India is likely to witness a continued momentum of increased cooperation in the energy sector from the US under Donald Trump’s second presidency, industry experts believe. For the global oil market, Trump 2.0 would mean continued oil and gas supply given Trump’s focus on increasing the US oil production which should keep oil prices under check, benefitting India.
“A second Trump administration might focus on increasing US oil production by rolling back environmental regulations and expanding offshore and federal lands leasing opportunities, according to S&P Global Commodity Insights.
After falling during the first Trump administration, production in Iran and Venezuela has recovered under Biden, as the focus of sanctions has shifted to Russia. S&P noted that growing US crude production has posed a significant challenge for OPEC+ in recent years, exerting downward pressure on prices, threatening the bloc’s market share and prompting massive output cuts.
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“The US election results do not change the fact that India and the US will continue to be key strategic partners. With Donald Trump in power, India can count on continued oil and gas supply to ensure its developmental needs since the US is a net exporter of fuels now. Between 2017 and 2024, the US became the fifth-largest liquified natural gas (LNG) and crude oil supplier to India,” said Arunabha Ghosh, CEO of the Council on Energy, Environment and Water.
Under Trump’s first presidency, India’s Petronet LNG Ltd had signed a $7.5-billion memorandum of understanding with Tellurian Inc, American natural gas company, wherein Petronet and its affiliates intend to negotiate the purchase of as much as 5 million tonnes of LNG per year from the Driftwood project. The signing of the MOU had coincided with the visit of Prime Minister Narendra Modi to Houston and a public event with Trump back in 2019.
Trump’s focus on fracking and raising US oil & gas output should keep oil prices muted, which should benefit the Indian oil marketing companies and value chain users of crude oil and substitutes, according to Elara Capital.
“We look forward to strengthening the long-term standing clean energy partnership between India and the United States, given the strong friendship between President Trump and Prime Minister Modi,” said Pinaki Bhattacharyya, MD and CEO of AMPIN Energy Transition.
However, the industry remains cautious of the proposed trade barriers which can negatively impact Indian industries, particularly for clean technologies under the Trump 2.0 regime.
India and the US under the presidency of Joe Biden have embarked on several energy deals strengthening their commitment towards achievement of renewable energy targets and net-zero goals.
The two countries had committed to expand the manufacturing and deployment of clean energy, including finding opportunities to expand US-India cooperation in solar, wind and nuclear energy and the development of small modular reactor technologies. The idea was to unlock $1 billion of multilateral financing to support projects across the clean energy value chain for renewable energy, energy storage, power grid and transmission technologies, high efficiency cooling systems, zero emission vehicles, and other emerging clean technologies.
Modi and Biden had also committed to accelerate the development of diverse and sustainable supply chains for critical minerals under the Minerals Security Partnership targeting strategic projects along the value chain.
Ghosh highlighted that 90% of India’s solar modules exports are to the US. “Over the next four years, India will need to be prepared and strategically nimble to deepen green trade, co-develop clean tech supply chains, and accelerate its energy transition,” he said.
“The recent US elections, confirming Donald Trump’s return, marks a promising chapter in the deep-rooted US-India partnership, with substantial potential for growth in trade, skilled workforce demand, and collaborative economic development,” said Ramesh Alluri Reddy, Chief Executive Officer, TeamLease Degree Apprenticeship.
He noted that trade between the two countries grew robustly from 2017 to 2021 during Trump’s previous presidency, underscoring the potential for another era of strong trade expansion.
“President Trump’s pro-business policies are expected to further strengthen this alliance, driving increased investments and favorable trade dynamics as the demand for a skilled Indian workforce continues to grow in industries pivotal to the digital economy and sustainable development,” Reddy said.
From: financialexpress
Financial News
