 2024, aimed at strengthening supply chains for critical minerals, such as cobalt and lithium, used in electric vehicles (EVs) and other clean energy applications, Reuters reported.

The Memorandum of Understanding (MoU), signed during Goyal’s visit to Washington, is intended to bolster resilience in the critical minerals sector for both nations. It outlines priority areas for cooperation, including the facilitation of mutually beneficial commercial development in exploration, extraction, processing, refining, recycling, and recovery of critical minerals in both the U.S. and India.

Vikram Handa, Managing Director of Epsilon Advanced Materials, commented on the MoU, stating that while the agreement is a positive step, it opens the door to further opportunities, particularly in material processing and attracting investments into mining and related sectors. He emphasized the importance of a dedicated Critical Raw Materials Act aligned with the U.S. Inflation Reduction Act (IRA), which could unlock significant benefits for Indian battery material manufacturers, including access to the $7,500 U.S. electric vehicle tax credit. This, he noted, would attract foreign investment and make large-scale production of essential battery components like anode graphite and cathodes commercially viable in India.

Goyal highlighted that the MoU will promote open supply chains for materials, technology development, and investment flows to support green energy. He also pointed out that collaboration with third countries, particularly mineral-rich nations in Africa and South America, would be crucial for achieving these goals, according to the newswire.

However, the MoU does not include provisions for a full critical minerals trade deal that would allow India to benefit from the $7,500 U.S. electric vehicle tax credit, Reuters reported.