US sees India as an indispensable ally in friendshoring: Yellen

US sees India as an indispensable ally in friendshoring: Yellen

Subject: Economy

Section: External Sector

Concept:

Terming India the biggest trading partner, U.S. Treasury Secretary pitched for advancing an approach called “friendshoring” to bolster the resilience of supply chains.

Friendshoring

• Friendshoring is a strategy where a country sources the raw materials, components and even manufactured goods from countries that share its values.
• The dependence on the countries considered a “threat” to the stability of the supply chains is slowly reduced.
• It is also called “allyshoring”.
• For the US, Russia has long presented itself as a reliable energy partner, but in the Ukraine war, it has weaponized the gas against the people of Europe.
• It’s an example of how malicious actors can use their market positions to try to gain geopolitical leverage or disrupt trade for their own gain.
• Friend-shoring or ally-shoring has become a means for the US to influence firms to move their sourcing and manufacturing sites to friendly shores—often back to the same shores in the case of the US.
• The purpose of Frienshoring is to insulate countries’ supply chains from less like-minded nations, such as China in case of the US.