India an Indispensable Partner: Yellen

Treasury Secretary Janet Yellen has remarked that the United States considers India "an indispensable partner" in its friend-shoring strategy to increase the reliability of its supply chains.

Yellen Sees India as an Essential Partner: Treasury Secretary Janet Yellen has remarked that the United States considers India "an indispensable partner" in its friend-shoring strategy to increase the reliability of its supply chains.

She urged international creditors to move quickly to provide debt relief to developing nations on the verge of default and noted that, thanks to measures already being put in place, multilateral development banks will be able to unleash an additional $200 billion in loans over the next decade.

"I hope to use this trip to deepen what is already a significant relationship with respect of friend-shoring that India and the US have," she said in response to a question from ET at a press conference before India's two-day presidency of the G20 Finance Ministers and Central Bank Governors meeting starting on Monday.

According to rumours, Yellen coined the phrase "friend-shoring" to describe the practise of importing components from friendly nations.

Yellen has stated that she hopes to use this, her third visit in as many months, to forge closer ties between the two countries. She remarked that "private sector behaviour is a key component of the friend-shoring" and that there have been numerous announcements of investments in India as a great site to produce and export to the US.

Prime concerns

Yellen suggested we focus on a global tax agreement, aid for Ukraine, the evolution of multilateral development banks, and debt distress in emerging markets and underdeveloped countries.

She noted that poor countries may recoup lost growth and development and make investments to solve difficulties that developed countries are striving to tackle collectively if they can restore debt sustainability.

She claimed that the debt vulnerabilities of several countries caused by the pandemic had been exacerbated by Russia's "illegal" conflict against Ukraine. She noted a twofold increase in the proportion of troubled debtor nations since 2015.

She argued that other countries like Ghana and Sri Lanka could benefit from the recent agreement among international creditors, including China, to assist Zambia pay its debts by using it as a model.

Rather of every starting from scratch, "we should apply the common principles we agreed to in Zambia's case in other cases," Yellen added. The operative phrase here is "and we must go faster."

Her visit to India comes after she spent less than a week in Beijing, where she met with high-ranking Chinese officials to discuss ways to improve ties between the two countries.

She declared that the United States Treasury was prepared to help the International Monetary Fund (IMF) stabilise its Poverty Reduction and Growth Trust (PRGT).

It is her hope that the IMF will come forward with a range of measures to address this issue. For example, "my team at treasury is ready to serve as a partner for the IMF as it considers the options at its disposal, like using the internally generated resources of the fund to support the PRGT subsidy account."

According to Yellen, the United States will keep pushing for a group effort to modernise the MDBs.

We will responsibly free up $50 billion in additional loan capacity over the next decade as a result of our improvements to the World Bank's balance sheet, she said. We believe that the MDBs as a system can free up $200 billion in the next decade from the measures now in place or being considered as part of our evolution strategy.

About China

While it would be premature to immediately remove the tariffs put on China by the Trump administration, Yellen said the United States should look for measures to "de-escalate" relations with China over time. The US is reaching the end of a four-year assessment of tariffs placed on China, according to the treasury secretary, who said as much on a recent visit to Beijing.

She noted that Washington's decision to put tariffs on Beijing was motivated in part by continued worries about China's unfair trade practises. They "really have not been addressed," she said. Any attempt to ease the restrictions would spark a political backlash at home, with several Republican presidential contenders calling for even more pressure to be put on China.

Regarding Russia and Ukraine

Yellen affirmed that the United States will maintain its embargo on military supplies and technologies that Russia need for its invasion of Ukraine. It is "one of our core goals this year" to "combat Russia's efforts to evade our sanctions," she said.