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Mumbai: With Donald Trump returning to the White House, US-India relations, particularly, in the renewable energy space, will be keenly watched. However, this could be significantly influenced by the former US President’s approach to policy, particularly toward the Inflation Reduction Act (IRA), according to industry experts.

Under the Biden administration, the Inflation Reduction Act (IRA) of 2022, has been a crucial pillar of US clean energy policy, providing substantial incentives for companies to invest in renewable energy infrastructure, including solar power.

For Indian manufacturers, these incentives have made the US an attractive destination for establishing production facilities. However, if Trump’s government leads to a policy rollback then that could undermine this progress and create uncertainty in the renewable energy sector.

Shantanu Gupta, Partner at Khaitan & Co, said that the possible rollback of key policies like the IRA could have a significant impact on Indian solar manufacturers, who have increasingly looked to the US as a base for expansion.

“The potential rollback of key renewable energy policies, like the IRA of 2022, could significantly impact the renewable energy landscape, especially for Indian solar manufacturers operating in the US,” he said.

He added that the IRA has been a major driver in attracting international renewable energy investments to the US, offering substantial incentives and funding to promote clean energy infrastructure.

“For Indian companies in the solar industry, these incentives have made the U.S. an attractive base for establishing manufacturing facilities,” he said.

Gupta said that a shift in US policy could cause Indian firms to rethink their US strategies, possibly pushing them to explore other regions with more stable or incentive-rich environments for renewable energy investments.

“If these incentives were reduced or removed, it could alter the cost-benefit analysis of operating in the US, affecting profitability and compelling companies to explore more stable or incentive-rich markets,” he said.

He added that such policy uncertainties might prompt Indian firms to consider alternative regions for expansion or strengthen their presence in countries with consistent renewable energy policies, hedging against the risk of sudden changes in the US.

There is also rising competition from Chinese solar manufacturers who have become dominant players in the global solar market by providing low-cost solar panels and benefitting from substantial government subsidies.

China’s growing influence in the solar sector has created challenges for both US and Indian manufacturers, who struggle to compete with the price advantage offered by Chinese imports and seek to secure energy independence.

Despite these potential challenges, there is optimism about the enduring strength of the US-India clean energy partnership, according to Pinaki Bhattacharyya, managing director and CEO of AMPIN Energy Transition.

“We respect the choice of the American people and look forward to strengthening the long-standing clean energy partnership between India and the United States, given the strong friendship between President Trump and Prime Minister Modi,” he said.

Both India and the US have deepened their collaboration in recent years, with joint initiatives focused on advancing renewable energy technologies and scaling up green energy projects. As both countries work toward achieving their clean energy goals, the future of US-India renewable energy ties will depend heavily on policy stability, trade relations, and their ability to counterbalance the growing clout of China’s solar industry.