Amid China concerns, India and US sign pact to secure supply of critical minerals

India and the United States signed a bilateral "Framework on the Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths" on May...

What Happened

India and the United States signed a bilateral "Framework on the Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths" on May 26, 2026, in New Delhi.
The agreement covers the full value chain of critical minerals and rare earths: mining, processing, recycling, and related investments — aimed at building supply chain resilience away from single-source dependence, particularly China's dominant processing capacity.
The pact was described by the Ministry of External Affairs as an "important milestone" aligned with shared strategic priorities identified at the February 2025 bilateral summit.
The framework is distinct from, but complementary to, the multilateral Quad Critical Minerals Framework (also announced the same day), which involves all four Quad nations and a USD 20 billion mobilisation target.
The agreement is intended to benefit sectors including semiconductors, electric vehicles, clean energy, and defence manufacturing — areas where both nations have identified supply chain vulnerabilities.

Static Topic Bridges

India-US Strategic Partnership — Bilateral Framework and Economic Pillars

The India-US bilateral relationship has evolved from a limited Cold War-era engagement to a Comprehensive Global Strategic Partnership, formalised progressively through the 2005 nuclear deal framework, the 2006 Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act, the 2008 123 Agreement, and a series of foundational defence agreements (GSOMIA 2002, LEMOA 2016, COMCASA 2018, BECA 2020). The economic relationship has grown significantly: bilateral trade in goods and services exceeded USD 190 billion in 2023-24, making the US India's largest trading partner.

US-India "Comprehensive Global Strategic Partnership": designated at the 2023 Narendra Modi state visit to Washington (June 2023)
LEMOA (Logistics Exchange Memorandum of Agreement): 2016 — enables reciprocal access to military logistics facilities
COMCASA (Communications Compatibility and Security Agreement): 2018 — enables secure communications equipment interoperability
BECA (Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation): 2020 — enables sharing of geospatial intelligence
Initiative on Critical and Emerging Technology (iCET): launched January 2023, covers semiconductors, advanced telecom, AI, space, defence innovation
India-US bilateral trade (2023-24): over USD 190 billion (goods + services)

Connection to this news: The critical minerals framework extends the iCET agenda into the upstream materials sector — securing the raw material inputs that underpin the semiconductor, EV, and defence technology cooperation already underway under iCET.

Supply Chain Security as a National Security Imperative

The COVID-19 pandemic (2020-21) exposed global vulnerabilities in concentrated supply chains — pharmaceutical APIs (India and China), semiconductors (Taiwan), and rare earths (China). Since then, "supply chain security" and "friend-shoring" (shifting supply chains to geopolitically aligned partners) have become central to the economic security doctrines of major democracies. The US CHIPS and Science Act (2022, USD 52.7 billion) and the EU Critical Raw Materials Act (2023) reflect this shift; India's PLI (Production Linked Incentive) schemes similarly aim to on-shore or ally-shore critical production.

US Inflation Reduction Act (2022): incentivises EVs and batteries using minerals sourced from countries with which the US has a Free Trade Agreement or bilateral agreement — the India-US minerals framework is designed to qualify Indian-sourced minerals under this provision
US CHIPS Act (2022): USD 52.7 billion for semiconductor manufacturing and R&D; requires supply chain diversification away from China
EU Critical Raw Materials Act (2023): mandates that no more than 65% of any strategic raw material should come from a single third country; targets domestic extraction (10%), processing (40%), and recycling (15%) by 2030
India's PLI schemes: 14 sectors including semiconductors, advanced chemistry cell batteries, and specialty steel — all critical mineral-intensive
"Friend-shoring": term used by the US Treasury (2022) to describe redirecting supply chains to trusted partner nations

Connection to this news: The bilateral India-US framework is a concrete implementation of the "friend-shoring" principle — establishing India as a trusted source and processor of critical minerals that can feed US defence and clean energy supply chains.

India's Critical Mineral Reserve Position vs. Production Gap

India possesses substantial geological endowments in several critical minerals but has chronically underperformed in extraction and processing. India ranks 3rd globally in rare earth reserves (6.9 million tonnes REO), holds the world's largest thorium reserves (~846,000 tonnes), and has significant deposits of lithium (Reasi, Jammu; Mandya, Karnataka), graphite (Odisha), and titanium-bearing minerals (ilmenite in beach sands). However, structural bottlenecks — including restrictive mining regulations, the radioactivity of monazite sands (which contain REEs alongside thorium), and the absence of domestic processing capacity — mean India produces less than 1% of global REEs despite holding ~7% of reserves.

India's rare earth reserves: 6.9 million tonnes (3rd globally; China leads at 44 million tonnes, Brazil 2nd at 21 million tonnes)
India's lithium discovery: ~5.9 million tonnes inferred resources in Reasi district (J&K), announced 2023 by Geological Survey of India — if confirmed, would be among the world's largest deposits
India's thorium reserves: world's largest at ~846,000 tonnes (key for long-term nuclear energy under the 3-stage nuclear programme)
Production gap: India extracts approximately 2,900 tonnes of REE per year (ranked 7th globally in production) against reserves that should support far greater output
Key bottleneck: monazite (India's primary REE-bearing mineral) contains radioactive thorium; regulated under the Atomic Energy Act, 1962 and controlled by the Atomic Minerals Directorate (Department of Atomic Energy)
Processing deficit: China controls ~90% of global REE refining; India has minimal domestic processing capacity

Connection to this news: The India-US framework is designed to attract US investment specifically into the processing and refining gap — building the downstream infrastructure that converts India's reserve wealth into supply chain reality.

India's Engagement in Global Minerals Security Frameworks

Beyond the bilateral US framework, India has actively joined multilateral mineral security architectures. India joined the Minerals Security Partnership (MSP), a US-led initiative launched in 2022 bringing together major economies to catalyse public and private investment in responsible critical minerals supply chains. India is also a member of the International Energy Agency (IEA) and participates in its Critical Minerals and Clean Energy Summit process.

Minerals Security Partnership (MSP): launched 2022 by the US; members include India, Australia, Canada, Finland, France, Germany, Italy, Japan, South Korea, Sweden, UK, and the EU
MSP objective: diversify critical mineral supply chains through financing, technical assistance, and project development
IEA membership: India became a full member in 2021
India-Australia Critical Minerals Investment Partnership: part of the bilateral CECA (Comprehensive Economic Cooperation Agreement) framework
India-Japan bilateral: partnership on critical minerals under the India-Japan Special Strategic and Global Partnership framework

Connection to this news: The bilateral India-US minerals framework reinforces India's broader strategy of embedding itself in multiple overlapping minerals security architectures — bilaterally (US, Australia, Japan) and multilaterally (MSP, Quad, IEA) — to maximise investment inflows and diversification options.

Key Facts & Data

Framework signed: May 26, 2026, New Delhi
Full name: Framework on the Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths
India's REE reserve ranking: 3rd globally (6.9 million tonnes REO)
India's thorium reserves: world's largest (~846,000 tonnes)
India's lithium discovery (Reasi, J&K): ~5.9 million tonnes inferred resources (GSI, 2023)
China's REE processing dominance: ~90% of global refining capacity
Minerals Security Partnership (MSP): launched 2022; India is a member
US Inflation Reduction Act (2022): USD 369 billion for clean energy; EV battery mineral sourcing preferences key driver of India-US minerals cooperation
India-US bilateral trade: over USD 190 billion (goods + services, 2023-24)
iCET (Initiative on Critical and Emerging Technology): launched January 2023 (precursor bilateral tech partnership framework)