Trump 2.0 and the future of India-US cooperation

Key takeaways:

Donald Trump’s return to the US presidency next January raises several questions for the future of America’s engagement with the world. Yet, the mood in New Delhi is relatively calm, and there is confidence that India-US relations will progress irrespective of who occupies the White House.

Towards the end of the Clinton presidency in the late 1990s, Washington and New Delhi began crafting a strategic partnership through different political dispensations, though primarily based on managing a rising China. This partnership endured the rough weather of Trump’s first term. In fact, it performed relatively well compared to America’s relations with other closer partners. The camaraderie that Prime Minister Narendra Modi was able to build with Trump is likely to pay dividends under Trump’s second term.

However, on matters of multilateral governance on major global issues like climate change and green energy transition, there might be more change than continuity, with New Delhi having to brace for four turbulent years of a transactional Trump presidency.

Climate change and clean energy cooperation: will they survive Trump 2.0?

Trump campaigned with a “drill, baby drill” slogan,  vowing to lift “restrictions” and “unleash” energy production from all sources. Domestically, he has promised to undo Biden-era legislation such as the Inflation Reduction Act (IRA), which provides tax credits and subsidies for clean energy products. However, even a Trump presidency cannot ignore the complex landscape of new technologies and green transition market forces underway in the United States and globally, not least the widespread adoption of electric vehicles.

New Delhi and Washington have invested much effort into clean energy cooperation and new technological advances, binding both countries’ governmental and business sectors. A change of administration may bring about drastic changes in US policies, as happened during the first Trump presidency, but private sector involvement and the various non-governmental initiatives will help propel green transition schemes even if Trump withdraws from certain commitments and de-prioritizes government-to-government initiatives.

Multilateral groupings like the G20—India and the US are both members—have put a premium on achieving the Sustainable Development Goals (SDGs), of which climate change and cleaner energy transition are critical components. The New Delhi Leaders’ Declaration released during India’s G20 presidency in 2023 outlined several aims, including a shift towards a “clean, sustainable, just, affordable, and inclusive energy transition.” How the incoming Trump administration engages the G20 over SDGs and, more particularly, in multi-national efforts to mitigate climate change will be germane to how India-US cooperation shapes these sectors.

As the Trump team gears up to take the reins of power in Washington, with the Republican Party controlling the House of Representatives and the Senate, the future of Biden-era initiatives, such as the US–India Climate and Clean Energy Agenda 2030 Partnership, is on the line. This partnership, among many other commitments, was primarily aimed at reducing greenhouse gas emissions and increasing renewable energy production. Moreover, the Biden era saw several joint projects launched to improve technological partnership and capacity building between the two countries. There are also cases of triangular development partnerships, with India and the United States collaborating to provide technical assistance and expertise to third countries in the Global South on various issues, including clean energy and infrastructure. For example, the US Agency for International Development and India’s Development Partnership Administration partnered to address development challenges in Tanzania.

Moreover, the Quadrilateral Security Dialogue (Quad) has also developed a very strong climate change and clean energy transition component. In 2022, the Quad countries’ energy ministers met for the first time, thereafter launching the Quad Clean Energy Innovation and Deployment. During the 2024 Quad Summit, India and the United States issued a joint statement, announcing that both nations “welcomed increased investment in each country’s clean energy markets” as well as revealing the “U.S.-India Roadmap to Build Safe and Secure Global Clean Energy Supply Chains.” However, during the second Trump presidency, New Delhi might have to respond to more demand from Washington on defense and security cooperation, keeping China in mind and keeping the climate component on the back burner.  

India is also a member of the US-initiated Indo-Pacific Economic Framework for Prosperity (IPEF) launched in 2022. One of the four pillars of the IPEF is “Clean Energy, Decarbonization, and Infrastructure.” Considering his track record of previously destroying the Obama-era Trans-Pacific Partnership (TPP), a multilateral free trade agreement, if Trump were to act upon his campaign promise and withdraw the United States from the IPEF, it would deal a body blow to a US-led economic framework that, in concert with like-minded allies and partners, aims to provide an alternative to the China-led Regional Comprehensive Economic Partnership (RCEP), of which India is not a member. Even if Trump were to refrain from full withdrawal, his resistance to climate and decarbonization goals would run counter to the grouping’s priorities, and his campaign to slap tariffs on friends and foes alike might disrupt the trade negotiations within the IPEF.

Infrastructure and connectivity cooperation: more geopolitics and less green

India-US cooperation on infrastructure and connectivity projects is imperative in the looming shadow of China’s Belt and Road Initiative (BRI), investment under which has been alleged to come with opaque financing and operating mechanisms, and in many cases, leading to huge debts on the part of the recipient countries of Chinese loans, popularly dubbed as “debt traps.”

India-US cooperation bilaterally and, more particularly, with like-minded partners becomes crucial in providing alternatives to countries in the Global South needing quality infrastructure and connectivity projects and transparent financing. For instance, the Blue Dot Network (BDN) is an important case in point. It is a multi-stakeholder initiative launched by the United States, Australia, and Japan to promote transparent and sustainable infrastructural investment in the Indo-Pacific region. At the same time, the  India-Middle East-Europe Economic Corridor (IMEC), if it comes to pass, would align infrastructure, connectivity, and clean energy ambitions, including transport infrastructure, undersea cables to facilitate the exchange of data, and long-distance hydrogen pipelines to boost the participants’ climate and decarbonization goals. There is also the I2U2 group, which brings together the United States, India, Israel, and the UAE on joint investments and new initiatives, including energy and transportation. Finally, the Quad is strongly committed to improving connectivity in the Indo-Pacific region by developing quality and resilient infrastructure. Significantly, it also promotes the development and deployment of digital public infrastructure.

Trump’s announced nominees for the foreign policy and national security team signal a priority on countering China’s assertive rise in the Indo-Pacific, and therefore, the infrastructure and connectivity projects that the US spearheads will acquire a more distinct geopolitical face, with China’s BRI as the target competitor. On the other hand, their commitments towards climate and sustainability targets are likely to be downplayed.

Conclusion

Trump’s return will likely disrupt political and economic developments in the United States and the country’s engagement with the world. His transactional style of foreign policy and boorish defense of “America First” are making many countries brace up for turbulent times ahead. His disdain for multilateralism and penchant for more reciprocal dealings will pose challenges in various multilateral platforms, including those on which India and the United States are close partners. India needs to brace for a more retracted American role from multilateral institutions, and hence more space for China to step up its multilateral game, which can swing either way for India, depending on how New Delhi manages its ties with Beijing during the next four years.