US treasury secretary Janet Yellen on November 11 in New Delhi said that the US will pursue the ‘friendshoring’ approach of deepening economic integration with trusted trading partners like India to diversify away from countries that present geopolitical and security risks to supply chains.
About ‘Friendshoring’
- While introduced the concept of ‘friendshoring’, Yellen said the approach involves partnering with developing countries to grow local industries and connect them to the global supply chain.
- She said that the Russia-Ukraine war-led elevated food and energy prices were making debt unsustainable for some economies and measures to ease these debt burdens will need to be discussed.
- In proof of friendshoring, Western companies have already begun shifting production from China, to countries like India and Vietnam, in a bid to reduce dependency on China. Apple’s contract manufacturers in India – Foxconn, Wistron and Pegatron – are on an expansion phase, adding more assembly lines to their facilities to offset a slowdown in iPhone manufacturing in China.
- Yellen also highlighted US-based solar manufacturing company First Solar’s $648 million plan to build a 3.3 gigawatt (GW) facility in Tamil Nadu.
- US treasury secretary Yellen and India’s Finance Minister Sitharaman led the 9th meeting of the India-US Economic Financial Partnership, where the two sides discussed issues of mutual interest including climate finance, multilateral issues, taxation, supply chain resilience, India-US Cooperation at G20 under India’s presidency, global economy, and the macroeconomic outlook.
