Thank you, Dr. Singh, for your warm welcome. It is a great honor to participate in the 2014 FICCI-IIFA Global Business Forum. Tampa is an ideal location to talk about the important and growing economic ties between the United States and India. Not only is Tampa the seventh-largest port in the United States by volume, it also handles the highest volume of goods headed to India. And FICCI is certainly the right partner for this conversation, as they have been such a key player in advancing our economic relationship.
And how thrilling it is for the IIFA Awards to be held in the United States for the first time! Indian culture is increasingly influencing popular culture, not just in America but around the globe.
I recall a moment some two decades ago, when I was a Red Cross volunteer in Tbilisi, Georgia, and I went to a local theater where Sholay was playing, dubbed in Russian. Imagine listening to some of the most iconic dialogues of Hindi cinema in Russian! And I will never forget the time I was in the small mountain town of Kutaisi and was asked to sing a folk song. I started singing “mera joota hai japani,” and the entire room of 200 Georgians started singing with me. They knew all the words! Indian art, culture, and film have global appeal. Every day, ethnic, linguistic, and cultural lines are blurred, because from Kabul to Kinshasa, from Moscow to Mumbai, from Tampa to Trivanduram, we are all under the thrall of Indian popular culture.
But it isn’t just pop culture. It is the idea of India itself that holds such special appeal to so many around the world. As for the United States, we want to take what three successive presidents and two prime ministers and most importantly our 1.6 billion citizens have built in 15 years, in this defining partnership of the 21st century, and make it even better.
Today, I want to discuss the opportunities that lie ahead as the U.S.-India economic relationship expands and matures, and as our two economies become increasingly intertwined and interdependent. We are living in a truly globalized world, brought closer by technology and trade – and yes, even movies! But despite the lightning speed of technological advances that are transforming so many aspects of our life for the better, we’re also contending with one of the most complex moments in world affairs with very real challenges, including conflict, poverty, and climate change.
Nowhere is this more apparent than in Asia, which boasts nearly two-thirds of the world’s population, squeezed into only a third of its landmass. It is a region with tremendous promise and potential. As President Obama said in Tokyo yesterday, when he reiterated that we are and always will be a Pacific nation, “America’s security and prosperity is inseparable from the future of this region,” and that’s why we’ve made it a priority to renew American leadership in the Asia Pacific. By 2050, Asia may well comprise half of global GDP. But for the region to realize its potential, it must embrace strong, inclusive, and sustainable economic growth, one where the private sector, not government, leads economic development. It must defeat terrorism and counter violent extremism, while at the same time advancing human dignity and human rights. And in an age where citizens have more access to information and are demanding more accountability than ever, governments must promote effective and transparent governance.
Despite these challenges, we’ve never been more optimistic about the future of Asia – and the role the United States and India will play in advancing prosperity and stability in the region.
One reason is India’s growing economic connectivity – eastward with Bangladesh, Burma, and Southeast Asia; and we see promise in links westward with Pakistan, Afghanistan, and Central Asia. These are vital to the prosperity and stability of Asia. We are committed to supporting economic linkages that will cultivate new markets and knit these countries even closer together – and make them more integrated with the global economy.
We’re advancing regional initiatives that do just that. First, there’s the historic opportunity to connect South and Southeast Asia into an integrated economic landscape. This Indo-Pacific Economic Corridor is a unique geography teeming with opportunity, but traditional north-south trade still trumps east-west movement of goods and services by a factor of five.
And through our New Silk Road initiative, we have been focused on creating regional energy markets that link Central Asia with South Asia; promoting trade and transportation routes and investing in critical infrastructure; improving customs and border procedures; and linking businesses and people.
Today, Afghanistan and its neighbors are increasingly championing and owning that New Silk Road vision, creating new transit and trade routes that complement the very vibrant east-to-west connections across Eurasia. And the region is making concrete efforts to reduce barriers to trade, invest in each other’s economies, and support development and cross-border projects.
At the heart of all of that is India, because prosperity in South Asia hinges on dynamic growth of its economic powerhouse. The United States is committed to working with India to fully unlock the true potential of our economic ties. Today, the United States is one of India’s largest trade and investment partners. Our bilateral trade in goods and services has grown to nearly $100 billion. I think India’s excellent envoy in Washington, Ambassador Jaishankar, said it best recently when he noted that the extraordinary growth in our trade relations has “changed the chemistry of our ties.”
Tectonic shifts in global economics have helped bring us to where we are today. And it didn’t happen overnight. After the Second World War, the creation of a rules-based trading system increased commerce, connectivity, and prosperity across the globe. While India’s economic transformation is more recent, its progress has been swift. Import tariffs on average are more than 30 times lower than they were in 1991, when then-Finance Minister Manmohan Singh began sweeping reforms. And since 2005 we have seen an increase in goods trade by 250%, in services trade by 350%.
But we can do even better. As Vice President Biden said last July, there is no reason why our bilateral trade shouldn’t quintuple again if our countries work to grow together and remain candid with each other about the obstacles that exist. I believe $500 billion in total trade is entirely possible.
Bilateral investment flows have also grown immensely, with foreign direct investment into India from the United States reaching $28.2 billion last year. Cumulative Indian FDI into the United States has also grown remarkably, from a negligible $96 million in 2000 to $5.2 billion by 2012.
Even so, we still lack the investment diversity needed to fuel the growth of new and emerging sectors in our respective economies. India needs a transparent, straightforward way of attracting foreign investment, offering private capital a way to share in India’s opportunity. There must be a welcoming business environment that allows every dollar of investment to work efficiently.
Currently, the United States and India are negotiating a Bilateral Investment Treaty, or BIT, which will be critical to deepening our economic relationship, improving investor confidence, and supporting economic growth in both countries. A BIT will go a long way toward bringing our economies closer and reducing the friction that’s only natural with two complex free-market systems such as ours. It will help us move past the choppiness that comes from not having an over-arching investment framework. And it will open up even more opportunities for American and Indian firms.
Beyond our BIT, India’s investment and tax policies need to be designed to attract capital flows from across the world. Regulatory requirements need to be transparent and consistently enforced. Contracts must be upheld and honored across jurisdictions, and perhaps most importantly, intellectual property rights – based on international norms – must be recognized.
And the future of India’s economy critically depends on the ability of people and goods to move where they are needed – efficiently and affordably. Soon, some sixty-eight Indian cities will have populations of over one million people each. India’s planned trillion-dollar commitment to infrastructure, with its strong emphasis on public-private partnerships, is both ambitious and admirable. No doubt infrastructure improvements will help to relieve the congestion on roads, railways, ports, airports, and in the power supply. American businesses are eager to participate – an effort the U.S. government fully supports.
India’s future prosperity will also depend on one of our shared strengths – innovation. Increasingly, our two countries are putting our best minds together, to make growth more sustainable and inclusive and address 21st-century challenges like climate change and energy security. That’s why we are so excited about the U.S.-India Technology Summit and Expo in November of this year in Delhi. The event will showcase our cooperation on science and technology, helping commercialize technology for economic growth and development, and shaping an ecosystem that incentivizes innovation. Policy-makers, industry leaders, educators, and scientists will discuss topics including manufacturing; life sciences and healthcare technologies; clean and renewable energy; IT; and earth science – all areas where U.S.-India collaboration can help us seize the opportunities, and respond to the challenges, of the 21st century. The Tech Summit is the idea place to showcase initiatives like the Millennium Alliance with FICCI, where we support Indian innovators and entrepreneurs who are coming up with new technologies to meet India’s development challenges.
In March, I saw first-hand some of the most cutting-edge cooperation in science and technology, when I visited the Indian Space Research Organization, ISRO. NASA’s cooperation with ISRO on India’s Mars Orbiter Mission – India’s first inter-planetary space launch – and ongoing discussions about future joint initiatives, show that even the sky is not the limit when it comes to our partnership.
And our energy partnership is changing the way our economies are powered. With 400 million people in India lacking reliable access to energy, the stakes for India’s future growth are enormous. We’re collaborating on clean and renewable energy, oil and gas, new technologies, energy efficiency, and civil nuclear energy.
But real prosperity is only possible if it is also truly inclusive. That’s why ensuring women and girls are part of the conversation is a critical element to all these areas of partnership. Positive linkages between women’s engagement and a country’s economic status have been definitively proven, and the Obama Administration is determined to elevate the status of women and girls as a critical aspect of our foreign policy. We firmly believe that women’s rights are human rights, and women’s security is national security.
While India is a leader in supporting women’s leadership across government, civil society and certainly in business, in many ways the potential of women and girls in India remains untapped and underutilized as a force for growth and development. This is why we support efforts like the Girl Rising Project to encourage public dialogue on gender and education issues to encourage community level interventions to help improve girls’ education. So I look forward to the next panel as a way to advance this discussion.
In this area and in so many others, our relationship is much broader than our government and business ties. As the late Senator Edward Kennedy noted, our relations are not just government to government, but people to people, citizen to citizen, and friend to friend. Nowhere is that more evident than in the deep and rich ties between the people of the United States and India.
Nearly 100,000 Indian students are studying at colleges and universities in the United States. Last year, almost 700,000 Indians visited the United States for business or tourism. It is these connections, between our entrepreneurs, scientists, scholars, and artists that make this partnership whole.
We find that the relationship is also flourishing at the state and city level. And our cities and states are partnering more extensively than ever before, helping plant even deeper and stronger roots for our partnership. A growing number of states and cities are tailoring their international outreach efforts for India, with delegations from Arizona, Iowa, Indianapolis and San Francisco visiting the subcontinent over the last year.
And these trips are yielding real results, opening new doors for business, educational exchanges, and workforce skill development. A great example is California and Maharashtra, home to the megacities of Los Angeles and Mumbai, sharing ideas on how to improve fuel quality for India’s fast-growing vehicle fleets. These efforts will not only improve the health of urban inhabitants, but help mitigate climate change.
So in conclusion, let me say that I am bullish on this relationship because I believe in the strength and vibrancy of our two countries. I know there is no challenge that we can’t address, no problem that we can’t solve when we bring our two societies together.
Thank you again for this opportunity. I would be happy to take a few questions.