The Current State of U.S.-India Cooperation and Prospects for the Future (As Prepared)
Assistant Secretary, Bureau of South and Central Asian Affairs
Thank you so much for inviting me to speak at CSIS today. It is a pleasure to be introduced by my distinguished predecessor and friend Ambassador Rick Inderfurth. I’m pleased to see that as the new Wadhwani Chair of U.S.-India Policy Studies, Rick and his team have dug right in, playing a vital role celebrating the successes and highlighting the challenges in U.S.-India relations today. CSIS provides policymakers with an exceptional array of commentary and analysis on a daily basis and I’m thrilled that they have added such an important India thinker to the CSIS team.
I heard that Rick, in the course he taught on South Asia Politics at the George Washington University, began each semester with a certain quotation by the great statesman and former Ambassador to India, Chester Bowles. Bowles noted upon his return to the United States in 1969 after serving as Ambassador to India for the previous two years, that engaging with India was in the United States’ national interest, and that India would have a “big impact on the world.” Some 42 years later, Bowles’ sentiments are truer today than ever.
The Arc of U.S.-India Relations
As I look out amongst the crowd this morning, I see many familiar faces – including Indian Americans, government officials, scholars, and academics – who have helped advance the extraordinary ties between our two nations. In fact, some of you were advocates for a U.S.-India partnership long before such a strong relationship was thought possible.
There is a common refrain that U.S.-India relations have progressed further in the last ten years than ever before. I myself have been privileged to serve this effort since 2003, as the Deputy Chief of Mission in New Delhi and now as Assistant Secretary.
I have seen first-hand how committed government leaders working hand-in-hand with the business community and buttressed by strong people-to-people ties can transform a bilateral relationship. Another striking asset of the U.S.-India relationship is the rock-solid bipartisan support in both of our countries for our partnership.
That bipartisanship has helped drive significant and uninterrupted progress over the last decade across administrations from both major political parties in both countries. The most recent milestone in this exponential growth in U.S-India ties came last November. President Obama’s trip will be remembered as a watershed, when the U.S. and India embarked at a new level on concrete initiatives to build a global strategic partnership.
Yet, while we’ve made undeniable strides in our relations during this still very new century – our minds fresh with the images of the President’s memorable outreach to business leaders and school children in Mumbai and his delivery of a historic articulation of our unique ties in the Indian Parliament in New Delhi last November – we shouldn’t overlook the influence of the dynamic figures of the last century, the early pioneers of our fledgling bilateral ties.
From the legendary letters and journals of diplomats John Kenneth Galbraith and Daniel Patrick Moynihan, both of whom reflected on the Subcontinent with admiration, to the historic travels across India of First Lady Jackie Kennedy, Americans have for decades recognized the cultural and strategic symbiosis our two nations share – even if our nations’ politics occasionally differed.
In fact, the First Lady’s 1962 visit – fondly remembered by both Indians and Americans – was a defining example of the importance of “soft power,” decades before the term was even coined!
In the same vein, Indian visionaries like Rabindranath Tagore admired what the United States stood for. Tagore proclaimed that the United States “is the best exponent of Western ideals of humanity.”
And one of the 20th century’s most distinguished Americans, Dr. Martin Luther King, Jr. found inspiration in Mahatma Gandhi, who he called “the guiding light of our technique of nonviolent social change.” When the President visited Mumbai in November, he visited Mani Bhavan, Gandhi-ji’s home in that metropolis, where he described Gandhi as a “hero not just to India, but to the world.”
When we reflect upon the arc of U.S-India relations, let us remember that our strong ties should be measured by this long-term perspective – not just today’s news cycle.
With that longer term horizon in our sights, we are jointly embarking upon areas of cooperation that will, over time, realize enormous benefits for both our peoples. I’d like to talk a bit more about how we are creating that architecture today.
The U.S.-India Global Strategic Partnership: Imagine the Possibilities
The pioneers of the values and principles that define our U.S.-India relationship would have no doubt been pleased by our recent bilateral accomplishments. Beginning with President Clinton’s landmark visit in 2000, and the civil nuclear agreement negotiated by the Bush Administration, to the whole-of-government vision of partnership articulated by President Obama, we have finally crafted a U.S.-India relationship that reflects the ideas that have crossed the oceans for over sixty years.
In November, President Obama’s visit resulted in new milestones across virtually every field of human endeavor, from non-proliferation, to joint satellite research, to food security. Chester Bowles would have been proud.
But the U.S.-India story still contains untapped potential and unrealized gains. India is on track to have the largest population on the planet by 2030, and might have the largest economy by 2050. India is a rising giant whose influence is being felt not only in the Indian Ocean, but clear across Asia Pacific to the shores of the Americas, in Africa, the Middle East, and in Central Asia. Its rise – fueled by a young, optimistic, dynamic, educated population – may well be the biggest story of the 21st century. And it’s that 21st century focus on innovation and science where we are creating lasting areas of collaboration with India that will change our shared futures.
The Innovation Agenda: Energy/Science/Space
India will need to maintain or exceed 9% growth in order to provide workforce opportunities for the millions of people entering every year. India’s overall growth trajectory depends on meeting a substantial increased demand for energy resources. India has set an ambitious goal of adding nearly 79,000 megawatts by 2012.
Diversification is the key to energy security for both our countries. In addition to civil nuclear cooperation, the United States and India are working together across a full portfolio of energy options, especially clean solutions.
Energy security is a key pillar of the U.S. National Security Strategy, a top priority as we seek to transition over time to a clean energy economy and reduce our dependence on foreign oil. India faces the same challenge; together we can advance our joint pursuit of a clean energy future, paved by extensive bilateral cooperation in renewable power, energy efficiency, and smart grid technologies. The U.S.-India Partnership to Advance Clean Energy, known as PACE, will improve energy access and promote low-carbon growth through the research and deployment of clean energy technologies.
As we embark on this collaboration between our public and private sectors, the United States is hosting a smart grid study tour this week, and a reverse solar trade mission in June. Under our partnership in the Global Shale Gas Initiative (GSGI) we have started to collect and assess data on unconventional gas resources in India, improving India’s access to cleaner fossil fuels from domestic sources.
A Joint Clean Energy Research and Development Center that will mobilize up to $100 million in public and private sector funds will buttress the PACE initiative. This new energy research initiative is the most integrated joint clean energy undertaking we have done with any country, ever. I am pleased to note that we will soon be opening the joint call for proposals, to support the best new ideas in clean energy innovation.
It is worth noting that India plans to significantly increase nuclear energy’s share in the overall energy basket within the next 25 years and has signed agreements with numerous nuclear supplier countries, including the U.S., to reach this goal. India’s domestic legal and regulatory framework related to nuclear liability, however, needs to be brought in line with international norms to allow for any international cooperation to be realized.
Many supplier states have made this point directly to the Indian government, and we hope that progress will be made during 2011 as India fulfills its pledge to ratify the Convention on Supplementary Compensation (CSC) and take steps to shore up deficiencies in its initial 2010 liability law.
In addition to the joint energy activities, our combined science strengths are making an impact on food security—from space. Working with the Indian Ministry of Earth and Sciences, our National Oceanic and Atmospheric Administration (NOAA) has developed a cutting-edge initiative to forecast monsoons using data that includes satellite imagery. In fact, NOAA has just established a “monsoon forecast desk” to oversee this exciting activity on the U.S. side. These forecasts will enable India’s policy makers and farmers to make accurate decisions about what and when to plant and harvest."
India, led by Minister Jairam Ramesh, played an important and constructive role at last year’s climate negotiations in Cancun, helping bridge differences on some very difficult and important issues. Cancun produced pledges by countries to reduce emissions, launched the new Green Climate fund, and created new mechanisms to help promote deployment of clean technologies, reduce deforestation, and to help countries adapt to a changing climate.
Without the Indians, Cancun would likely not have been as successful. The United States looks forward to continuing to work with India to focus the negotiations this year on implementing the Cancun agreements, demonstrating that the international community is taking immediate action to meet the threat of climate change.
Cutting across all of these areas, the United States and India have established a new public-private partnership, the Science and Technology Endowment Fund, which will award grants to promising and innovative ideas that could produce material benefits for both countries. The fund will grant 2 -2.5 million dollars per year to science and technology projects that, if successful, we can scale up. The grants will specifically target latter stage research and development geared towards commercializing technologies that can produce high-impact, bottom-of-the-pyramid innovations.
Many of these innovations will focus on the health sector, which will complement the Global Disease and Detection Center that the Center for Disease Control (CDC) has set up in New Delhi to take advantage of India’s first-rate health infrastructure to monitor regional and global disease.
The Security Agenda
While the innovation agenda helps us secure our welfare, we must also work together to ensure that our countries and the neighborhood remain safe and stable. As the world’s largest democratic states, governed by the rule of law, India and the United States have the greatest stake in upholding the current rules-based international system.
We share a common interest in fighting the global terrorist threat of Al Qaeda and its networks, and protecting and ensuring free access to our shared domains.
For all the logic to our security partnership, however, institutionally it remains relatively modest. We have done extensive bilateral exercises with India, but strategically we still have much to talk about and much to learn from each other, especially at the planning level.
We will seek to work with India to encourage greater interaction between our service chiefs and uniformed personnel, to better understand how our two militaries can work together and to build trust and confidence between our defense establishments. We will emulate the success we have had through our East Asia diplomatic and security consultations and extend that model to other critical regions.
India has had great success recently thwarting the piracy threat in the Indian Ocean, most recently on May 5 when it protected the Chinese Merchant Ship Full City from Somali pirates. We look forward to working with India in similar counter-terrorism, maritime security, humanitarian assistance, and disaster relief activities, showing the global benefits of the U.S.-India partnership.
Where you will see us really take-off this year is in Asia. I’m pleased that our annual U.S-India Strategic Dialogue in July is scheduled to take place right before the ASEAN Regional Forum, or ARF, a premier Asian venue for discussion that includes the United States and India as participants.
We strongly welcome the recent progress in East Asian and Southeast Asian bilateral relations with India, and encourage New Delhi to build on these steps, adopting a “Be East” policy that seeks to expand its market and security integration across the region and enhance its role in Asian multilateral fora.
For example, a “Be East” policy might entail India seeking an increased role in the East Asia Summit, elevating interaction with ASEAN, and developing further political relations with East Asia that match India’s vibrant trade and investment growth in the region. And we will continue our highly successful East Asia sub-dialogue – something I have worked on closely with my colleague Kurt Campbell.
The United States is interested in working with India and other members of the East Asia Summit to make it the premier forum for Asia-Pacific leaders to discuss pressing security and strategic issues. And it’s worth remembering that President Obama has announced that he plans to attend the 2011 East Asian Summit in Indonesia, providing an occasion for the U.S. and India to deepen our dialogue about security and economic architectures in Asia.
Also, this summer we will kick off a United States-India-Japan trilateral dialogue, which will provide a superb opportunity for our three vibrant democracies to discuss areas of common interest.
As we promote peace and security, there is no more important challenge than that of the proliferation of weapons of mass destruction and their means of delivery. During President Obama’s trip to New Delhi last November, we took several important steps forward in that regard.
First, the U.S. and India signed a memorandum of understanding that allows us to cooperate on nuclear security issues under the auspices of India’s planned Global Centre for Nuclear Energy Partnership, which India announced the creation of at the 2010 Nuclear Security Summit.
Second, the United States and India decided to take mutual steps to expand U.S.-India cooperation in civil space, defense, and other high-technology sectors. The United States indicated its intention to support India's pursuit of full membership in the four multilateral export control regimes consistent with the core principles of these regimes, as India takes steps toward the full adoption of their export control requirements.
In addition, the U.S. pledged to realign U.S. export control policies to reflect India’s status as a strategic partner, and in January removed India’s space and defense entities from the Commerce Department’s Entity List.
I also want to take a moment to note that Prime Minister has also recognized India’s enhanced position as a regional leader. Prime Minister Singh’s visit to Kabul, which he concluded today, underscored India’s strong efforts to support international efforts to rebuild a secure, stable Afghanistan.
The Prime Minister raised India’s assistance pledge to a total of $ 2 billion, and India has assisted with critical infrastructure, like power stations and the Parliament building, and small development projects like health care facilities and wells.
Likewise, for Pakistan, Prime Minister Singh has spearheaded the initiative to normalize relations. Building on the “cricket diplomacy” launched by Prime Ministers Singh and Gilani in Mohali, the Commerce Secretaries of the two countries met last month in Islamabad and jointly announced ambitious commitments to enhance trade and commercial ties.
India’s economic rise presents an enormous opportunity for Pakistan, and the normalization of economic ties could provide immense benefits to millions of entrepreneurs, farmers and businesspeople in both countries. More critically, a bilateral breakthrough could provide a catalyst for wider regional economic integration, a transformative goal we all wish realized.
Military modernization and defense sales in a strategic partnership
The scholar Robert Kaplan has called the rise of the India the greatest piece of geopolitical good luck the United States has come across since the end of the Cold War, and he’s right. The rise of India is undoubtedly in our national interest, and a strong partnership with India will help facilitate the emergence of our shared approach to our collective ideas globally.
Charting out its own ambitions for its global role, India has embarked upon a military modernization program and is expected to spend more than $35 billion over the next five years on defense acquisitions.
It is a testament to the superiority of American equipment that India continues to look to U.S. suppliers to facilitate this modernization. U.S. firms have won almost $4 billion in defense sales in the past four years, including the transfer of the former USS Trenton – now the INS Jalashwa – to the Indian Navy; the Indian Air Force’s purchase of 6 C-130J aircraft, the first of which arrived on time and under budget in February; and the purchase of 8 P-8I long-range maritime patrol aircraft.
We have done a lot together, rapidly. But the relationship is still developing. Both countries have work to do internally to adjust bureaucratic procedures and mindsets to reflect the current and future U.S.-India relationship. We will continue to look for opportunities to increase understanding of each other’s processes, practices, and procedures to enable better cooperation in the future.
Of course, it will come as no surprise to those of you here today to learn that we in the U.S. government—and many Americans outside government--were deeply disappointed that the Indian Defense Ministry did not include an American firm in its shortlist for its once-in-a generation fighter jet acquisition, the Medium Multi-Role Combat Aircraft tender.
We see this as a missed opportunity to take the U.S. and India to the next level of strategic cooperation; a U.S. fighter jet would have been a long-term investment in what our defense forces could do together, enabling new levels of technology cooperation and relationship building between our two militaries.
The Boeing F/A 18IN and the Lockheed Martin F-16IN – as configured specifically for India – would have included state of the art avionics, engines, and sensor packages that would make them among the most formidable fighters ever deployed – a fact that I think has been made abundantly clear during the past several years. The U.S. offers were very competitive in terms of cost, and our firms’ competitiveness and efficiency would have provided reliable support that is second to none. Most importantly, these sales would have provided a ladder to even higher levels of U.S.-India technology transfer. It is a source of puzzlement and disappointment that the Indian Air Force did not see the advantages of the U.S. aircraft.
The U.S.-India partnership is a long-term friendship, not a tit-for-tat business arrangement. Sales are a way to facilitate technological and strategic linkages, enabling our armed forces to work together more easily, and we plan to continue strengthening our defense ties through increased sales and exercises.
The People-to-People Agenda
Bolstering our strategic relationship, people-to-people ties have given the partnership its vitality. During each of the past four years, our consular officers in India issued more than 49 percent of all H1-B visas worldwide, and more than 44 percent of all L-1 intra-company transfer visas worldwide.
In the same four-year period, our Embassy in New Delhi issued more than double the number of H-1B and L-1 visas than the four next-highest-issuing countries combined. 650,000 Indians traveled to the United States in 2010 – an 18 percent increase over 2009. And of course, India has historically been one of the largest sources of international students in our colleges and universities with over 100,000 students coming here to study last year.
Mirroring the Indian enthusiasm for the United States, we would like more Americans to go to India, and will work with the Indian government to encourage more tourism, business trips and exchanges. I particularly hope we can exceed the 2,700 Americans who studied in India last year.
The U.S.-India Higher Education Summit this fall in Washington, DC will bring hundreds of educational institutes together from both our countries, and could foster linkages that ease the ability of American students to participate in India’s venerable educational system, while further extending the number of Indians studying in the United States and bringing higher education institutional ties between our two countries to a new level.
As evidence of the democratic values that we share, and both of our governments’ reliance on active civic engagement, we have embarked on an unprecedented initiative on open governance and democracy promotion. India’s success as a thriving democracy has served as a demonstration effect for its neighborhood; since 2008, an elected government serves in every country in South Asia.
Now India is ready to share its recipe beyond its immediate neighborhood. Already, most recently, Egypt and India have partnered bilaterally to use both Indian expertise and technology for Egypt’s upcoming elections.
At a broader level, the Indian Election Commission established the Indian Institute of Democracy and Election Management in New Delhi to serve as a prime resource center for information and election training. The Indian Election Commission and the International Foundation for Electoral Systems soon hope to partner to develop an internationally tailored curriculum to share India’s best practices in election management.
The Growth Agenda
The health of our commercial relationship presents another aspect of our strong people-to-people ties. Trade between the U.S. and India has doubled twice in the past ten years and continues to grow and drive our partnership. There isn’t a multinational company without an India strategy these days.
Behind the scenes, our governments and businesses work piece by piece and deal by deal to build relationships and foster trade, yet economic impediments make it hard for American exporters to gain access to Indian markets, especially in agricultural goods. Restrictions in retail, insurance, defense and other key areas have also limited the expansion of American firms, and the Indian firms with whom they seek to partner.
India and the U.S. have the potential to be each others’ largest trade and investment partners, demonstrating significant, balanced benefits for both economies and peoples. This is a long-term goal, for which we’ve already taken significant strides. To maintain this trajectory, we need to methodically address trade and investment barriers and foster market openings that position us to capitalize on this continued growth, and allow our private sectors to thrive.
As one of the steps forward in the near-term, we hope to sign a significant bilateral aviation safety agreement (BASA) that will help open the door to cooperation between our civil aviation authorities. This agreement further builds on our already strong aviation relationship, anchored by our 2005 open skies agreement. We also stand ready to work with India as it modernizes its aviation infrastructure.
We will also want to explore how to re-energize Bilateral Investment Treaty discussions – which would provide investment protections to strengthen the ability of our companies to cooperate more effectively in both markets.
Recognizing India’s tremendous economic growth and the fantastic potential for U.S. investors, U.S. companies need to be in India, and American businesses have been some of India’s boosters; but, with India’s ranking of 134 out of 183 on the World Bank’s “Ease of Doing Business Index,” clearly this can be a challenge.
A BIT with India would help lower the risk of investing, establishing safeguards and an independent arbitration process that would provide our investors maximum protection. A BIT would also protect growing Indian investment in the United States.
The total stock of FDI from India to the U.S. was almost $5.5 billion at the end of 2009, growing at approximately 35 percent between 2005 and 2009 and making India the seventh fastest growing source of foreign direct investment in the United States. For the record, Indian companies are invested in, operating in, and creating jobs in 40 U.S. states and the District of Columbia, and we welcome even more.
In addition to its contribution to the U.S. economy, India’s economic growth has lifted millions out of poverty and hunger at home. As India’s economic reform proceeds – however slowly -- in the future, I have no doubt it will expand the space for greater U.S. trade and investment.
We are natural economic partners. In fact, we are now extending our economic partnership to benefit third countries. For the first time in our history, the United States and India have jointly approached three African countries with a proposal to collaborate on building agricultural capacity. As a result, India has become an integral part of the President’s Feed the Future initiative, which has taken on greater importance with the possible return of higher food prices.
The joint activities that I have described point to a long-term vision of using the U.S.-India partnership to produce benefits for both our countries, as well as citizens around the world. Our strategic relationship will make the world more secure and democratic, while our commercial partnerships will produce novel products that meet the needs of the 21st century consumer. Our joint research and development in space, health and agriculture will lift the welfare of millions.
As partners, we must discuss and debate how we can further strengthen our unique bilateral relationship, while actively helping other nations around the globe achieve peace, prosperity, openness, and stability. We owe the pioneers of U.S-India relations to think big, to look ahead, and to aim higher than ever before. Tectonic shifts in international relations never wait for moments most convenient for global actors.
The global strategic partnership between the United States and India is strong, and is founded on shared values and exceptional people-to-people ties. But we must remember that this is a long-term project. Neither country can take the relationship for granted. Right now, we need to work together to ensure that the initiatives launched during the President’s visit are implemented, as this will build the political support in Washington and Delhi, as well as Mumbai and Manhattan, to think more ambitiously about what we can achieve, and where our partnership will go.
As Rabindranath Tagore, the great Bengali son and hero to all Indians once said “you can't cross the sea merely by standing and staring at the water.” My friends, our people, our businesses, our diverse, intertwined knowledge-based societies will support the next chapter of the U.S.-India partnership. The time is now to turn our imaginations – both here in the United States and India – into reality. All of your counsel will be instrumental. Thank you very much for your time, and I’d be honored to take your questions.