Context: The Vice-President of the United States has highlighted the US’s willingness to cooperate with India more closely on energy and defence. The countries must deepen and institutionalise their cooperation, particularly focusing on critical minerals and nuclear energy.
Relevance of the Topic: Mains: India-US bilateral relations: Agreements in energy, defence, and critical minerals.
India’s Energy Priorities
- India’s energy security is guided by three imperatives, at present:
- having sufficient energy resources at predictable prices
- minimal disruptions in supply chains
- progress towards an increasingly sustainable energy mix.
- Nuclear energy and critical minerals matter in this respect, and can be the bedrock of further deepening energy and technology partnership.
- Major Challenge: China controls about 90% of the world’s processing of critical minerals. It sometimes restricts their exports for strategic goals which poses risks to global supply chains.
India-US Cooperation in Energy and Defence sector:
- US-India Energy Security Partnership, including in oil, gas and civil nuclear energy. 123 Civil Nuclear Agreement and plans to build US designed nuclear reactors in India through large-scale localisation and energy transfer.
- Strategic Mineral Recovery initiative, a new US-India program for cooperation in recovery and processing of critical minerals, including lithium, cobalt, and rare earth elements, from heavy industries like aluminum, coal mining and oil and gas.
- Accelerate R&D and promote investment across the entire critical mineral value chain, through US-led Minerals Security Finance Network and the Mineral Security Partnership.
- US-India TRUST (Transforming the Relationship Utilising Strategic Technology) initiative to catalyse government-to-government, academia and private sector collaboration to promote application of critical and emerging technologies like semiconductors, defence, AI, quantum, biotechnology, space etc.
- INDUS-X Initiative: Collaboration between India's iDEX (Innovations for Defence Excellence) and the US Defence Innovation Unit to promote innovation in defence technologies, including semiconductors for military applications.
Way Forward
- The countries should prioritise long-term strategy and enable cross-sectoral skills and technology exchange in the sectors utilising critical minerals (clean energy, defence, and electronics). This includes increasing cooperation in:
- Exploring and processing critical minerals jointly. Sharing technology and skills.
- Co-investing in mineral-rich countries like those in Africa or South America.
- Building an India-US Mineral Exchange: a digital platform to track trade and investment.
- Creating blockchain-based tracking systems to ensure transparency, like Europe’s Battery Passport.
- Making joint stockpiles of important minerals to protect against future disruptions.
- Long-term partnership: It takes 12–16 years to fully develop mines and processing plants, so this partnership must be planned for the long term.
- To make this successful, both countries need to encourage innovation through platforms like iCET (India-U.S. Critical and Emerging Technology initiative).
India has the growth potential, while the U.S. has technology and capital. Together, they can create a long-term energy partnership that looks beyond short-term gains and focuses on stability, strategy, and sustainability.
Also Read: India-US TRUST Initiative