 "Janet Yellen")
The US is actively working to help India attract more private sector capital to close its infrastructure gap, Treasury Secretary Janet Yellen said and asserted that India-US innovations can help push down the cost curves of new technologies and accelerate the world's transition to a net-zero economy.
Yellen's comments come ahead of Prime Minister Narendra Modi's official State Visit to the US next week.
Describing India as one of the US's reliable trading partners, Yellen on Tuesday said the two countries are working to connect new communities to the global market so that they can move up the value chain.
"Looking forward, I believe that we have significant potential to grow trade and investment between our nations. Both of our countries are advancing what I call 'modern supply-side' policies -- investing in human capital, physical capital, and science and technology to boost our long-term economic potential," Yellen said at the annual India Ideas Summit of the US-India Business Council.
Stating that Modi has launched a massive infrastructure programme -- just as the US is beginning to see the early results of President Joe Biden's Bipartisan Infrastructure Law -- Yellen observed that India's infrastructure investments have significant potential to boost productivity and increase trade efficiency between the two countries.
"(The US) Treasury (Department) is actively working with the Indian government to help them attract more private sector capital to close India's infrastructure gap. Both of our countries are also pursuing leadership in clean energy technologies.
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"Together, I believe our innovations can help push down the cost curves of new technologies and accelerate the world's transition to a net-zero economy," Yellen added.
Beyond the bilateral relationship, Yellen said the US is working closely with India during its G20 presidency on global economic issues.
By fall this year, Yellen will have travelled to India more times than any other country as Treasury Secretary -- including four times in less than a year.
Yellen, a former Chair of the US Federal Reserve, added, "I believe that our close collaboration is showing the world how advanced and emerging economies can bridge policy differences and make progress on our shared policy objectives.
"When India and the United States work together, we can add significant momentum to important efforts."
Yellen further said, "During the past six months, we have made progress across a number of areas. Debt distress in the developing world continues to pose a risk to macroeconomic growth and stability. Much more needs to be done to provide timely and comprehensive debt treatments. But we have taken steps forward on urgent cases like Sri Lanka -- where India's proactive actions have been critical to supporting the authorities' reform efforts. We are continuing to push for urgent action in other cases as well."
In April 2022, Sri Lanka declared its first-ever debt default -- the worst economic crisis since its independence from the UK in 1948 -- triggered by forex shortages that sparked public protests.
Yellen said, "We've also made progress on our collective efforts to evolve the multilateral development banks to better address global challenges -- like climate change, pandemics, and fragility and conflict. And we are working together to shape the digital economy.
"We are collaborating with India to deliver tangible outcomes on the G20's work to enhance cross-border payments -- as well as our financial inclusion efforts to connect the unbanked around the world."
India and the US, she said, have made significant progress to strengthen bilateral ties and noted that US is India's largest trading partner.
"In 2022, our bilateral trade reached over USD 190 billion. And we have significant cross-border investments and durable people-to-people ties as the two largest democracies in the world," Yellen said.
The Biden administration, she said, has taken concrete steps to build on this robust foundation. One of them is enhancing economic dialogue.
"The US-India Economic and Financial Partnership (EFP) has been a centrepiece of our formal economic dialogue since the global financial crisis. We have moved the EFP meetings from an annual to a quarterly cadence. And I have personally met with Indian Finance Minister (Nirmala) Sitharaman over 10 times since assuming office," she said.
"This reflects the importance of our close collaboration with India on issues spanning the macroeconomy to climate finance to financial regulation. We have also been close partners in responding to global disruptions and advancing our shared goal of a free and open Indo-Pacific," Yellen noted.
She also cited the progress of the Quad, which includes Japan, India, Australia, and the US. The four countries in 2017 gave shape to the long-pending proposal of setting up the Quadrilateral coalition or "Quad" to counter China's aggressive behaviour in the Indo-Pacific.
"We are working closely with India, Australia and Japan through the Quad. And we are writing new rules for the 21st-century economy with India and a dozen other countries through the Indo-Pacific Economic Framework (IPEF). Last month, IPEF member countries reached a first-of-its-kind international supply chains agreement under the framework," she said.
Supply chain resilience, the Treasury Secretary said, has been a major goal of recent cooperation. After the shocks of recent years, the US is pursuing a policy of "friend-shoring" to deepen integration with its trusted trading partners.
"Our aim is to expand trade ties with the broad array of countries we can rely on -- in order to create more redundancies in our critical supply chains. India is one of our reliable trading partners.
"We are working to connect new communities to the global market. And we are working to do so in a way that helps these communities move up the value chain," Yellen said.
