India-US TRUST Initiative: Strengthening Critical Minerals and Pharma Supply Chains

Sub :IR

Sec: India and world

Why in News

The Transforming Relationship Utilizing Strategic Technology (TRUST) Initiative was announced during Prime Minister Narendra Modi’s visit to Washington.

About TRUST Initiative:

The TRUST initiative will facilitate collaboration in the recovery and processing of critical minerals like lithium and rare earth elements (REEs).
It aims to reduce barriers to technology transfer, address export controls, and enhance high-tech commerce.
India and the US will work together to create a secure and resilient supply chain for critical minerals.
TRUST will drive collaboration among governments, academia, and private sectors to foster innovation in:
- Defence, Artificial Intelligence (AI), Semiconductors, Quantum Computing, Biotechnology and Energy and Space Technologies.

Impact on the Pharmaceutical Sector:

India is the second-largest manufacturer of Active Pharmaceutical Ingredients (APIs) after China.
Many APIs depend on critical minerals like lithium, magnesium, zinc, and selenium.
In 2023, pharma products accounted for 21.9% of India’s $20 billion exports to the US.
The TRUST initiative aims to secure the supply of essential raw materials for the pharmaceutical industry.

US Critical Minerals Strategy:

US Energy Act (2020): Authorized $675 million for the Critical Minerals and Materials (CMM) program to diversify supply chains.
Battery and Critical Mineral Recycling Program (2024): Provided $125 million in grants for battery reuse and recycling.
India’s National Critical Minerals Mission: Launched in 2024 with a budget of ₹16,300 crore over seven years.
₹7,000 crore allocated for the exploration of critical minerals.
₹1,500 crore allocated for an incentive scheme to support recycling.
India-US iCET Initiative (2022):Focused on semiconductors, wireless communication, and AI.
TRUST has a broader focus, covering critical minerals and supply chain security.
TRUST will enhance bilateral engagement beyond MSFN and MSP frameworks.
It seeks to reduce technology transfer barriers and address export control challenges.
While it does not provide Inflation Reduction Act (IRA) tax benefits to Indian companies like Japan, it opens new avenues for collaboration.

Importance of Critical Minerals in Strategic Sectors:

Critical minerals and REEs are essential for industries like defence, semiconductors, AI, energy, and space.
Key applications:
- Neodymium, praseodymium, samarium – High-performance magnets for missiles, fighter jets, radars.
- Lithium, cobalt, nickel – Batteries for electric vehicles and energy storage.
- Gallium, indium – Essential for semiconductors and AI hardware.
- Europium, terbium – Used in medical diagnostics and biotech imaging.
- Rare earth magnets – Crucial for wind turbines and space technology.
China controls ~70% of global REE production and dominates processing.
India, despite having some reserves, remains dependent on imports, especially for heavy rare earths.
The TRUST initiative aims to reduce dependence on China by securing alternative global partnerships.