Treasury Secretary Janet Yellen is visiting India, swiftly following a trip by Prime Minister Narendra Modi to the U.S., a sign of strengthening diplomatic ties as investor interest increases in the world’s fifth-largest economy.
Yellen is headed to Gandhinagar, in Modi’s home state of Gujarat, to participate in a G-20 meeting of finance ministers and central bankers. The first session kicks off next week and Yellen departs for Vietnam on July 20.
At the economic forum, Yellen is planning to stress India’s position as an indispensable partner, according to a release from the Treasury Department on Thursday. That is a big pivot from last year’s discussions, which were aimed at convincing India to pause its import of discounted crude oil from Russia.
“Secretary Yellen will use her participation at the G-20 in Gandhinagar to help deepen our already significant relationship.” the statement said.
While G-20 is the prime rationale for the trip, Yellen’s second visit to India this year builds on her initiative to diversify away from countries presenting geopolitical and security risks.
It also comes about three weeks after Modi’s visit to the U.S. The four-day trip was packed with announcements on deals by semiconductor companies such as
Micron Technology
(ticker: MU) and
Applied Materials
(AMAT). It also saw a show of confidence from Tesla CEO Elon Musk, who said the car maker plans to expand into the country. While the visit included a state dinner at the White House, it culminated without a large discussion on Russia.
Interest in India gained steam this year when it overtook China as the world’s most populous country in April, according to U.N. population estimates.
The country’s benchmark
S&P BSE Sensex Index
marked a record close on July 6 at 65785.64, although its 7.8% gain this year dwarfs in comparison with the
S&P 500
‘s nearly 18% increase and the 19% rise in Japan’s
TOPIX Index
year-to-date, through Thursday.
Investor optimism about India can be tracked by looking at flows into the
iShares
MSCI India ETF (INDA), the largest U.S.-based fund focused on India with $5.3 billion in assets under management, as of Wednesday’s close.
The fund’s net flow of $262.75 million from April through July 12 was the highest since 2019 over the same period, FactSet data show. This year, overall, the fund has gathered $490.66 million in net flows, the highest since 2021 during the same period.
Write to Karishma Vanjani at [email protected]
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