Context and Significance
- Karnataka government has decided to operationalise the Gig Workers’ Welfare Board under the Karnataka Platform-based Gig Workers (Social Security and Welfare) Act.
- The move addresses regulatory gaps in platform-based employment, recognising gig workers as a distinct labour category requiring statutory social security mechanisms.
Relevance
- GS Paper 2 (International Relations):
Global governance, multilateral institutions, Global South diplomacy, India–US relations, climate diplomacy. - GS Paper 3 (Environment & Economy):
Renewable energy transition, climate finance, green growth, solar manufacturing, energy security.
International Solar Alliance (ISA): Core Facts
Establishment and Institutional Profile
- ISA was launched in 2015 on the sidelines of COP21 (Paris) by India and France.
- It became a treaty-based intergovernmental organisation in 2018, after ratification by required member states.
- Headquarters: Gurugram, Haryana, India.
- Membership: Over 120 countries, primarily tropical and developing nations across Africa, Asia, and Small Island Developing States (SIDS).
Mandate and Functional Role of ISA
What ISA Does (and Does Not Do) ?
- ISA does not directly build solar plants; instead, it focuses on risk mitigation, standard-setting, capacity building, and mobilisation of finance.
- It acts as a platform aggregator, linking governments, multilateral banks, private investors, and technology providers.
- Key objective: Reduce cost of capital for solar projects in developing economies.
U.S. Exit: Financial vs Confidence Impact
Limited Financial Impact
- The U.S. joined ISA only in 2021 and contributed around $2.1 million over three years.
- This constituted ~1% of ISA’s total funds, making direct financial disruption negligible.
- India and ISA officials have clarified that ongoing programmes, training, and capacity-building initiatives will continue.
Confidence and Signalling Effect
- Withdrawal sends a negative signal to global lenders and investors, especially in risk-sensitive developing markets.
- Climate economics is driven not only by funds, but also by credibility, long-term commitment, and policy certainty.
Impact on India’s Solar Manufacturing and Projects
Domestic Manufacturing Capacity
- India is now largely self-reliant in solar modules and components, supported by PLI schemes, customs duties, and domestic demand.
- India does not depend on U.S. supply chains for panels or critical equipment.
- Hence, solar power costs in India are unlikely to rise due to U.S. exit.
Employment and Investment
- Most Indian solar projects are backed by long-term PPAs with SECI and state DISCOMs, insulating them from global political shifts.
- Jobs and domestic investments remain structurally secure.
Potential Upside for Indian Industry
- With the U.S. slowing renewable approvals domestically and facing supply tensions with China and Mexico, Indian manufacturers may find export and relocation opportunities.
- Outcomes depend on progress in India–U.S. bilateral trade negotiations and alignment with U.S. technical standards.
Real Risk Zone: Africa and Poorer Developing Countries
Financing Constraints
- ISA’s core work is concentrated in Africa and least-developed countries, which rely heavily on concessional finance and multilateral confidence.
- U.S. retreat from climate platforms may make lenders more risk-averse, slowing project approvals and financial closures.
Spillover Effects on India
- Indian solar developers seeking overseas expansion through ISA-supported projects may face delays.
- Slower solar deployment in Africa weakens South–South cooperation momentum.
Strategic and Diplomatic Implications for India
- ISA is a key pillar of India’s Global South diplomacy and climate leadership.
- U.S. exit removes an influential partner but does not alter leadership structure—India remains the anchor.
- India’s role shifts from agenda-setter to system-sustainer, increasing responsibility for credibility and delivery.
Broader Global Governance Signal
- The episode reflects fragmentation of global climate governance, where multilateral cooperation weakens amid geopolitical realignments.
- Climate action increasingly depends on coalitions of the willing, regional platforms, and middle-power leadership.
Way Forward
- India should strengthen ISA by crowding in MDBs, development finance institutions, and private capital.
- Expand ISA’s role in blended finance, guarantees, and project preparation facilities.
- Use ISA as a tool for technology diffusion, standards harmonisation, and South–South cooperation.
- Diversify partnerships beyond traditional Western donors to ensure resilience.
