India and US to Seek New Ways to Finance Renewable Energy
On (June 17, 20232) Monday, India and the US vowed to strengthen their bilateral ties even further, look into other financing options for renewable energy, and actively pursue the G20 agenda, which calls for strengthening MDBs and taking joint action to combat climate change.
Several topics came up during a bilateral meeting between Finance Minister Nirmala Sitharaman and US Treasury Secretary Janet Yellen, which was held on the sidelines of the G20 meeting of Finance Ministers and Central Bank Governors. These issues included climate action, rising indebtedness in low and middle-income countries, and digital public infrastructure.
India, Sitharaman said, “will look forward to furthering … bilateral interests through development cooperation and new investment opportunities through Alternate Investment platforms for renewable energy.”
Yellen too in her statement said the US will “look forward to working with India on an investment platform to deliver a lower cost of capital and increased private investment to speed India’s energy transition.”
The US Treasury Secretary also emphasized the necessity of India and the US working together to push for more ambitious and specific reforms with regard to the vision, incentive structures, operational procedures, and financial capacity of multilateral development banks (MDBs) to better address global challenges.
“We estimate that MDBs as a system could unlock USD 200 billion over the next decade just from the measures already being implemented or under deliberation as part of this process… It is also important to address the immediate need to boost the bank’s concessional lending capacity for global challenges and support low-income countries to supplement ongoing efforts,” Yellen said.
An expert committee on improving MDBs was established by the G20 finance ministers at their most recent meeting in March. The committee has delivered its first report, which emphasizes the expansion of MDBs’ scope, financial capability, and funding methods.
The second report, which is due in October, will go into great detail about how MDBs coordinate with one another.
“The recently released G20 MDB Experts Group report is one recent useful input to this work, though we must only explore capital increase after the reforms in these areas have progressed further,” Yellen said.
She claimed that the greatest Indian diaspora outside of Asia resides in the US, which also serves as India’s main export market.
“Bilateral trade between our two countries reached an all-time high last year, and we expect it to grow further in the years to come,” Yellen added.
In 2022, the bilateral commerce between the US and India hit USD 191 billion, roughly tripling from 2014. The two countries are working together on a variety of economic challenges, including supply chain improvement, commercial and technology cooperation, and accelerating the switch to renewable energy.
“I also appreciate India’s focus on finalizing the historic Two-Pillar global tax deal in the Inclusive Framework, and I believe that we are close to reaching an agreement,” Yellen added.
Yellen continued, “I also appreciate India’s focus on concluding the historic Two-Pillar global tax arrangement in the Inclusive Framework, and I believe that we are close to an agreement.”
In accordance with the global tax agreement, nearly 140 nations, including India, have committed to updating international tax laws to ensure that multinational corporations pay taxes at a minimum of 15% everywhere they do business.
Before it is put into effect, though, a few tricky problems must be resolved.
Sitharaman stated at the bilateral meeting that India and the US have reaffirmed their commitment to achieving significant results via close collaboration.
The finance minister declared, “By utilizing one another’s knowledge and resources, we actively support economic growth, foster innovation, and drive sustainable development.
The bilateral meetings, according to Sitharaman, demonstrate India and the US’s commitment to aggressively advancing the G20 agenda, which includes addressing crucial international issues like bolstering MDBs and implementing coordinated climate action.
Additionally, it entails fostering consensus on difficult problems related to the growing debt of low- and middle-income nations, as well as utilizing the potential provided by crypto-assets and digital public infrastructure for financial inclusion.
Content Credit: The Indian Express