India Considering Discussing With Australia Under FTA Mechanism For A Steady Supply Of Essential Minerals

According to sources, India is considering discussing a mechanism with Australia under the comprehensive Free Trade Agreement (FTA) to ensure a steady supply of critical minerals.

In December 2022, India and Australia implemented an Economic Cooperation Trade Agreement (ECTA), and now negotiations are underway to expand the scope of that agreement into a comprehensive treaty (Comprehensive Economic Cooperation Agreement or CECA).

India has a high need for essential minerals such as lithium, titanium, vanadium, cobalt, nickel, and graphite, as the government aims to increase renewable energy production by 2030.

Batteries will facilitate India's ongoing energy shift to electric mobility, renewable energy integration through grid-scale storage, and increased energy availability.

India's present lithium-ion battery production capacity is limited, and existing manufacturers rely largely on imports.

An MoU (memorandum of understanding) has been signed between Khanij Bidesh India Ltd (KABIL), a joint venture of three central public sector units under the Ministry of Mines, and the Critical Minerals Facilitation Office (CMFO), Government of Australia, to strengthen bilateral trade relations and lay the groundwork for delivering on a shared ambition to develop secure, robust, and commercially viable critical minerals supply chains.

The sources stated that at now, nothing has been finalized, but there is a thought that " "we can think of some kind of mechanism under which India can get assured supply of these minerals"

"We have to work on the details. How to craft that mechanism. It is broad thinking at present. It has never happened in any free trade agreement. We have an MoU with Australia. Now, we are thinking about how we can strengthen that MoU," They went on to say.

According to an official statement made on March 11, India and Australia have attained a significant milestone in their efforts to invest in important minerals projects that would help the two nations create supply chains.

Over half of the world's lithium is produced in Australia. It is also the second-largest cobalt producer and the fourth-largest rare earth producer.

Critical minerals are important raw materials for a variety of high-demand manufactured items. These minerals are used in metallurgy, chemical industries, and energy storage systems for renewable energy, electric mobility, power production, high-end electronics, and defense.

Because of their importance, India is searching for a reliable supply source.

Important News and Blog Tags for Readers

Free Trade Agreement (FTA)

Over half of the world's lithium is produced in Australia

Economic Cooperation Trade Agreement (ECTA)

Comprehensive Economic Cooperation Agreement or CECA

Critical minerals supply chains

Over half of the world's lithium is produced in Australia