NEW DELHI: Supply chains, Russia's war in Ukraine and the impact of COVID-19 were top of mind for U.S. Treasury Secretary Janet Yellen as she prepared to meet with Indian leaders Friday in New Delhi.
For too long, countries around the world have been overly dependent on risky countries or a single source for critical inputs, she told the technology sector leaders during a visit to the Microsoft India Development Center on the outskirts of New Delhi.
Citing Russia's leveraging of energy supplies, Yellen said President Vladimir Putin's strategy was "an example of how malicious actors can use their market positions to try to gain geopolitical leverage or disrupt trade for their own gain." She said Russia had previously been a long-time, reliable energy partner. "But for the better part of this year, Putin has weaponized Russia's natural gas supply against the people of Europe," she said.
Cooperation among friendly countries will help diversify supply chains away from China, which currently dominates over 80% of global solar panel production, Yellen said.
China's strict "zero-COVID" policy has also affected global supply chains with widespread lockdowns in major financial and manufacturing hubs. Apple announced Sunday that customers will have to wait longer to get its latest iPhone models after anti-virus restrictions were imposed on a contractor's factory in central China.
The United States is pursuing an approach called "friend-shoring" to diversify away from countries that present geopolitical and security risks to the supply chain. "To do so, we are proactively deepening economic integration with trusted trading partners like India," Yellen said. "Technology companies like Amazon and Google are investing in India and Vietnam. Apple recently announced that it was shifting some iPhone manufacturing from China to India," she said.
New supply chains already are developing across regions from Asia to the European Union, she added.
Yellen is scheduled to meet India's Finance Minister Nirmala Sitharaman later Friday. Yellen will discuss the U.S. partnership with India establishing an economic framework in the Indo-Pacific "to increase economic integration with trusted trading partners and mitigate geopolitical risks," the U.S. Treasury Department said.
Also on the agenda are India's G-20 presidency in 2023, climate change, Russia's war in Ukraine and the ongoing economic impact of the COVID-19 pandemic.
Later Friday, she will also participate in the U.S.-India Economic and Financial Partnership dialogue and meet with executives from major Indian companies and U.S. companies operating in India.
READ | Biden, Modi have productive relationship, says US envoy ahead of G20