During US Treasury Secretary Janet Yellen’s recent visit to India in November 2022, she announced that the USA is actively pursuing a ‘friendshoring’ approach with India.

So what is 'friendshoring'? And what does it mean for India?

Simply put, friend-shoring is a trading approach with the primary objective of strengthening economic ties with reliable trading partners and moving away from countries that could pose potential security and geopolitical risks to the global supply chain.

Simply put, friend-shoring is a trading approach with the primary objective of strengthening economic ties with reliable trading partners and moving away from countries that could pose potential security and geopolitical risks to the global supply chain.

Yellen first introduced and explained the term during her visit when she also announced that the United States is giving $500 million in debt financing to America’s leading solar manufacturer to facilitate the construction of a facility in Tamil Nadu. This boost will help increase India’s solar manufacturing potential and capabilities, thereby decreasing India’s reliance on China, as stated by Yellen.

Big Tech’s Big Moves

The United States’ Big Tech companies such as Amazon, Google, and Apple have already increased their investments in India, aiming to harness India’s significant industrial and consumer potential while decreasing their dependence on China as a manufacturing hub and market.

In 2020, Google’s parent company Alphabet established a $10 billion fund called the India Digitization Fund to assist technology companies in India. The same year, Amazon announced an investment of $1 million to support local, small-scale e-businesses in India. And in November 2022, Amazon established its second AWS region in India and has plans to invest over $4.4 billion in the Indian market by 2030 as a part of its efforts to expand its cloud services worldwide.

In April 2022, tech giant Apple took a significant step in diversifying its manufacturing away from China by beginning production of the iPhone 13 in India. This move added to the existing roster of iPhones that Apple was manufacturing in India, including the iPhone SE, iPhone 11, and iPhone 12. 

Apple is currently planning a notable expansion of its manufacturing arms in India; its goal is to triple iPhone production in the country within the next two years. Additionally, Apple's expansion efforts extend beyond manufacturing, with the company ready to open its first non-affiliate storefront in India.

Yellen’s catchy term ‘friend-shoring’ has undoubtedly been in play in India long before the US government’s announcement. Yellen’s trip and statement reinforce the Biden administration’s desire to strengthen economic relations with India, a move that will significantly benefit both nations.