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Diplomacy in Action

U.S.-India Strategic Partnership: A Way Forward

Geoffrey Pyatt
Principal Deputy Assistant Secretary, Bureau of South and Central Asian Affairs
U.S.-India Business Council
Menlo Park, CA
April 27, 2012


Thank you for the warm welcome, Mr. Kanoria, Ron.

As a native Californian, I’m always happy to come home to the west coast, and it was an easy sell when Ron asked me to come to Menlo Park and talk about the global impact of the U.S.-India relationship, since there’s such a good fit between the optimistic California story and our view of the U.S.-India strategic partnership. I’ll briefly outline the global potential of this partnership, but I also want to highlight the local impact this relationship has here in California and in cities across the United States and India.

In getting ready for this trip I discovered some extraordinary historical linkages this state shares with India and the Indian Diaspora. California was home to Gobind Behari Lal, the first Indian American to win the Pulitzer prize; Bhagat S. Thind, the first Indian American to serve in the U.S. Army; and Dalip S. Saund, the first American Congressman of South Asian descent.

Nearly a hundred years later, the impact of India and its citizens on California is as strong as ever. Right here in Silicon Valley, from 1995-2005, 26 percent of science and technology companies were formed by Indian immigrants, according to a study published several years ago. I imagine that number has only increased since then.

Ambassador Singh and I have been working together for nearly a decade and we both know the change in this relationship is transformational and profound. In both countries, our leadership has consistently articulated an ambitious vision for the future that keeps pace with what you all are accomplishing in the world of business. As President Obama has stated, the United States is convinced that “the interests of the United States and the interests we share with India are best advanced in partnership.” You know, the breadth and depth of this partnership make it challenging to distill into a sound bite, or even 15 minutes worth of remarks. Following Arun’s great lead, I’ll give it my best shot and I hope I’ll decisively shoot down the narrative of drift in our relations.

The Strategic Dialogue launched in 2009 by Secretary Clinton and Minister Krishna is our primary vehicle to drive forward this partnership. The next round will be held in Washington on June 13 with an ambitious agenda on both sides. From maritime security to diabetes research to capacity building and governance training in third counties, there is little that isn’t on our agenda. But the common thread across these issues is a realization that collaboration is essential to our respective success. Across government, our diplomats, scientists, military personnel and policy makers are working together with the belief that this collaboration will create a world that is safer, greener and more prosperous. Beyond the conversations in our capitals, we seek a partnership that gives local officials, entrepreneurs and civil society leaders outside Delhi and Washington a stake in the outcome. In many of the most promising areas of this relationship, including high technology trade, energy, health and space, our people and our businesses will be the primary drivers of the relationship. For our part, we will bring to bear the entire U.S. government toolkit to ensure the right policies and incentives are in place for this relationship to have the global impact we seek.

Nowhere is the impact of our societies’ complementary strength more evident than our technology and innovation partnerships. The efforts of our researchers and scientists in the 1970s sparked the Green Revolution and supported India’s achievement of food security. Today, our Agriculture Dialogue includes multi-agency and multi-ministry efforts aimed at regional and global food security. We promote cooperation pathways for crop forecasting, management and market information; nutrition and plant health research; and expanded private sector investment for agriculture modernization. In one recent example, the U.S.-India S&T Endowment Fund selected its first grant awardee: a bilateral partnership that has created a cold storage solution for preservation of healthy fruits and vegetables.

According to a McKinsey report, India will need to invest $143 billion in health care, $392 billion in transportation infrastructure, and $1.25 trillion in energy production by 2030 to support its rapidly expanding population. We aim to be India’s leading partner in all these sectors. The Partnership to Advance Clean Energy encourages American and Indian innovators to push the limits to create, develop, and deploy solutions for the energy challenges of the 21st century. Recently, the United States and India announced the winners of the Joint Clean Energy Research and Deployment Center, a collaborative research effort that brings together universities, not for profits, and the public and private sectors in the areas of solar energy, biofuels and building efficiency.

Another example of technology-centered partnership is our civil nuclear deal, which at its core was about strengthening India’s energy security and facilitating India’s rising international role. But just as important, the nuclear deal laid the foundation for the strategic partnership we share today, which includes counterterrorism cooperation, joint military exercises and counter proliferation efforts. With terrorists increasingly resorting to hacking and making use of the Internet for communications, India and the U.S. have increased collaboration in cyber security, including the exchange of critical cyber security information and expertise between the two governments – an area where I expect more progress in the months ahead.

And I should emphasize, this partnership recognizes that India’s rise is good for the world and good for the region.

A commitment to regional economic integration across South and Central Asia, what we in Washington call the New Silk Road, will increase peace, stability and prosperity in the region and help to advance our common vision for Afghanistan’s stable and secure future. India is at the center of this vision, and has provided $2 billion in development aid to Afghanistan since 2001. In December, an Indian consortium announced it will make a multi-billion investment to develop the Hajigak iron deposit, a key investment for Afghanistan’s extractive industries sector. Meanwhile, India and Pakistan are making unprecedented progress toward expanding trade and commerce – an effort in which FICCI has played a decidedly positive role. Over time, we look forward to India playing an essential role in our joint vision of economic connectivity and shared prosperity across the Indo-Pacific region.

California has always occupied a place of hope and possibility in our national imagination, a sentiment I saw as my native San Diego transformed itself from a military and aerospace center to a hub of biotechnology, trade and advanced manufacturing. Now, as the United States looks to renew its foundations, expand in new technology fields, and compete in an increasingly competitive global trading system, we again look west -- west to California and across the Pacific to Asia.

Here in Menlo Park, I’m well placed to cite a U.C. Berkeley study which reported that one-third of the engineers in Silicon Valley are of Indian descent, and more than seven percent of the Valley’s hi-tech firms are led by Indian origin CEOs. As I mentioned earlier, California has been at the vanguard of our people-to-people relationship from day one. California is where Indian Americans have established themselves to become globally known entrepreneurs of the 21st century.

Nancy Powell, our newly arrived ambassador in New Delhi has emphasized her view that economic engagement is the driver of the U.S.-India relationship. Bilateral goods and services trade is expected to top $100 billion this year, with that trade uniquely concentrated at the high end of both our economies. With India as the second fastest growing investor in the United States, our efforts seek to build a mutually beneficial economic partnership -- Indian investment in the United States and American exports to India create jobs and strengthen our middle class.

As bilateral trade flourishes, we see software development, hardware manufacturing, aerospace, and healthcare industries all thriving, building out a diversified economic base reflecting the Indian economy of tomorrow, directly linked to global markets and vital to U.S. and global economic prosperity. An impressive 60 percent of Indian software and services exports are destined for the United States. But let me cite a few concrete examples of how our economies complement each other:

TATA, one of India’s most recognizable global brands, will work with Starbucks to meet India’s fast developing taste for good coffee. Here in the United States, TATA produces “Eight O’clock” coffee at its manufacturing facility in Landover, Md.

As of December 2011, Suzlon, has built enough capacity in the United States to power nearly 1 million average American homes. Suzlon is an Indian company, but it is also the world's fifth largest wind power group, supporting American jobs through its blade manufacturing facility in Pipestone, Minn.

Just around the corner, the Stanford-India Biodesign program, in collaboration with IIT-Delhi and All India Institute of Medical Sciences is training the next generation of medical technology innovators in India.

The Kanpur Indo-American Program, which supported the creation of IIT-Kanpur, is considered by many to be one of the most significant success stories in the rich history of bilateral higher education exchange programs between the United States and India. Visiting Kanpur several years ago, I was deeply impressed by rich legacy this investment has left behind. There are several IIT alums here today, each of whom illustrate the dynamic role the Indian-American community plays in our economic story. We continue to support our education partnerships through the Obama-Singh 21st Century Knowledge Initiative where our governments have committed $10 million over the next four years to promote faculty exchange and institutional linkages between U.S. and Indian universities.

Defense trade, virtually nil a decade ago, has increased to nearly $9 billion today. The C-17 deal announced last year is not only giving the Indian Air Force an important strategic airlift capability – the IAF will soon have the second largest C-17 fleet in the world – it is also creating jobs here in California. Defense cooperation is not just about sales, it’s about creating new linkages between our technology and business sectors. Our scientists and military personnel are increasingly asking not only what they can buy but what they can co-produce and co-develop. The significant steps the Obama administration has taken to ease technology transfer and licensing with India are intended to facilitate this trend and strengthen our defense ties.

In Washington, we recognize that compared to other metrics of cooperation, our official ties are past due for an upgrade. That is why the State Department and our Embassy in New Delhi and consulate generals across India are committed to fully supporting the people-to-people and business-to-business partnerships I’ve just described.

Our embassy and Consulate’s Economic and Commercial officers stand ready to support U.S. businesses as they form partnership ties in India and ensure they have the best possible chance to compete in a fair Indian market. Ambassador Powell has made it a top priority for her team to look beyond the mega-cities and develop strong ties with India’s increasing urban villages. There are dynamic chief ministers open and willing to engage with the U.S. Government and U.S. businesses. I expect you will hear more about this in a week or so when Secretary Clinton visits Calcutta.

The President announced the U.S.-India Export Control Initiative and the removal of all space and defense-related entities from the Department of Commerce’s Entity List in November 2010. We now are working to transform this announcement into a concrete set of opportunities for U.S. business in the civil space, defense, and high technology sectors.

Our counterparts at the Department of Commerce, the Overseas Private Investment Corporation, the Export-Import Bank, and the U.S. Trade and Development Agency have all dedicated substantial effort to supporting business partnerships with India.

Just this month, OPIC, approved $250 million in financing to help India’s Infrastructure Development Finance Company expand its lending to renewable energy and infrastructure projects, providing much-needed long-term capital.

USTDA is supporting an Energy Efficiency/Green Buildings Reverse Trade Mission later this year for 10 Indian public and private sector delegates to introduce them to commercial energy efficiency and green building technologies and U.S. practices and standards.

The Indo-U.S. Science and Technology Forum has facilitated travel for over 11,000 scientists between the United States and India, established 24 joint research centers, and organized more than 30 training programs and 150 bilateral conferences, two-thirds of which have resulted in long-term partnerships.

I know I can’t ask you all to charge ahead in realizing the potential of this relationship without addressing the very practical issue of visas. Let me say first that the choice between Silicon Valley or Bangalore is a false one. It’s Silicon Valley and Bangalore. I don’t need to articulate for this group the new dynamics of the global economy or the intellectual and economic value of having the best minds in the world creating opportunities in the United States. We’ve seen the contributions of the Indian American community and the 100,000 plus Indian students studying in the United States. We get it and we’re listening. India is the world’s largest recipient of H-1B and L-1 visas, by a wide margin. In fiscal year 2011, our consular team issued more than 67,000 H-1B visas and more than 25,000 L-1 visas. Additionally, tens of thousands of Indians traveled to the United States last year on B1 visas as members of our Business Executive Program. B1 business travelers, like tourists, typically receive 10-year, multiple-entry visas. For my Indian counterparts, I would urge making the necessary changes to ensure that American citizens enjoy the same opportunities that are available to Indians, such as making a 10-year validity the default choice for American business people applying for Indian visas.

Our leaders have given us the vision, but while messy politics may slow government action, I have no doubt the trajectory of the U.S.-India relationship will be driven by our entrepreneurs, our visionaries – our people. When you are in Washington, please come see us, but most importantly, continue to challenge us to keep up with you.

Thank you.

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