India-UK trade deal to boost Indian cleantech exports amid renewable energy slump in US
Sweta Goswami
The Free Trade Agreement (FTA) between India and the United Kingdom (UK) signed on July 24 will allow renewable energy manufacturers in India to access a new and more attractive market with zero tariffs for exporting products like solar modules and wind turbines to the UK.
The zero tariff on renewable energy products by the UK for India has come as a shot in the arm for the country’s cleantech manufacturers as their exports, majority of which went to the US, have gradually begun to decline due to Donald Trump administration’s decision to curb incentives for solar and wind projects.
Besides, the UK will also support India on green hydrogen, civil nuclear energy, and offshore wind apart from helping India finance its climate goals through multilateral development banks (MDBs). Moneycontrol on June 20 had reported that the trade talks would also cover green hydrogen.
Vinay Rustagi, Chief Business Officer, Premier Energies, a leading renewable energy manufacturing company in India said the trade deal could not have come at a better time. “The agreement allows tariff-free export of engineering goods including solar modules and other renewable energy equipment to the UK. This is a highly welcome move, opening up a potentially lucrative export opportunity for Indian manufacturers who are rapidly scaling up their capacities and technology capability,” he said, adding that the company hopes that the Indian government will be able to negotiate similar agreements with other large nations around the world.
The trade deal also will also increase foreign direct investment (FDI) in India’s renewable sector. In its statement, the British government said the FTA “will give the clean energy industry a brand new and unprecedented access to India’s vast procurement market”, as India makes the switch to renewable energy, alongside its growing energy demand.
For example, Carbon Clean, a UK-based leader in carbon capture, with projected UK export contributions of £83 million over the next five years, has invested £7.6 million in a Global Innovation Centre in Mumbai. “This ODI (overseas direct investment) and export wins will unlock 250 jobs across London, Glasgow and Huddersfield as well as 100 jobs in Mumbai,” the British government said in a statement on July 24.
The UK renewable energy market size was estimated at $ 20.25 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 20.3 percent from 2024 to 2030, according to Grand View Research. The Indian renewable energy market was valued at $ 23.9 billion in 2024 and is likely to grow at a CAGR of 9 percent during 2025-2033, as per market research firm IMARC.
The two countries also agreed upon the ‘India-UK Vision 2035’ under which the UK will help mobilise timely, adequate and affordable finance for climate action to India. The vision document also mentioned that the two countries would collaborate on a host of sectors across climate and clean energy ranging from civil nuclear energy to power grids and green hydrogen.
“We will collaborate on reforming global financial systems towards better, bigger and more effective multilateral development banks (MDBs) to enable scaling up of affordable finance for climate action by developing countries,” the document stated.
This article has been republished from The Moneycontrol.com