USA and India will collaborate strongly in energy
India and the US are expected to deepen their partnership in several sectors, including energy, following a G20 summit. In an effort to counter Chinese dominance, the countries' leaders are focused on strengthening their relations to support the Indian economy, stimulate trade and accelerate the global green transition. This follows several previous discussions between the two powers focused on strengthening their collaboration on energy, especially clean energy and related technologies.
At the G20 summit in Delhi, India this month, Indian Prime Minister Narendra Modi and US President Joe Biden pledged to deepen their ties. This is their second bilateral meeting in less than six months. In a personal meeting between the two leaders at Modi's official residence, they released a 29-point statement, which highlighted the main areas to focus on in their new relationship. It included building resilient strategic technology value chains and collaboration on renewable and nuclear energy, as well as climate finance.
A joint statement from the meeting outlined several areas of cooperation between India and the US, many of them closely related to the energy sector. The two powerhouses will support building resilient global semiconductor supply chains, including a multi-year initiative by Microchip Technology, Inc., to invest approximately $300 million in expanding its research and development presence in India and the announcement of Advanced Micro Device to invest $400 million in India. They also reiterated the importance of nuclear energy in ensuring greater energy security in the green transition. India and the United States plan to collaborate on developing both countries' nuclear power capacity, as well as building next-generation small modular reactor technologies.
No representatives from China or Russia attended the recent G20 meeting, which India and the United States hope will demonstrate to the Global South that the remaining G20 countries provide a more realistic proposition for food security and debt resolution. The summit aimed to accelerate sustainable development, strengthen multilateral cooperation and develop a global consensus for inclusive economic policies. During the talks, Biden and Modi stressed the importance of the Quad, an informal security alignment between Australia, India, Japan and the United States to counter China's power in the Indo-Pacific region.
When it comes to energy, the United States and India have worked more closely together in recent years. In June, USAID and Indian Railways announced a memorandum of understanding to combat climate change and achieve Indian Railways' goal of net-zero carbon emissions by 2030. Together, the two partners aim to accelerate capacity development of renewable energy, improve energy efficiency and energy. storage technologies and align with the net-zero goal.
In July, U.S. Secretary of Energy Jennifer M. Granholm and Indian Minister of Petroleum and Natural Gas Hardeep Singh Puri hosted the third ministerial meeting of the U.S.-India Strategic Clean Energy Partnership (SCEP), which began in 202 1. The Partnership builds on work by government, industry and other stakeholders to improve energy security, build countries' clean energy capacity and decarbonise. The two representatives underlined the importance of bilateral energy cooperation to strengthen energy security, stimulate employment and support the global green transition.
The SCEP is expected to increase energy trade between the two powers, as well as encourage greater innovation in clean energy technology, such as battery storage and green hydrogen. Both countries see green hydrogen as key to the global energy transition and will support each other in developing their green hydrogen capacity and developing new hydrogen technologies to reduce production costs. SCEP also focuses on deepening cooperation between the public and private sectors to support decarbonization.
Despite deepening ties with the United States, India intends to continue energy trade with Russia, even in the face of growing criticism from several major world powers. According to India's state-controlled Bank of Baroda, India's imports of Russian crude oil have increased tenfold in 2022. This is due to the huge reduction in the price of Russian oil following sanctions imposed on Russian energy by the United States and Europe. To ensure it can continue exporting oil and maintain its revenue, Russia has been selling crude at a deeply discounted price, attracting trade with major powers such as India and China.
But India's main energy company, Oil and Natural Gas Corporation (ONGC), believes that India's import of Russian crude oil is beneficial to the world economy. KC Ramesh, executive director of ONGC, recently explained: “By importing from Russia, India has also helped the global economy, in the sense that [we] have freed up some of the oil in the Gulf for other countries to source, particularly l 'Europe. So, it was kind of a win-win situation. He added: “[It] has a huge impact on our economy, in terms of helping the [Indian] economy grow… the price we get from Russia is very reasonable.”
The United States continues to deepen its energy partnership with India to help develop its role in the Asian region, as well as improve energy security and support the global green transition. The recent G20 summit underlined the two powers' commitment to deepening ties in several sectors, including energy. This comes despite India's continued purchase of Russian crude oil and failure to condemn Russia's invasion of Ukraine.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/usa-e-india-collaboraneranno-fortemente-nellenergia/ on Thu, 21 Sep 2023 07:00:53 +0000.