On the heels of a trip to Beijing, US Treasury Secretary Janet Yellen returns to India for the third time in nine months, this time to meet with Group of 20 finance ministers on the global economic challenges, such as the growing threat of debt default it faces. low income countries.
Yellen told reporters in Gandhinagar, the capital of the western Indian state of Gujarat, on Sunday that she was trying to foster warm US-India relations. He also plans a stop in Hanoi, Vietnam, to address supply chain reliability, the clean energy transition, and other economic resilience issues.
Yellen said her goals during her time in India were to push for debt restructuring in economically distressed developing countries, push for the modernization of global development banks to become more climate-focused, and deepen the ever-deepening relationship. greater between the United States and India.
Yellen’s frequent stops in the country point to the importance of that relationship at a time of tension with China.
India’s long-standing relationship with Russia also looms large as the Kremlin’s invasion of Ukraine continues despite efforts by the United States and allied countries to sanction and financially hit Russia’s economy. India has not taken part in efforts to punish Russia and maintains energy trade with that country despite a Group of Seven agreed price ceiling for Russian oilIt has had some success in slowing down Russia’s economy.
Yellen said that ending the war in Ukraine “is first and foremost a moral imperative. But it’s also the best thing we can do for the global economy.”
He added that the United States would continue to cut off Russia’s access to the military equipment and technologies it needs to wage war against Ukraine.
“One of our main goals this year is to combat Russia’s efforts to evade our sanctions. Our coalition builds on the actions we have taken in recent months to suppress these efforts,” Yellen said.
The United States trusts India more and more and has courted its leaders.
He said that the United States sees India as an indispensable partner in its strategy of supporting friends to increase the resilience of supply chains.
He added that private American companies see India as an excellent place to produce goods and export to the United States.
He also noted that slowing growth in China has affected growth in many other countries.
“It is something I discussed with my Chinese counterparts. I think the Chinese are eager to communicate that their business environment is open. There is certainly a desire to see foreign investment,” Yellen said.
President Joe Biden hosted a state visit to the White House to honor Indian Prime Minister Narendra Modi in June, designed to highlight and foster ties. The two leaders said the US-India relationship has never been stronger and launched new trade deals between the nations.
Raymond Vickery Jr., a policy expert on US-India relations at the Center for Strategic and International Studies, said Yellen’s arrival in India shortly after visiting China is significant because Indian officials “are going to want to to know in great detail what happened in the meetings with their Chinese counterparts and see where it fits with their perspective on economic relations with China.”
“They are going to want to know whether or not the United States is serious about moving some of their sourcing activity from China to India.”
A senior Treasury official, speaking on condition of anonymity to preview Yellen’s trip, said there was hope that the debt treatments for Ghana and Sri Lanka would be discussed and completed quickly at the meetings.
Sri Lanka and Ghana defaulted on their international debts last year, about two years after Zambia defaulted. And more than half of all low-income countries face debt problems, hurting their long-term ability to function and develop.
Last month, Zambia and its government creditors, including China, reached an agreement to restructure $6.3 billion in loanson the sidelines of a world financial summit in Paris.
The deal covers loans from countries including France, the UK, South Africa, Israel and India, as well as China, Zambia’s biggest creditor with $4.1 billion of the total. The agreement may provide a roadmap for how China will handle restructuring deals with other nations with debt problems.
Yellen’s trip comes shortly after she spent a week in China, meeting with the nation’s finance ministry and discussing mutual trade restrictions and national security concerns.
Harold W. Furchtgott-Roth, a senior fellow at the Hudson Institute, said Yellen’s trip to India “is a reflection of a naturally developing partnership.”
“India has a lot of tension with China, they have constant border disputes,” he said. And India wants to develop and has become a kind of naval power in the Indian Ocean, which is also a region that China wants to develop.”
