Treasury Secretary Janet Yellen’s visit to India Last week highlights renewed focus in US on strengthening economic ties with Asia’s third largest economy and ‘one of America’s indispensable partners’, The current global environment with its macroeconomic, trade and strategic challenges makes it all the more compelling for the world’s two largest democracies to deepen their engagement in a mutually beneficial manner. In Delhi, Ms Yellen stressed that “the United States and India are interested in strengthening our supply chains in a world where few governments trade as a geopolitical weapon”. The US was particularly keen to reduce its vulnerability to supply-chain disruptions and was therefore adopting a strategy of ‘friendship’ with India, which confers its reliance on countries that present ‘geopolitical and security risks’. was a key element in the plan to reduce the supply chain. Citing Ukraine’s invasion and emphasizing that Moscow has ‘armed’ the supply of natural gas to Europe, as well as the challenges of China’s dominance in the production of products such as solar panels, He underscored Washington’s eagerness to nurture local partners in developing countries. Help reduce over-concentration on select suppliers.
Ms Yellen’s visit also highlights the opportunities and challenges in bilateral economic ties, notably bridging the rift caused by the Trump administration’s opposing decisions on trade, including withdrawing duty-free access to Indian exporters under the current arrangement in Washington. takes steps to do so. The 2020 decision to put India back on the US Treasury’s ‘watch list’ on its currency practices along with the Generalized System of Preferences (GSP). The US is yet to restore GSP benefits and exporters from both sides still face challenges, despite the fact that the US is one of India’s largest trading partners. In fact, the US International Trade Administration notes in its Investment Climate Summary on India that “new protectionist measures, including tighter enforcement and possible expansion of data localization measures, increased tariffs … and Indian-specific standards are in line with international standards.” are not compliant. effectively shutting down producers from global supply chains and restricting expansion in bilateral trade and investment”. There is an opportunity to move the global economic and trade agenda towards greater equality, especially given Ms. Yellen’s vocal assurances of US support. There is much for both sides to achieve, particularly by increasing mutual trust and cooperation on trade. are ready.