• The Centre for Social and Economic Progress (CSEP) hosted a closed-door research seminar with Pooja Ramamurthi, Fellow, CSEP on “Triangular Cooperation as a Catalyst for Green Trade: The Role of MSMEs in India’s Climate Partnerships” on 10 September 2025.
• The seminar launched a new research paper, “India and Global Triangular Climate Cooperation: Motivation, Institutional Models, and Policy Options”. The seminar, focused on how and why India engages with partners for triangular cooperation, focussing on the case of climate action. The paper launch was followed by a discussion on how triangular cooperation can enable Micro, Small, and Medium Enterprises (MSMEs) to advance India’s climate partnerships.
• The discussants were Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME), Rodney Reviere, Programme Head, GIZ India, and Marc De Sousa Shields, Country Director and Head of Multi Country Office, International Fund for Agricultural Development (IFAD). The talk was moderated by Constantino Xavier, Senior Fellow, CSEP.
• The participants included representatives from the Indian government, the diplomatic community, think tankers and scholars from research institutes and universities in India and abroad, as well as representatives from business.

Framing Triangular Cooperation in Climate and Trade

The seminar launched the paper on “India and Global Triangular Climate Cooperation: Motivation, Institutional Models, and Policy Options” situating triangular cooperation (TrC) within the shifting landscape of global development and climate diplomacy. The presentation highlighted how this framework has traditionally built on bilateral engagements, India’s evolving strategy reflects a greater willingness to act as a facilitator in multiparty partnerships. The discussion emphasised three key modalities shaping India’s approach: (i) deepening bilateral ties, (ii) building triangular platforms through institutions such as the International Solar Alliance (ISA) and the Coalition for Disaster Resilient Infrastructure (CDRI), and (iii) engaging with multilateral organisations such as the United Nations (UN) to scale climate action.

Climate and energy emerged as the cross-cutting agenda binding these modalities together. TrC was viewed as an instrument to expand India’s development partnerships beyond its traditional diplomatic footprint, especially in regions where its presence has been limited. However, it was noted that while countries like Brazil have embedded triangular cooperation in their global South strategies, India lacks a clearly defined framework on which regions, sectors, and modalities to prioritise.

The conversation revealed both opportunity and gaps. On the one hand, India can strengthen its institutional capacity, design joint standards, and catalyse private sector participation in development cooperation. On the other, the absence of a monitoring and evaluation strategy constrains its ability to measure impact and refine approaches. TrC was thus framed not merely as a foreign policy tool, but as an evolving mechanism for knowledge exchange, innovation, and facilitation in addressing shared climate challenges.

The Role of MSMEs in Green Transition and Trade

A central theme of the seminar was the role of MSMEs in advancing green trade under triangular cooperation. MSMEs contribute to 50 percent of India’s export share and consume roughly a quarter of the country’s industrial energy. Their dual positioning, both as energy users who need to adopt low-carbon measures and as providers of green technological solutions, makes them pivotal in enabling the green transition.

It was highlighted that there is not a full understanding of the extent to which MSMEs contribute to carbon emissions. Energy-intensive sectors such as textiles and food processing which are dominated by MSMEs remain underrepresented in reported emissions data. Several discussants pointed out that while MSMEs are pragmatic actors, quickly adjusting to shifts in market and policy incentives, they face steep challenges in financing, technological access, and knowledge asymmetry. Yet, when business cases for energy efficiency are clear, these enterprises often respond with speed and scale.

The seminar underscored successful models, such as South-South initiatives that have fostered agro-processing, renewable energy applications, and eco-packaging solutions. Examples from Africa and Southeast Asia illustrate how knowledge and technologies developed in India could be adapted abroad, while India itself could learn from climate-smart practices pioneered in the Global South. MSMEs were framed not only as recipients of triangular projects but as active contributors of expertise.

At the same time, participants reflected on the constraints MSMEs face in internationalising their operations. Without strong institutional backbones and enabling networks, these enterprises are unable to reach beyond domestic markets. Regulatory environments, fiscal incentives, and integration into global supply chains were identified as key levers to incentivise MSMEs’ engagement with climate partnerships. TrC could therefore serve as a platform to amplify MSMEs’ green contributions while addressing systemic barriers.

Opportunities, Challenges, and Critiques of Triangular Cooperation

The seminar also discussed the operational realities of TrC. One recurring theme was the complexity of aligning multiple actors such as governments, line ministries, implementing agencies, and private stakeholders across three countries. While such processes carry high transaction costs, they also hold potential for innovative arrangements. For instance, examples from past and on-going projects in agriculture, digital services, and sustainable industrial technologies illustrated how triangular partnerships could combine technical know-how with financial and policy support.

Yet, the discussions also revealed scepticism. Participants pointed out that triangular cooperation often lacks a clear starting point and defined outcomes, making it vulnerable to political motivations rather than developmental needs. Pilot projects are sometimes designed for demonstration rather than long-term sustainability, raising questions about scalability. Others observed that the private sector, a central actor for climate transition, remains inadequately integrated into TrC frameworks, despite its role as a critical driver of innovation, finance, and implementation.

With aid flows declining and official development assistance becoming less central, the need for alternative financing mechanisms has grown. Triangular cooperation was viewed as a way to leverage concessional finance, trade, and technology in more economically driven models of diplomacy. Shared learnings from Global South countries, such as energy-saving markets in Latin America or pay-as-you-go renewable models in Africa, were seen as instructive for India’s own MSMEs.

The political dimension of TrC was openly acknowledged. Development cooperation has always been intertwined with foreign policy objectives, whether in post-war Europe or in the Global South today. Rather than dismissing this, participants argued for more transparency about the political drivers of TrC while simultaneously articulating its developmental impact. This could help reconcile critiques of inefficiency with the recognition that cooperation inevitably serves both strategic and developmental goals.

Future Directions for Research and Practice

The seminar concluded by looking ahead to future pathways for triangular cooperation in advancing green trade and MSME engagement. A strong consensus emerged around the need for systematic research on three fronts:

1. Defining Strategy and Scope: India must articulate a clearer strategy for TrC, identifying priority sectors, geographies, and modalities of engagement. Deep-dive case studies can help map what has worked for other countries and adapt lessons to India’s context.
2. Strengthening Institutional and Private Sector Capacity: Building domestic institutional capacity was seen as essential to sustain TrC efforts. At the same time, mechanisms to reduce knowledge asymmetry among MSMEs were emphasised. These could be through peer learning platforms, South-South knowledge exchange, and digital infrastructure. The private sector, particularly small and medium enterprises, should not only be beneficiaries but also facilitators and drivers of cooperation.
3. Reimagining Finance and Incentives: Moving away from traditional aid models, the future of TrC lies in economic diplomacy, concessional finance, and market-driven approaches. Incentives, regulatory frameworks, and global reporting standards will be critical to integrate MSMEs into green supply chains. Innovative financial models, such as energy-saving insurance or blended finance, were highlighted as opportunities to enable MSMEs’ green transition.

By leveraging the strengths of multiple partners and centring MSMEs in the green transition, India can redefine its role as a global climate partner.