Speaker 1: Kerav Agarwal, Founder and CEO of 2Republics
Speaker 2: Akshat Singh: Associate Fellow at CSIS | Critical Minerals, Economic and Commercial Policy, Clean Energy
Speaker 3: Abhimanyu Gupta, Co-Founder and COO of 2Republics
Speaker 1: Well, thank you so much for meeting with us. If you could please give us a quick introduction to who you are and what work you do.
Speaker 2: Thank you for having me, Kerav and Abhi. I'm Akshat Singh. I'm an associate fellow at the chair on India and emerging Asia economics at the Center for Strategic and International Studies, CSIS Washington, DC.At CSIS, our work is largely focused on promoting US India bilateral ties across four major themes. Number one, commercials. Number two, defense. Number three, state level cooperation. Number four, India's partnership with countries in the global South and non US partners.
At CSIS, I work on several of our projects, including our state's level regulatory updates including India's economic reforms, and specifically focus on promoting The US and their critical minerals partnership. Great.
Speaker 1: Thank you so much. So the first question that we have for you is that renewable energy has become a strategic pillar in US India relations. Why is renewable energy and commercial ties so important in US India relations today, and how do they impact both people in both countries?
Speaker 2: Absolutely. So, let's think about the subject, in a macro theme first. Both the US and India are major economies, with significant populations. India has become the largest, the most populated country, surpassing China just last year. More people means more energy requirement.More people means greater potential for a commercial and energy partnership. Now, traditionally, the Indian energy market has largely relied on conventional sources of energy, including coal and including oil. The reliance on hydrocarbons in India means that India's coal industry affects climate patterns in India. And, reliance on oil means that apart from the domestically sourced oil, India also relies on countries such as Russia for oil. Now, combined with the geostrategic implications of relying on partners like Russia, as well as the climate imperatives, When you put that together with the growth potential in India, due to the population, do you understand that there is a huge, huge market for greater energy engagement?I believe that the government has recognized, the greater demand and the greater need for energy engagement and has consistently worked towards that. So if you think about it, energy seems to be an all weather pillar of The US India bilateral partnership so far. Despite different focuses of different administrations, over the past few years, of the past twenty years, energy has remained a key priority. Now, we've seen the energy relationship evolve in several ways. The first big thing that happened to the energy relationship was the elevation of the bilateral energy partnership to the ministerial level.
The partnership was called the Strategic comprehensive the Strategic Clean Energy Partnership or the SCEP. Now, with the new administration in Washington, DC, the movement towards hydrocarbon trade as well as nuclear energy, which has also been of relevance to the two countries. For the future, I feel that the countries will further collaborate on clean energy manufacturing and resilient supply chains as well as nuclear energy partnership. Just yesterday, when prime minister Modi visited the White House and met President Trump, they announced that the countries are gonna solve some underlying issues in nuclear partnership, by making adjustments to the Indian domestic law. So, all good things ahead.
Speaker 3: So especially capturing onto that main point that The US and India currently have very distinct energy policies, what are the most significant challenges that you would see in scaling up the renewable energies in both countries? And where do you see the greatest opportunities, especially given the recent discussions that occurred between prime minister Modi and US Leaders on expanding hydro hydrocarbon trade and nuclear energy cooperation?
Speaker 2: Thanks for the question, Abhi. That's a great one. So let me begin by saying that, the energy policies in both countries are distinct, but they're not disparate. Both countries rely on a few common themes, which guide the energy policy. The first big one of that is energy security. So, energy security in the sense that the country is self-sufficient in energy and does not need to necessarily rely on partners that it might not want to rely on. These partners can include Russia. These partners can include China, which as, you know, produces a lot of energy equipment, be it batteries, be it critical minerals, etcetera. Apart from the emphasis on energy security, both countries are also focused on ensuring that the energy industry provides employment to people. Employment has been a political hot button issue in both India and in The United States. Both countries, went through elections recently in 2024, and employment and unemployment, emerged as major issue. So our countries want to now work towards developing an energy ecosystem, which provides more employment to the people of the country. Now this can mean potential challenges because, this would mean, an industrial policy which is focused on generating employment.
But, if the countries are able to find opportunities of collaboration and figuring out exact places in the supply chain where each country would like to specialize in and double down, This could also mean reduced, supply chain risk and, and, furthering of the China plus one policy that, previous administrations have pursued. In terms of where the major differences of policy lie right now is, the, rapid focus, of India on deploying, large scale, renewable energy projects, not only as means for, climate change, but of addressing climate change, but also as a means of attaining energy security. Right? With the new administration in Barrio, we've seen a reemphasis on fracking, on drilling, and, on going back to the the extractive sector through promoting, mining and, other extractives related industries. We don't see that resurgence in India so far.However, the Indian government has time and again emphasized that it is not going to reduce, coal production. It is not going to reduce coal based thermal power, and, that is a stream that is going to be carried forward. Coal for India has been important because there are political, and labor union implications. It not only provides people, jobs, coal unions in India also happen to be, extremely important political stakeholders. And therefore, we while the rhetoric might be different in countries, while India may not, maybe not overemphasize its reliance on traditional hydrocarbons, India will ultimately try to further its renewable energy its energy strategy by still relying on traditional hydrocarbons.
Speaker 1: You mentioned supply chains, and obviously, they're a big issue worldwide. How are US and Indian companies, you know, managing this in the renewable energy space? And how does technology sharing play a huge role in this?
Speaker 2: Sure. So, in terms of supply chain partnership, an interesting idea that emerged over the past few years is the idea of China plus one that I mentioned.Right? The COVID pandemic, really highlighted the inherent weaknesses in our existing supply chains and, really pointed out, some problems of over relying on one country, especially if that country has misbehaved in the international arena, to put it mildly. We saw time and again China using its supply chain dominance as a geopolitical tool, as a tool for geopolitical coercion. We saw that when China was tracking tariffs against Australia. We saw that, when China was tracking tariffs against Japan, Japan actually ended up imposing them, and we saw China doing that to India and The US as well.Since these difficulties were highlighted, companies as well as governments, started pursuing the strategy of China plus one. So not completely delinking from China, but diversifying the supply chain. And, it's an important distinction to make from delinking to diversifying because, delinking as a process is not a short term goal. Moving ahead, moving away from factories and processes and supply lines from China is not as easily achievable as some people might make it sound. Now, the exact ways in which, the countries can and are working on, supply chains, include, following some frameworks that have been created.The, most significant one of those has been the IPEF, the Indo Pacific Economic Framework, which, essentially dedicated on easing some of the regulatory, systems which allow companies to and the governments to partner on supply chain de risking. We have seen some substantial work being done through IPEF, but there are other exact ways, in which the US and India have specifically worked on, addressing some key challenges. Right? One of them being the renewable energy technology action platform. Another one is, the Mineral Security Partnership, which is a coalition of, like minded countries, including US, India, Canada, and others, which are essentially allowing not only technology transfers, but also direct financing for real projects in countries. Right? For instance, MSP is supporting, lithium processing facility in India right now. And, lithium processing is currently dominated by China. Having a supplier, providing support to a supplier that can emerge as a key player in, at least setting up the ecosystem that breaks China's dominance can go a long way. Apart from that, we have also seen that, US and India, have some key sectors where there is technology, but the lack of finance is limiting. And, even though the lack of finance is limiting, there is interest from American companies to go and invest in India. Right? And, the United States National Development Finance Corporation, DFC, which was actually set up under the previous Trump administration, is actively promoting some of these investments. So India is now among the biggest portfolios that the DFC has. I believe it's the second biggest portfolio right after Vietnam. And we saw just in 2024 2023, '20 '20 '4, two back to back investments, totaling to about $1,000,000,000. And these were investments in the key renewable energy areas, including solar panels, etcetera. So there is already a lot of bilateral partnership in supply chain resilience happening. The way the countries can move ahead is in recognizing that, some of the objectives that both countries have are actually at loggerheads with each other, objectives surrounding manufacturing and job creation, and, having recognized that, identifying exact areas within the supply chain that they want to partner and work on.
Speaker 3: Alright. Thank you for that. And especially considering the fact on how we're talking about more about bilateral communication, given the recent discussions between prime minister Modi and president Trump just yesterday, where they agreed to increase India's imports of US oil and gas to help reduce the trade deficit, how can The US and India balance the expansion of hydrocarbon trade with their commitments to renewable energy and climate change mitigation, especially meeting the goals set by the UN?
Speaker 2: So, let's think about a couple of things here. Let's look at the total quantum of US India trade. The US is India's largest trading partner as of now. However, the, US trade is a little over a hundred billion dollars. Right? Now apart from the commitments on hydrocarbon trades, countries have also announced that they want to increase the bilateral trade to about $500,000,000,000.And having said that, that is a pretty big ambitious number. Right? Saying that we want to increase our bilateral trade by five times, especially given the fact that the total trade between US and India is only about 1,150,000,000,000.00. And even when you put together the top seven trading partners of India, the number is just a little under $500,000,000,000. So when we talk about increasing US India bilateral trade, be it in hydrocarbons, be it in other sectors, such as IT services, textiles, agriculture, whatever, it means, increasing total trade for India. We can't achieve a 500,000,000,000 digit, with US and India trade if India's trade is only $1,500,000,000,000. India's trade needs to go larger so that, US and India, trade goes larger as well. So, coming from a macro regulatory environment, I believe that India will need to ease some of the regulatory processes, within the country itself to ease, foreign investments. This would include, relaxing certain sectors from FDI, as well as promoting ease of doing business, in the country itself.My team at CSS, we put together an India reform scorecard each time a new government is elected. I urge your viewers to check that out and see some of the top reforms that we suggest the government should implement to increase this trade. Now talking about hydrocarbon's trade specifically, I previously mentioned that one of India's largest trading partners is Russia. And, the reason why Russia is a major trading partner for India is because India currently buys Russian hydrocarbons, processes it, and then sells it to Germany and other European countries. This has been happening amid bigger Russia Ukraine conflict, and, what we often don't talk about is that the ultimate buyer of the final product that India is processing is Europe and is Germany.And, Russian oil is ultimately, with a few additional steps, still sustaining, energy, and electricity access in, Europe. So to increase hydrocarbon's trade with, The US, India will need to either cut down its hydrocarbon dependence on Russia or, simultaneously, build up, increasing capacity so that it's able to absorb. One potential solution, which, can allow India to continue trading with Russia while also, decarbonizing its own renewable energy and not really using that, energy that it's procuring from, United States could be, building up, the processing and refining capabilities that India has right now and essentially being the, middle of the supply chain partner where it further processes, cleans up the hydrocarbons, and then sends it to another country. This could be great for, both the manufacturing industry and employment for India. And this could also mean that India is not actually moving towards a greater expansion of fossil fuel based hydro fossil fuel based energy than renewable or nuclear.
Speaker 1: No. That's great. Moving along, do you lead a group of young South Asia Policy Professionals? How can students and, you know, young people get involved in renewable energy or international trade, whether it be between The US and India or just in general? How can we delve more interest in this area?
Speaker 2: Sure. So, as you mentioned, I run, Young Professionals in South Asia Policy, YPSAP. We are a DC based group of, young professionals who are either working or are interested in all policies in South Asia. We've emerged as the largest DC based, networking group, specifically serving the subset. We have about 520 members. As of this week, our model has been pretty simple. We've tried supporting our members, in things that they care about, which include networking, which include access to information, which include access to mentorship, as well as, career opportunities. So we have a lot of programming. I can send you over the link, for some of our work. In terms of how, I would suggest people, get involved with policy work in renewable energy and other areas, engaging as many folks as you can. Reach out to people, talk to as many people. DC is a nice place. Everyone's always willing to talk, and share what they know. But, since there is an inherent barrier of entry in the field, it requires a lot of independent outreach, and, be prepared to do that. My second piece of advice is, read as much as you can. Don't be afraid of reading long, dense policy documents. Don't rely on just journals and news articles on your sources of information. A lot of people don't read the primary source documents that the governments publish, which essentially means that a lot of the information that we see on a subject around the Internet is regurgitated from a singular article, which was based on what one journalist read. Right? Don't deprive yourself of good reading. And, believe me, sometimes when you spot that one thing that no one has in a policy document, it is a truly exhilarating feeling. My third piece of advice would be, get writing. Write and not only write, the way you are already trained in writing, but also learn how to write for a policy specific audience. So read big, write small, write shorter, commentaries, write shorter pieces, and make sure that you always include your recommendations rather than just doing literature reviews of whatever exists. Right? Because as someone who has read extensively at this point and as someone who has an opinion on what things can be done, as someone who's seen broader patents or similar partnerships or similar challenges in the past, be it in the same industry, be it in a different country. The true value add that you can have for policymakers is giving them an insight on what you think should be done. Make sure you back it up. Make sure you back it up with examples, but, get writing. So three pieces of advice. Talk to as many people as you can. Number two, read as much as you can. Number three, write and write specific short recommendation oriented pieces.
Speaker 3: That's fantastic advice. But moving aside from just what our advice is for people entering the field, We'd like to wrap today up with asking you a personal question about your vision for The US India Reliable Trade Partnership by 2040.What is that vision, and what milestones should be should we be aiming for by 2040?
Speaker 2: That is a great question. You're asking me to be a fortune teller at this point, so, I will add a cautionary note. I can't see the future. But, okay.Let's imagine it's '24 it's 2040. It's fifteen years ahead. The climate crisis is even more significant than it is right now. Most of India now lives in cities rather than villages, and urban centers in India are major sources of political leverage. So urban voters in India count. As of 2025, they don't. Indian governments are chosen by voters who largely live in rural areas. But since it's 2040, I'm assuming most cities, most people live in cities. Now people living in cities are more sensitive to climate, which essentially means that there is a greater emphasis on renewable energy and climate friendly technologies. What does US India trade look like?I believe that US India trade is extremely heavy on, number one, nuclear civil nuclear. This could mean, exchange of civil nuclear materials, including enriched uranium, which India has none of, or, technologies used for enriching or processing thorium in India, which India has an abundance of. This could also mean, exchange of technical know-how, including small modular reactor designs, and that is something that the two leaders talked about yesterday as well. Well. So more nuclear, that's number one. Number two is, more, exchange on, clean energy minerals. Right? So there are certain, subset of, the product group that we call critical minerals that are specifically focused on clean energy transition. Right? These minerals include lithium.These minerals include graphite, they include cobalt. They include, red earth elements, and, they also include, some non fancy minerals such as copper, which essentially is required for creating electric wires. So, we can expect a greater exchange in the materials. Now the direction of the exchange can be a little tricky for me to predict because both countries have their own unique reserves of minerals, and both countries have unique capabilities on processing and manufacturing these. So, I see it being a mix of each other.And I do see, while in the near term, I do see hydrocarbons increasing. I feel that, as climate pressures become real, it will become a political imperative for administrations to address that in a more head on way. The flavor of the day is employment, and it is completely understandable. The labor market is affected and people do want real jobs. But, I feel as we move towards the place where climate challenges will become even more pertinent, it will, that the bilateral energy trade will be more reliant on renewable energy. One thing that we can think about is that the summer that we had this past year was probably the coldest summer of our lives, and that is something that we should think about when we think about the future of renewable energy.
Speaker 1: Thank you for that insightful advice. I think we learned a lot about US India relations and especially in the area of renewable trade and especially how hydrocarbons and nuclear energy cooperation is so important and especially how the young generation and how students can get involved, especially by reading more, talking, and writing. That's some very valuable advice that hopefully can get more people to be involved not only in international relations, but hopefully involved in renewable energy as well. So thank you so much.
Speaker 3: Absolutely. Pleasure. Definitely. Thank you.
