Context

The India-US TRUST Initiative was introduced during the recent visit of India’s Prime Minister to the United States. India, as the second-largest manufacturer of active pharmaceutical ingredients (APIs) after China, is expected to benefit from this initiative, particularly in securing essential mineral supplies for pharmaceutical production.

About India-US TRUST Initiative

The initiative is designed to enhance cooperation between India and the United States in the critical minerals sector, focusing on lithium, rare earth elements (REEs), and other strategic resources. It builds upon India's recent inclusion in the US-led Minerals Security Finance Network (MSFN) and the Minerals Security Partnership (MSP).

Key objectives of the initiative include:

• Diversifying and securing critical mineral supply chains to reduce dependence on any single source.
• Facilitating technology transfers and addressing export controls to improve trade and innovation in strategic industries.
• Strengthening high-tech commerce across sectors such as defense, artificial intelligence, semiconductors, and biotechnology.
• Developing supply chains for pharmaceuticals, particularly for minerals like lithium and zinc, which are essential for API production.
• Encouraging collaboration among governments, research institutions, and private industry to advance innovation and sustainable development.

Mineral Security Partnership (MSP)

The Mineral Security Partnership (MSP) is a global initiative launched in 2022 to mitigate risks in critical mineral supply chains by fostering investments in mineral extraction, processing, and recycling.

Membership and Funding:

• The MSP consists of 14 countries and the European Commission, collectively accounting for more than 50% of global GDP.
• Key financial institutions involved include the US International Development Finance Corporation (DFC), European Investment Bank (EIB), and Japan International Cooperation Agency (JICA).
• The funding is not restricted to MSP member nations, and investments are aimed at global projects to create diversified supply chains.
• India became a member of the MSP in 2023 and contributes to strengthening critical mineral supply chains on a global scale.

Critical Minerals and Their Importance

Critical minerals play a key role in modern technology but are often subject to supply chain vulnerabilities due to limited production sources and geopolitical factors.

• Example:  Lithium, Cobalt, Nickel, Copper, and Rare Earth Elements (REEs).
• India has identified 30 critical minerals, including Antimony, Graphite, Gallium, and Molybdenum, which are essential for industries such as telecommunications, electric vehicles, renewable energy, and defense.

Significance of Critical Minerals:

• Economic: Integral to industries such as electronics, electric vehicles, and telecommunications.
• Environmental: Essential for renewable energy technologies, including solar panels, wind turbines, and semiconductors.
• Security: Crucial for defense applications, including aircraft and missile technologies.

Conclusion

The India-US TRUST Initiative represents a strategic step in strengthening critical mineral supply chains and expanding bilateral cooperation in key industrial sectors. While the initiative does not grant Indian companies the same tax incentives under the US Inflation Reduction Act (IRA) as Japan, it provides opportunities for collaboration in high-tech industries. By building on previous efforts under the MSFN and MSP, the initiative aims to create resilient and diversified supply chains, benefiting both India and the United States.