Ambassador's address at the World Affairs Council, Charlotte, NC
January 21, 2010
I am honored by the invitation to speak at the World Affairs Council in Charlotte and gratified to see such strong interest in India-US relations here. As residents of one of the largest financial centers in the United States you have seen the relentless march of global inter-dependence; you have experienced its immense opportunities and challenges; and, how lives of people, far and near, are getting increasingly bound in a common destiny.
In the global economic crisis, we have seen our shared vulnerabilities, and in the recently held G-20 meetings, we have seen our collective ability to fashion cooperation to respond to the crisis. In the inter-continental trail that nearly led to a tragedy in the skies over Detroit, and in the recently unearthed role of two Chicago residents in the Mumbai terror attack that was hatched in Pakistan, we are reminded again of the nature of threat that we face and of the need for closer international cooperation to defeat it.
We also live at an interesting moment in history, when we not only face immediate challenges, but when we are in the midst of profound long-term changes that will shape a new world order in this century. Part of this great flux of our times is India’s own transition in a changing world and the transformation of the relationship between India and the United States.
It is almost ten years since President Bill Clinton’s March 2000 visit, which set our relationship on a new course. And, through these ten years, through successive governments in Delhi, through President Bush’s two terms in office, we have continually added wind to our sail, intensifying our dialogue, deepening our mutual strategic understanding and taking our cooperation into hitherto uncharted territories. And, we have seen an uninterrupted momentum in our relationship through the democratic transitions in the two countries in 2009, culminating in President Obama hosting Prime Minister Manmohan Singh as his first state guest in November, during which Prime Minister Singh described the relationship as vital for building a shared destiny for humankind and President Obama called it one of the defining relationships of the 21st century.
It is always a good fortune to serve as an Ambassador when the relationship is on such a firm upward trajectory and when two leaders share such a strong vision for the future! But, on a personal note, having served in Washington DC in the 1990s, I witness everyday the enormous change in our relationship and the extraordinary optimism about its future.
This is a relationship that, as Prime Minister Singh said, is a wonderful and rare mix of “pragmatism and principles”, of values and interests.
We are the world’s two largest democracies. Forged from different faiths and cultures, we embrace pluralism, celebrate diversity and define our nationhood on the basis of values and not identities. We have both recognized that democracy must not only guarantee freedoms, but also transform our societies and empower our people. And, in Dr. Martin Luther King using Mahatma Gandhi’s non-violent techniques for his civil rights movement in the United States or in Indian constitution makers drawing upon the American constitutional experience, we are reminded of how India and the United States have been influenced by each other at important moments in their histories.
Our relationship rests on the solid bedrock of shared values and ideals, but it is invigorated by mutual interest and mutual benefit.
India sees the United States as an important partner in our development effort. After decades of slow growth and unfulfilled promise, our economic reforms, introduced in the early 1990s, have produced a sweeping shift in the direction and pace of the Indian economy. We are now the second fastest growing economy in the world, which averaged growth of nearly 9% per year between 2003 and 2008, even as we have strengthened our overall macroeconomic stability. Although the global slowdown brought down our economic growth to 6.7% last year, we are witnessing a return of investor confidence and business momentum, and expect to grow at over 7% this year. We have no doubt that with a savings rate of around 34.5% of the GDP and an investment rate of 36.5% we can return to a long-term growth path of 9-10% per year.
As we seek to build a modern and efficient infrastructure; expand our energy supplies five-fold in the next two decades; shift towards cleaner and renewable sources of energy; achieve transformative breakthroughs in agricultural productivity and radically expand and reform our education system, we will require resources, investments and innovation on an extraordinary scale. While we will rely principally on our domestic resources, we will look to our international partnerships, especially with the United States, to supplement our efforts.
Economic growth in India, which is driven largely by domestic demand and expansion of the domestic market, is creating enormous economic opportunities and has the potential to serve as a factor of global economic stability.
Our economic partnership with the United States is promising. India-US trade and investment ties, although still relatively small, are growing rapidly – and, more important, in a balanced manner in both directions - demonstrating strong potential for sustainable growth in the future that will bring mutual benefit, to both countries.
Just in the last five years, our trade in goods doubled to USD 44 billion; US exports to India grew three times. Though trade slowed down in 2009 with the U.S. recession, we are optimistic that, as the U.S. economy picks up, trade flows will acquire fresh momentum. In the much scrutinized services sector trade has been growing and reached USD 22 billion in 2008, again in a broadly balanced manner with Indian exports of USD 12 billion and US exports of USD 10 billion. Today, the US is not only one of our leading trade partners, it is also the leading source of technology collaborations and a major source of foreign investment.
But, equally gratifying, there has been a surge in Indian investments into the United States. In fact, on the basis of annual flows, this has exceeded US foreign direct investment into India in recent years. In 2007-08 alone, an estimated US$ 10.25 billion was invested by Indian companies in the US, creating many new jobs in the US. This trend is expected to continue as Indian companies increasingly seek to position themselves in the global economy. A significant part of this investment is in the manufacturing sector, which demonstrates a high level of confidence in the industrial future of the United States.
India-US relations are also being shaped by our increasingly convergent security and strategic interests.
India and the United States face a common challenge from violent extremism and terrorism, emanating from the same region and perpetrated by groups that are motivated by similar objectives, use the same infrastructure and now act increasingly in concert and mutual support. As we have been reminded repeatedly in the recent past, the threat remains strong; and, it has morphed into a more complex, transnational operation that demands more intense cooperation among nations. We launched a Joint Working Group on counter-terrorism with the United States in February 2000, and over the years, our mutual understanding and our cooperation has increased. The Mumbai terrorist attack in November 2008 has strengthened cooperation, not only in terms of engagement between our agencies, but also in the perception of our people and the political leadership on the importance of this engagement, in terms of capacity building, intelligence sharing and operational cooperation.
We have a shared interest in the stability of Afghanistan and Pakistan and in the elimination of terrorist safe havens and infrastructure there. We believe that a stable, moderate, democratic and increasingly prosperous Pakistan is in our interest. India, for its part, has repeatedly sought to build a relationship with Pakistan defined by the power of cooperation rather than by the perils of conflict.
We share the objective of helping Afghanistan’s evolution from violent instability into a nation defined by peace, moderation, democracy and development. The threat to Afghanistan has a global implication, but it is a battle that must be won, above all, by the people of Afghanistan. India is confident that with firm and enduring support from the international community, the Afghan people will have the confidence and the capacity to succeed. India, which has committed assistance of USD 1.3 billion so far in Afghanistan’s economic development and reconstruction efforts - roads, transmission lines, power and irrigation projects, community assets, rural infrastructure, agriculture, healthcare and human resource development - will increase its support to Afghanistan in the future. And, we do not see Afghanistan as a theatre of influence. We are prepared to work with all countries within the region and beyond to shape a future for Afghanistan that we all want.
Asia’s surge to prosperity is shifting the center of gravity of global opportunities towards Asia. But, the rise of Asian countries is reordering the role of extra-regional powers and their relationship with rising Asian powers. Relationships and engagement among Asian countries are also evolving in new directions. The rapid transformation of Asia across its immense diversity has thrown up new questions about co-existence, cooperation and competition in the wider Asian region.
Located at the strategic and cultural crossroads of Asia, where different sub-regions of Asia meet at our borders, India has vital stakes in the security and stability of each part of Asia. As India has integrated into the global economy, we are rediscovering our traditional, sometimes even ancient, interests in Southeast Asia, Africa and West Asia. We believe that we must work towards the evolution of an open, inclusive architecture of economic and security cooperation in Asia, which accommodates the interests of all countries. India recognizes that the United States has a role and stake in the future of Asia. We are working together with the United States and with others, for security and stability in Asia and the Indian Ocean region.
Our cooperation, both bilateral and in the international context, will be indispensable for addressing our shared challenges of energy security, food security, and environmental security.
It is against these wide-ranging interests that our relationship has transformed over the past decade. Our political dialogue has intensified and become broad-based; our strategic understanding has deepened. And, across diverse fields of human endeavour we are exploring new frontiers, redefining paradigms and turning constraints of the past into opportunities for the future.
Nothing was as great a symbol and the instrument of transformation in India-US relations as the civil nuclear agreement. It was a radical and a transformational idea, and the product of a monumental effort in both countries. Neither government could have persisted with this extraordinary endeavour without a strong belief in the importance of the India-US relationship; and, without the recognition of the need to address a complex issue, which had constrained both countries from realizing the full potential of our relationship. As we implement the agreement, we will give an enormous boost to our bilateral ties and economic engagement, and contribute to advancing our shared interests on energy security, climate change and non-proliferation.
Yet, another example of a new dimension in our relationship – and one of the most visible symbols of change – is our growing defence engagement. Our militaries, once unfamiliar with each other, now hold regular dialogue and joint exercises in the air and on land and sea. We coordinate anti-piracy efforts and have worked together on humanitarian missions. Our defense trade, which was negligible a decade ago, is growing. We placed orders worth U.S. dollars 3.5 billion last year, and it could grow even more in the future, as India seeks to diversify its sources of supply for defence systems. From our perspective, defense trade is not merely a commercial transaction; it reflects mutual confidence and investment in a long-term strategic relationship. Secretary Gates’s visit to India this week provides an opportunity to reaffirm our goal of strengthening defence cooperation.
Prime Minister Dr. Manmohan Singh’s visit to Washington DC from 22-26 November 2009 has laid the foundation to take the relationship to a new level.
Besides reaffirming convergence of views between our two governments on wide-ranging strategic issues and current challenges, we had productive discussions on expanding cooperation in areas that increasingly reflect the priorities for the future, including agriculture, education, health, clean energy and energy security, science and technology, in addition to further consolidating cooperation in defence, and counter-terrorism. Prime Minister and President Obama placed strong emphasis on growth in bilateral trade and investment and on expeditious completion of the remaining steps in the implementation of the civil nuclear agreement.
The visit highlighted once again the breadth of our bilateral engagement. Ours is a relationship not born out of a crisis, nor is it determined by the relationships that India and the United States have with others. It responds to our shared recognition of the enormous opportunities for cooperation across diverse fields of human endeavour. There is hardly an issue that we are not pursuing in our relationship –reflected in our official dialogue architecture that now comprises over 25 mechanisms. And, the strength of the ties between our two governments is matched by the vitality of private partnerships and warmth between our peoples. The 2.7 million community of Indian Americans and the 100,000 or so Indian students in US Universities are a vital link connecting our two countries and enabling innumerable partnerships to flourish.
In an increasingly complex world, neither India nor the United States can achieve their goals on their own; nor will our partnership exclusively suffice to address our problems. But, our collaboration and cooperation will be indispensable for shaping the character of the 21st century.