US treasury secretary Janet Yellen’s visit to India on Friday and meeting with finance minister Nirmala Sitharaman will be an opportunity for Washington to impress on India to accept the price cap on Russian oil and also join the crucial “trade pillar” of the US-led Indo-Pacific Economic Framework (IPEF), according to trade sources.
Yellen will attend the ninth US-India Economic and Financial Partnership (EFP) on Friday and hold talks with Sitharaman on a range of issues, including on India’s assumption of the G20 presidency in December and further deepening of bilateral co-operation. She will then proceed to participate in the G20 Summit in Indonesia on Saturday.
Yellen will likely highlight the benefits for India if it joins the G7 nations and endorse the price cap, said the sources. In a bid to prevent Moscowfrom profiting from oil after its attack on Ukraine, while ensuring that much of its oil still continues to flow to global markets, the US and its allies have decided to put a price cap on Russian oil. They plan to cap prices of sea-borne oil shipments from December 5, with a second cap on oil products from February 5. In fact, in an interview to PTI in Washington prior to her India visit, Yellen said the US hopes India will take advantage of the price cap on Russian oil.
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At the same time, she may also impress on India to join the “trade pillar” of the IPEF, viewed by some as a mechanism to counter the aggressive and non-transparent trade and economic policies of China.
In September, India opted out of the “trade pillar” but decided to be on board for the other three pillars of the IPEF, such as the resilient economy (supply chain), clean economy (clean energy, decarbonisation, and infrastructure) and fair economy (anti-corruption, anti-money laundering and tax). Lack of clarity on the nature of binding commitments, especially in digital trade, labour and environment, and fears of hasty pledges undermining its still-evolving policies in areas like data privacy had prompted India to opt out of the “trade pillar”, sources had then said.
According to a statement by the US Treasury last week, “The secretary will also welcome India’s assumption of the G20 presidency next month and discuss opportunities to make progress on global challenges through global climate action, evolving the multilateral development banks (MDBs), further strengthening global health architecture, and advancing debt relief for low-income countries and emerging markets.”
Following the EFP dialogue, Yellen will join Sitharaman for a fireside discussion with executives from major Indian companies and American companies operating in this country. Earlier in the day, she will meet with technology sector leaders and visit the Microsoft India Development Centre.
The meeting with Sitharaman comes at a time when the G20 group continues to struggle with divisions over Russia’s invasion of Ukraine, as this year’s leaders’ summit in Indonesia approaches. Yellen will likely seek India’s support to hold Russia accountable for its action in Ukraine.