What is friendshoring, and does it help India?

What does friendshoring mean?

Friendshoring aims to encourage trade and deepen economic ties between trusted business partners; strengthening supply chains; and diversifying away from nations that could pose geopolitical and security risks to global supply chains. In the post-pandemic world due to geopolitical headwinds, the concept emerged as an alternative model for international trade. This will reduce excessive dependence on countries that can pose security risks and are a source of critical inputs and raw materials. However, restricting the trade of critical inputs to trusted countries can reverse the benefits of globalization.

How does India rank in US friendshoring?

Against a backdrop of a challenging global economic outlook and geopolitical instability, Yellen said during her visit to India in mid-November that the US would continue to deepen economic ties with India as it continues its friendly approach with reliable trading partners. follows. He also said that the global economic trajectory will be shaped by the work that the two countries do together. The US Treasury Secretary called on India to play a key role in handling debt restructuring especially of middle and low-income countries as it assumes the G20 presidency.

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What does India-US trade data look like?

In 2021-22, the US re-established itself as India’s largest trading partner. Bilateral trade between the two stood at $119.41 billion. India’s trade surplus with the US in 2021-22 was $32.8 billion. The US is India’s largest trading partner in terms of exports, while the US ranks third in terms of imports. In addition, the US is the top source of foreign portfolio investment in India.

Is it against multilateral agreements?

Friendship between countries committed to democracy and peace should be carried out in true spirit. Within the bloc, no country should provide protection to another country, especially a country harboring terrorism. It is important to note that WTO was established on the initiative of OECD countries with a broad trade agenda mainly to protect the interest of US and European countries. Thus, although a country is entitled to act in its own interest, frequent changes in strategy and gameplan may not go down well.

What strategy should India adopt?

As India prepares to take over the presidency of the G20 in December, it should take advantage of this unique opportunity and contribute to the global agenda. It should work towards further strengthening bilateral trade ties with major trading partners. However, the country should continue to actively trade with nations with which it has established stable and time-tested trade relations and explore trade opportunities that work to the benefit of its citizens.

Jagdish Shettigar and Pooja Mishra are faculty members at BIMTECH.

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