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Climate change can drive US-India trade ties in future
The report points out the growing need for trade policies that support “green trade,” which refers to lowering trade barriers for renewable energy inputs.
Center for American Progress and the Council on Energy, Environment, and Water. / Facebook
The United States and India are positioned to deepen their trade partnership by aligning on climate action, according to a report by the Center for American Progress and the Council on Energy, Environment, and Water.
As both countries seek to transform climate challenges into economic opportunities, this collaboration signals a new era in US-India trade relations, particularly in the realm of green technologies and decarbonization.
The report points out the growing need for trade policies that support “green trade,” which refers to lowering trade barriers for renewable energy inputs, strengthening the competitiveness of low-carbon goods, and creating common markets for sustainable materials. This shift in trade policy, driven by global efforts to combat climate change, is expected to enhance economic growth while supporting environmental goals.
“Given these overlapping approaches; the large size and emissions profile of both economies; and the broader deepening of US-India ties over the past decade, there is a compelling climate and geopolitical logic to collaboration between Washington and New Delhi around green trade,” the report states.
Although trade has historically been a contentious issue in US-India relations, recent developments have paved the way for cooperation. Prime Minister Narendra Modi’s administration has prioritized trade diplomacy to attract foreign investment, integrate into global supply chains, and reduce reliance on Chinese imports.
Meanwhile, the US has moved away from conventional free trade agreements in favor of strategic partnerships aimed at advancing climate goals and addressing nonmarket practices.
The report outlines key recommendations for a successful US-India green trade partnership. These include developing shared principles on green subsidies, pursuing interoperability of sustainability standards, and enhancing transparency to build resilient supply chains. Additionally, both nations are encouraged to pursue agreements on clean energy subsidies, critical minerals, and next-generation climate technologies.
By collaborating on green trade, the report concludes, the US and India can advance their economic, climate, and national security objectives while providing a model for global cooperation on climate action.
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