US Commerce Secretary Gina Raimondo and India's Minister of Commerce and Industry Piyush Goyal met in the US capital Washington on Thursday, inking a deal to "expand and diversify" critical mineral supply lines.
The aim of the Memorandum of Understanding (MoU) is to increase resilience in the critical minerals sector, said the statement.
Both sides will also identify ways to facilitate "commercial development of US and Indian critical minerals exploration, extraction, processing and refining, recycling, and recovery," the statement added.
Rare earth elements and minerals are increasingly important given their use in clean energy technologies like batteries for electric cars.
But the United States is set to face gaps in supplies when it comes to meeting projected demand for Electric Vehicles (EVs).
China is a major player in the critical minerals supply chain.
The United States and India also pledged Thursday to collaborate in the area of semiconductors.
"We will continue to expand cooperation in new areas and strengthen existing ones by capitalising on the immense opportunities for India-US trade and commercial partnership," Goyal said in a post on social media platform X.
Last year, the United States and Japan reached an agreement on trade in critical minerals, seeking to reinforce supply chains in the face of China's dominance.
The US-Japan deal included commitments not to impose export duties on critical minerals shipped bilaterally.
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