world biggest deal: On May 1, 2025, America made the world’s biggest deal – it will affect India and the whole world
world biggest deal: On May 1, 2025, America signed the world’s biggest deal. This deal can have a profound impact on the global-political balance, global mineral supply chain and the strategy of developing countries. Let us understand what it means for India and the world.
The world’s biggest awaited event happened on 1 May 2025. According to CNBC International, the US and Ukraine signed a historic ‘Minerals Deal’ on Wednesday. Under this, the US will get preference over Ukraine’s rare minerals, oil, gas and other natural resources. In return, the two countries will create a joint investment fund to help revive the war-ravaged Ukraine’s economy.
India’s electronics industry can benefit from the new supply chain. If China’s dominance reduces, minerals can be obtained at a lower cost. There is a possibility of reversal in the prices of gold and metals.
The impact of this deal is huge-
It would be limited to view the mineral agreement between the US and Ukraine on May 1, 2025 as only a bilateral deal.
This deal can have a profound impact on the global-political balance, global mineral supply chain and the strategy of developing countries. Let us understand what it means for India and the world:
What minerals are there in Ukraine?
America needs minerals like lithium, titanium, graphite and rare earth elements, which are essential for batteries, electronics, defence and green energy.
Till now America was dependent on China for these minerals. America now wants to make Ukraine a new supplier, so that China’s hold can be weakened.
What will Ukraine get? Billions of dollars in financial aid and military equipment. Hope of post-war security guarantees. Global recognition of its mineral resources.
What will America get- It has special access to Ukraine’s mineral resources. It has an opportunity to strengthen the supply chain. Trade conflict has to be balanced by importing less from China.
Let’s know what has happened in the deal:
The US will get priority in using Ukraine’s rare earth, oil, gas and critical minerals. In simple words, it will be able to use it easily without any approval.
Ukraine’s control Ukraine will decide “what and where mining will take place”:
50-50 investment fund The US and Ukraine will together create an equal fund. No one will have monopoly over it.
The foundation of the deal was agreed upon in April, the final negotiations took place during the funeral of Pope Francis.
The US Treasury Secretary says that this deal is a clear message to Russia that the US is committed to an independent and prosperous future for Ukraine.
US President Donald Trump says that this deal is a strategic return on the money we have invested in helping Ukraine. I did not want to look foolish.
Ukrainian Minister Yulia Sviridenko says the deal will also signal to other global investors that Ukraine is a reliable partner for decades.
What will happen with this deal:
Energy Security – America will get the minerals needed for electric vehicles and defense production.Funding and investment for Ukraine reconstruction of war-damaged infrastructure.
Apart from this, a strong western block will be created against Russia as a geopolitical alliance.
Impact on India:
Rare Earth Minerals-The US is now getting exclusive access to Ukraine’s rare earth and critical minerals.
India is also prioritising exploration and import of these minerals for batteries, semiconductors and electric vehicles.
Meaning: India will have to find alternative sources for these resources or increase domestic production and strategic partnerships.
US dominance in global supply chain-
US presence in Ukraine’s mineral sector can increase competition and diplomatic complexity for countries like India. If India wants future investment or mineral agreements with Ukraine, US influence can become a factor.
New definition of strategic cooperation
US has made this deal as a “strategic return” for the military assistance given to Ukraine.Hint: Countries like India can also now extend strategic partnership to resource sharing instead of limiting it to just defence or trade.India will now have to adopt a more active strategy.
It is important to increase mineral partnership with countries like Africa, Latin America and Australia. Domestic mineral policy and production will have to be accelerated.
Impact on the world
Geopolitical pressure on Russia will increase- US’s deep penetration into Ukraine’s mineral sector will pose a geopolitical and economic challenge to Russia.
This agreement signals to Russia that the Western world is serious about the long-term reconstruction and control of Ukraine.
The Era of Mineral Diplomacy – Minerals are no longer just a currency of the economy but also a form of diplomatic leverage.
China, already a major player in the global rare earths market, will now feel new competition.