India pushing for a critical minerals partnership agreement with the US to move closer to FTA status: Piyush Goyal

Commerce and industry minister Piyush Goyal

India is pushing for a critical minerals partnership agreement with the United States, commerce and industry minister Piyush Goyal said on October 19, noting that the agreement could be a path to further cooperation.

“The critical minerals partnership agreement could go towards a foreign trade agreement (status),” the minister said.

The minister was in the US recently to sign a memorandum of understanding on critical minerals, which helps establish a secure supply chain of minerals between the countries and ensure a smooth flow with a third country as well and lead cooperation in extraction and product development.

The issue of critical minerals has taken precedence with growing geo-political fragmentation on the global stage, especially with China securing a lead in areas like electric vehicles.

The US signed a critical minerals agreement with Japan in 2023, which was designated by the US Department of Treasury as an FTA for the purposes of tax credit under the Inflation Reduction Act.

The countries do not have a formal FTA.

The Inflation Reduction Act provides for tax credit of up to $7,500 on EVs, which meet domestic content requirements

The US imports 49 percent of its critical minerals from FTA countries, another 44 percent comes from non-FTA countries and 7 percent comes from China, which has been designated as Foreign Entity of Concern.

“India has been pushing for a similar benefits with CMA, which can help us taken advantage of the huge opportunity that the US provides via the IRA,” an official noted.

Goyal noted that India wanted to be clean energy capital of the world.