India-US relationship: Rough weather, better environment?

By: |
November 10, 2020 6:15 AM

Biden will present India a tougher policy environment, a U-turn on global warming is welcome but delivery is tough

Biden is pledging to cut US emission to net-zero by 2050 and clean up the power sector by 2035.

It is too early to say how India’s relations with a Biden administration will pan out, especially since the contours of its policy towards Chinese expansionism are unclear—many suggest a more accommodative policy—but it does seem likely India is not going to find a policy environment that is as alive to its sensitivities as the Trump government was; certainly a decision to revoke the Donald Trump ‘Muslim’ ban—Trump had banned travel from several Muslim majority countries including Iran and Syria—suggests that attempts to portray India as anti-Muslim may get more traction and that more uncomfortable questions will be asked about Kashmir.

While many believe Republican regimes are friendlier to India than Democratic ones, how this pans out really depends on India’s own pro-growth and investment policies. Not only was India growing at 7-8% in the days George Bush offered the nuclear deal, with investment levels at 38-39% of GDP levels at that point, India’s potential looked bright.

GDP will not just contract this year, potential growth over the next few years looks a lot less robust, and India’s treatment of several large global majors suggest a less rosy future; India’s inability to sign even a limited trade deal with the Trump administration has to be seen as a negative.

The immediate preoccupations apart, a lot of the excitement about a Biden administration is the promise of correcting Trump’s climate-scepticism. How much Biden is able to push the agenda, of course, will depend upon whether, by the end of January, the Democrats are able to wrest a majority in the Senate; that Florida, one of the states most vulnerable to climate change, went to Trump suggests climate change isn’t a hot-button issue for most of the country.

Biden has promised the US will be rejoining the Paris Accord on the first day of his presidency and that his administration will also be looking at injecting $2 trillion as a “green stimulus” to ease the US into a low-emission economic growth trajectory; given this will require higher taxes in other areas and tighter emission norms will hit large parts of the economy, delivering on this is not going to be easy, more so since not all Democrats are convinced about this either.

As president, though, Biden could make a start using the executive route; he could start with rolling back the dilution and overturning of nearly 100 environmental regulations that the Trump regime affected including the one that asked every federal agency to dismantle their climate policies.

Biden is pledging to cut US emission to net-zero by 2050 and clean up the power sector by 2035. If he is able to deliver on this, taken together with China’s pledge to reach carbon neutrality by 2060—EU targets 2050 for net-zero status—the US achieving the Biden target could pull global warming down to 2.3-2.4oC above the pre-industrial levels by the end of this century, as per the Climate Action tracker.

And, with the US willing to join China, the largest current emitter, and India, another top emitter (though a much smaller per capita emitter) on climate action leadership, chances of reaching the Paris accord ideal, of limiting global warming to 1.5oC would rise meaningfully, as per an expert cited in a Financial Times report.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Funding a Punjab crop diversification plan critical
2Modi govt must get its vaccine talk right
3Recovery hurdles: The salary-cut cloud on consumption