By Treasury Secretary Janet Yellen is making a visit to India, showcasing the strengthening diplomatic ties between the United States and the world’s fifth-largest economy. This visit comes shortly after Prime Minister Narendra Modi’s trip to the U.S., reflecting the increasing investor interest in India.
Yellen’s destination is Gandhinagar, located in Modi’s home state of Gujarat. She will be participating in a G-20 meeting of finance ministers and central bankers. The first session of the meeting is scheduled to commence next week, after which Yellen will depart for Vietnam on July 20.
During the economic forum, Yellen plans to emphasize India’s role as an indispensable partner. This marks a significant shift from last year’s discussions which centered around persuading India to reduce its import of discounted crude oil from Russia.
“Secretary Yellen will utilize her participation at the G-20 in Gandhinagar to further strengthen our already substantial relationship,” stated the Treasury Department.
While the G-20 meeting is the primary reason for her visit, Yellen’s second trip to India this year builds upon her initiative to diversify partnerships away from countries that pose geopolitical and security risks.
India’s Growing Significance in the Global Market
India has emerged as a significant player in the global market, capturing the attention of investors and companies worldwide. This newfound interest comes in the wake of Prime Minister Modi’s recent visit to the United States, where he announced several lucrative deals with semiconductor giants such as Micron Technology and Applied Materials.
During his four-day trip, which featured a state dinner at the White House, Modi received further validation from Tesla CEO Elon Musk, who expressed intentions to expand the electric car manufacturer’s presence in India. While India’s growing influence captivated the world, discussions on Russia took a backseat during the visit.
India’s rise in prominence gained momentum earlier this year when it surpassed China as the world’s most populous country, as reported by U.N. population estimates in April.
Although India’s benchmark S&P BSE Sensex Index achieved a record close at 65,785.64 on July 6th, its year-to-date gain of 7.8% pales in comparison to the S&P 500’s nearly 18% increase and Japan’s TOPIX Index’s 19% rise by Thursday.
This flourishing optimism towards India’s market can be observed through the significant inflows into the iShares MSCI India ETF (INDA), the largest U.S.-based fund primarily focused on investing in India. With assets under management totaling $5.3 billion, the INDA has attracted a net flow of $262.75 million from April to July 12th, marking the highest inflow since 2019 over the same period, based on data from FactSet.
Overall, this year has seen the INDA accumulating $490.66 million in net flows, representing its highest inflow since 2021 during the same corresponding period. These staggering figures reflect growing confidence among investors in India’s potential as a lucrative investment destination.
As India continues to make strides on the global stage, it is likely to capture even more attention from investors seeking new opportunities in emerging markets. The nation’s economic growth, coupled with its burgeoning population, positions India as a formidable force in the years to come.
Comments