On her third visit to India in nine months, U.S. Treasury Secretary Janet Yellen is focusing on addressing global economic challenges and strengthening the relationship between the United States and India. Yellen’s visit follows her recent trip to Beijing and aims to foster improved relations between the two countries. In addition to meeting finance ministers from the Group of 20 nations to discuss threats of debt defaults in low-income countries, Yellen plans to discuss various economic resilience matters in Hanoi, Vietnam.
During her time in India, Yellen is advocating for debt restructuring in developing nations experiencing economic distress and pushing for the modernization of global development banks with a greater focus on climate change. Yellen’s frequent visits to India highlight the significance of the U.S.-India relationship, particularly in light of tensions with China.
While India has maintained energy trade with Russia, despite efforts by the U.S. and allied nations to sanction Russia’s economy, Yellen emphasizes the moral importance of ending the war in Ukraine. She also affirms the commitment to restrict Russia’s access to military equipment and technologies that support its aggression against Ukraine. Yellen’s core goal is to combat Russia’s attempts to evade sanctions, building upon the actions taken in recent months.
The United States increasingly sees India as a crucial partner in its strategy to enhance supply chain resilience and has been actively courting Indian leaders. Yellen acknowledges India’s potential as an excellent location for producing goods and exporting them to the United States. She also highlights how the slowing growth in China has affected other nations and discusses the desire of Chinese officials to attract foreign investment.
The relationship between the United States and India was further emphasized through a state visit hosted by President Joe Biden in June, honoring Indian Prime Minister Narendra Modi. During the visit, the leaders of the two nations affirmed the strength of the U.S.-India relationship and announced new business deals.
Yellen’s trip to India immediately after her visit to China holds significant meaning for Indian officials. They will seek detailed insights into the discussions with Chinese counterparts and how they align with India’s perspective on economic relations with China. Indian authorities are particularly interested in understanding whether the United States is genuinely considering shifting some of its sourcing activities from China to India.
During the meetings, there is hope that debt treatments for Ghana and Sri Lanka, two countries that defaulted on their international debts last year, will be discussed and finalized promptly. Over half of all low-income countries face debt distress, hindering their long-term development and functioning.
The recent restructuring deal for Zambia’s $6.3 billion in loans provides a potential roadmap for China’s approach to restructuring deals with other nations in debt distress. It involved countries like France, the U.K., South Africa, Israel, and India, as well as China, which is Zambia’s largest creditor. Yellen’s trip to India follows her week-long visit to China, where she engaged with the finance ministry on trade restrictions and national security concerns.
The trip to India is a testament to the naturally developing alliance between the United States and India. The tension between India and China, fueled by constant border disputes, motivates India to develop into an Indian Ocean naval power—a region of interest for China as well.
In summary, U.S. Treasury Secretary Janet Yellen’s visit to India focuses on addressing global economic challenges, strengthening the U.S.-India relationship, and combatting issues related to debt defaults and Russia. She emphasizes the importance of debt restructuring, climate-focused development banks, supply chain reliability, and resolving the conflict in Ukraine. Additionally, Yellen highlights India’s significance as a partner in enhancing supply chain resilience and discusses the impact of China’s slowing growth on other countries. Indian officials are keen to understand the discussions with Chinese counterparts, and meetings will also cover debt treatments for Ghana and Sri Lanka.
