Thank you Danielle, for that kind introduction. I also want to thank the American Enterprise Institute for putting on such a thought-provoking program. I'm very pleased to be here today and appreciate the opportunity to address you. Events like this one help inform our policy dialogue and ensure we have the benefit of a wide range of views.
I know Ambassador Shankar kicked off your program this morning, and I’m happy to be the other bookend. You may find that my remarks are not all that different from hers! This is one of many signs of the growing convergence of interests and views between our two countries.
The timing of AEI’s program today is opportune. In a few weeks Secretary of State Hillary Clinton will be traveling to New Delhi to announce with our Indian friends how we intend to broaden the strategic partnership between our two great nations.
Your program is also an opportunity for me to tell you that Secretary Clinton’s visit will answer those who are whispering that with President Obama’s new comprehensive strategy in Afghanistan and Pakistan, India’s importance to the U.S. has somehow diminished. Ladies and gentlemen, nothing could be further from the truth.
On the contrary, this is a time of great optimism and promise in America’s relations with India. Our two countries agreed we had to await the outcome of India’s recent elections before charting a new course in our relations. The strong showing of the Congress Party, Prime Minister Singh’s new mandate, and President Obama’s support for strengthening ties with India, open the way for a new, invigorated partnership.
In my remarks today, I will first briefly review the recent history of the U.S. – India relationship and how we arrived where we are today. Second, I’ll discuss our plans for robust engagement with India. I’ll conclude by answering the central question of your program today – Why India? Are the U.S. and India really “natural allies” or are the obstacles between us too great to overcome?
How We Got Here
Secretary of State Clinton gave a major speech on India a week and a half ago at the U.S.-India Business Council, entitled “U.S. – India 3.0, the Future of U.S. India Relations.” She described three phases of our relations. 1.0 lasted from India’s founding to the end of the Cold War and was characterized by missed opportunities for closer partnership that were the result of mistrust and old conflicts between East and West, North and South.
The 2.0 chapter opened with the ground-breaking talks between then-Deputy Secretary of State Strobe Talbott and Minister Jaswant Singh. These opened the door for President Clinton’s landmark visit to India in 2000, and the significant progress achieved during the Bush Administration, highlighted by the signing of the civil nuclear deal. This agreement turned a source of friction between our two countries into opportunities for cooperation: trade and job creation, helping India meet its growing energy needs, and strengthening jointly the global non-proliferation regime.
As the Deputy Chief of Mission at the U.S. Embassy in New Delhi from 2003 to 2006, I was privileged to see first-hand the positive effect these important steps had in breaking down barriers between our two societies and convincing skeptics of the promise the future holds for cooperation.
A New Strengthened Partnership
Which brings us to India-U.S. 3.0. President Obama and Secretary Clinton have repeatedly stated their deep commitment to strengthen our partnership with India. They view India as one of few key countries in the world that will help the United States shape the 21st century. Let me describe how we plan to work together to expand our cooperation on a wide range of bilateral and global issues.
The first is global security. The Mumbai attacks last November reminded us all that the United States and India face the common threat of terrorism and must work together and with nations around the world to combat this danger.
The U.S. response to the Mumbai attacks reinforced the unprecedented cooperation that has taken place between the U.S. and India on terror financing, law enforcement, training and information sharing. In recent months, the Director of the Federal Bureau of Investigation, the Director of the Central Intelligence Agency, the Chairman of the Joint Chiefs of Staff, and National Security Advisor Jones all visited India to underline and strengthen that cooperation. General Jones also conveyed an invitation from President Obama for Prime Minister Singh to visit Washington this fall.
There is room for expanded defense cooperation between the United States and India. As India’s economy grows, it has sought to modernize its military, and U.S. technology can and should be a part of that modernization. We are working hard to conclude bilateral agreements such as the End Use Monitoring Agreement to ensure defense sales and military-to-military cooperation can continue their positive trajectory.
More broadly, economic and trade cooperation is one of the fastest growing segments of the U.S. – India relationship. India has weathered the global downturn better than most, and is projected to grow at an enviable 6% this year. Although the size of India’s economy is still small – $1 trillion versus $14 trillion for the United States – its continued growth at a time when other countries are stagnating can help the global economic recovery.
One area of immediate promise for U.S. firms is civil nuclear cooperation. In May, the Indian government’s safeguards agreement with the International Atomic Energy Agency entered into force and India subsequently signed its Additional Protocol. India still must file a declaration of safeguarded facilities with the IAEA in order to complete the steps necessary to allow Nuclear Regulatory Commission licensing.
We hope the Government of India will soon be in a position to announce two nuclear reactor park sites that will be designated for U.S. firms. We also hope it will approve liability protections for U.S. companies by adhering to the Convention on Supplementary Compensation for Nuclear Damages (CSC). These steps would open the way for billions of dollars in new civil nuclear trade and investment.
On the broader trade front, while India still maintains significant barriers to U.S. trade and investment, U.S. – India trade nonetheless has doubled in the past five years, our trade deficit with India has narrowed, and bilateral investment flows have doubled. India also is a growing player in the United States. A new study by the Federation of Indian Chambers of Commerce and Industry says that Indian companies acquired or invested in 143 U.S. companies over the last two years, creating over 30,000 new American jobs.
As we look ahead, both countries want to dismantle barriers to trade and investment. President Obama has been clear that the United States will not use the global financial crisis as an excuse to fall back on protectionism. The U.S. was encouraged by the early visit to Washington of India’s new Minister of Commerce and Industry Anand Sharma in mid-June. He and Commerce Secretary Gary Locke affirmed their intention to forge stronger bilateral ties. One early sign is our hope to begin negotiations on a bilateral investment treaty soon. Another is our plan to reinvigorate the CEO Forum, and hold our first meeting on the margins of the UN General Assembly this fall.
Secretary Clinton described human development – especially education and women’s empowerment – as another area that will see growing cooperation between the United States and India. I just finished an excellent book by Infosys founder Nandan Nilekani entitled “Imagining India – The Idea of a Renewed Nation.” He says; “The new India is united by a respect for achievement; yearning for a better life; and an unprecedented belief that such a life is possible regardless of caste or social and economic status.” In short, the expectations of young Indians are high.
Nilekani eloquently describes why analysts from Goldman Sachs to McKinsey are so optimistic about India’s future. He states that while the working age population of other major economies will be falling, India will have an additional 47 million workers in 2020, almost equal to the world’s shortfall. He estimates that India’s “demographic dividend” will peak at 2035, by which time India will have added 270 million persons to its working age population.
These legions of Indians entering the workforce for the first time represent an immense economic opportunity for India and its partners, but only if they receive the education and training they will need to compete in India’s globalizing economy. Right now, the United States is educating over 90,000 Indian students in U.S. schools. But America’s educational institutions would like to do more joint work in India, to reach the vast majority who cannot go to the U.S. for an education.
We plan to build on the goals of the Indian government to boost literacy, expand vocational training, and improve access to higher education. United States universities and professors have much to share with India. We particularly welcome the ambitious plans of Kapil Sibal, India’s new Minister for Human Resource Development, for educational reform.
In the area of women’s empowerment, there is much we can learn from India – a country with a female President, female Speaker of the House, and female head of the largest political party. Secretary Clinton will describe in more detail during her trip to India our plans to expand cooperation in this important area.
A fourth domain of intensified bilateral cooperation will be to mobilize our two knowledge societies to expand the frontiers of human knowledge, and use that knowledge to improve people’s lives. Science and technology cooperation has always been an important part of the United States-India relationship, but we must do more to harness the brain power of our scientific and research communities and their private sector counterparts to improve energy efficiency, to find low cost health care solutions, and enhance global food security.
Agriculture is a high priority for Prime Minister Singh and an area where we hope to expand cooperation. To quote Nilekani again, “The hold of middlemen has blocked the rise of open networks; special interests … have blocked reforms.” The Prime Minister and his team are well aware of these challenges. The United States is ready to help with technology, research, and by sharing best practices in the “farm-to-fork” food supply chain.
Cooperation on Global Challenges
Ladies and gentlemen, President Obama neatly captured the scope and breadth of our relations when he said, “Our rapidly growing and deepening friendship with India offers benefits to all the world's citizens as our scientists solve environmental challenges together, our doctors discover new medicines, our engineers advance our societies, our entrepreneurs generate prosperity, our educators lay the foundation for our future generations, and our governments work together to advance peace, prosperity, and stability around the globe.”
Let me briefly turn to our plans to collaborate on global challenges. Ambassador Tezi Schaeffer, who has deep experience in India, recently remarked that the U.S. relationship with India has been largely bilateral, sometimes regional, but rarely global. Our two countries want to change that and take our relationship global.
Non-proliferation marks one new area that few would have thought possible even a few years ago. Earlier this year President Obama announced in Prague his vision of a nuclear free world. Indian Special Envoy Shyam Saran told an audience at the Brookings Institution in March that the Civil Nuclear Initiative has enabled India to look “proactively and not defensively at a new global agenda for nuclear nonproliferation and nuclear disarmament.”
We have already seen signs of this new outlook. In recent weeks, India signed its IAEA Additional Protocol, Foreign Minister Krishna condemned the North Korean nuclear test, and India became only the third state to completely destroy its chemical weapons stockpile.
Climate change is another thorny issue where there is room to make progress. The United States views India as a partner in confronting the interrelated challenges of clean development, energy, and climate change. As President Obama has indicated, we agree that actions to address climate change must also respect India’s urgent development needs.
But if you take a step back from the climate change negotiating table, and think of India’s development path as a whole, there is tremendous potential. India does not need to follow the same old fossil-fuel development path. As with the extraordinary growth of mobile phones, India can leapfrog to 21st century clean energy technology.
Already the U.S. and India are working together to promote more energy efficient buildings, clean coal technology, and the use of solar, wind, hydro and other clean energy alternatives to ensure a lower carbon future. We plan much more.
To conclude my remarks, let me turn to the question posed by this seminar. I think the U.S. and India increasingly are natural allies. We share a growing convergence of our values and our interests. Our peoples and our governments are engaged together in virtually every field of human endeavor. After more than a decade of cooperation, it is clear there is strong and bipartisan support in both countries to cooperate more closely.
Most important, however, are the strong people-to-people ties. Prime Minister Singh frequently tells audiences that almost every middle class family in India has a relative who is studying, living or doing business in or with the United States. Such ties provide the mutual understanding that will enable continued progress in U.S.-India relations.
During my recent trip to India with Under Secretary Burns, we heard from Indian interlocutors that “the sky is the limit” to the U.S.-India relationship. Actually, with our growing space cooperation, we may have to extend that boundary of cooperation! The stage is therefore set and the curtain is rising on U.S.-India 3.0. Our governments and our peoples together will help shape the course of the 21st century.
Thank you again for the opportunity to speak with you.