Trump’s Energy Policies Reshape US Priorities, Challenge India

Solar Project

In line with US President Donald Trump’s commitment to reversing policies implemented by the outgoing Biden administration, he announced a series of provisions that prioritize contracts related to materials, equipment, and services, aiming to maximize domestic energy supplies under specific circumstances.

The US Congress has introduced several provisions concerning domestic energy. Notably, Section 101(c) authorizes the President to allocate and prioritize contracts related to materials, equipment, and services to enhance domestic energy supplies. However, this authority is restricted unless the President meets certain conditions. Additionally, Section 105 of the Defense Production Act (DPA) prohibits the use of these powers to ration gasoline consumption without congressional approval. Furthermore, Section 106 of Title I, as amended, designates energy as a strategic and critical material, enabling the application of other DPA authorities, particularly those under Title III, for energy-related policy initiatives.

Under these provisions, the Secretary of Defense is responsible for decisions related to military production and construction, foreign military assistance, military use of civil transportation, stockpiles managed by the Department of Defense, space, and directly related activities. The Secretary of Energy oversees energy production, construction, distribution, and related activities. Meanwhile, the Secretary of Homeland Security manages all other national defense programs, including civil defense and government continuity.

A Turning Point for India

A Climate Energy Finance report highlights a turning point for India’s renewable energy sector. After years of slow deployment, 2024 saw record solar PV installations of 24.5 GW, bringing cumulative deployments to 100 GW. India is now on track to meet its 2030 renewable energy target. While domestic solar PV module manufacturing is expanding rapidly—reaching 80 GW by the end of 2024—the country remains heavily dependent on Chinese solar wafers and cells. This dependency exposes Indian manufacturers to the growing risk of US trade sanctions, particularly as exports to the US surge.

The report stated, “With the return of US protectionism under President Trump, India has an opportunity to reduce its reliance on external supply chains by accelerating domestic solar installations. However, Trump’s policies could also pose challenges. Increased trade barriers may impact India’s solar PV exports and planned manufacturing expansion, creating headwinds for the sector.” It added, “Meanwhile, the projected rapid growth of the US solar PV and battery energy storage system (BESS) manufacturing sector is now uncertain. Rhomotion had forecast 160 GWh of annual BESS capacity to come online in 2025, but this outlook is now at risk.”

The report further analyses, “Any erosion of legislative and policy support by a new US administration could have far-reaching consequences. A rollback of clean energy incentives—similar to the Trump administration’s previous freezing of Department of Energy (DoE) loans and incentives under the Inflation Reduction Act (IRA)—would undermine investment confidence. This, in turn, could stall clean technology manufacturing, reindustrialization efforts, and the deployment of variable renewable energy (VRE). To safeguard progress, securing multipartisan support for current policy initiatives remains essential.”