U.S., India Pledge Closer Economic Ties

Throughout the meetings on Friday, Ms. Yellen repeatedly emphasized her concept of “friendshoring,” a term used to describe an effort to reorient supply chains away from geopolitical adversaries such as China. She has said that the U.S. needs to avoid relying too heavily on a small concentration of suppliers, a dynamic that helped to create bottlenecks during the Covid-19 pandemic and to push up prices.

India, Ms. Yellen said, was one viable alternative to China, along with Vietnam and other countries.

“I think India has a lot of potential as a place where one can expand manufacturing,” she said.

Ms. Sitharaman, meanwhile, said during a public discussion with Ms. Yellen that investors in the U.S. should make more commitments in India.

“We are continuously engaged with the U.S. administration and most of our business leaders also do business in the U.S.,” she said.

Russia’s invasion of Ukraine has put fresh pressure on the U.S.-India relationship this year. India has deep historical and military ties to Russia and has stayed largely neutral during the conflict, while increasing its purchases of Russian oil. Along with providing weapons to Ukraine, the U.S. has led a coalition of its allies to place a series of wide-ranging sanctions on Russia for the invasion.

In a speech at a

Microsoft

facility in New Delhi, Ms. Yellen said that ending Russia’s war in Ukraine was a “a moral imperative.” Indian Prime Minister

Narendra Modi

told Russian President

Vladimir Putin

that “today’s era is not one for war” in September.

Ms. Yellen also said that ending the war is “the single best thing we can do to help the global economy.” The war has weighed on global food and energy prices all year, exacerbating the worst inflation in decades. Indian officials have raised concerns about the economic consequences of the invasion.

Still, Ms. Yellen didn’t call on India to change its relationship with Russia. After having raised concerns to their Indian counterparts about Russia in the spring, Biden administration officials have largely backed off calling out India’s ties to Russia.

“The strength of Indo-U.S. relationship lies in mutual understanding of each one’s necessities and respecting differences,” Ms. Sitharaman said on Friday.

Write to Andrew Duehren at andrew.duehren@wsj.com

Throughout the meetings on Friday, Ms. Yellen repeatedly emphasized her concept of “friendshoring,” a term used to describe an effort to reorient supply chains away from geopolitical adversaries such as China. She has said that the U.S. needs to avoid relying too heavily on a small concentration of suppliers, a dynamic that helped to create bottlenecks during the Covid-19 pandemic and to push up prices.

India, Ms. Yellen said, was one viable alternative to China, along with Vietnam and other countries.

“I think India has a lot of potential as a place where one can expand manufacturing,” she said.

Ms. Sitharaman, meanwhile, said during a public discussion with Ms. Yellen that investors in the U.S. should make more commitments in India.

“We are continuously engaged with the U.S. administration and most of our business leaders also do business in the U.S.,” she said.

Russia’s invasion of Ukraine has put fresh pressure on the U.S.-India relationship this year. India has deep historical and military ties to Russia and has stayed largely neutral during the conflict, while increasing its purchases of Russian oil. Along with providing weapons to Ukraine, the U.S. has led a coalition of its allies to place a series of wide-ranging sanctions on Russia for the invasion.

In a speech at a

Microsoft

facility in New Delhi, Ms. Yellen said that ending Russia’s war in Ukraine was a “a moral imperative.” Indian Prime Minister

Narendra Modi

told Russian President

Vladimir Putin

that “today’s era is not one for war” in September.

Ms. Yellen also said that ending the war is “the single best thing we can do to help the global economy.” The war has weighed on global food and energy prices all year, exacerbating the worst inflation in decades. Indian officials have raised concerns about the economic consequences of the invasion.

Still, Ms. Yellen didn’t call on India to change its relationship with Russia. After having raised concerns to their Indian counterparts about Russia in the spring, Biden administration officials have largely backed off calling out India’s ties to Russia.

“The strength of Indo-U.S. relationship lies in mutual understanding of each one’s necessities and respecting differences,” Ms. Sitharaman said on Friday.

Write to Andrew Duehren at andrew.duehren@wsj.com