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Indian Globalization and the Transformation of U.S.-India Relations


Remarks
Robert O. Blake, Jr.
Assistant Secretary, Bureau of South and Central Asian Affairs
The Heritage Foundation
Washington, DC
December 8, 2010

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Thank you so much, Dr. Kim Holmes, for the kind words of introduction and your warm welcome. I’d like to say how much I appreciated the insightful remarks given by Ambassador Meera Shankar this morning. Meera and her great team here at the Indian Embassy have been wonderful partners in building the U.S.-India partnership.

I’m so pleased and honored to address such a dynamic and unique group of business leaders, esteemed U.S. government colleagues, noteworthy academics and others here today. I want to thank at the outset Heritage and the Observer Research Foundation for arranging this important conference on a subject near and dear to my heart!

I was particularly happy to see that the overarching title of today’s event – Indian Globalization and the Transformation of U.S.-India Relations – directly acknowledges the immense progress made by three Administrations, over more than a decade, to transform the way the United States and India work together.

Before going any further, let me add my own condolences to the families of the victims of yesterday’s terrorist attack in the holy city of Varanasi. Ambassador Roemer made his own statement and told the Indian people that the U.S. stands ready to provide any appropriate assistance to the Indian government to investigate this heinous crime and bring the perpetrators to justice.

Ladies and gentlemen, nearly 70 years ago, President Franklin Roosevelt identified the four essential human freedoms: freedom from fear; freedom of speech and expression; freedom of every person to worship in his or her own way; and freedom from want.

These fundamental freedoms underpin our society; they also function as catalysts for social, economic, and political progress. While these values have existed in India since its independence, they are now becoming increasingly apparent to the world at large.

India shares our commitment to pluralism, religious liberty, universal education and the promotion of innovation and free enterprise. Indeed our mutual commitment to these freedoms animates our global strategic partnership and provides us with the energy and the courage to build a better world together.
I have been privileged to help advance the US-India partnership since 2003. Our two countries have traveled a great distance since then under Democratic and Republican Administrations, reflecting the bi-partisan support in both countries for expanding ties. The Bush Administration deserves great credit for the landmark civil nuclear deal that marked a key turning point.

I believe President Obama’s recently concluded trip will be remembered as another watershed, when the U.S. and India embarked for the first time on concrete initiatives to develop our global strategic partnership. The challenge before us now – on which I expect think tanks like Heritage and ORF to play a leading role – is to define an agenda for both governments going forward that capitalizes on what we have achieved and meets the ambitious vision agreed by President Obama and Prime Minister Singh.

I thought I would use my time today to provide the strategic context for India’s growing importance to the U.S., Asia and the world. Then I will describe some of the principal outcomes of the President’s visit – particularly those advances that have flown under-the-radar. These examples will show why our relations with India will be in President Obama’s words, an “indispensable partnership” for the world in the 21st century.

India in Asia

The changing nature of our engagement with India is a tribute to the hard work in both our governments and our private sectors, but it also reflects a fundamental transformation in the world around us. We’ve moved from a transatlantic century to a transpacific century in which the rise of Asia has already started to define the 21st century. India of course plays a critical role in Asia’s ascent. Just to offer a few illustrative examples:

· Our trade in goods with Asia is 1.5 times more than our trade with Europe.

  • India soon will be the world’s most populous country. And it is a young country. At a time when much of the industrialized world faces rapidly declining birthrates, half of India’s population is under age 25.

· India is the world’s second fastest growing economy today and is projected by our National Intelligence Council to become the world’s third largest economy in the year 2025.

As former National Economic Council Director Dr. Larry Summers noted earlier this year, by 2040, one of the world’s largest economies will be India, not a wealthy industrialized country but “a developing state driven not by mercantilist capitalism or exports but a people-centric focus on growing levels of consumption.”

Those are some of the reasons why the U.S. supports a greater role for India in Asian architecture. It is natural for India to "look East," where its soft power -- long visible everywhere from the temples of Angkor Wat and Bali to the global reach of Bollywood -- is increasingly complemented by its economic power.

Widening economic interests have reinforced India's readiness to share responsibility for securing Asia, for safeguarding the sea and air routes on which much of the global economy depends. And it is very much in the American interest for India to build on this role in the years ahead.

It is no coincidence that other large Asia-Pacific democracies -- Japan, Australia, and South Korea -- are also engaging more closely with New Delhi and cooperating more systematically on security issues. And it is no coincidence that the President began his trip of four Asian democracies with a three-day stay in India.

India's voice as a successful democracy is important in a region where courageous leaders have emerged in the non-violent footsteps of Gandhi. In fact, India is situated in a South Asia region that for the first time ever has democratically elected governments in every South Asian nation, including Bhutan and Maldives. That democratic trend would not have occurred without the example of India.

Now I’d like to provide details of the President’s trip to India, which turned out to be one of the most successful trips ever taken by an American president to South Asia, and focus particularly on those accomplishments that showcase our broad agenda and the new dimensions of our global strategic partnership.

The President in India

The trip produced a number of significant new milestones that, amidst the Security Council endorsement and the first lady's Bhangra dancing, you may have missed. Many of these provided concrete examples of how the U.S. and India increasingly are working together to advance global peace, development and security.

The big headline-maker was, of course, the President's endorsement in his parliament speech of a reformed United Nations that includes India as a permanent member. The endorsement of an Indian seat on a reformed U.N. Security Council, as a permanent member, reflects our confidence that it is a country with which we will be working more closely to advance global security and prosperity.

During the trip, the Indian government positioned itself to take on a leading role in enhancing global stability by finalizing a $4.1 billion sale for ten C-17 Globemaster III heavy lift transport aircraft – a deal announced during the President’s recent visit. Once all the aircraft have been delivered, ladies and gentlemen, India will have the second largest C-17 fleet in the world behind the United States –a highly visible manifestation of the U.S.-India defense partnership.
In conjunction with the purchase of six C-130J transport aircraft in 2008 – the first of which will be delivered to India next week -- this deal will double U.S.-India defense trade and provide the Indian Air Force a strategic airlift and humanitarian response capability that is unique to the region and emblematic of India’s ambitions to play an increasingly global role.

Indeed, the President and Prime Minister agreed that in this increasingly inter-dependent world, the stability of, and our access to, the air, sea, space, and cyberspace domains is vital for the security and economic prosperity of all nations. They therefore agreed to launched a dialogue to explore ways we can work together, as well as with other countries, to develop a shared vision for these critical domains to promote peace, security and development.
As we promote peace and security, there is no more important challenge than that of proliferation. We took several important steps forward in that regard.

First, the U.S. and India signed a memorandum of understanding that provides a general framework for cooperation in connection with India’s Global Centre for Nuclear Energy Partnership, which India announced at the 2010 Nuclear Security Summit.

We agreed to give priority to discussion of best practices on the security of nuclear material and facilities, development of international nuclear security training curricula and programs, and joint outreach on nuclear security issues to our nuclear industries.

Second, the United States agreed to support India's full membership in the four multilateral export control regimes (Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group, and Wassenaar Arrangement) in a phased manner, as India takes steps towards full adoption of the regime core requirements.
We also decided to take mutual, big steps to expand U.S.- India cooperation in defense, civil space, and other high-technology sectors. The U.S. will remove India’s space and defense entities from the Commerce Department’s Entity List as India aligns its export controls with global standards.

The American business community has welcomed these steps for the important new opportunities they will open for our companies in the defense and civil space areas.

Another significant outcome within the nuclear arena was that both sides completed the government pieces of the civil-nuclear deal, opening the way for U.S. companies to supply billions of dollars worth of civil nuclear reactors for India's growing energy market.

Last, as the two largest democracies in the world, we agreed we should begin for the first time to jointly share our expertise in this area with interested countries. Specifically, the President and Prime Minister launched a U.S.-India Open Government Dialogue

on how we can democratize access to information, support global initiatives in this area, and share our own experience. They also agreed to explore cooperation in strengthening elections organization and management in other interested countries.

Let me know turn to some of the activities we launched that did not garner the attention they deserve, but nonetheless could have far-reaching implications.

Clean Energy
In the energy field, the United States and India both are committed to charting a lean energy future both because it makes clear economic sense and because it supports our mutual objectives to help slow the pace of climate change. We also believe there are important synergies we can exploit to accelerate our transition to a low carbon future.
We have committed to jointly developing, deploying, and commercializing innovative clean energy technologies to achieve that goal through the bilateral Partnership to Advance Clean Energy, or PACE.
Under this initiative, we have already begun to undertake joint research efforts and the deployment of clean energy resources, such as solar, advanced biofuels, shale gas, and smart grids.
Our efforts to promote and improve access to cleaner electricity will ensure that children can continue to study after the sun has set and small businessmen and women will have more opportunities to prosper.
This cooperation will help to create green jobs at home, and improve living standards and stimulate the economy in India’s villages and urban centers.
The U.S. government seeks to encourage private sector participation in the development of India’s clean energy future. The Overseas Private Investment Corporation contributed $100 million to the $300 million Global Environment Fund South Asia
Clean Energy Fund, which will form an India-specific sub-fund in conjunction with the India Development Infrastructure Finance Company and other potential Indian investors targeting India-only investment in clean energy.
The Export-Import Bank also signed a $5 billion MOU with Reliance Power to support the development of gas-fired electricity generating units and renewable energy facilities.
Our bilateral commitment to improve access to clean energy is also manifested by a public-private partnership to promote green building technologies. Prominent global companies like Wipro, Infosys, Walmart, Target, and Marriott are leading the way to commercialize and implement these technologies and practices.

Space
Like our clean energy efforts, a natural partnership exists between India’s human enterprise and the United States’ storied history of pioneering space exploration. The removal of Indian Space Research Organization, known as ISRO, from the Commerce Department’s Entity List will bring in a new era in space collaboration. No longer will we treat India’s space program as a target; rather, we hope that it will become a close partner.
The possibilities of cooperation between the United States and India in space, to advance scientific knowledge and human welfare, are without boundaries and limits.
To paraphrase former ISRO Chairman Madhavan Nair, India’s space program is only successful when it can produce benefits – material change -- for Indian citizens.
Indian farmers will see the fruits of our collaboration as U.S. and Indian space scientists work together on climate and weather forecasting for agriculture, navigation, resource mapping, research and development, and capacity building.
Our experts have developed enhanced monsoon forecasting that will begin to transmit detailed forecasts to farmers, beginning with the 2011 monsoon season.
This will give farmers reliable information and forecasting tools to enhance agricultural production and manage the risks of weather-related crop loss in the context of changing climatic conditions and shifts in the global agricultural market.
India also is an emerging leader in earth observation, with the second highest number of earth observation satellites in orbit. American fishing fleets could increase their catch thanks to the collection of tide data as part of the OCEANSAT initiative.
We are seeking ways to collaborate on future lunar missions, the international space station, human space flight, and data sharing.
I hope that our private sectors will now have the opportunity to develop new avenues of cooperation in the space realm and build on our achievements that further improve the livelihoods of our populations.
Human Security
There is nothing more important to the long-term strength of a country than its ability to manage and protect human security. Whether it is through the comprehensive education of its people,
the health and wellness of its citizens from all walks of life, and the ensured safety and security of its public, globalization demands that a state pay ever close attention to its human security fabric.
Private industry has recognized this as well. The Council on Competitiveness and Deloitte surveyed more than 400 CEOs about competitiveness in the manufacturing sector. Their report, released in June 2010, reveals that talent-driven innovation and skilled labor are critical to the health of an economy.
It is, of course, no surprise that both India and the United States – having realized the sheer importance of human security to future prosperity and well-being – have pledged to partner in a number of key human security areas.
President Obama and Prime Minister Singh agreed to build on the historic legacy of cooperation between India and the United States during the Green Revolution, to work together to develop, test, and replicate transformative technologies to extend food security as part of an “Evergreen Revolution.” These efforts will focus on providing farmers the means to improve agricultural productivity.

Collaboration also will enhance the agricultural value chain and strengthen market institutions to reduce post-harvest crop losses. Enhancing food security in India is vital to continuing India’s globalizing trends and sustaining our burgeoning strategic economic partnership.

This cooperation will also bring wider global benefits. President Obama and Prime Minister Singh announced during the President’s visit that the U.S. and India will begin trilateral cooperation with Afghanistan to capitalize on the significant efforts both of our countries are making to stabilize Afghanistan.

Specifically, our two leaders agreed to pursue joint development projects in Afghanistan in agriculture and women's empowerment and to strengthen capacity building efforts. They also agreed that for the first time, the U.S. and India will adapt our shared innovations and technologies and use our expertise in capacity building to extend food security to other interested countries, particularly in Africa.

Bilateral health cooperation marks another promising area of bilateral cooperation with potential global benefits. The U.S. and India signed an MOU establishing a Global Disease Detection network, which will involve a number of collaborative activities, such as emerging disease detection, pandemic influenza preparedness and response, laboratory containment systems, and bio-safety training and capacity building. Employers know that a healthy workforce is a productive workforce.

The strides the United States and India have made in the last ten years have been impressive, but we know that the full potential of the global strategic partnership lies in the hands of succeeding generations.

To help ensure that all members of those generations enjoy the benefits of higher education, the Prime Minister and the President agreed to convene U.S.-India Higher Education Summit, chaired by senior officials from both countries in 2011, as part of a continued effort to strengthen educational opportunities, and ensure that innovation and knowledge-based industry can continue to drive growth in our two economies.

India and the U.S. in the Future


If we take a step back and think about the foundations we are laying now for our future cooperation in the key areas I have talked about, it is clear that building a strong economic plank is necessary in building a strategic partnership for the future. We have strong foundations to build on.

· India is the fastest-growing major economy driven by domestic demand.

· Trade between our two countries has accelerated over the last decade – goods exports to India quadrupled and services exports to India more than tripled -- and is still nowhere near its potential.

· Bilateral trade also is relatively balanced, especially compared to the difficult trade relations we have gone through elsewhere in Asia.

We envision a relationship where together both countries capitalize on our complementary strengths as knowledge and innovation hubs, to expand opportunities for engagement between our private sectors, academia, and scientific and research communities.

Our private sectors are already there. During President Obama’s visit, he announced deals whose worth exceeded $14.9 billion in total value, with $9.5 billion in U.S. export content, supporting an estimated 53,670 U.S. jobs.

Our governments need to match the ambition of our businesses. While the U.S. develops a long-term approach that expands the opportunities for our private sector, we have taken note that the EU is negotiating and Japan concluded free trade agreements with India.

They see that the strategic position of India necessitates a grand economic vision to overcome the obstacles that currently exist in the Indian market.

Let me conclude where I began. I have appreciated the opportunity to elaborate why President Obama’s trip to India will be remembered as a key turning point, when the U.S. and India embarked for the first time on concrete initiatives to develop our global strategic partnership.

This full-spectrum collaboration that I discussed promises to provide mutually inclusive growth and innovation for the people of India and the United States, and to deliver pioneering solutions and opportunities for millions of others around the world.

In a recent article in Foreign Affairs, Secretary Clinton wrote that “Today's world is a crucible of challenges testing American leadership. Global problems, from violent extremism to worldwide recession to climate change to poverty, demand collective solutions, even as power in the world becomes more diffuse. They require effective international cooperation, even as that becomes harder to achieve. And they cannot be solved unless a nation is willing to accept the responsibility of mobilizing action.”

The Secretary’s words succinctly summarize why the U.S.-India partnership matters more than ever to the world. As two of the world’s leading democracies and market economies, as countries who are committed to promoting pluralism, diversity, tolerance,
enterprise, innovation and opportunity, and as countries who are willing to take responsibility for mobilizing responses to the world’s challenges, the U.S. and India together can together profoundly influence the future of our peoples as well as the course of this new century before us.
With that, I’d like to thank The Heritage Foundation and the Observer Research Foundation for graciously inviting me to speak with you today, and for hosting such an important day of discussion. I would be very pleased to take any questions and hear your comments.


Questions and Answers Session Indian Globalization and the Transformation of U.S.-India Relations
The Heritage Foundation
Washington, D.C.
December 8, 2010

MODERATOR: Maybe what we can do is take three questions in a row, and then give you a chance to speak on all three.

QUESTION: Ambassador Blake, I wonder if you could comment on the specifics to the extent possible, of course, in an open forum, the specifics of the Counter-Terrorism Cooperation Initiative between the U.S. and India.

QUESTION: I wonder, Mr. Secretary, could you comment on where things stand on the nuclear liability issue?

QUESTION: Thank you for your talk. I was wondering whether you could comment a little bit on the relations in South Asia that are sometimes a little neglected, like the other states in South Asia -- Bangladesh, Nepal. What’s the kind of coordination initiatives that are going on there right now? Thank you.

ASSISTANT SECRETARY BLAKE: First of all with respect to the Counter-Terrorism Cooperation Initiative, that was announced last summer, as you all know, and we are moving out smartly to actually implement that through a huge range of different issues. I think almost all of our agencies are involved in some way or another. We in the State Department have our own counter-terrorism dialogue that is very very active. We have very active information sharing and intelligence sharing that is going on. That was already going on before the Mumbai attacks. I think that’s been accelerated since then.

We’re starting as part of the President’s recent trip, a new dialogue between our Departments of Homeland Security because there’s a great deal of work that needs to be done there. I think they and our Secretary Napolitano will be going out this spring to have her first talks with Minister Chidambaram, the Minister of Home Affairs.

We’ve had a lot of cooperation at the municipal level because after Mumbai there was a great deal of interest in what we call mega-city policing. That is how does a large city like New York or Chicago or Los Angeles manage to coordinate the panoply of federal, state and municipal authorities and agencies to come up with one kind of center that can coordinate all of their activities and make sure that everybody’s working together. I think India felt that it had a lot to learn in that regard, so there’s already been several visits back and forth from our police chiefs from several of those big cities.

So there’s a huge range of work being done. A lot of it we can’t really talk about for obvious reasons. But I think it is extremely important and it underlines the very important commitment that the United States has to India’s security and to helping India cope with many of the counter-terrorism challenges that it now faces.

On the nuclear liability question, I said in my speech that both governments have completed the government-to-government pieces of the nuclear deal. That was very much an important part of that.

About a week before the President’s visit India signed the Convention on Supplementary Compensation in Vienna which is the global standard for this. It committed in the Joint Statement to ratify that within a year. That was a very important undertaking, particularly for our companies.

With that undertaking now our companies have already begun negotiations on this and I think are optimistic about taking this forward because they see some very significant opportunities. You saw that President Sarkozy was recently in India as well, and they too are moving ahead on some of their civil nuclear cooperation as well.

On the coordination in South Asia, I think that’s quite an important question. Even when I was there from 2003 to 2006, the United States and India already had a very good regional dialogue where we were cooperating ever more closely to coordinate our policies in South Asia. We’ve always recognized that India has the preeminent role in this region. We’re not seeing to challenge that in any way. But at the same time, we think that it’s very much in our interest to work closely with India. We saw that in Sri Lanka where I was ambassador during three often very tough years that marked the end of the war in Sri Lanka where again, the United States and India and the EU, Japan and others worked very very closely together. We see that now in places like Bangladesh where we have welcomed very much the growing cooperation that has occurred between Prime Minister Hasina’s government and Prime Minister Singh’s. That has I think produced concrete benefits in the counter-terrorism area. They’re beginning to talk about things like water. There’s a lot of good economic cooperation. India has made available an envelope of a billion dollars in financing to help promote that. So this is a very very welcome development.

We’re also working very closely together in Nepal to help that country first to form a new government, but even more importantly to take over the responsibilities once the UN mission in Nepal leaves in mid-January, that Nepal has to be prepared to take on many of those activities to complete the Comprehensive Peace Accord, to bring the former Maoist Army into the Nepalese Army, to write a new constitution, and many many other priorities that still exist. So I think there again, it will be very very important for the United States and India to work very very closely. I’m very happy with the cooperation that we’ve had so far.

QUESTION: You talked about including India as a permanent member of the UN Security Council. We haven’t really been together on that many issues on the UN. You look at India’s votes, India doesn’t vote with us very often. How do you see this partnership playing out on the Security Council? Do you see us working together a little bit more productively? How do we get past those hurdles?

QUESTION: How India-U.S. relationship, business and [inaudible] area relationship would impact U.S. relationship with China.

QUESTION: In the Indian press there was some disappointment regarding the fact that Obama had not mentioned Pakistan more specifically during some of his talks. I was wondering if it’s possible that the India-U.S. relationship can move forward without a different stance towards Pakistan.

ASSISTANT SECRETARY BLAKE: First of all with respect to your important question about India and our support for its permanent membership, we have to say that this is still a long way away. There are many many different obstacles that have to be overcome before there’s a consensus on this important issue. But I think we’ll work together on that.

India, as many of you know, is about to take on a two-year term as a non-permanent member beginning January 1st of next year. So that will be a very very important opportunity for us to work together.

To answer directly your question, you’re right. India has frequently in the past voted against us. We keep track of these things. India’s voted roughly ten percent of the time on important votes to us in the past. And I think the way we react to that is first of all, we think over time that’s going to change. And that’s going to change not because of any pressure from the United States, but because of India’s own desire to take on greater global responsibilities. That will in turn be reflected in its voting record in the Council.

It will also be, I think, reflected in the better dialogue that we will have on many of these issues. And I think when we take the time to raise to the political level some of the importance that we attach to specific votes and explain why it’s important and why it’s in India’s interest to do these things, I think we will be able to have some impact into, again, in terms of working together to achieve our common objectives.

So I actually expect that this is going to change over time, and I think there’s good reason for optimism in that area.

On the question of business relations with China. I don’t really see that there’s any contradiction there. I think they can proceed as they already have, in fact. One of India’s fastest growing economic relationships other than the United States is China where trade relations really are booming between India and China, and I think that’s had quite a salutary effect on their bilateral relations as well. It’s given both countries the incentive to work through some of the challenges that do exist between India and China and they’ve been working through those in a very I think business-like way to address those.

Again, we don’t see this as a zero sum game. We are going to pursue, without apology, our own interests and to try to expand our economic relations as quickly as possible.

There was a very interesting article that was done by Les Gelb not too long ago that talked about how increasingly economic relationships are going to dominate the military and security relationships. I think that is true in many ways with the Indian and American one. It is important to remember that it is the economic success of India and the reforms that were originally put in place by then Finance Minister Singh in the early 1990s that have given India the wherewithal now to begin to project its influence overseas and around the world. So your global influence is going to rely on your economic power. I think again, both of our countries are in a position to continue very strong economic growth over the next 20 or 30 years, and that in turn will help us to continue not only to project our own interests around the world and protect them, but also to work together in that regard.

On the question of Pakistan, I actually would disagree that it wasn’t a subject of conversation. It came up at almost every single public event that the President did. I think he addressed it very adroitly. ..There was a very notable exchange in Mumbai with one of the students there. The student asked the President why the United States hadn’t declared Pakistan a state sponsor of terrorism. He gave a very good answer in which he talked about how of course we do have concerns about some of the terrorism that exists in Pakistan. We’ve been working with Pakistan to give that country the wherewithal to begin its own counter-insurgency strategy. There’s been progress in South Waziristan, there’s been progress elsewhere, but more work needs to be done. I think the President was very clear about that.

He also talked, we explicitly talked about the need to address LET in the Joint Statement. And most importantly, I think the President talked about how it is in India’s own interest to help stabilize Pakistan. And that India is really never going to be the great power that it aspires to be and that we want it to be unless there’s peace in its own neighborhood and stability in its own neighborhood. That’s why it’s profoundly in the interest of the United States to develop trade and other ways to help Pakistan to overcome the many challenges that it faces.

I’m afraid I’m going to have to run off to one of these terrible interagency meetings that many of you in government remember so fondly. But again, I want to thank you so much for the opportunity today. I hope that many of you that are visiting will come to see us. We’d love to have an opportunity to exchange more views and hear from you as well.

Thank you again so much for the opportunity.



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