U.S. Treasury Secretary Janet Yellen said in New Delhi Friday that “like-minded countries” should work together to reduce the world’s economic dependency on “risky countries.”
On a visit to New Delhi aimed at strengthening the economic partnership between the two countries, she said, “We are proactively deepening economic integration with trusted trading partners like India.”
Yellen said that the United States is pursuing an approach she called “friend-shoring” – the diversification of supply chains away from countries that present geopolitical and security risks to global trade. The approach involves working with such developing countries as India where the supply chains can be established
“For too long countries around the world have been overly dependent on risky countries or a single source for critical inputs,” Yellen said Friday at a Microsoft facility in New Delhi on her first visit to India as Treasury secretary.
Trade disruptions have escalated globally in recent years because of the COVID-19 pandemic and the Russia-Ukraine war.
Citing Russia as “an example of how malicious actors can use their market positions to try to gain geopolitical leverage or disrupt trade for their own gain,” Yellen said Moscow had for the better part of this year “weaponized” its natural gas supply against Europe.
She pointed out that new supply chains are already developing across regions from Asia to the European Union.
“We’re also seeing signs that Western firms are diversifying their supply chains beyond China. Technology companies like Amazon and Google are investing in India and Vietnam,” she said.
Co-chairing a forum with Yellen on U.S.-India economic and financial partnership, Indian Finance Minister Nirmala Sitharaman said that New Delhi values its relationship with the United States as a “trusted partner” and will rely on cooperation with it to address global economic challenges.
U.S.-Indian trade has been growing and the United States became India’s largest trading partner last year.
Yellen said that New Delhi’s membership in the Indo-Pacific Economic Framework will also tighten India-U.S. ties and support economic prosperity across the Indo-Pacific region. The framework is a Biden administration initiative aimed at increasing economic engagement with Asian countries, which are heavily dependent on trade with China.
Common concerns about China’s rise have drawn the U.S. and India closer in recent years and, according to observers, neither wants to allow their divergent approaches to the Russian invasion of Ukraine to jeopardize their economic or security ties.
New Delhi has not explicitly condemned the Russian invasion of Ukraine or supported Western sanctions against Moscow. It has significantly increased its purchases of discounted crude oil from Moscow in recent months and is unlikely to endorse the plan by the Group of Seven nations to cap the price of Russian oil starting next month.
“India wants to work with the U.S. in a variety of spaces, but it’s not about to sign on to a plan that could penalize its partner Russia economicall — and especially with New Delhi having recently scaled up commercial cooperation with Moscow,” Michael Kugelman, deputy director of the Asia program at the Washington-based Wilson Center, told VOA.
Earlier this week, Indian External Affairs Minister Subrahmanyam Jaishankar said during a visit to Moscow that India would bolster economic ties with Russia and continue to purchase oil from Moscow.
U.S. officials say they are not expecting India to end purchases of Russian oil, but before arriving in India, Yellen had expressed hope that India could benefit from the price cap by enabling its buyers to negotiate better discounts.
“We are dealing with a confluence of headwinds,” Yellen said during her visit, adding that ending Russia’s war in Ukraine is “the single best thing we can do to help the global economy,” which is now in a “pivotal moment.”