India and the United States have taken a big step to secure important minerals like lithium and cobalt, which are essential for making electric vehicles (EVs) and supporting clean energy. On Friday, India announced that both countries signed an agreement to “expand and diversify” their supply chains for these critical materials. The goal? To reduce their reliance on China, which currently controls most of the world’s supply of these minerals.
The agreement, signed by Indian Commerce Minister Piyush Goyal and US Secretary of Commerce Gina Raimondo, took place during Goyal’s visit to Washington. The deal aims to build stronger, more reliable supply chains by combining the strengths of both countries. They want to find better ways to explore, mine, process, and refine these critical minerals.
Why is this so important? Lithium, cobalt, and similar minerals are the backbone of the green energy economy. They are key to manufacturing electric vehicle batteries and other clean technologies. But with China dominating this market, other countries, including the US and India, are trying to find alternatives to reduce their dependence on Chinese supply.
The new India-US pact is not just about minerals, though. Goyal explained that it’s a “multi-dimensional” partnership. This means that it goes beyond just securing materials — it also focuses on technology development, sharing best practices, and encouraging investments to support the clean energy transition. Both nations realize they can’t do this alone. They will need to work with other countries, especially those rich in these minerals, like many in Africa and South America.
In fact, India has already started looking toward Africa to meet its mineral needs. Countries like Zambia, Namibia, and the Democratic Republic of Congo have reached out to India, offering access to their resources. In return, these nations want India to help pay back some of their development loans.
Earlier this year, India also signed a deal with Argentina to explore five lithium deposits, as part of a broader strategy to diversify its supply of the mineral. India is even partnering with the US in a program called the Minerals Security Partnership (MSP), which aims to secure critical minerals in a more sustainable and secure way.
China, right now, controls nearly 70% of the global supply of lithium, as well as other key minerals like cobalt, graphite, and manganese — all of which are vital for green technology. India has discovered its own lithium reserves recently in states like Jharkhand and Jammu & Kashmir, but it hasn’t yet started producing lithium at home and still relies completely on imports.
The stakes are high. The demand for lithium in India is skyrocketing as the country pushes to grow its electric vehicle market. EV sales are expected to jump from $3.21 billion in 2022 to a whopping $113.99 billion by 2029! To support this, India recently launched a $1.3 billion scheme to encourage people to buy more electric cars and two-wheelers.
By working together, India and the US hope to ensure they have the minerals needed to fuel the future of green energy, while avoiding a dangerous overreliance on China. The world is watching as these two global powers try to reshape the future of critical minerals — and possibly change the balance of power in the clean energy race.
