PremiumFor too long, countries around the world have been overly dependent on risky countries or a single source for critical inputs, Yellan said
NEW DELHI: America plans to pursuing a ‘friendshoring’ approach to diversify away from countries that present geopolitical and security risks to supply chain and deepen economic integration with trusted trading partners like India, said US Treasury Secretary Janet Yellen on Friday.
“Russia has long presented itself as a reliable energy partner. But for the better part of this year, Putin has weaponized Russia’s natural gas supply against the people of Europe. It’s an example of how malicious actors can use their market positions to try to gain geopolitical leverage or disrupt trade for their own gain," Yellen said.
Speaking at an event at Microsoft Inc’s facility in the national capital, she said US-India are natural allies who can show the rest of the world that democracies can deliver for their citizens despite volatility and war. “For too long, countries around the world have been overly dependent on risky countries or a single source for critical inputs," she said. “We are proactively deepening economic integration with trusted trading partners like India."
The two nations share an interest in strengthening their supply chains in a world where certain governments wield trade as a geopolitical weapon, Yellen said as she introduced the concept of ‘friendshoring’.
Explaining “friendshoring", Yellen said the approach involves partnering with developing countries to grow local industries and connect them to the global supply chain.
“Our development finance institution is providing America’s largest solar manufacturer with up to $500 million in debt financing to build a facility in Tamil Nadu in India and this facility will boost India’s solar manufacturing capacity," she added.
“At the same time, it will help diversify supply chains away from China, which currently dominates over 80% of global solar panel production. Our investments are also consistent with our values: certain solar panel materials produced in China – like those from the Xinjiang region – are known to be produced with forced labor. We are already seeing progress. New supply chains are developing across regions from Asia to the European Union. We are also seeing signs that Western firms are diversifying their supply chains beyond China," Yellen stressed.
She said that new supply chains are developing across regions from Asia to the European Union.
“We are also seeing signs that Western firms are diversifying their supply chains beyond China. Technology companies like Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOGL) are investing in India and Vietnam. Apple (NASDAQ:AAPL) recently announced that it was shifting some iPhone manufacturing from China to India. The US will continue to deepen our business and commercial ties with India as we pursue our friendshoring agenda," she added.