India-US TRUST Initiative

The India-US TRUST initiative was launched to enhance collaboration in the recovery and processing of critical minerals. This includes vital resources such as lithium and rare earth elements (REEs). Announced during Prime Minister Narendra Modi’s visit to Washington, the initiative aims to establish strong supply chains and reduce barriers to technology transfer. It is a strategic response to counter China’s dominance in critical minerals.

Background of the TRUST Initiative

• The TRUST initiative is a bilateral partnership distinct from previous multilateral efforts.
• It builds on India’s recent induction into the US-led Minerals Security Finance Network. This initiative follows India’s entry into the Minerals Security Partnership, which aims to enhance mineral supply chains. The TRUST initiative focuses on encouraging cooperation between governments, academia, and the private sector.

Goals of the TRUST Initiative

The primary goal is to create robust supply chains for critical minerals. This includes advanced materials and pharmaceuticals. The initiative is expected to drive innovation across various sectors. These sectors include defence, artificial intelligence, semiconductors, and biotechnology. By enhancing collaboration, the initiative aims to boost India’s position in the global supply chain.

National Programmes and Funding

The TRUST initiative aligns with national programmes in both countries. The US has allocated $675 million for its Critical Minerals and Materials programme. This aims to diversify supply chains and promote a circular economy. India has approved the National Critical Minerals Mission with a budget of Rs 16,300 crore. This mission includes funding for exploration and recycling of critical minerals.

Strategic Importance of Critical Minerals

Critical minerals are essential for various strategic industries. They are vital for defence applications, energy storage, and advanced technology. Elements like neodymium and lithium are crucial for high-performance magnets and batteries. Gallium and indium play key roles in semiconductors. The demand for these minerals is increasing as technology advances.

China’s Dominance in Critical Minerals

China currently controls approximately 70% of global REE production. This dominance poses challenges for countries seeking to secure diversified supply chains. The TRUST initiative aims to reduce dependence on Chinese imports. India, despite having some mineral reserves, remains reliant on imports, especially for heavy rare earths.

Future Prospects

The TRUST initiative is expected to deepen cooperation between India and the US. It may also lead to increased investments in critical mineral supply chains. While it does not provide Indian companies with tax benefits under the US Inflation Reduction Act, it broadens collaboration opportunities. The initiative lays the groundwork for a more resilient and secure supply chain for critical minerals.

Questions for UPSC:

1. Critically analyse the role of critical minerals in technological advancements in defence and energy sectors.
2. Explain the significance of the TRUST initiative in the context of India-US relations and global supply chains.
3. What are rare earth elements? Discuss their applications in modern technology and industry.
4. What is the impact of China’s dominance in rare earth element production on global trade and security? Provide examples.

Answer Hints:

1. Critically analyse the role of critical minerals in technological advancements in defence and energy sectors.

1. Critical minerals are essential for high-performance applications in defence, including missiles and fighter jets.
2. They are vital in energy storage solutions, particularly in advanced batteries for electric vehicles.
3. Elements like lithium, cobalt, and nickel enhance energy efficiency and sustainability in modern technology.
4. Advancements in semiconductors and AI rely on critical minerals such as gallium and indium.
5. These minerals play important role in the development of renewable energy technologies, like wind turbines.

2. Explain the significance of the TRUST initiative in the context of India-US relations and global supply chains.

1. The TRUST initiative strengthens bilateral ties by encouraging cooperation in critical minerals and technology transfer.
2. It aims to reduce dependency on China by establishing robust supply chains for critical minerals.
3. This initiative enhances innovation across various sectors, including defence and biotechnology.
4. It aligns with national programmes in both countries, promoting investment and research in critical minerals.
5. TRUST positions India as a key player in global supply chains, enhancing its technological sovereignty.

3. What are rare earth elements? Discuss their applications in modern technology and industry.

1. Rare earth elements (REEs) are a group of 17 metallic elements critical for various high-tech applications.
2. They are essential in manufacturing powerful magnets used in motors and generators in electric vehicles.
3. REEs are crucial for the production of phosphors in LED lighting and display technologies.
4. They play role in the aerospace industry, particularly in radar and missile systems.
5. REEs are also used in catalysts for petroleum refining and in various medical imaging technologies.

4. What is the impact of China’s dominance in rare earth element production on global trade and security? Provide examples.

1. China controls approximately 70% of global REE production, impacting supply chains and pricing globally.
2. This dominance creates vulnerabilities for countries reliant on REE imports for technology and defence.
3. China’s control allows it to leverage REEs as a strategic asset in international relations and trade negotiations.
4. For example, during trade tensions, China threatened to restrict REE exports to the US, raising security concerns.
5. The reliance on Chinese REEs has prompted initiatives like TRUST to diversify sources and enhance national security.