Howdy Modi & India US Relations

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Context: Prime Minister Narendra Modi played host to United States President Donald Trump at NRG Stadium in Houston, Texas, for an Indian-American rally dubbed the ‘Howdy Modi: Shared Dreams, Bright Futures’. The mega ‘Howdy, Modi’ gala event saw around 50,000 Indian-Americans in attendance. Before this event, no US President has ever addressed a community event along with an Indian Prime Minister.

Relevance:

GS-2 Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora.

Background:

Ahead of the rally with President Trump, PM Modi met heads of 17 energy companies. Herein, India updated the MoU it signed with American company Tellurian. Petronet, Indian LNG importer will invest $2.5 billion in Tellurian’s $29 billion Driftwood project.

The deal has mutual benefits for the US as well as India.

Benefits for the US:

  1. Manufacturing will be supported in 18 U.S. States.
  2. Creation of 50,000 direct and indirect jobs.

Benefits for India:

  1. Access of up to 5 million tonnes of LNG for India per year.
  2. India’s vision of achieving a $5trillion economy will get a shot in the arm.
  3. It will contribute to a cleaner environment.

The heads of energy companies at the meeting appreciated India on the following grounds:

  1. India’s oil and gas purchases have more than doubled in the last year.
  2. India’s initiatives towards the ease of doing business.
  3. India’s steps towards deregulation in the energy sector.

Notwithstanding the praises, certain concerns and suggestions were also highlighted:

  1. Issues with India’s arbitration and dispute resolution mechanism.
  2. The suggestion was made to consider a unified ministry for all energy issues, as against the existence of separate ministries like Petroleum and Natural gas, Coal and Renewable energy.

This deal holds great significance for India-US energy cooperation. India-U.S. energy cooperation is gaining momentum with the passage of time. Following points further corroborate this:

  • Both India and the U.S. have acknowledged that energy can emerge as the main fulcrum of their bilateral relationship. With this in view, both countries consider it as an important element of their strategic ties.
  • Oil and gas, energy efficiency, renewable energy, coal and nuclear energy are acknowledged as important pillars of energy cooperation.
  • The U.S. today is the world's leading producer of oil and natural gas, and is setting and regularly breaking records for oil and natural gas production, and exporting LNG to 30 countries now on five continents. Accordingly, U.S.-India Gas task force has been formed, to help India unleash its own natural gas potential.
  • The U.S.-India Partnership to Advance Clean Energy (PACE) aims to enhance energy security and accelerate the adoption of clean energy. Begun in 2009, it focuses on spurring low carbon development by supporting research and deployment of clean energy; strengthening institutional and human capacity; improving the enabling environment; mobilizing financing for clean energy, and increasing awareness and understanding of clean energy technologies. The two countries have helped finance, with private funds, a Joint Clean Energy Research and Development Center, which supports research and development in solar energy, biofuels, and energy-efficient buildings.
  • India’s purchase of oil and gas from the U.S. has doubled in the last year. This can be seen in the light of India stopping the imports of oil from Iran and Venezuela.
  • Shale gas accounts for 33% of electricity production in the U.S. It is worth noting that India has huge reserves of shale gas, sufficient enough to meet Natural gas demand for the next 25 years. U.S. can help India with a fracking technique for extracting shale.
  • Despite all the positivity surrounding the LNG deal, a difficult question stands in front of India as to how soon India would be able to consume the 5 million tonnes of LNG per year. In 2011, GAIL signed a 20-year contract with U.S. firms for supplying 5.8 million tonnes of LNG per year. However, due to lower demand, much of it had to be resold.

For a deeper understanding of the topic, some questions need to be answered 

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