Why in news?

On the sidelines of the 11th Quad Foreign Ministers' Meeting (FMM), India and the United States signed the bilateral India-US Critical Minerals Framework — formally titled "Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths.”

What’s in Today’s Article?

• What Triggered This Framework — China's Export Controls
• Key Objectives of the India-US Framework
• Building Blocks — The Journey So Far
• India's Regulatory Push — FDI Policy Changes
• The Investment Challenge
• Conclusion

What Triggered This Framework — China's Export Controls

• The immediate trigger for the framework was China's imposition of a licensing regime on rare earth element exports in 2025 — effectively choking global supplies during its trade war with the US.
• This directly impacted Indian industry, which began facing shortages of rare earth magnets late last year.
• The strategic context is stark — China controls 90% of global critical mineral processing, giving it enormous leverage over global technology supply chains.
• India is 100% import-dependent for key critical minerals including cobalt, lithium, nickel, rare earth elements (REEs), and silicon — with little domestic processing capacity.

Key Objectives of the India-US Framework

• The bilateral framework seeks to:
  • Deepen cooperation across the entire critical minerals and rare earths supply chain — covering mining, processing, recycling, and related investments.
  • Strengthen resilient and diversified supply chains — reducing dependence on China.
  • Promote collaboration in financing and effective management of critical minerals and rare earths scrap.
  • Accelerate R&D collaboration and promote investment across the entire critical mineral value chain.
  • Align domestic laws and regulations of both countries to facilitate easier supply chain access.
  • Tighten controls to address national security requirements.

Building Blocks — The Journey So Far

• The India-US Critical Minerals Framework did not emerge overnight. It is the culmination of a series of engagements:
  • February 2025 — Secure supply routes for critical minerals were identified as a "shared strategic priority" under the India-US TRUST (Transforming the Relationship Utilising Strategic Technology) initiative.
    • The Strategic Mineral Recovery Initiative was also launched — a US-India programme to recover and process critical minerals (including lithium, cobalt, and rare earths) from heavy industries like aluminium, coal mining, and oil and gas.
  • February 2026 — India became a signatory to the US-led Pax Silica initiative — a Washington-led grouping to counter China's dominance in new-age sectors including AI and critical minerals.
  • May 2026 — Signing of the bilateral India-US Critical Minerals Framework and the Quad Critical Minerals Initiative Framework.
• Other Related Initiatives
  • Forum on Resource Geostrategic Engagement (FORGE) — India and the US are also partnering under this initiative for resource security cooperation.
  • Mineral Security Partnership (MSP) — Both India and the US are members of this US-led grouping that aims to catalyse public and private investment in critical mineral supply chains globally.

India's Regulatory Push — FDI Policy Changes

• To complement the international frameworks and attract strategic investment, India announced calibrated changes in FDI policy for Land Bordering Countries (LBCs) in March 2026 — through Press Note 3 (PN3).
• Investment applications from LBCs in "specified sectors" — including capital goods, electronic components, polysilicon, ingot-wafer, and rare earth magnets — shall now be processed and decided within 60 days, fast-tracking decisions on strategically important investments.

The Investment Challenge

• Despite these frameworks, the actual investment picture remains challenging.
• India's gross FDI rose to a record $94.53 billion in 2025-26 but net FDI was a mere $7.65 billion — largely due to high repatriation by foreign companies.
• Foreign capital has exited India in large volumes since the West Asia war began — $13.6 billion in March, $7.56 billion in April, and $2.62 billion in May — creating a difficult environment for attracting the long-term investment that critical mineral supply chain development requires.

Conclusion

The India-US Critical Minerals Framework represents a significant deepening of the India-US strategic technology partnership — moving from declarations to operational frameworks for supply chain security.

It reflects India's recognition that critical mineral security is inseparable from economic security, technological sovereignty, and defence preparedness.

The framework's alignment with the Quad multilateral architecture also signals that critical mineral security is becoming a central pillar of the Indo-Pacific strategic order — with China's dominance as the explicit strategic challenge being addressed.