India-US Economic and financial dialogue includes new focus on ‘Climate Change’

The meeting was held between the Finance Minister of India, Nirmala Sitharaman and the Secretary of the Treasury of the United States, Janet Yellen, along with them joined Federal Reserve Chair, Jerome Powell and RBI Governor, Shaktikanta Das virtually.

For the first time, a session dedicated to climate finance took place. As a result, both the countries agreed to step up cooperation on a host of economic issues, including climate change and infrastructure finance, close liaison in financial regulation and tackling financial crimes.  Broadly, these are only some of the few issues on which US and India consensually agreed on working with, confirmed in a joint statement issued on Friday, after both the sides met.

In the run up to the UN Climate Change Conference( “COP26”) in Glasgow, India has been pushing first world countries to meet their Paris Accord climate finance commitment of $100 billion per year.

Both the countries “reaffirmed the collective developed country goal to mobilise $100 billion annually for developing countries from public and private sources, in the context of meaningful mitigation actions and transparency on implementation,” the statement said. Deliberating such a prodigious session threw light on the “critical” role climate finance has to play in achieving global climate goals and the two sides’ commitments to drive “urgent progress” in tackling climate change.

At Thursday’s meeting, the sides also shared views global efforts to increase climate ambition and each country’s effort to meet stated goals. India has been under pressure to up its commitments from Paris, to provide a deadline to reach ‘Net Zero’ emissions. India has so far not declared further climate action apart from its Paris related goals and has argued that developing countries need space to grow, and urged rich countries to move towards net minus commitment in addition to fulfilling their climate finance pledges.

In lines with the subject, other topics of discussion also included the economic recovery from the pandemic, anti-money laundering and financing of terrorism (AML/CFT), bilateral lending and debt sustainability, as well as international taxation.

The two sides also assented, “the importance of fighting financial crimes and on the effective implementation of the Financial Action Task Force standards to protect our financial systems from abuse.”

In the closing statement, it was said, “As India prepares for its 2023 G20 Presidency, the United States stands ready to support India in hosting a successful and productive year.”