On the heels of a trip to Beijing, U.S. Treasury Secretary Janet Yellen is back in India for the third time in nine months. Her visit aims to meet finance ministers from the Group of 20 nations to discuss global economic challenges, particularly the increased threat of debt defaults in developing countries. In Gandhinagar, Yellen stated that she is trying to foster warming relations between the U.S. and India. She also plans to address supply chain reliability, clean energy transition, and other matters of economic resilience in Hanoi, Vietnam.
Yellen’s frequent stops in India highlight the significance of the U.S.-India relationship, especially during times of tension with China. India’s relationship with Russia has also been in focus due to the Kremlin’s invasion of Ukraine and India’s continued energy trade with Russia despite efforts to sanction it. Yellen emphasized the importance of ending the war in Ukraine and stated that it is the best thing for the global economy. She pledged to cut off Russia’s access to military equipment and technologies needed to wage war against Ukraine.
India is becoming an increasingly important partner for the U.S., and Yellen sees it as indispensable in strengthening supply chain resilience. Private U.S. firms view India as an excellent place for production and export. Yellen also discussed the impact of slowing growth in China on other countries’ economies and mentioned China’s interest in foreign investment.
The U.S.-India relationship has been a focus for President Joe Biden and Indian Prime Minister Narendra Modi. The two leaders recently celebrated the strong ties between the nations during a White House state visit. Yellen’s visit to India shortly after her trip to China holds significance for Indian officials, as they would want to know the details of her meetings with Chinese counterparts and understand how it aligns with their perspective on economic relations with China.
Yellen’s trip also aims to discuss and complete debt treatments for Ghana and Sri Lanka, both of which defaulted on their international debts. More than half of all low-income countries are facing debt distress, which hampers their long-term functioning and development. Zambia, which defaulted on its debts, recently reached a restructuring deal with its government creditors, including China. This agreement may serve as a roadmap for debt restructuring deals with other nations in distress.
Overall, Yellen’s visit to India underscores the efforts to strengthen economic ties, address global economic challenges, and deepen the U.S.-India relationship amidst geopolitical tensions.
