The India-US TRUST initiative: what is it, and how will it strengthen the critical minerals and pharma supply chains

“Today we have agreed on TRUST. Under this, emphasis will be laid on creating strong supply chains of critical minerals, advanced materials and pharmaceuticals. It has also been decided to launch a recovery and processing initiative for strategic minerals like lithium and rare earth,” the Prime Minister said at a press conference with US President Donald Trump on Thursday (early on Friday in India).

The TRUST initiative follows India’s induction into the US-led Minerals Security Finance Network in September last year. India joined the Minerals Security Partnership (MSP) in 2023.

Unlike previous multilateral partnerships, however, the TRUST initiative will build on bilateral engagement. It also positions India and the US to accelerate existing efforts, and counter China’s dominance in critical minerals supply chains.

How will TRUST work, and what benefits is it expected to bring?

Will boost innovation across sectors

“This initiative will catalyse collaboration among governments, academia and the private sector to drive innovation in defence, artificial intelligence, semiconductors, quantum computing, biotechnology, energy and space,” Foreign Secretary Vikram Misri said.

The TRUST initiative’s effort to create robust supply chains for pharma could focus on active pharmaceutical ingredients (APIs), many of which depend on critical minerals like lithium, magnesium, zinc, and selenium. India is the world’s second largest manufacturer of APIs after China.

Pharma products made up the largest share (21.9%) of the $20 billion worth of final consumer goods that India exported to the US in 2023. The pharma sector is vulnerable to tariffs that the Trump administration may decide to impose.

Will build on national programmes

The India-US collaboration in critical minerals and advanced materials comes after the two countries announced major national programmes over the past few years to boost this sector – from exploration and recycling to research and development (R&D) in processing technologies.

In 2020, the US Energy Act authorised $675 million for the Critical Minerals and Materials (CMM) programme to diversify and expand supply chains and build a circular economy.

The US also launched the Battery and Critical Mineral Recycling programme in 2024, with grants worth $125 million for R&D to increase the reuse and recycling of batteries.

And in January, India approved the National Critical Minerals Mission with a budgetary outlay of Rs 16,300 crore over seven years, of which roughly Rs 7,000 crore is allocated for exploration of critical minerals.

The mission also includes Rs 1,500 crore for an incentive scheme to support the recycling of critical minerals.

In 2022, India and the US had announced the initiative on Critical and Emerging Technology (iCET) to collaborate specifically on semiconductors, wireless communication, and artificial intelligence (AI), with a focus on defence- and security-related applications. In comparison, the TRUST initiative has a wider critical minerals and supply chain focus.

TRUST will deepen cooperation

The emphasis of the TRUST initiative on reducing barriers to technology transfer, addressing export controls, and enhancing high-tech commerce lays the groundwork for deeper coordination between India and the US in the critical minerals space.

While the initiative falls short of giving Indian companies tax benefits from the US Inflation Reduction Act (IRA) for battery components and critical raw materials – a privilege that is extended to Japanese companies – it still broadens the scope for collaboration significantly.

Some Indian players in the battery space had earlier pushed for an agreement with the US similar to the one it signed with Japan in 2023, for IRA tax benefits.

In its bilateral spirit, the TRUST initiative moves forward from the Minerals Security Finance Network (MSFN) under the MSP, which sought to bring together development finance institutions (DFIs) and export credit agencies (ECAs) from the participating nations to “create synergies and increase impact”.

The MSP is a US-led collaboration of 14 countries that aims to catalyse public and private investment in critical minerals supply chains. In addition to the US, it includes India, Australia, Canada, Estonia, Finland, France, Germany, Italy, Japan, the Republic of Korea, Sweden, the UK, and the European Union (represented by the European Commission).

Why critical minerals are key in strategic sectors

Critical minerals and REEs are essential for strategic industries, including defence, semiconductors, quantum computing, energy, and space.

Elements such as neodymium, praseodymium, and samarium are crucial for high-performance magnets used in missiles, fighter jets, and radars.

Lithium, cobalt, and nickel power are used in advanced batteries for energy storage and electric vehicles, while gallium and indium are key in semiconductors and AI hardware.

Quantum computing relies on ultra-pure silicon and superconducting materials, while REEs like europium and terbium enhance biotech imaging and medical diagnostics.

In energy, rare earth magnets are vital for wind turbines, and space technology depends on heat-resistant alloys and lightweight materials like scandium.

With China controlling nearly 70% of global REE production and much of the processing infrastructure, securing diversified supply chains is critical for technological sovereignty and national security.

India, despite some reserves, remains dependent on imports, particularly for heavy rare earths.