US Treasury Secretary Yellen Back in India to Bolster Relations and Address Global Economic Issues

Following a recent visit to Beijing, US Treasury Secretary Janet Yellen has returned to India, marking her third visit in less than a year. The purpose of her current visit is to engage with finance ministers from the G20 nations on global economic challenges, including the escalating threat of debt defaults that many low-income countries are grappling with.

Speaking to reporters in Gandhinagar, the capital of Gujarat in western India, Yellen shared her intention to strengthen the bond between the US and India. Further on her itinerary is a stop in Hanoi, Vietnam, where she intends to address concerns related to supply chain reliability, the shift towards clean energy, and overall economic resilience.

While in India, Yellen aims to advocate for debt restructuring for economically distressed developing countries, push for a modern, climate-conscious approach in global development banks, and nurture the growing relationship between the US and India.

Yellen’s regular visits to India underscore the significance of the US-India relationship during tense times with China. Also, India’s longstanding alliance with Russia, which continues its invasion of Ukraine despite international sanctions, brings a complex dynamic to these discussions. Notably, India has not joined efforts to penalize Russia, and continues to trade energy with the country, even in the face of a G7-imposed cap on Russian oil prices.

Yellen emphasized that resolving the Ukraine conflict is not just a moral duty, but also crucial for the global economy. She confirmed that the US would persist in restricting Russia’s access to military resources required for the war against Ukraine, and fight against Russia’s attempts to bypass US sanctions.

The US sees India as a key ally and has been actively seeking the support of its leaders. Yellen expressed the view that India plays a crucial role in the US strategy to diversify supply chains. She also mentioned that many US private companies find India a favorable destination for manufacturing goods for export to the US.

She further commented on how the slowdown in China’s economic growth has had repercussions for many countries. Yellen stated that she had discussed this issue with her Chinese counterparts, who seemed keen on portraying China as open for business and welcoming foreign investment.

President Joe Biden recently hosted Indian Prime Minister Narendra Modi at the White House to foster stronger ties and announced new business deals between the two nations.

According to Raymond Vickery Jr., an expert on US-India relations at the Center for Strategic and International Studies, Yellen’s trip to India so soon after her China visit is seen as significant by Indian officials. They are keen on understanding the outcomes of her meetings with Chinese counterparts and their implications for India’s economic relations with China.

A high-ranking Treasury official, who requested anonymity, expressed optimism that the debt situations of Ghana and Sri Lanka would be a part of the discussions and resolved swiftly.

Sri Lanka and Ghana defaulted on their international debts last year, joining Zambia, which defaulted two years prior. More than half of all low-income countries are facing debt distress, negatively impacting their long-term development.

Recently, Zambia and its government creditors, including China, agreed to restructure $6.3 billion in loans. The deal may offer a blueprint for how China might approach debt restructuring with other nations facing similar difficulties.

Yellen’s trip to India follows a week-long stay in China, where she met with the finance ministry to discuss mutual trade restrictions and national security concerns.

According to Harold W. Furchtgott-Roth, a senior fellow at the Hudson Institute, Yellen’s trip to India signifies a naturally evolving alliance. He noted the persistent border disputes and tensions between India and China and India’s aspirations to be a naval power in the Indian Ocean – a region also eyed by China.

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More about US-India Relations

• U.S. Department of the Treasury
• G20 official website
• Center for Strategic and International Studies
• Hudson Institute
• Information about the conflict in Ukraine
• The World Bank on Debt Restructuring
• President Joe Biden’s meeting with Indian PM Narendra Modi
• Information about China’s Economic Slowdown