U.S. Treasury Secretary Janet Yellen holds a news conference at the U.S. Treasury Department in Washington
U.S. Treasury Secretary Janet Yellen holds a news conference in the Cash Room at the U.S. Treasury Department in Washington, U.S. July 28, 2022. Reuters

The United States and India are natural allies that can show the rest of the world that democracies can deliver for their citizens, despite volatility and war, U.S. Treasury Secretary Janet Yellen said on Friday.

Yellen, in a speech highlighting the Biden administration's desire to deepen economic ties with India, said that both the global economy and the democratic idea were at inflection points.

Her remarks at a Microsoft research facility on the outskirts of New Delhi came as control of the U.S. Congress was still undecided after mid-term elections on Tuesday.

"The U.S. and India are 'natural allies,' in the words of a former Indian prime minister," Yellen said, adding that both countries waged similar fights for independence to attain freedom and dignity."

"People around the world are looking to us and asking: can democracies meet the economic needs of their citizens? Can they stand up to bullies and cooperate on the most intractable global problems?" she said.

As the two largest democracies, India and the United States could answer the sceptics by taking actions over the next year and beyond that could "demonstrate the capacity of our democracies to deliver for our people. I am confident that we will succeed."

Among these actions are goals for India's leadership of the Group of 20 major economies next year, which should focus on the countries' shared priorities for boosting investments to fight climate change, breaking a logjam in restructuring debts for poorer countries and improving access to the digital economy.

"India's G20 year is a chance to accelerate global coordination on debt restructuring," Yellen said.

She also said that ending the war in Ukraine was a "moral imperative" but that economic challenges from the conflict and from supply chain strains were drawing India and the United States closer together. The United States was working to strengthen India's "friend-shoring" role as a trusted, reliable supplier.