Friendshoring is an important foundation for global supply chain resilience, in which India is an indispensable partner, US treasury secretary Janet Yellen said on Sunday, adding that American companies are investing in manufacturing in India for exports to the US.
“I will use this trip to deepen what was already a very significant relationship with respect to friendshoring with the United States,” Yellen said here at the G20 meeting of Finance Ministers and Central Bank Governors.
The US is India’s largest export market. Bilateral trade between the two countries exceeded $191 billion in 2022, nearly double of that in 2014.
“The behaviour by the private sector is really an important part of friendshoring. You’re seeing continued advancements of investments in India by private firms that are seeking to produce and export to the US,” Yellen said.
Recently, electric car maker Tesla said it is exploring an investment proposal to set up a factory in the country. It will likely set up its supply chain ecosystem.
India has been highlighting opportunities available in the country to relocate companies from China not just as a captive market, but also as a potential hub serving the region by becoming a key supply chain partner.
Speaking about her priorities in the G20 meeting, Yellen said she would focus on debt distress in emerging markets and developing countries, multilateral development bank evolution, support for Ukraine, and the global tax deal.
“This week, I will continue to push for full and timely participation of all bilateral official creditors on pending debt restructuring cases. I was pleased by last month’s progress on Zambia, which I discussed with my Chinese counterparts last week,” she said.
The Zambia agreement took too long to negotiate, but it shows that creditors can overcome differences and agree on common principles for debt relief, she said.
“We should apply the common principles we agreed to in Zambia’s case in other cases — rather than starting at zero every time. Our hope and expectation are for Ghana and Sri Lanka’s debt treatments to be finalised quickly so that the IMF can move forward with their first programme reviews by this fall,” she said.
China is a major bilateral official creditor to Sri Lanka and many other poor and developing countries which are facing debt distress.
The US is committed to implementing a global corporate minimum tax deal reached in 2021, Yellen said. She said negotiations on technical details of the deal’s Pillar 1 — reallocation of taxing rights on large multinationals including big technology firms — were “very close” to completion.
On reforming and increasing funding capacity of multilateral development banks (MDBs), the US treasury secretary said the G20 MDB Experts Group report is a useful input to the agenda. “I am pleased with the report’s emphasis on incorporating global public goods into the mandates of the MDBs — along with its focus on making the operating model of the institutions more responsive through changes to culture, incentives, and risk appetite,” she said.
Yellen supported the request for swift implementation of the Capital Adequacy Framework recommendations. “But I believe that we should only explore capital increases after considering the reforms that I laid out along with those in the report. We should build better banks, not just bigger ones,” she said.