India is working with multilateral bodies on climate funding, says Nirmala Sitharaman

New Delhi: India is continuously working with multilateral institutions to make sure they have enough leverage with their funds to finance the common cause of climate action, even as countries like itself, having committed to a greener future, are having to find their own resources in the absence of global funding, finance minister Nirmala Sitharaman said on Thursday.

Speaking at an event with students of Delhi University, Sitharaman also highlighted that indigenous defence manufacturing was an opportunity for India in the light of Operation Sindoor, the codename for India's strike against terrorist camps in Pakistan and Pakistan-occupied areas on 7 May.

Impact of climate change on economic growth

Sitharaman said the adverse impact of climate change on economic growth had aggravated the issue and raised more complex issues over the last two years. She said previously, all nations could meet the climate-related targets they had set for themselves using domestic funding, as well as funding from global and multilateral institutions.

But the worsening climate crisis has left each nation on its own, said Sitharaman. The finance minister said each country has to rely on its own domestic funding to shift to cleaner energy sources and manufacture greener products to export. In this effort, she said the government has continued to work with multilateral institutions to raise more funds to help developing nations.

"Today, with many countries having understood the cost of moving from fossil fuels to renewable energy, they are asking themselves this question—whether it is possible for them," said Sitharaman. She added that during the transition period from fossil fuels to renewable energy, many states looked for greener alternatives such as natural gas.

Green exports

Also, issues such as how green exports are have become a trade issue, said Sitharaman, referring to policies such as the Carbon Border Adjustment Mechanism (CBAM) put in place by the European Union.

"So the pressure on countries like India, which successfully completed complying with the COP21 regulations, was mounting. And you already are proving that you are shifting towards renewable energy. But now it is very clear, that it is just you and your funds. No funds are available yet globally. So it is a question of how speedily you can move towards greening yourself and looking at cutting down carbon emissions," said Sitharaman.

"We are negotiating to make sure that global multilateral institutions will have leverage with their funds so that they can use them for a common cause, a public good," she added.

Defence production

Sitharaman also said India's indigenous defence production had shown significant progress, compared to the past when all the country's weapons were imported. "From that stage to where we are today, most of what is being used by defence personnel today is made in India," she said.

While India continues to import weapons, it still makes its own products, which integrate seamlessly among the three arms of the military—the army, the navy, and the air force—and work well with imported technology. 

India’s systems in defence today are able to integrate equipment coming in from elsewhere, the minister said. “They can talk to our operational systems, and our operational systems are capable of functioning on their own, and between the three forces—the army, navy, and air force—there is that interoperability," said the finance minister.

The minister also said that while some states are actively engaging in capital expenditure with their own funds, others are relying primarily on the Union government funds. Since the covid pandemic, there has been a realisation of the multiplier effect of capital expenditure on growth, suggesting that capital expenditure can significantly accelerate economic growth, the minister added.

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