India should tie up with the US for critical minerals

G. Chandrashekhar

The proposed India-USA Bilateral Trade Agreement (BTA) is still under intense negotiation. While, it is widely believed the US is keen to open up India’s farm sector (soybean cotton, corn, chicken legs, animal welfare products), India can attempt to soften the US’ aggressive stand by offering critical minerals the US desperately needs.

Desperate because China the world’s dominant producer of several critical minerals used in high-tech applications has restricted exports by imposing a quota / licensing system that is seen as an indirect way to restrict export. This is China’s way of responding to US tariff threats.

India produces a variety of minerals, some of which are considered critical minerals by the US due to their importance in various industries, especially in clean energy technologies and defence.

Here are some critical minerals that India produces and the US may be interested in:

  • Bauxite: India has the 5th largest reserves of bauxite in the world and is a significant producer. Bauxite is the primary ore for aluminium, which is considered a critical material for energy by the U.S. due to its use in various sectors including light- weighting vehicles and in solar energy technologies.
  • Chromite: India ranks as the 3rd largest producer of chromite globally. Chromium, derived from chromite, is essential in producing stainless steel and other alloys, crucial for various industrial and potentially defence applications.
  • Copper: India has substantial copper reserves. Copper is increasingly important for clean energy technologies, energy storage and electronics, leading the demand for critical metals. Importantly, the U.S. also lists copper as a critical material for energy.
  • Graphite: India is among the top producers of graphite. Natural graphite is a critical material for lithium-ion batteries used in electric vehicles and energy storage.
  • Iron Ore: India is the 4th largest producer of iron ore globally. While iron ore itself is not always listed as a ‘critical mineral’, it is fundamental to steelmaking, which has implications for infrastructure and defence.
  • Manganese: India has significant manganese ore reserves. Manganese is crucial in steelmaking and is also used in some battery technologies.
  • Mica: India holds some of the largest mica reserves globally. Mica is used in various electrical and electronic applications.
  • Titanium: India possesses reserves of titanium-bearing minerals like ilmenite. Titanium is vital for aerospace and defence industries due to its high strength-to- weight ratio.

We must recognize that while India has reserves and production capabilities for these minerals, the actual quantities available for export and specific grades might influence their attractiveness to the US.

Furthermore, some critical minerals like lithium and cobalt, essential for the energy transition, are areas where India is actively exploring and trying to increase domestic production to meet its own rising demand.

The US has identified a list of critical minerals that are essential to the economic and national security of the US and have vulnerable supply chains. This list includes over 50 minerals, encompassing those crucial for energy technologies.

Some of the minerals produced in India overlap with this US list, making India a potentially important partner in diversifying critical mineral supply chains.

India too has identified its own list of 30 critical minerals including lithium, cobalt, gallium, copper, tin, nickel, silicon, phosphorus and potash, highlighting the importance of these resources for its economic development and energy transition goals. This indicates a domestic focus on securing these materials, which could also align with US interests in diversifying global supplies (read, moving away from China).

Endowment of natural resources like critical minerals is a strength. India should leverage this strength judiciously in the bilateral talks. It would make enormous commercial sense for India to invite US investments and technology in responsibly exploiting the natural resources without compromising national interest.