India, US vow to fight supply chain disruptions
India and the US on Friday reiterated their commitment to multilaterally addressing the issue of global supply-side disruptions that are sparking food and fuel inflation.
India and the US on Friday reiterated their commitment to multilaterally addressing the issue of global supply-side disruptions that are sparking food and fuel inflation; discussing emerging financial sector issues such as digital assets and payment system, including cryptocurrencies; and joining hands to fight financial crimes such as terror funding, money laundering, offshore tax evasion, and the unauthorised use of data.
India “deeply values” its relationship with the US as a “trusted” partner, Union finance minister Nirmala Sitharaman said after the 9th US-India Economic and Financial Partnership (EFP) meeting with US Treasury Secretary Janet Yellen .
“I’m here at a pivotal moment for the global economy. We are dealing with a confluence of headwinds -- the lingering effects of the pandemic, spillovers from Putin’s barbaric war in Ukraine, and macroeconomic tightening as many countries grapple with inflation,” Yellen told reporters at Microsoft’s development centre in Noida, hours before the EFP meeting.
Also Read | 'Rough seas ahead... need strong leaders to guide India': S Jaishankar to HT
India and the US “remain committed to upholding the rules-based international order”, she added, expressing confidence in India playing a major role as a reliable partner for “friendshoring” to minimise supply chain vulnerabilities. Friendshoring is the business strategy of running supply chains only through countries that are close political partners.
After the EFP meeting in New Delhi, Union finance minister Sitharaman and Yellen said in a joint statement that the two partners had “productive discussions” on a range of subjects, including the macroeconomic outlook, supply chain resilience, climate finance, multilateral engagement, global debt vulnerabilities, and combating money laundering and terror financing.
“Both countries will continue to work to enhance mutual collaboration in sharing of information to tackle offshore tax evasion,” the joint statement said.
The US and India look forward to sustained engagement through the longstanding US-India Financial Regulatory Dialogue, a platform for discussing emerging financial sector issues and priority areas, including banking and insurance sector reforms, capital market development, digital assets and payment system modernisation, sustainable finance, and data security and protection frameworks, it added.
Interacting with industry leaders , Yellen said that there was a need for a high regulatory standard globally to deal with risks associated with cryptocurrencies. India has a similar view on cryptocurrencies, which are currently unregulated in the country, and is awaiting a global response before framing a law on them.
Sitharaman stressed India was a bright spot amid global economic gloom. Citing the latest World Economic Outlook of the International Monetary Fund, released on October 11, she said global economic activities are experiencing “a broad-based and sharper-than-expected slowdown, with inflation higher than in several decades”.
“The Indian economy is not insulated from the impact of global economic developments. However, India has carved out its growth trajectory supported by the above-normal south-west monsoon, public investment, strong corporate balance sheets, upbeat consumer and business confidence and receding threat of the pandemic,” she added.
India has emerged as one of the fastest-growing major economies in the world. It has recently surpassed the UK to become the fifth-largest economy, and is expected to be one of the top three economic powers globally over the next 10-15 years, the finance minister said.
“This resilience of India is not a stroke of luck. Instead, it has manifested from a conscious approach of pursuing and pushing structural reforms, believing in the spirit of Atmanirbhar Bharat (self-reliant India campaign), and adopting an agile and calibrated policy approach,” she said.
Sitharaman also underscored the value of bilateral ties between India and the US. “The strength of India-US relationship lies in mutual understanding of each one’s necessities and respecting the differences,” she said. Bilateral trade in goods between the two countries crossed the $100 billion mark in 2021, making it the largest volume of goods trade in India-US economic history, she added.
The defence trade between India and the US has reached more than $20 billion from near-zero about 12 years ago, she said. “As our defence partnership evolves our defence industry welcomes opportunities for collaboration, especially to innovate, co-develop, and co-produce for India and the world,” she added.
The US Treasury and India’s finance ministry launched EFP in 2010 as a framework to cement the economic bonds between our two nations and build a foundation for greater cooperation and economic growth in the future.
Yellen said that India-US collaboration will not only promote growth and stability, but can be instrumental to supporting economic prosperity across the Indo-Pacific region. “Looking ahead, we’re also eager to discuss our shared priorities as India assumes the presidency of the G20 in the coming weeks.”