During Pres. Donald Trump’s first term, US sanctions targeted PdVSA, aiming to dismantle Pres. Nicolás Maduro’s regime by crippling Venezuela’s primary revenue stream, its crude oil exports.8 Venezuela, home to some of the world’s largest oil reserves, estimated at 303 billion bbl, experienced a dramatic contraction in oil exports.9 In 2020, under the weight of sanctions, Venezuelan exports plummeted 37.5% to just 626,534 b/d, the lowest level in 77 years.10 The revenue loss also was significant, with Venezuela losing an estimated $11 billion annually.11
For India, the sanctions posed dual problems: the immediate disruption of Venezuelan crude imports and broader volatility in oil markets. Even as Venezuelan crude exports dwindled, India, along with China, adjusted its import strategies and cautiously reengaged Venezuela following the easing of sanctions in 2023.
Trump’s policies
The first Trump administration ushered in a transformative era for US energy policy, emphasizing domestic energy dominance and retreating from multilateral climate commitments. These shifts had profound global implications, influencing oil prices, trade flows, and the strategic calculations of major energy importers, including India. Another round of the same is already underway with the start of the second term.
The withdrawal from the Paris Agreement, which became effective Nov. 4, 2020, was justified as necessary to protect American workers and industries from what the Administration viewed as unfair economic burdens.12 The move drew widespread international criticism and prompted a rollback of domestic environmental regulations, prioritizing fossil fuels over renewable energy. India found itself navigating an increasingly fragmented international landscape for clean energy funding and collaboration.
The first Administration’s push for “America First” policies aimed to establish the US as the world’s leading energy producer.13 By 2019, US crude oil production exceeded 12 million b/d, positioning the country as a net energy exporter. Traditional oil producers, including Venezuela and members of the Organization of the Petroleum Exporting Countries (OPEC), faced heightened competition from the US.
Dual realities
The new US retreat from the Paris Agreement could significantly undermine international efforts to transition toward renewable energy, including weakening key mechanisms, such as the Global Methane Pledge, which aims to reduce methane emissions by 30% from 2020 levels by 2030. For India, the US withdrawal presents dual problems. Reduced international support for clean energy could hinder progress toward India’s target of having 500 Gw of non-fossil fuel power generation in place by 2030. And India is forced to shoulder the financial and technological burdens of any progress that is to be made.
Had the US remained committed to the Paris Agreement, it could have played a pivotal role in supporting India’s clean energy ambitions. For example, the US could have facilitated access to advanced solar and wind technologies or provided critical funding through global platforms like the Green Climate Fund, attracting greater private sector investment to India’s renewable energy development and reducing the financial burden on India’s government resources.
As of December 2024, India’s renewable energy capacity had reached 209.44 Gw, year-on-year growth of 15.84%.14 But to meet the 2030 target, India must add an average of 50 Gw annually, a substantial goal that demands a combination of financial resources, technological advancements, and global partnerships.15 India continues to seek out new avenues for international collaboration, notably through partnerships with countries like Australia, and initiatives such as the International Solar Alliance.
Renewed energy synergy
Despite Pres. Trump’s emphasis on energy independence and fossil fuels, US-India collaboration continued to thrive during the first Trump Administration through initiatives like the US-India Strategic Energy Partnership (SEP), later restructured into the Strategic Clean Energy Partnership (SCEP). Established in 2018, SEP focused on enhancing energy security, expanding access, to energy, and fostering innovation.
Under Trump’s leadership, the US became a significant supplier of crude oil and LNG to India, reducing its dependence on Middle Eastern oil. By 2020, India was importing about 250,000 b/d of US-sourced crude oil.16 This partnership not only bolstered India’s energy security but also reinforced US energy markets and diversified global oil supply chains.
Looking ahead, clean energy cooperation remains viable if it aligns with both nations’ economic and geopolitical interests. India’s ambitious renewable energy targets, such as achieving 500 Gw of non-fossil fuel power generation capacity by 2030, offer numerous opportunities for joint growth. The US can play a crucial role in supporting India’s green transition through technology transfer, investment, and joint research initiatives like the US-India Clean Energy Finance Task Force.17
Hydrogen’s promise
The US and India can accelerate their clean energy goals by collaborating regarding green hydrogen, a promising avenue for sustainable energy development. India has set an ambitious target of producing 5 million tonnes/year (tpy) of green hydrogen by 2030.
Green hydrogen plays a pivotal role in the India-Middle East-Europe Economic Corridor (IMEC), a strategic initiative designed to enhance economic integration and clean energy development.18 IMEC plans to establish hydrogen pipelines, facilitating India’s transition to renewable energy while supporting broader geopolitical objectives. During Trump’s second term, however, green hydrogen may face resistance, as the new administration favors fossil fuels and is rolling back clean energy subsidies.
Despite these difficulties, IMEC’s potential remains compelling within the broader strategic landscape. The corridor’s role in boosting trade efficiency, enhancing economic integration, and strengthening geopolitical ties makes it a valuable initiative beyond just clean energy. Framing IMEC as not only a clean energy initiative but also a geopolitical tool, positions it to remain as a cornerstone of US-India relations.
The author
Manish Vaid, a junior fellow at Observer Research Foundation, researches energy policy and geopolitics. He holds an executive post-graduate diploma in petroleum management (with a specialization in the oil and gas sector) from Pandit Deen Dayal Energy University, Gandhinagar, Gujarat.
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