Cooperation Amid Constraint: Limits and Possibilities of India–China Climate Interactions

Executive Summary

India and China occupy central positions in the global energy transition, yet their relationship is defined by a paradox: Decarbonisation deepens their economic interdependence even as geopolitical rivalry constrains cooperation. India’s transition targets are ambitious, with 500 gigawatts of non-fossil capacity by 2030, net zero by 2070, and clean-energy investment needs exceeding US$170 billion (S$219.4 billion) a year. Given China’s command of over 80% of solar manufacturing and the bulk of battery and processing supply chains globally, India’s targets cannot be met without access to Chinese technology, capital, and critical minerals. China is therefore an important but politically sensitive partner.

This paper argues that India–China climate engagement will remain limited, selective, and calibrated rather than integrated. A large Indian bilateral trade deficit (roughly US$99 billion [S$127.8 billion] in 2024–25), restrictive investment screening of Chinese investments under Press Note 3 in India, episodes of weaponised export controls by China, and the strategic mistrust entrenched since the 2020 border clash together limit deep cooperation. Complete decoupling, however, is neither feasible nor affordable at the pace India’s energy transition demands. The realistic space lies in governance-oriented, technically framed, lower-risk domains where mutual gains are tangible and strategic exposure is managed.

A recurring theme is that past engagement was broad but shallow, wide in coverage, thin in implementation, and that renewed cooperation must be reimagined around actors beyond the state. With formal bilateral channels being constrained, subnational governments, firms, research institutions, and Track 1.5 and Track 2 dialogues offer potentially worthy, durable, and less politically exposed avenues to sustain links, build trust, and generate practical outcomes.

The likely future of India–China climate engagement will not rest on a comprehensive partnership or political convergence. It will depend on whether both countries can institutionalise narrow, sector-specific forms of interdependence that advance decarbonisation while keeping geopolitical risk manageable. This is particularly salient as the United States (US) retreats from climate leadership and a fragmenting governance architecture creates openings for Asian powers to shape standards and coalitions.

This paper draws on secondary sources and two full-day Track 2 workshops convened in Singapore in August 2025 and January 2026 with Indian and Chinese scholars, practitioners, and private sector experts on climate and clean energy.

This paper identifies six domains that can be practical entry points for India-China cooperation:

Power Systems Modernisation: Power-system modernisation can focus on implementation challenges such as grid planning, market design, flexibility mechanisms, and operational standards. The breadth of the sector, spanning technology innovations (smart meters, artificial intelligence), regulation, and finance, provides multiple avenues for technical exchange and incremental trustbuilding. Collaboration can occur through knowledge sharing of methodologies, particularly in areas such as electricity dispatch regulations, grid optimisation, minimising curtailment, and system resilience. Regulators from both countries could convene a standing forum, drawing particularly on regions facing similar challenges around renewable energy (RE) curtailment and extreme weather events.

Climate Finance: India–China cooperation should focus on aligning green taxonomies, standards, data, and verification systems to reduce investment barriers and improve credibility. Both countries could develop blended-finance and guarantee mechanisms to mobilise private capital, alongside greater cooperation on green bonds and carbon markets. Engagement through multilateral institutions such as the Asian Infrastructure Investment Bank (AIIB), the New Development Bank (NDB), and the Asian Development Bank (ADB) could support joint green investment while reducing the need for politically sensitive bilateral finance flows.

Adaptation and Urban Resilience: Cooperation on adaptation should focus on joint urban climate-risk research, technical exchanges, and common resilience standards for areas such as heat, flooding, water, housing, and transport. Both countries could revive city-to-city partnerships and use multilateral platforms to share adaptation practices and develop Global South standards. Cooperation should also explore blended finance, municipal bonds, insurance, and risk-sharing mechanisms to mobilise private investment in urban resilience. Beyond cities, collaboration could extend to Himalayan resilience, water management, irrigation, and climate-resilient agriculture through bilateral and regional platforms.

Multilateral and Minilateral Engagement: While bilateral engagement may remain constrained, sector-specific cooperation in specialised multilateral frameworks emerges as a more viable pathway. These forums may include the United Nations (UN), BRICS (Brazil, Russia, India, China, and South Africa; membership has since expanded), the Group of Twenty (G20), and multilateral development banks (MDBs). At the same time, both countries can explore participation in climate initiatives spearheaded by each other, such as the Coalition for Disaster Resilient Infrastructure (CDRI). Areas such as adaptation, disaster risk reduction, maritime decarbonisation, aviation emissions, and infrastructure resilience offer opportunities for collaboration that are technical in nature and less politically contentious at international forums. These domains allow for incremental progress through standards-setting, data sharing, and joint initiatives, even in the absence of broader strategic alignment. Similarly, cooperation through development finance institutions, both traditional and more recent, continues to provide practical avenues for engagement, particularly in supporting infrastructure and energy transition projects.

Technology and Knowledge Exchange: India should adopt a narrow, sector-focused strategy for climate-technology engagement with China, prioritising areas where cooperation is less commercially and strategically sensitive. This could include grid management, regulatory design, carbon markets, energy efficiency, waste management, battery recycling, and climate adaptation rather than direct hardware technology transfer. Joint research between universities and research institutions could support the development of low-cost, scalable climate solutions. Cooperation could also focus on just transitions in coal-dependent regions, while ensuring that engagement with China is aligned with India’s domestic energy security, industrial, and innovation objectives.

Diverse Actors of Engagement: India and China should revive existing bilateral climate and energy mechanisms while adapting them to include a wider range of actors. Greater engagement with private-sector firms, subnational governments, academia, and civil society can create less politically sensitive channels for knowledge sharing, joint research, and pilot projects. In particular, private-sector dialogue can facilitate cooperation on green technologies, climate-related standards, investment practices, and clean-energy projects, while helping identify commercially viable areas for collaboration. Existing sister-city arrangements and Track 2 dialogues could also be strengthened to maintain cooperation during periods of bilateral tension. This more diversified, multi actor approach can make climate cooperation more resilient to geopolitical disruptions.