'Friend-shoring' to clean energy: Growing areas of converging interests

New Delhi: United States Treasury Secretary Janet Yellen’s visit to India this week was her third in the last nine months. She was here to participate in the G20 finance ministers and central bank governors meeting in Gandhinagar, but more importantly, it was yet another sign of the warming ties between India and the US, which was visible during Prime Minister Narendra Modi's visit to the US last month.

This was also reflected during Yellen’s interaction with the media on the sidelines of the G20 conference, when she said that her endeavour was to foster warm relations between India and the US.

However the frequency of her visits to India underlines the buoyancy in stark contrast to the tensions in Washington’s relations with Beijing.

Yellen’s frequent stops in the country signal the importance of that relationship at a time of tension with China.

She said during that media interaction that the US sees India as an indispensable partner in its friend-shoring endeavour.

This strategy is gradually being adopted by the US to strengthen its supply chains by shifting its production bases out of China to nations like India.

Yellen said that several US companies see India as an ideal place for producing their goods and then exporting them to the US.

This friend-shoring has been taking place owing to the sluggish growth of the Chinese economy.

These friendly overtures were also visible during Modi’s visit to Washington last month, when US president Joe Biden hosted him at the White House.

The two leaders had also announced that India-US relations were never more stronger and several business deals were inked between the two countries.

Coinciding with Yellen’s visit was the arrival of another Biden administration official, US energy secretary Jennifer Granholm, who was here to attend the meeting of the India and US Strategic Clean Energy Partnership (SCEP) this week.

Both the nations welcomed the setting up of the public-private energy storage task force and related efforts to help large-scale integration of renewable energy, needed to support the clean energy transition under the umbrella of SCEP.

The ministerial meeting of the SCEP, which was held between petroleum minister Hardeep Puri and the US energy secretary, appreciated deepened collaboration to scale and accelerate deployment of hydrogen technologies through the public-private hydrogen task force and other efforts in support of their national hydrogen strategies, including a focus on common cost reduction goals.

The forum also lauded the launch of the US-India new and emerging renewable energy technologies action platform (RETAP) to accelerate development of key technologies to advance common ambitious clean energy goals.

Both the sides also discussed ways of advancing the positive agenda outlined by Prime Minister Narendra Modi and US president Joe Biden in their Joint Statement of June 22, 2023, which welcomed efforts under the SCEP to develop and deploy energy storage technologies, expand collaboration in support of their respective national hydrogen strategies and cost reduction goals, and accelerate cooperation on new and emerging renewable energy technologies.

During the meeting, the two sides noted the growing importance of bilateral energy cooperation between the countries while underscoring the critical importance of bilateral clean energy engagement and the achievements of the SCEP in strengthening energy security, creating opportunities for clean energy innovation, addressing climate change and creating employment generation opportunities.

In this context, the sides welcomed the growing energy trade between the countries which has been consistently scaling new heights and welcomed the commercial partnerships facilitated by the SCEP.

The two sides also underscored the importance of a stable, sustainable, diversified, resilient and globally responsible clean energy supply chain to enable energy transition pathways while minimising risks and uncertainty.

Gradually as the date for the G20 leaders’ summit nears (it is scheduled to take place on September 9 and 10, 2023 in New Delhi), there are possibilities of more Biden administration officials visiting India.

As of now there is no clarity regarding who would be visiting, but foreign affairs observers said that some high profile visits are likely to take place from Washington to New Delhi in the next couple of months, highlighting the growing warmth in the India-US relations.