US Treasury Secretary Janet Yellen, following her recent visit to China, has arrived in India to attend the G20 summit. In a press conference held in Gujarat, Yellen emphasized the significance of India as an “indispensable partner” in the United States’ policy of “friend-shoring.” She highlighted the importance of derisking and friend-shoring in promoting the shift of manufacturing away from authoritarian states towards allied nations.Â
India as an Indispensable Partner in Friend-shoring
Yellen reiterated the United States’ recognition of India’s pivotal role in its friend-shoring strategy. She emphasized the significance of India as an excellent place for producing and exporting goods to the US, with private firms continuing to invest in India. The bilateral trade between the two countries reached an all-time high last year, reflecting the growing ties and potential for further growth. Yellen stressed that the private sector plays a crucial role in friend-shoring initiatives.
Support for Ukraine and Combating Russian Efforts
Yellen also reaffirmed the US’s commitment to supporting Ukraine and combatting Russia’s illegal actions. She emphasized that ending the war in Ukraine is not only a moral imperative but also beneficial for the global economy. Yellen highlighted the United States’ unwavering support for Ukraine and its determination to cut off Russia’s access to military equipment and technologies needed to wage war. The Treasury Secretary stated that combatting Russia’s efforts to evade sanctions remains a core goal for the US and its coalition partners.
Debt Restructuring and Multilateral Development Banks
Addressing global economic challenges, Yellen focused on the increased threat of debt defaults facing low-income countries. She expressed her intent to push for debt restructuring in developing countries experiencing economic distress. Yellen emphasized the importance of restoring debt sustainability, unlocking the economic potential of these nations, and enabling investments in common challenges.
The US Treasury Secretary also emphasized the need to modernize global development banks to prioritize climate-focused initiatives, facilitating sustainable development. She also stressed the measures undertaken by Ajay Banga at the World Bank as reform based and looks forward to furthering roles of such international organizations in providing debt relief as well as assistance during disasters including interest pausing.
Global Tax Deal and Future Prospects:
Yellen emphasized the ongoing efforts to make the international tax system fairer and more suitable for the 21st century. She commended the progress made by many countries in implementing a global minimum tax on the earnings of large multinationals, which aims to end the race to the bottom on corporate tax rates. Yellen expressed the United States’ commitment to ensuring consistent implementation through the inclusive framework and anticipated additional published guidance soon.
Australian Treasurer Jim Chalmers also expressed his confidence in the progress made towards such tax efforts that allow giants like Apple & Amazon to book profits in low tax countries.As part of the 2021 deal, the first pillar would aim to reallocate taxing rights on about 200 billion in countries where the sales occur. Second pillar expects governments to end competition on taxes to attract investment with a 15% minimum corporate tax next year.Â
US Treasury Secretary Janet Yellen’s visit to India highlights the country’s growing significance as an “indispensable partner” for the United States. Yellen emphasized India’s role in friend-shoring, as well as the deepening bilateral ties and the potential for further growth. Additionally, Yellen reiterated the US’s commitment to supporting Ukraine and combatting Russian efforts to evade sanctions.
The Treasury Secretary also emphasized the importance of addressing global economic challenges, such as debt restructuring and the evolution of multilateral development banks. Overall, Yellen’s visit underscores the objective of fostering cooperation and building resilient economic partnerships in an ever-changing global landscape.
