Yellen told reporters in Gandhinagar, the capital of the western Indian state of Gujarat, on Sunday that she was trying to improve the strained relationship between the US and India. He also plans to stop in Hanoi, Vietnam, to address supply chain reliability, clean energy transitions and other matters of economic stability.
Yellen said her goals for her time in India are to push for debt restructuring in developing countries that are in economic trouble, push for the modernization of global development banks to they may be more focused on climate and deepening the ever-growing US-India relationship.
Yellen’s frequent stops in the country signal the importance of that relationship at a time of tensions with China.
India’s long-standing ties with Russia have also come to a head as the Kremlin’s invasion of Ukraine continues despite efforts by the US and allied countries to sanction and economically undermine Russia’s economy. India has not joined efforts to punish Russia and continue energy trade with that country despite a Group of Seven agreed cap on oil prices with Russia, which has seen some success in slowing the economy. in Russia.
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 US will continue to cut off Russia’s access to the military equipment and technologies it needs to wage war against Ukraine.
“One of our core goals this year is to combat Russia’s efforts to evade our sanctions. Our coalition builds on the actions we’ve taken in recent months to thwart these efforts,” Yellen said.
The US is increasingly dependent on India and courting its leaders.
He said that the US sees India as an indispensable partner in the friend-shoring strategy for increasing the stability of supply chains.
He added that US private companies see India as an excellent place for manufacturing and exporting products to the United States.
He also noted that the slowdown in China’s growth has affected the growth of many other countries.
“This is something I have discussed with my Chinese counterparts. I think the Chinese are anxious to announce that their business environment is open. There is a desire to see foreign investment,” said Yellen.
President Joe Biden hosted a state visit to the White House honoring Indian Prime Minister Narendra Modi in June, designed to promote and develop ties. The two leaders stated that the US-India relationship has never been stronger and launched new business deals between the countries.
Raymond Vickery Jr., a policy expert on US-India relations at the Center for Strategic and International Studies, said that Yellen’s arrival in India shortly after the visit to China is significant that Indian officials ” wants to know in more detail what happened in. the meetings with his Chinese counterparts and see where it fits into their vision of economic relations with China.
“They want to know whether or not the United States is serious about moving some sourcing activity from China to India.”
A senior Treasury official, who spoke 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 finalized during the meetings.
Sri Lanka and Ghana defaulted on their international debts last year, almost two years after Zambia defaulted. And more than half of all low-income countries face debt distress, undermining 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 loans, on the sidelines of a global financial summit in Paris.
The agreement covers loans from countries such as France, the UK, South Africa, Israel and India as well as China – Zambia’s biggest creditor at $4.1 billion in total. The agreement could provide a road map for how China will handle restructuring agreements with other countries with debt difficulties.
Yellen’s trip comes shortly after a week in China, meeting with the country’s finance ministry and discussing 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 evolving alliance.”
“India has a lot of tension with China – they have constant border disputes,” he said. And India wants to develop and become a kind of naval power in the Indian Ocean, which is also a region that China wants to develop.