U.S. Treasury Secretary Janet Yellen announced on July 17 that the United States is collaborating with India to establish an investment platform aimed at reducing the cost of capital and attracting increased private investment to accelerate India's energy transition. Yellen's remarks came following a bilateral meeting with India's Finance Minister, Nirmala Sitharaman, on the sidelines of the G20 meeting taking place in Gandhinagar, Gujarat.
The partnership between the two countries encompasses various economic aspects, including commercial and technological collaboration and strengthening supply chains. Yellen expressed enthusiasm about the collaboration.
"We look forward to working with India on an investment platform to deliver a lower cost of capital and increased private investment to speed India's energy transition," Yellen stated.
This marks Yellen's third visit to India in 2023, signifying the deepening ties between the two nations. The visit follows Indian Prime Minister Narendra Modi's recent state visit to Washington, during which several defense and high technology agreements were signed, further highlighting the growing bilateral relationship.
Finance Minister Sitharaman emphasized the commitment to achieving significant outcomes through close engagement, adding that potential areas of cooperation include development and alternate investment platforms for renewable energy.
Yellen also revealed that the United States and India are nearing an agreement on the implementation of a global minimum tax system. In 2021, the U.S. spearheaded a historic deal involving nearly 140 countries agreeing to a minimum 15% tax on large global firms, along with an additional 25% tax on "excess profits." Australia and Japan are also seeking progress on the global minimum tax during the G20 meeting.
However, analysts expressed skepticism regarding the feasibility of reaching an agreement on such a sweeping change in cross-border taxation. Some governments may prioritize their national tax regimes, which could hinder the consensus-building process.
Following the conclusion of the G20 finance meetings on July 18, Secretary Yellen is scheduled to visit Vietnam, further underscoring the United States' commitment to strengthening economic ties in the Asia-Pacific region.
The collaboration between the United States and India on the investment platform for energy transition represents a significant step toward achieving sustainable and clean energy goals, while also fostering closer bilateral relations and driving economic growth in both countries.
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