18 Nov 2024
According to a report, India is poised to play a key role in supporting the U.S. renewable energy sector with its extensive manufacturing capacity, cost-effective production, and a strong stem talent pool. The report emphasised that despite the challenges of navigating energy policy under the Trump administration, the long-term prospects for renewable energy in the US remain strong.
It stated, "India's large-scale manufacturing base, skilled workforce, competitive production costs (compared to Southeast Asia and Mexico), and reliable supply chain make it a strong candidate for becoming a preferred partner." It also indicated that India could potentially replace Southeast Asian nations as the major solar PV exporter to the US, especially as it aims to lessen its reliance on Chinese supply chains.
The report noted that India could potentially surpass Southeast Asian nations as the key exporter of solar PV to the US. It mentioned that the US's Inflation Reduction Act (IRA) has provided a strong framework for boosting investments in renewable energy, especially solar power, which has experienced significant growth—rising from 15 GW in 2013 to 178 GW by 2023. This upward trend is fuelled by technological progress, declining costs, and an increasing public commitment to decarbonisation.
It said that it would be difficult for the Trump administration to alter the renewable IRA, stating, "Repealing or making significant changes to the IRA would pose challenges for any administration. As the IRA is an enacted law, not a federal agency regulation or executive order, any major modifications would need congressional approval."
Moreover, the current geopolitical landscape, marked by rising anti-China sentiment, creates significant opportunities for India. As the US seeks to diversify its trade partnerships, India’s established trade ties in sectors like software and pharmaceuticals can help ease the shift toward greater cooperation in renewable energy. Many Indian companies are already setting up manufacturing facilities in the US, reducing risks and positioning themselves to capitalise on tax incentives linked to renewable energy production.
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