India, US to work on new climate finance assistance deal for developing countries

Union Finance Minister Nirmala Sitharaman with US Treasury Secretary Janet Yellen.

India and the US have agreed to come up with a new climate finance assistance deal for developing countries.

"We acknowledge the developed country goal to jointly mobilise $100 billion every year till 2025 from public and private sources for developing countries, in the context of meaningful mitigation actions and transparency on implementation," a joint statement issued at the conclusion of the Ninth India-US Economic and Financial Partnership said.

"We also agree to work together in arriving at a new collective quantified goal from a floor of $100 billion annually for the post 2025 period, taking into account the needs and priorities of developing countries," the statement added.

US Treasury Secretary Janet Yellen led the US delegation, with Federal Reserve Chair Jerome Powell participating in the meeting via video-conference.

The Indian delegation, led by Finance Minister Nirmala Sitharaman, included Reserve Bank of India (RBI) Governor Shaktikanta Das and other senior officials from the finance ministry and the external affairs ministry.

India has been at the forefront in asking developed countries to provide greater financial assistance to developing countries in making the transition to clean energy, adapt to climate change, and ensure there is no further rise in global temperatures.

Developing nations have argued that the climate finance funding promise has not been met, with the Organisation for Economic Co-operation and Development finding that only $83.3 billion was mobilised for climate finance in 2020.

At COP-26, held in Glagow, Scotland, in late 2021, India had demanded a ten-fold increase in the annual climate finance funding to $1 trillion.

Finance Minister Nirmala Sitharaman has previously called for "more global co-operation, probably less talk" on climate change.

The joint statement issued today said India and US would continue the discussion on the matter during India's G-20 presidency.

Macro Outlook

Apart from climate change and finance, the macroeconomic outlook, supply chain resilience, multilateral engagement, global debt vulnerabilities, anti-money laundering, and combating the financing of terrorism were also discussed at the bilateral talks.

"In the context of the conflict in Ukraine, we discussed the current headwinds to the global macroeconomic outlook including increased commodity and energy prices as well as supply side disruptions, and we reemphasised our commitment to the central role of multilateral cooperation in addressing these global macroeconomic challenges," the statement said.

On the financial sector, India and US will continue to work on increasing sharing of information to tackle offshore tax evasion. Further, discussions will continue on other matters, including banking and insurance sector reforms, capital market development, digital assets, and payment system modernisation.

In a discussion with industrialists earlier today, Yellen had said the Biden administration was focussed on the crypto landscape and had made a lot of progress in dealing with illicit finance in connection with cryptocurrencies in the US.

"This is an area where international collaboration is really important among public authorities, private sector, and other stakeholders. We need a high regulatory standard globally, we need to take steps to reduce the cost of cross-border payments and we are very actively working in the context of financial stability with Financial Action Task Force and multilateral banks like IMF to really address on a global basis the risks and some of the benefits from cryptocurrencies," Yellen had said.

The joint statement did not specifically mention cryptocurrencies.