India’s trade minister, Piyush Goyal, announced on Saturday that the country is looking for a partnership agreement with the United States regarding critical minerals.
He hopes this can lead to discussions about a broader trade deal between the two countries. Goyal mentioned that he suggested changing a previous agreement, known as a Memorandum of Understanding (MoU), into a more comprehensive critical mineral partnership.
This new agreement would serve as a starting point for a Free Trade Agreement (FTA). Earlier this month, India and the U.S. signed an initial pact to work together on strengthening supply chains for important minerals like lithium and cobalt, which are essential for electric vehicles and clean energy technologies.
However, this MoU is not enough to provide India with the benefits of the U.S. electric vehicle tax credit of $7,500, which could be a significant advantage for Indian manufacturers.
These types of mineral trade agreements are part of U.S. President Joe Biden’s strategy to give trusted allies access to the EV tax credit introduced in last year’s Inflation Reduction Act, which focuses on climate change.
According to Reuters, this partnership could help both countries enhance their economic ties and support the transition to cleaner energy sources.