US working with India on platform to speed energy transition: Yellen

Treasury secretary is on her third visit to the South Asian nation this year

GANDHINAGAR (Reuters) – The United States is working with India to develop an investment platform to lower the cost of capital and increase private investment to fast-track India's energy transition, US Treasury Secretary Janet Yellen said on Monday.

After a bilateral meeting with India's finance minister Nirmala Sitharaman on the sidelines of a G20 meeting, Yellen said the two nations have been collaborating across a range of economic issues, including commercial and technological collaboration and strengthening supply chains.

"In particular, we 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," she said in a statement while attending the G20 in Gandhinagar, the capital of Gujarat, one of India's most industrialised states.

The visit is Yellen's third to India this year, indicating the growing closeness between the two countries.

"As we look ahead, we reaffirm our commitment to achieve substantial outcomes through close engagement," Sitharaman said in a statement, also noting the potential for development cooperation and alternate investment platforms for renewable energy.

The improvement in bilateral relations was highlighted during Prime Minister Narendra Modi's state visit to Washington last month which saw a slew of defence and high technology deals being signed.

Yellen also said the two countries are close to reaching an agreement on the global minimum tax system.

In a historical deal in 2021 pushed by the US nearly 140 countries agreed to a minimum 15 per cent tax on large global firms along with additional 25pc tax on "excess profits."

Australia and Japan are hoping to make progress during the G20 meeting on the global minimum tax. Some analysts doubt whether an agreement can be reached for such a sweeping change in cross-border taxation, as some governments will want to give priority to national tax regimes.

Yellen will visit Vietnam after the G20 finance meetings end on July 18.

GREEN ENERGY RUSH

In 2020, China spewed more than 11.6bn metric tons of carbon dioxide, which is 30.6pc of the globe’s carbon dioxide emissions and more than twice as much carbon pollution as of the United States which was the next highest emitter at 13.5pc, scientists calculated. The European Union, when lumped together, comes in third at 7.5pc followed by India’s 7pc.

Earlier this month, Reuters reported that India was considering bilateral agreements with countries such as Japan to allow them to use carbon credits linked to green hydrogen production in India in exchange for investment and purchase deals, two government sources and one industry source told Reuters.

Read more: India in talks to supply 10m tonnes of green hydrogen to EU

New Delhi this year approved a 174.9 billion rupees ($2.13bn) incentive plan to promote green hydrogen in a bid to cut carbon dioxide emissions and become a major exporter in the sector.

Indian companies such as Reliance Industries, Indian Oil and Adani Enterprises have big plans for green hydrogen, a fuel generated using renewable energy.

Trading in carbon credits - earned by projects for reduction of greenhouse gases and each equivalent to one tonne of carbon dioxide - can bring in more investments and assured offtake to India, said the sources, all of whom declined to be named as the discussions are not public.