Did US send Yellen to India to influence its policy on Russia and China?

On her visit to India, Janet Yellen went to Microsoft’s research facility on the outskirts of New Delhi, where she met some of the country’s leaders in the technology sector and addressed a press conference with Indian Finance Minister Nirmala Sitharaman.

The US treasury secretary’s goal to visit India has come at a time when Russia’s offensive in Ukraine is putting Europe and the West on the edge, and a tussle for economic supremacy with China threatening to turn ugly.

In her own words, she was in India for “friend-shoring” — an approach pursued by the US to diversify away from countries that present geopolitical and security risks to the global supply chain. 

Meaning, the US would rather engage with friendly countries in this respect, so as to avoid disruptions. For too long, countries around the world have been overly dependent on risky countries or a single source for critical inputs, Associated Press quoted Yellen as saying.

Apple’s recent announcement that its consumers will have to wait for a longer period of time to get their hands on the latest iPhone models due to the imposition of Covid-19 restrictions on a contractor’s factory in central China offers crucial insights.

“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.”

It is perhaps for this reason that Yellen said India’s membership in the Indo-Pacific Economic Framework will make supply chains resilient between the Asian country and the US, and in the process reduce the region’s dependency on China.

The US’s push to have India act as a counterweight to China comes from New Delhi’s tense relations with Beijing, who were as early as last year involved in a border skirmish that was feared to escalate into a full-fledged war. Plus, India’s economic potential makes it a natural rival to China’s growing influence in the region.

Critical partnership

The US often comes under criticism for ignoring India’s poor human rights record, especially when it comes to implementation of new measures targeting its Muslim and Christian minorities under the Hindu-nationalist government of Bharatiya Janata Party (BJP).

Earlier in April this year, Ilhan Omar, a US representative, questioned the reluctance of the US government to criticise the ruling BJP and Indian Prime Minister Narendra Modi on human rights. “What does Modi need to do to India’s Muslim population before we will stop considering them a partner in peace,” she said.

Meanwhile, Yellen said strong trade and investment, and people- to- people ties make the bilateral economic and financial relationship a critical element to the partnership between the US and India.

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 weaponised Russia’s natural gas supply against the people of Europe,” she said.

The Washington Post interpreted the visit as yet another attempt by the Biden administration in the US to overlook India’s decades-old ties with Russia. Since Moscow launched its military campaign in Ukraine, where Ukrainians continue to mount a strong counteroffensive, the US’s expectations from India have not remained constant.

In the initial days of the military offensive, the US had warned India against increasing its purchase of Russian oil. It even voiced concerns over it deteriorating human rights record, especially New Delhi’s “discriminatory” approach toward its minorities. However, the tone has since changed, and today Washington insists on a price cap defined by it and its allies, but still would not come across as pressuring India to agree to it.

While the US treasury officials said the price cap issue could come up in the discussions, security experts and analysts thought otherwise. Still, why would there be such a noticeable change in the US stance? 

Yellen answered that during her visit. “The US and India are ‘natural allies’, in the words of a former Indian prime minister,” she said, adding that both had waged similar fights for independence to attain freedom and dignity.

“People around the world are looking to us and asking: can democracies meet the economic needs of their citizens? Can they stand up to bullies and cooperate on the most intractable global problems?” she said.

“As the two largest democracies, India and the US could answer the sceptics by taking action over the next year and beyond that could demonstrate the capacity of our democracies to deliver for our people. I am confident that we will succeed.”