The real-estate tycoon said he made the decision as the deal was unfair to the US and badly hit businesses and jobs.
He said India would get billions of dollars for meeting its commitment under the 2015 Paris Agreement and it - along with China - would double its coal-fired power plants in the years to come, gaining a financial advantage over the US.
He also drew widespread condemnation from entrepreneurs, politicians, world leaders and environmentalist for abandoning the single most important international effort to curb global warming.
Democratic leader Nancy Pelosi said pulling out of the deal was "abandoning America's leadership in the fight against the climate crisis."
"If President Trump wants nations like China and India to take stronger and swifter action on climate, then he should do so through the accountability and enforcement provisions in the Paris Agreement, not by breaking our word and storming out of the room," Pelosi said.
The much-anticipated decision was, however, a culmination of one Trump's most prominent election promises as he struggles to set aside the distractions caused by accusations of his campaign's ties with Russia in his first 100 days in office. He has previously called climate change a "hoax".
In withdrawing from the agreement, Trump put the US in league with two other nations - Syria and Nicaragua - who have not signed onto the deal agreed by over 190 other nations.
"I am fighting every day for the great people of this country. Therefore, in order to fulfil my solemn duty to protect America and its citizens, the US will withdraw from the Paris climate accord," he said, and vowed to stand with the American people against "draconian" international deal.
Trump said he wanted to negotiate a better deal for the US. And he will stick to the process laid out in the Paris agreement - which could take the US four years to leave the deal coinciding with the next presidential election, meaning American voters could have the final word on the decision.
But minutes after Trump's speech, Italy, France and Germany issued a joint statement saying they believed the treaty was "irreversible" and could not be renegotiated.
Former president Barack Obama, who worked hard to ensure the deal ses the light of the day after nearly two decades of failed negotiations, issued a rare statement saying the Trump administration had joined "a small handful of nations that reject the future".
Trump also said "not only does this deal subject our citizens to harsh economic restrictions, it fails to live up to our environmental ideals."
In short, according to him, this agreement was "less about the climate and more about other countries gaining a financial advantage over the United States."
"India makes its participation contingent on receiving billions and billions and billions of dollars in foreign aid from developed countries," Trump said.
But not everyone was convinced.
Senator Mazie K Hirono said the move was "irresponsible, hasty, and short-sighted."
Senator Ed Markey said Trump was breaking a promise to the world to combat climate change in order to keep an empty campaign promise to the coal industry. "Withdrawal from the climate agreement is a betrayal of scientific fact, economic opportunity, and moral leadership," he said.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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