WASHINGTON (AP) — Hot 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, this time to meet with Group of 20 finance ministers on challenges global economies as the threat of rising defaults looms over low-income countries.
Yellen will use his time in Gandhinagar to try to foster warming relations between the United States and India. She also plans a stopover in Hanoi, Vietnam to discuss supply chain reliability, clean energy transition and other economic resilience issues.
Yellen’s goals for his time in India include pushing for debt restructuring in economically challenged developing countries, pushing to modernize global development banks to make them more climate-focused, and deepening the ever-growing relationship between the United States and India.
Yellen’s frequent stops in the country testify to the importance of this relationship at a time of tension with China.
India’s long-standing relationship with Russia will also loom as the Kremlin’s invasion of Ukraine continues despite efforts by the United States and allied countries to sanction and economically bludgeon the Russian economy. India has not taken part in efforts to punish Russia and maintains energy trade with that country despite a cap on Russian oil prices agreed by the Group of Seven, which has had some success in the downturn in the Russian economy.
Yet the United States is increasingly leaning on India and courting its leaders.
President Joe Biden hosted a state visit to the White House in honor of Indian Prime Minister Narendra Modi in June, designed to highlight and foster ties. The two leaders said US-India relations had never been stronger and launched new trade deals between the nations.
Raymond Vickery Jr., a policy expert on U.S.-India relations at the Center for Strategic and International Studies, said Yellen’s coming to India shortly after his visit to China was significant in that Indian officials “will want to know in detail what happened in China”. meetings with his Chinese counterparts and see where it fits with their views on economic relations with China.
“They will want to know if the United States is seriously considering moving some of its sourcing activity from China to India.”
A senior Treasury official, speaking on condition of anonymity to preview Yellen’s trip, said there was hope that the debt treatments for Ghana and Sri Lanka will be discussed and completed soon. during meetings.
Sri Lanka and Ghana defaulted on their international debts last year, about two years after Zambia defaulted. And more than half of all low-income countries face over-indebtedness, undermining their long-term ability to function and grow.
Last month, Zambia and its government creditors, including China, reached an agreement to restructure $6.3 billion in loans, on the sidelines of a global finance summit in Paris.
The deal covers loans from countries including France, the UK, South Africa, Israel and India as well as China – Zambia’s biggest creditor with $4.1bn of the total . The deal can provide a roadmap for how China will handle restructuring deals with other over-indebted countries.
Yellen’s trip comes shortly after spending a week in China, meeting with the country’s finance ministry and discussing mutual trade restrictions and national security concerns.
Harold W. Furchtgott-Roth, a senior fellow at the Hudson Institute, said Yellen’s trip to India “is a reflection of a naturally growing alliance.”
“India has a lot of tension with China – they have constant border disputes,” he said. “And India wants to grow and has become a kind of naval power in the Indian Ocean, which is also an area that China wants to develop.”