(12 November 2011)
Ms. Sudarshana Mona Parikh,
President of the Indo-American Chamber of Commerce
of Greater Houston and her team,
Consul General Mr. Sanjeev Arora
Ladies and Gentleman,
I would like to thank the President of the Indo-American Chamber of Commerce of Greater Houston for inviting me to address the 12th Annual Gala of the Chamber.
This is my first visit to Houston as Ambassador of India to the US and I am impressed with the diversity, economic buoyancy, its diverse competencies and international character, vibrant cultural profile of the city of Houston and its physical infrastructure.
The Indo-American Chamber of Commerce of Greater Houston has been a vibrant forum for promoting business and economies ties between India and the United States. We welcome and value the active role being played by the Chamber in fostering intensified engagement between business communities from our two countries. I wish to compliment all the members of the Chamber for their consistent efforts and support in expanding the frontiers of India-US partnership.
I would like to share my thoughts on India; the salience of its wide ranging growth, and opportunities and potential that it opens up for expanding India-US trade and economic relations.
We are living in an environment which is full of uncertainties and challenges. The pace of economic recovery world over is uneven and in some sectors it is not accompanied by job growth. Indeed, even after extensive stimulus packages, unemployment remains a concern in the developed economies. Euro debt crisis remain unresolved. Inflationary pressures and stress on currencies world-wide is further slowing down the world GDP growth.
It is in this backdrop that we should view India’s dynamic economy, its growth paradigm and its rapidly growing externalities including a rich agenda of bilateral cooperation with the United States.
Over the past two decades, we have been the second fastest growing major economy in the world. This growth has been largely driven by domestic demand and financed by domestic savings. The steady growth of Indian economy has not only helped improve the living standards of many of our peoples, but has also led to our deepening integration into the global economy. This has created immense opportunities for us to expand our mutually beneficial ties with the United States. For us cooperation with the US is also important for achieving our national development goals. Similarly, growth in the Indian economy provides potentially a large market for the US products, technologies and services.
As one of the largest and rapidly growing economies, India has emerged not only as one of the key drivers of global growth but also of its stability. India's development story with particular focus on 'inclusive' growth; its ability to withstand the global economic downturn in the last couple of years; its paradigm of domestically driven growth and our desire to develop India as a global innovation hub have contributed to significant expansion in India-U.S. economic engagement. At the political level, our dialogue has grown to an unprecedented level; our strategic understanding has deepened and encompasses both our region and the world; and our bilateral cooperation has entered new frontiers.
The signing of the India-US civil nuclear agreement signaled a new thinking in our bilateral ties, a willingness to address complex issues with clarity and maturity. Our growing security and defence ties are another manifestation of the changing nature of our relationship. We both share a common and strategic interest in seeking to establish security and stability in a rapidly changing Asia; in stemming and reversing the tide of extremism and terrorism; combating proliferation of weapons of mass destruction; and addressing together a range of global challenges from humanitarian disasters to piracy and narcotics trafficking.
India and the United States are now both partners in each other’s growth and prosperity. We now seek common and new ground in our cooperative endeavors in virtually all key sectors ranging such as space, energy security including nuclear energy and renewables, defence trade, counter-terrorism, education, health, agriculture, science and technology, trade and investment.
During his landmark visit to India in November last year, President Obama and Prime Minister Manmohan Singh reaffirmed that India-US strategic partnership is indispensible not only for their two countries but also for global stability and prosperity in the 21st century. To make this vision a reality, the substantive agenda for bilateral engagement includes:
• Strengthening partnership in Global Security.
• Deepen linkages in fields of technology, innovation and energy.
• Forge greater links to encourage research and innovation leading to job, wealth and value creation in both economies;
• Joint efforts to develop, test and replicate transformative technologies to extend food security as part of an Evergreen Revolution;
• Work to achieve stronger investment flows in India’s infrastructure sector, clean energy, aviation and transportation, health care, food processing and education; and,
• Expand and deepen bilateral trade and business-to-business links including through greater engagement between Indian and American small and medium sized enterprises.
The strength of the relationship between our governments is underpinned by the vitality of private partnerships and the warmth of ties between the people of the two countries. The enterprise, energy, skills and resources of Indian American community, who have made the US their home; over 100,000 Indian students in US universities and colleges, have provided new vibrancy and resilience to growing India-US ties.
India-US trade has doubled in the last four years; it is balanced and continues to grow strongly. US exports to India have grown three times during the same period. While the US is the largest source of foreign investments in India, Indian direct investment into the US has also been growing rapidly and in recent years has matched or even exceeded the U.S. foreign direct investment into India.
During 2004-2009, as per independent studies, Indian companies have invested about US$ 26 billion in 43 states in manufacturing, mining, information technology, and services. In many ways, India-US partnerships have contributed immensely to the growth the knowledge economy sectors in both countries and contributed in sustaining US competitiveness in IT and other sectors. Surely, it has benefited India immensely; but it has also had a profound all round impact in strengthening of the India-US relationship.
In years to come, products and services developed through indigenous innovation economy would provide sustainability and momentum to India’s growth and provide solutions to our national developmental priorities. We are also aiming to increase the share of manufacturing in our GDP to around 25% in coming years. This is sought to be achieved through the national manufacturing policy which emphasizes new manufacturing zones with industrial parks, warehousing, and opportunities in special economic zones.
In developing innovation economy, the key focus in India has been on its relevance and scalability. The result has been grassroots acceptability and easy commercialization of new technologies. The Indian corporate sector has played an important role in this field in India. From indigenous designing and manufacturing of the Nano to effective e-governance models; from inclusive banking to accessible public health care, the Indian industry has contributed in the development of need based and cost effective innovative solutions that have scalability and global relevance.
I am aware of strong interest among business entities in Greater Houston area for collaborating with their Indian counterparts. Of course, from Houston's perspective, one crucial area of cooperation is energy. Indeed our present electricity consumption is less than one fourth the world’s average. If we are to sustain the high pace of our economic growth and achieve development outcomes to improve the well being of our people, it is essential that we significantly increase our overall energy production. India is attempting to do so through harnessing conventional energy sources in a sustainable manner and at the same time pursuing an ambitious plan to increase the share of new and renewable sources in our energy matrix. In meeting this objective, we are looking at forging international partnerships, including with the US. I am therefore not at surprised that almost all the major energy companies that are based here have set up offices in India and are working with Indian partners to meet our growing energy requirements.
In recent years, companies in other sectors have also set up operations in India – for example, I understand BMC Software has nearly 1400 personnel at its facility at Pune. An increasing number of Indian companies (for example, Jindal Steel Works, Mahindras, L&T, INOX, TCS) have shown interest and set up operations in this area in the last few years. These partnerships are creating jobs and prosperity for the local economies.
Apart from ensuring abundant supplies of clean sources of energy for innovation driven growth, we also need to invest in building a world class infrastructure that could cater to the demands of a billion plus population. We estimate that our economy would need more than US $ one trillion of investment in developing this infrastructure over the next few years. And we are increasingly looking at US companies to harness these new opportunities for mutual benefit.
It is the attractiveness of Indian market comprising of its strong consumption economy; its skilled human resource base; its strengths in knowledge economy; its rapidly growing middle class (estimated at around 250-300 million); and strong trends in urbanization that a large number of US companies now have their operations in India. Out of Fortune 500 companies, around 200 have set up R&D centres in India. Clearly, India offers a mutually beneficial value proposition for businesses in both countries.
I should also mention that notwithstanding the media narrative on policy liberalization in India, we have made great progress in building consensus on the economic reforms in India. This year marks the twentieth year of the initiation of economic reforms in India. We are committed to a path of economic reforms within a democratic polity that is line with our national development priorities.
Let me conclude by saying that from my last tour of duty in the United States in early 90s to my current responsibilities, it has been a story of change. Change in the Indian economy; change in the whole space of our bilateral ties; and change in the global environment in which our relationship has matured.
Today, more than ever before, in the US, as in India, there is a clear recognition and much excitement in moving India-US relationship to a new level of higher engagement befitting of our strategic partnership.
I once again thank the Indo-American Chamber of Commerce of Greater Houston for its positive contribution in promoting strong trade and economic linkages and fostering friendship and understanding between world’s two largest democracies. I am sure we can count on your continued support and cooperation as we nurture and expand India-US partnership for peace and prosperity of our two peoples.