A question that immediately comes to mind is — what do the November 5 elections in the US signify for the India-US energy relations? Will Donald Trump’s return to the White House lead to a re-orientation in the bilateral relations between the two on the energy front.
Not really, if one goes by what policymakers in New Delhi have to say. “A lot has happened between Trump’s first stint and now,” said an official here.
According to Western media reports, Trump’s energy agenda may emphasise energy independence, economic growth, and expanded production of fossil fuels.
The US-India energy cooperation is technical, economic, and bilateral. The US is among the top five fossil fuel suppliers to India, a reason why New Delhi cannot be ignored by the Trump regime.
According to data available, hydrocarbon trade between the two countries has nearly doubled from 2018-19, touching $13.6 billion during 2023-24. For the first two months of FY25 hydrocarbon trade is valued at $2.43 billion.
In November 2009, the two countries launched the Partnership to Advance Clean Energy, to accelerate inclusive, low carbon growth by supporting research and deployment of clean energy technologies.
Green initiatives
In 2021 the two revamped the US-India Strategic Clean Energy Partnership (SCEP) to advance the climate and clean energy goals of both countries following the US-India Climate and Clean Energy Agenda 2030 Partnership announced by President Joe Biden and Prime Minister Narendra Modi, which recognised the importance of accelerating climate action in the decisive decade ahead.
Under the SCEP, the two countries agreed to collaborate across five pillars: Power and Energy Efficiency; Renewable Energy; Responsible Oil and Gas; Sustainable Growth; Emerging Fuels.
In addition, the two were to continue to push innovation in civil nuclear power as a net-zero solution through different collaborative programmes including the long-standing Civil Nuclear Energy Working Group (CNEWG).
The two countries were also to engage the private sector and other stakeholders across the technical areas to help deploy clean technologies to accelerate a clean energy transition.
According to Peter J. Jarka-Sellers, Expert in US-India Energy Policy, “There is every indication that Trump’s fundamental orientation on energy and climate will be the same as during his first-term. He will seek to boost fossil fuel production, remove measures to decrease consumption, and completely reject climate mitigation as a policy imperative. He campaigned vocally on this and his campaign was backed by the fossil fuel industry.
“He will almost certainly move to undo all Biden-era regulations such as setting emissions limits on coal and gas power plants, fuel efficiency standards for cars (including promoting EVs), and regulations supporting clean energy industries like offshore wind where the federal government plays an especially important role,” he said adding “These are some of the most high-profile examples.”
“Connected to boosting production and of greater relevance to other countries like India, he will look for new and expanded export markets for fossil fuels, such as LNG. The result will be that the energy transition slows and that shifts away from fossil fuels will be driven by market forces and state/local policy rather than national policy,” he said.
But, a lot has changed since 2016-2020, he agrees. “The clean energy industry for one is larger/more mature, clean technologies are being deployed faster and at higher volumes, and that industry is by extension more politically and economically influential,” he said.
While it was easier for Trump to undo Obama’s executive actions, it may not be easy to undo Biden’s actions which were through legislations. Therefore, Trump may tread in a more structured manner.
The Russia angle
Another aspect that one needs to watch out for is Trump’s stance on Russian oil. India’s stance on Russian oil has been clear. For India what mattered was commerce — availability of cheap oil.
According to Jarka-Sellers, “The future of sanctions on Russian oil is unclear though changes to the Biden-era policy seem likely at some point. It’s hard to say when, if, and how US sanction policy vis-a-vis Russia will change and I think the future of sanctions on Russian oil is likely dependent on how Trump approaches the US-Russia relationship and the war in Ukraine more broadly.”
Trump does seem, however, to be less firmly committed to Ukraine’s war effort and the cause of its territorial integrity, he said adding “Trump has suggested that he would make a deal with Russia to end the war at Ukraine’s expense and given the toll of sanctions on Russia, lifting those sanctions would be a very logical and, by extension likely, part of such a deal. Russia would likely make it a condition for a deal and if Trump goes ahead with such a deal, he would likely have to accept that condition.”
While Trump is clear on his stance towards clean energy projects, it is also evident that the American business works purely on commerce. But, an aspect which also has emerged between Trump’s first stint and now is that India cannot be ignored as it is a stable market for the fossil fuel industry.
India will need to sharpen its bargaining skills when doing business with the US.