India-US Trust Initiative Strengthening Mineral & Pharma Supply Chains.

Why in thy NEWS?

India and the United States have launched a bilateral initiative to cooperate in the recovery and processing of critical minerals, including lithium and rare earth elements (REE).

Key Points:

• India and the US have announced the Transforming Relationships Utilizing Strategic Technology (TRUST) initiative.
• Its main objective is to strengthen the supply chain of critical minerals, advanced materials and pharmaceuticals.
• This initiative will deepen bilateral cooperation between India and the US to challenge the global supply chain dominated by China.

What will you read next in this topic?

1. What is the TRUST initiative?
2. Why is the TRUST initiative important?
3. India-US Collaboration in Critical Minerals
4. What sectors will the TRUST initiative impact?
5. TRUST synergies with national and international programmes
6. How will the TRUST initiative benefit India and the US?
7. What could be the challenges?

What is the TRUST initiative?

• The TRUST (Transforming Relationship Utilizing Strategic Technology) initiative was announced during Prime Minister Narendra Modi’s visit to Washington.
• It aims to reduce barriers to technology transfer, resolve export controls and promote high-tech commerce.
• The initiative will focus on the recovery and processing of lithium, rare earth elements (REE), pharmaceuticals and other critical minerals.

Why is the TRUST initiative important?

• China’s global dominance – China currently controls more than 70% of REE (Rare Earth Elements) production and processing.
• India’s dependence – India has some rare mineral reserves, but it is still dependent on China for heavy rare earth minerals.
• Expanding clean energy and electric vehicle industry – Critical minerals, especially lithium, cobalt and nickel, are essential for electric vehicles and advanced batteries.
• Growth of Pharmaceutical Industry – India is the world’s second largest API (Active Pharmaceutical Ingredient) manufacturer and this initiative will further strengthen API production.

India-US Collaboration in Critical Minerals

• The TRUST initiative will further India and US collaboration under the Mineral Security Partnership (MSP) and Mineral Security Finance Network (MSFN).
• India joins the MSP (Mineral Security Partnership) in 2023, a US-led initiative to develop secure supply chains of critical minerals.
• The TRUST initiative will go a step beyond MSP and establish direct bilateral collaboration between India and the US.

What sectors will the TRUST initiative impact?

Importance of Strategic Minerals and REEs (Rare Earth Elements)

Pharmaceuticals and API (Active Pharmaceutical Ingredients) Supply Chain

• The TRUST initiative to strengthen the pharmaceuticals supply chain will focus on minerals such as lithium, magnesium, zinc and selenium.
• India exported pharma products worth $20 billion to the US in 2023, accounting for 21.9% of total exports.
• This initiative will make India's pharma supply chain self-reliant by increasing API production.

TRUST synergies with national and international programmes

US’s Plans

• 2020: $675 million budget approved under US Energy Act for supply chain diversification and expansion.
• 2024: US grants $125 million for battery and critical minerals recycling programme.

India’s Plans

• 2024: India approves budgetary outlay of ₹16,300 crore under National Critical Minerals Mission.
• ₹7,000 crore: For exploration of critical minerals.
• ₹1,500 crore: To promote recycling and processing.

How will the TRUST initiative benefit India and the US?

Technology transfer and high-tech commerce

• The initiative will promote cooperation between India and the US in high-tech sectors.
• India's battery manufacturing and electronics industries will get access to cutting-edge technologies.

Improvement in export controls

• The US and India will ease export controls, thereby simplifying the exchange of cutting-edge defence and technology products.

Reducing dependence on China

• The TRUST initiative will develop alternative supply chains to challenge China's dominance.

Self-reliance in the pharma industry

• API production for the pharma sector will increase, thereby reducing import dependence.

What could be the challenges?

• The TRUST initiative is a historic step to promote technological and strategic cooperation between India and the US. 
• This initiative will not only strengthen critical minerals and pharmaceutical supply chains but will also challenge China's dominance in the world.
• The success of this initiative will provide India with an opportunity to play a more influential role in technological sovereignty, economic development and global supply chains.