US Treasury Secy considers India an ‘indispensable partner’ for friend-shoring

The third G20 Finance Ministers and Central Bank Governors (FMCBGs) meeting, under India’s G20 Presidency, will be held in Gandhinagar, Gujarat from today and tomorrow. The meeting will be co-chaired by Smt. Nirmala Sitharaman, the Union Finance, and Corporate Affairs Minister, and Dr. Shaktikanta Das, the Governor of the Reserve Bank of India (RBI). Ahead of the meeting, US Treasury Secretary – Janet Yellen – said that the Western superpower considers India to be an ‘indispensable partner’ for its friend-shoring efforts, towards making supply chains more resilient.

To that end, Yellen added that with the initiatives being taken, there is a possibility that multilateral development banks will provide USD 200 billion in lending over the next decade. She also urged the international creditors to speed up the debt relief program for developing economies in default.

“I hope to use this trip to deepen what is already a significant relationship with respect of friend-shoring that India and the US have,”

Janet Yellen

Yellen was speaking at a press conference organised ahead of the FMCBGs Meeting that starts today. It is said that she was the first to use the term ‘friend-shoring’ that essentially means sourcing inputs from one’s geopolitical allies. With China in a sticky situation with most other economies, and the countless other factors that have been disrupting global supply chains lately, concepts like re-shoring, near-shoring, and friend-shoring are gaining fast traction across the world.

Yellen’s agenda of critical discussion points included debt distress in emerging markets and developing countries, multilateral development bank evolution, support for Ukraine, and a global tax deal. She stressed that with successful attempts to restore debt sustainability in developing nations, their “massive economic potential” can be harvested. “(it can) help them regain lost growth and development and enable them to make investments to address challenges that we are trying to tackle together,” she said

In this direction, she also talked about how Russia’s war against Ukraine has worsened the pandemic-induced debt vulnerabilities of many countries, and called it ‘illegal’. Her vision for debt sustainability included helping countries like Ghana and Sri Lanka to get back on their feet and restore growth.

Yellen also spoke about de-escalating the US-China tension and stabilising the relationship between two of the world’s most powerful nations. However, she also acknowledged China’s “unfair trade practices”. Adding on, she also mentioned that one of the US’ most important tasks on the checklist for the year included “to combat Russia’s efforts to evade our sanctions,”.

Attendees of the 3rd G20 FMCBGs meeting include Finance Ministers and Central Bank Governors from G20 member countries, guest nations, as well as heads of International Organizations. With a total of 520 participants, representing 66 delegations, the event will facilitate extensive discussions and collaborations.

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