“For too long, countries around the world have been overly dependent on risky countries or a single source for critical inputs,” Yellen said during her first trip to India as Treasury Secretary.
“We are proactively deepening economic integration with trusted trading partners like India,” she added.
Yellen on Friday met business leaders at Microsoft India Development Centre, Noida during her trip to India which focuses on strengthening India-US economic ties.
“I am here to meet my counterpart Finance Minister Nirmala Sitharaman. India-US economic ties are getting stronger and deeper with time. With concerns on supply chain, we should work together,” she said.
In proof of what Yellen has termed friendshoring, Western companies have already begun shifting production from China, to countries like India and Vietnam, in a bid to reduce dependency on China.
Apple’s contract manufacturers in India – Foxconn, Wistron and Pegatron – are on an expansion phase, adding more assembly lines to their facilities to offset a slowdown in iPhone manufacturing in China.
Yellen also highlighted US-based solar manufacturing company First Solar’s $648 million plan to build a 3.3 gigawatt (GW) facility in Tamil Nadu.
“The United States and India share an interest in strengthening our supply chains in a world where certain governments wield trade as a geopolitical weapon,” Yellen said. “The United States will continue to deepen our business and commercial ties with India as we pursue our friendshoring agenda.”
The Treasury chief outlined a number of objectives the US and India share and which should be priorities for the G-20, including the need for creditor nations to coordinate debt-relief for poor and middle-income countries, ideally through a G-20 program known as the Common Framework.
“We welcome India’s leadership in this area, whether through an expansion of the Common Framework or another multilateral framework,” she added.
Yellen took the opportunity to hit out at China for not engaging in the program. “The Common Framework has not delivered on its promise, largely because of lack of cooperation from China,” she said.
Calling out Putin, Yellen said the Russian president’s attempts at “weaponizing” gas supply to Europe in the wake of his invasion of Ukraine serves 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.”
“We are dealing with a confluence of headwinds,” Yellen said, 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.”
With inputs from agencies