NEW DELHI – United States puts India at the center of his desire to separate global supply chains from paws of American Adversaries Seeking to Strengthen Ties with one of in the world’s fastest growing economies as tension with China remain high and like Russia’s war in Ukraine is turning over international trade.
This was stated by Secretary of the Treasury Janet L. Yellen, the chief economic diplomat of the Biden administration. in human on Friday during a visit to the capital of India for a moment of intensive global economic uncertainty. Soaring Food and Energy Prices Driven by Russia’s War and Growing Fears of America’s Dependency on Chinese goods pushed the United States to try to change global economic order to make allies dependent on one another for goods and services that power their economies.
India often in middle of geopolitical struggle between the USA, China and Russia. But as the Biden administration promotes what it calls “friend attraction,” it is doing clear what he wants India to be in America’s orbit of economic allies.
After the tour of Microsoft research as well as development campus on outskirts of New Delhi on On Friday, Ms. Yellen spoke about the case for moving away from countries that could destabilize America’s supply chains and from manufacturers that show little attention for human life. It was clear that China and Russia were in the lead of intelligence.
“The United States is taking an approach called “bring friends” to diversify countries that pose geopolitical and security risks to our supply chain,” said Ms Yellen. “To do this, we are actively deepening economic integration with fiduciary trading partners like India.”
Growing Microsoft Operations in India is an example of integration that the United States wants to see. Ms. Yellen noted that America development the financial agency provided the US solar energy manufacturer with $500 million in financing build an object in south indian state of Tamil Nadu. This is the part of administration’s efforts to help in the worldsolar industry move away from China, which Ms. Yellen said made solar panels. using forced labor in this is xinjiang region. And she highlighted the recent Apple switch to move iPhone manufacturing from China to India.
“We also addressing our addiction on manufacturers whose approaches differ with our human rights values”, added Miss Yellen who traveled to India before visiting the group of Summit 20 leaders in Indonesia next a week.
Importance of America’s bond with India has grown in recent months. The country is a rare ally that maintains strong diplomatic relations with Russia, which became its main supplier of oil and has an impact with President Vladimir Putin. At the same time, India’s large English-speaking population population has the potential to make it international production center for American companies. United States is India’s largest trading partner in general.
But trade relationships were not always easy. US officials say their Indian counterparts are among the toughest negotiators. for clinging to protectionist impulses in international meetings. And considering challenges of does business in India, including the absence of infrastructure and government bureaucracy is not clear how many manufacturers will jump from China.
Sadanand Dume, senior fellow at the American Enterprise Institute, said India faced several challenges in becomes the center for international production, including government reforms that are not yet “noticeable” made this is more attractive place for companies. And compared with China, India domestic consumer market smaller and therefore less attractive for companies that manufacture there.
India became a major obstacle when members of The World Trade Organization tried to achieve a suite of agreements at the meeting year. It has also declined to join negotiation over in trade pillar of Indo-Pacific economic structure for Prosperity, Asia-Pacific Economic Pact proposed by the Biden administration.
in last several months, India’s long economic relationship with Russia becomes more and more problematic for United States. India is the world’s largest buyer of Russian ammunition is a relationship that is difficult to break, especially given the tensions in India with neighboring China and Pakistan. India refuses to condemn Russia invasion of Ukraine. And since the beginning of the war has become a major buyer of Russian oil, which it is capable of purchase on international discount markets.
India’s imports from Russia increased by 430 percent from the war in Ukraine started in February like tankers of Russian crude oil rushes to the ports of India. India, which imports a significant amount of energy is the world’s second-most populous country, said it was simply concentrated on buy oil at the lowest price price.
Eswar Prasad, trade policy at Cornell University who speaks to American and Indian officials, said that while India wanted build stronger economic relationships with USA, hardly distance yourself from Russia.
“India has very deep economic interests in maintaining a reliable and relatively cheap supply of oil from Russia,” said Mr. Prasad, former official with International Monetary Fund.
American hugs of India comes as the United States and its European allies seek complete in terms of restriction plan price of Russian oil. The initiative must be in place by 5 December, when the European embargo and ban on marine insurance will come into effect, potentially interrupting the flow of Russian oil around world.
price the restriction would essentially create an exception to Western sanctions, allowing Russian oil to be sold and shipped as long as it remains below a certain price level that has yet to be determined.
India has been wary of the proposal, but treasury officials say the United States is not trying to push it into formal adoption. join this is coalition. Instead, they hope that India use in price constraint as leverage to negotiate lower prices with Russia, depriving Putin of income, but keeping the flow of oil in the country.
However, Ms. Yellen emphasized in her speech, which is based on Russian oil came with risks.
“Russia has long established itself as a reliable energy partner,” said Ms. Yellen. “But for the best part of this yearPutin armed the Russian natural gas supply against in people of Europe.
Treasury Department secretary added: “That’s an example of how attackers can use them market positions to try to gain geopolitical leverage or undermine trade for their own benefit.”
Attentive, mindful of India’s economic ties with Russia, the US were focused on other areas in which they can cooperate. India has a thriving agricultural and service sector, but the United States believes it has significant room to expand its manufacturing capacity.
Atul Keshap, President of US-India Business Council Says There Are Many Opportunities for economic partnership between the US and India, especially in parameter up secure supply chains for strategic technologies like semiconductors, electrical vehicle batteries, artificial intelligence, quantum computing and drones.
“You look at the headlines, you look at the risks to the supply chain,” Mr. Keshap said. “You’re looking at uncertainty of in last two or three years and countries like India has an opportunity.”
But business leaders and trade experts say the US and Indian governments are still failed realize these possibilities. Negotiation for a trade to deal with with India prospered briefly under the Trump administration, but series of persistent economic problems – ranging from India’s barriers for US agricultural commodities and medical devices to its disadvantage of protection for US intellectual property – have made any agreement is difficult to reach.
USA program that the tariffs have been reduced on imports from poorer countries including India expired in 2020 was not enough support in Congress restore it. In 2021 trade meeting in New Delhi, sides made some progress on opening trade for American pork, cherry and alfalfa hay, and Indian mango and pomegranate.
USA-India trade policy forum for November 8 in Washington was pushed out back to give officials more time to reach more Key Findings, Representative of the Office of This was stated by the US Trade Representative.
Speaking to reporters on aside of her meetings on On Friday, Ms. Yellen said the tariff cuts are not currently part of discussions with India, but both sides were talking about something else.”trade simplification measures reduce non-tariff barriers.
According to Mr Prasad, who is also a former IMF official has lingering skepticism in India on longevity of America good intentions in in aftermath of tariffs that former President Donald J. Trump passed the law.
“There is a layer of apprehension, if not outright distrust in Delhi, Mr. Prasad said.
Miss Yellen came to India to show that, despite their differences, the United States can be a reliable partner. On Friday she also met with India Finance Minister Nirmala Sitharaman.
“Our strong trade investment and people-to-people ties make bilateral economic and financial relations critical element of it’s a partnership,” Ms. Yellen said. with Miss Sitharaman next to her side.
Ms. Sitharaman said that the power of relationship between two countries rested on understanding each other’s needs and “respect for differences”.
Speaking with Indian business leaders at the meeting, Ms. Yellen said big democracies like India and the US must stick together in volatile global economy.
“AT world where supply chain vulnerabilities could lead to high costs, we believe it is important to strengthen our trade ties with India and a large number of countries what share our approach to economic relations,” she said.