March 15, 2010
Deputy Secretary of Commerce, Mr. Dennis Hightower,
Ambassador Meera Shankar,
Under Secretary Dan Hill,
Mr. Ron Somers of the US India Business Council,
Mr. Chandrajit Banerjee, Director General, Confederation of Indian Industry,
Mrs.Ranjana Khanna of the Federation of Indian Chambers of Commerce and Industry
I am sure I speak for all of you when I commend all the partners in this event for the important role that they have all played in advancing the HTCG agenda.
I would like to thank the industry groups represented here today- who have made it possible for the private sector of both countries to work together to realize the important objectives of this initiative. In particular, I must thank Mr. Ron Somers, President of the US - India Business Council for his leadership. I am very glad to see the substantial presence of the members of the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry who have been driving the process from the Indian side for many years now.
Since the last HTCG meeting, there have been some landmark bilateral achievements. The Civil Nuclear Cooperation Agreement was signed into law in United States October 2008. Both India and the United States went through the process of elections - and both Governments lost no time , after assuming office , in reaffirming the special relationship between our two countries.
In the Joint Statement issued on the occasion of Prime Minister Dr. Manmohan Singh’s state visit to the US in November 2009, he and President Obama reiterated their intention to realize the full potential of the India-U.S. Agreement for Cooperation concerning the Peaceful Uses of Nuclear Energy through the implementation of its provisions. They agreed to expedite U.S. firms' participation in the implementation of this agreement. They also agreed to collaborate in the application of their space technology and related scientific capabilities in outer space and for development purposes. To quote our Joint Statement , “The two leaders agreed that strengthening high technology trade between their countries is in the spirit of their strategic dialogue and partnership. They reiterated their shared commitment to technology security and that it is in their mutual interest to invigorate this area of their partnership”.
Earlier, in July, 2009 both our Governments agreed on the End Use Monitoring Arrangement and signed a Technology Safeguards Agreement for Space application. These collaborations are expected to directly contribute to creating more jobs in the USA and more synergies between our economies.
Central role of Private Sector close partnership between our governments and our respective private sectors is essential. That is why, from the very outset, the focus of the HTCG has been to bridge the gap that often separates policymakers from industry: those who set targets for economic and commercial cooperation from those who actually achieve those targets. This exceptional feature has served the HTCG well and we must thank industry for the increase in bilateral high technology trade. The total exports of Advanced Technology Products from the United States to India has increased from US$1.3 billion in 2003 to over US $ 4 billion in 2009, a somewhat impressive increase - particularly against the backdrop of the global economic slowdown.
Opportune moment for meeting
This is an opportune moment for our meeting – which coincides with the US Government’s decision to undertake a thorough export control review to increase high technology exports. We noted the announcement of a National Export Initiative - to reform the Export Control System for American strategic, high-tech industries, so that their competitiveness is enhanced without compromising the country’s national security.
And I would say, there could be no better partner than India to galvanize hi-tech US exports. The Indian economy has shown excellent macroeconomic results testifying to its resurgence. As the growth trajectory rebounds to 8-9%; India’s appetite will grow for advanced technology-related services and products which can help it meet the many challenges that it faces.
At this moment, we have the challenge before us of reshaping and reenergizing the HTCG process so that it can again play a key role in deepening the strategic partnership between the two new governments while contributing to their economic recovery and consolidation.
Result oriented approach
The approach that the HTCG has adopted since 2002 is result-oriented. It has produced not voluminous reports but a matrix of decisions, deliverable in the short term. For example, industry – particularly US industry - has brought up policy constraints in this forum that have, in their perception, hampered their high technology exports to India. This , indeed, must remain one of our major tasks for removing systemic tariff and non-tariff barriers so as to ensure a supportive regulatory and institutional environment in India for robust bilateral high technology commerce is part of the very raison d’être of the HTCG.
Among the early results of the HTCG were the removal of a number of Indian organisations from the Entity List by 2005, delicensing of certain categories of dual-use items and institution of a presumption of approval policy in other categories. This process of easing of controls seems to have slowed down; we need to address this issue.
We also need to assess the success of this Forum against another yardstick. The role envisaged for the HTCG in the Statement of Principles adopted in 2002 was not just to facilitate trade and market access trade but to explore and generate awareness of new opportunities while doing so. I see this public-private forum of the HTCG as an ideal vehicle for our industries to connect, communicate and collaborate.
An important facet of our relations is our growing interaction in the defence sector. We hold a regular dialogue on defence issues, including under the HTCG . Our defence trade is growing. There is potential for it to grow further as we look at diversified sources of defence systems for our military as well as counter terrorism requirements and allow private sector participation in our defence production. It is our expectation that the US Government export control regulations will, after they are reviewed, facilitate more efficient defence trade. This would be in line with growing mutual confidence and the long-term strategic partnership that we seek to build.
In Biotechnology and Life Sciences, we look forward to building on the discussions that have taken place to promote collaboration in innovation to provide access to affordable and safe healthcare in both countries by using the mutual synergies. India, which has long been recognized as a leading producer of high quality generic drugs, is well on the way to establishing itself as a hub for clinical research and trial, which could significantly reduce the lab-to-market time for US companies. India really offers huge opportunities for research collaboration to provide solutions through cost competitiveness and innovative drug discovery capabilities. An initiative that we would suggest is to undertake collaboration for addressing the problems of orphan diseases. TB is a case in example which afflicts millions but does not get adequate attention of research-based pharma firms. If the HTCG could facilitate Indian and US companies to work together and use cutting edge technology to find a better treatment, the HTCG would have truly proved its worth.
I am aware that concerns linger in the US industry regarding India’s Intellectual Property protection regime. I want to assure them that the Indian IP regime is completely TRIPS-compliant today. The government has devoted significant financial and human resources to building up the infrastructure to implement and enforce this regime. A major programme of modernization of the infrastructure of Intellectual Property Offices of India costing about 40 million dollars was implemented during the 10th Five Year Plan ; the target is that eventually the complete process of grant of patent or registration of trademarks will be on-line and the Indian Patent and Trade Mark Offices will function almost as paperless offices.
Coming to the area of nanotechnology, its applications cut across many sectors and its scope is immense. Innovative work is often being done in Universities or small businesses, often funded by venture capital companies. The complexity of the sector demands that we should enter into innovative partnerships and the promise it holds is exciting. This is an area in which we would like to see substantive exchanges.
Addition of Working Group on civil aviation
We look forward to discussing the new sector of civil aviation in this Forum for the first time. This is a sunrise sector in India, with anticipated double-digit growths in both domestic and international air travel in the coming decade. The growth has already led to significant exports from the US to India. Air India alone has placed orders for 68 Boeing aircraft. I am given to understand that each US aircraft means 10,000 jobs across 50 states of the country. We are pleased that our purchase of these aircraft may be helping not just the Indian air passengers but also the US economy and people. We hope that we would be able to move beyond purchase to joint production and collaboration MRO (maintenance, Overhaul & Repair) operations. This has already begun with the Boeing–Air India MRO Joint Venture due to be established in Nagpur. We look forward to a very positive outcome of this new Working Group.
Similarly , implementation of the India-US Civil Nuclear Agreement and the India US Bilateral Investment Treaty ( which is presently under discussion) – as also our defence procurement programme – these are opportunities for a win-win situation for both our countries.
Once the 123 Agreement is implemented, a structured bilateral interaction with the Industry on both sides could take forward the process. In the meanwhile, there is already a steady and direct interaction between US nuclear industry and NPCIL. Two MOUs have already been signed with GE Hitachi and Westinghouse.
Liberalisation of US Export Controls
The United States Government’s announcement of their intention to overhaul the US’ Export Control policy is reassuring. Government of India has shared its views regarding US’ high technology restrictions applicable to India with the US Department of Commerce.
We see this as yet another area where Indian and US interest converge and, as a reliable and strategic partner, we look forward to seeing enhancement of trade in such goods and technologies between our two countries and removal of remaining Indian organizations from the Entity List. It is anomalous that a body like ISRO, which is developing several collaborations with NASA, should continue to be on this list.
We hope that your response and the outcome of your review would be such that it would reflect - and reaffirm the strategic nature of our partnership.
Ideally , the collaborations in this forum should spawn a multitude of India-US partners across the hemispheres, working jointly to address the impact of climate change or in tandem on technology collaborations, commercialization of new technologies from the laboratory to the market - as both Indian and American scientists realize ideas and concepts conceived by each other , create futuristic technologies and come up with superior components or products or revolutionary ways of changing our respective health, energy and environment related industries - whether in nanotechnology, or biotechnology or for defence platforms or information processing software that could revolutionise these industries in both our countries.
7th HTCG Industry recommendations
Without pre-empting the outcome of the breakout sessions today and the Government to Government meetings tomorrow, in the working groups, I would like to stress the need for very precise and incisive identification of the priority areas of work in the 4 working groups and a very clear work plan for the immediate and short term, ensuring that there is a steady interaction through the year to achieve targets and timelines that we should set ourselves.
I also anticipate that industry participants will come up with detailed insights and recommendations to provide a useful foundation for the government-to-government dialogue and to help the officials on both sides to see how the policy framework can be made more business-friendly.
Looking ahead, there is no doubt about the potential of high technology as a key area of co-operation and trade between India and the United States. Authoritative studies have indicated that by 2020, we will probably be two of the three largest economies in the world. Our partnership will undoubtedly benefit both the Indian as well as the US industry through the many synergies that we will create.
I wish all participants a very purposeful session today.