US, India Agree to Cooperate on Critical Minerals in Battery Supply Chain

The U.S. Commerce Department and India’s Minister of Commerce and Industry Piyush Goyal announced on Oct. 3 that the two countries have signed a new pact to cooperate in the critical minerals sector, materials essential for battery manufacturing, as the Chinese Communist Party (CCP) tightens its grip on critical mineral exports.

Critical minerals—such as cobalt, antimony, and holmium—are needed in a wide range of tech from consumer goods to military weapons. China dominates the global market in both processing these minerals for use and in supplying them to international markets. The United States, for instance, obtains the majority of its critical mineral supply from China, and does not have its own domestic mining capacity.

The CCP has already restricted exports on some critical mineral exports, which lawmakers have warned could create an “existential vulnerability” for the United States should Beijing cut off or weaponize supply.

“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,” a Commerce Department statement reads.

The agreement builds on previous memorandums of understanding to partner on semiconductor technology and a framework regarding the Indo-Pacific supply chain, as the CCP’s increasing economic and military aggression has neighbors worried.

After signing the memorandum of understanding, Goyal spoke at an event hosted by the Center for Strategic and International Studies in Washington, describing the agreement as a dynamic partnership, which may expand with the United States and India developing supply chains in other countries.

“We are looking at deeper partnership between the two countries, to have open supply chains and to ensure that we partner with each other, and support each other wherever we have strengths in critical minerals,” Goyal said.

“Keeping supply chains open is not only about material movement, it’s also about technology movement, it’s also about integrating the capital investment.”

Goyal described the rise and fall, and recent resurgence, of India’s manufacturing sector, pointing out how the CCP decades ago “killed” that industry, and how other Western countries are now realizing they’ve similarly suffered.

For example, India used to be the prime manufacturer of sewing machines for Swiss companies, which dominated that market, Goyal said.

China under the CCP does not have a market economy. The CCP subsidized the Chinese manufacturing industry in order to flood the global market with low-cost sewing machines, and effectively put free-market competitors out of business.

The European Union recently raised tariffs on Chinese electric vehicles in hopes of preventing that exact scenario.

“We want to get all those sectors back into shape,” Goyal said.

The Indian government has created short-term incentives meant to kickstart those industries, he said, but the modernization of some of those sectors will require technology, which India hopes the United States will be a partner in.

“You will need a basic manufacturing hub and India offers that manufacturing hub in an open government, an open economic environment where you can be assured that you will have protection, from the law, against any discrimination or wrongdoing against your companies,” Goyal said, contrasting this with the hostile environment created by the Chinese regime.

“I’m happy that America is also recognizing the importance of manufacturing,” Goyal said. “There was no other way but to have something like this, particularly to meet the nontransparent pricing, the opaque economic systems that we are facing with our northern neighbor that’s China.”

In June, Congress created a bipartisan working group to produce legislation to counter the CCP’s dominance of the critical minerals market. Other countries, such as South Korea and New Zealand, have similarly begun to invest in critical mineral capacity to turn the tide on overdependency on Chinese supply.

 

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