Ties with India stronger than before: Yellen

NEW DELHI: US Treasury Secretary Janet Yellen, on her first visit to India, touted her ‘friendshoring’ strategy of aligning trade and investment within a group of countries with shared values, in an apparent attempt to cut the role of China.

Speaking at an event at Microsoft Inc’s facility just outside the national capital, she said US-India are natural allies who can show the rest of the world that democracies can deliver for their citizens despite volatility and war. “For too long, countries around the world have been overly dependent on risky countries or a single source for critical inputs,” she said. “We are proactively deepening economic integration with trusted trading partners like India.”

The two nations share an interest in strengthening their supply chains in a world where certain governments wield trade as a geopolitical weapon, Yellen said as she introduced the concept of ‘friendshoring’. While trade can drive growth and bring significant economic benefits to all countries involved, the probability of disruptions should also be accounted for.

“Recent disruptions have contributed to higher prices in both of our countries and sapped economic output,” she said in an oblique reference to energy and commodity prices spiking up after Russia invaded Ukraine.

The US in its new ‘friendshoring’ approach is diversifying away from countries that present geopolitical and security risks to our supply chain, she said. “Our strategy will also create redundancies in our supply chain to mitigate over-concentration risks. And we are also addressing our reliance on manufacturers whose approaches clash with our human rights values.”

Yellen highlighted plans by the US firm First Solar Inc to build a manufacturing facility in Tamil Nadu and Apple Inc’s plans to shift some iPhone manufacturing from China to India. “To be very clear, friendshoring is not limited to an exclusive club of countries. We seek integration with the large group of countries that we can count on - developing countries and advanced economies alike,” she said.

“In fact, part of our ‘friendshoring’ approach involves partnering with developing countries to grow local industries and connect them to the global supply chain.” She went on to state that the solar manufacturing facility in Tamil Nadu will help diversify supply chains away from china, which currently dominates over 80 per cent of global solar panel production. “Our investments are also consistent with our values: certain solar panel materials produced in China - like those from the Xinjiang region - are known to be produced with forced labour,” she said.

India and the US will look forward to strengthening bilateral ties with greater vigour, Finance Minister Nirmala Sitharaman said.

Addressing the media jointly with the US Treasury Secretary at the start of the Ninth Indo-US Financial Partnership, she said bilateral talks will impart greater vigour to the long-standing relationship with the US. India, the FM said, “deeply values its relationship with the US as a trusted partner. We share a traditionally strong bilateral relationship underpinned with shared values, convergence of interests on wide ranging issues and vibrant people-to-people contact.”

The substantial and multi-faceted cooperation through the economic and Financial Partnership Forum remains a key cornerstone of the bilateral engagements, the finance minister added.

“Our meeting will lend greater vigour to our economic relationship, strengthen business-to-business links, and facilitate coordinated policy stance to address the pressing global economic challenges,” she said. The ninth meeting of the Forum is being held against the backdrop of India preparing to assume the G20 presidency.