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Friendshoring strategy

  • Category
  • Published
    4th Mar, 2023


In a meeting of US and Indian tech business leaders, the United States shown interest to strengthen US-India ties in the technology sector and said that India is an important part of a US business strategy of “friend shoring” where supply chains to the US are being made resilient.

What is Friend shoring strategy?

  • Friend-shoring means encouraging companies to shift manufacturing away from authoritarian states and toward allies.
  • Objective: The idea of ‘friend-shoring’ supply chains is gaining purchase among economic policymakers concerned about relying on geopolitical competitors for accessing critical materials and technologies.
  • Benefits:
    • Friend-shoring is about deepening relationships and diversifying our supply chains with a greater number of trusted trading partners to lower risks for our economy and theirs.
    • It will also encourage domestic production, which could substitute for imports.

India-US trade relations:

  • The US is India’s biggest trading partner.
  • In 2021, our bilateral trade was over $150 billion.

Upcoming Agreements:

  • Partnership for Global Infrastructure and Investment, or PGII:
    • Under PGII, the United States has announced investments in Agri-tech to enable climate-smart agricultural production and in digital payments systems for micro entrepreneurs.
    • The US aims to mobilize $200 billion through 2027 for PGII and will look at India as a partner to invest in for its future.

Impacts for ‘Freindshoring’:

  • This would reduce overdependence on countries which could pose a security risk and are a single source of critical inputs?and raw materials.
  • However, limiting the trade of key inputs to trusted countries could reverse the gains of globalization.

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