India is one of America's indispensable partners, said U.S. Treasury Secretary Janet Yellen, while highlighting her country's interest in 'friendshoring' with India to strengthen its supply-chain vulnerabilities.
Yellen shared President Joe Biden's words and sentiments while addressing business leaders at the Microsoft India Development Centre in Noida ahead of meeting India's Finance Minister Nirmala Sitharaman.
Before joining @POTUS at the G20 Summit in Indonesia, I'm visiting India to participate in the U.S.-India Economic and Financial Partnership. The U.S. relationship with India is strong and continues to deepen through trade, critical economic ties, and shared values.
She underscored the confluence of headwinds such as the lingering effects of the pandemic, spillovers from the Ukraine war, and central bank tightening as countries deal with inflation. In line with the U.S. stand on the Ukraine war, she agreed with Prime Minister Modi's previously expressed sentiments that this was "not an era for war".
"Emerging markets and developing countries are particularly under pressure ... I believe that ending Russia's war is a moral imperative. It is also the single best thing we can do to help the global economy," Yellen said.
Yellen's also highlighted the U.S.' interest in strengthening trade with India. She stated that both, India and the US are pursuing long-term investments in economic strength.
The Treasury Secretary noted that similar to India's Gati Shakti plan, the U.S. is pursuing a $1.2 trillion infrastructure law and even growing their domestic semiconductor and clean energy industries, just as India plans to do the same.
"The U.S. welcomes India's ambition to become a powerhouse in the areas of green hydrogen and other renewable technologies like solar," she added.
Interest in Friendshoring
As the Ukraine war affects energy interests globally, pushing up gas prices to new highs, the U.S. is looking to strengthen its supply chain vulnerabilities.
"The U.S. is pursuing an approach called 'friendshoring' to diversify away from countries that present geopolitical and security risks to our supply chain. To do so, we are proactively deepening economic integration with trusted trading partners like India," Yellen said.
This is evidenced by Apple's shift in manufacturing base to India and the planned DFC (U.S. International Development Finance Corp.) financed 3.3 gigawatt solar module manufacturing facility in Tamil Nadu.
"Our strategy will also create redundancies in our supply chain to mitigate over-concentration risks," Yellen said. "And we are also addressing our reliance on manufacturers whose approaches clash with our human rights values."
Yellen said that the U.S. is looking to integrate with a 'large group of countries' — developing countries and advanced economies alike.
Shared G20 Agenda
Looking forward to India's presidency, Yellen stated four shared objectives: addressing debt distress, promoting climate action, evolving the multilateral development banks, and embracing and shaping changing economy.
On debt distress, Yellen said though a common framework to bring all the major bilateral creditors together to provide debt relief for low-income countries was in place, it has not delivered due to a lack of cooperation from China. "...This needs to change. All major bilateral creditors, including China, must cooperate constructively to deliver on their G20 commitment to provide meaningful debt relief," Yellen said.
She also added that U.S. is taking significant action on climate action and has enacted the Inflation Reduction Act to that effect.
Indian Finance Minister Sitharaman has often noted the responsibility of developed countries and international institutions to act on climate justice and urged that developing countries need to keep up climate financing commitments.
Yellen said the Biden administration has committed to increasing U.S. international public climate financing to over $11 billion by 2024.
She also spoke about India and the U.S. guiding international institutions like the World Bank and hopes the two countries can work closely to bridge the global digital gap.
Yellen noted U.S.' interest in making cross-border payments cheaper, faster, more transparent, and easier to access--this is expected to one of India's objectives as the G20 host this year.
Post her visit to India, Yellen will join U.S. President Joe Biden in Indonesia for the G20 Summit where India will assume leadership as the 2022-23 host.
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