Dr. John Hamre, Ambassador Karl Inderfurth, friends,
Dr. Hamre, thank you for your kind words of introduction and for setting the stage so eloquently for a discussion on India-U.S. relations. It, indeed, is a great honour and privilege be hosted at the Statesmen’s Forum at the Center for Strategic and International Studies, a center of great eminence and scholarship, and one that now has a special link to India through the CSIS Wadhwani Chair for India-U.S. Policy studies.
I am fairly sure that I am here purely as a guest – as I am no statesman. Particularly not in Truman’s definition. But I am returning to Washington DC - more than 25 years after I had done a three-year tour of duty at our Embassy here. Besides the iconic architectural marvels of this city and the reassuringly familiar feel of the Embassy Row, much has changed in this city. The K-street is much richer now. And yet much remains as it was particularly the vigour of your debates, and the fact that they encompass the entire globe.
While change is a constant companion of time, it is also true that since the mid eighties, the world has seen more profound political, economic, technological and strategic changes than we would normally expect in a period of two or three decades. Yet through these changes the significance of the US has not altered. But India’s ongoing transformation and the new India-U.S. relationship are both part of what has changed, and both can have a considerable impact on the shape of the world in the 21st century.
When I returned to Delhi last July to prepare for my current assignment, I had the good fortune to begin with the second India-U.S. Strategic Dialogue, which Ambassador Nirupama Rao, then our Foreign Secretary, was coordinating so ably. I was struck by the depth and diversity of our partnership; the comfort and candour in our dialogue; and, the extensive support it enjoyed across a broad spectrum of public opinion, particularly among those looking to the future. Some of us are absorbed with the present which is of course a bridge to the future, but it became evident to me that what was perhaps unprecedented and novel in our relationship ten years ago is even right now part of the normal and the routine. There are many here who have experienced or participated in that change, and few would understand it as well as Karl Inderfurth, who was handling this account at critical times.
We spent the first decade of this century in building this relationship – addressing the constraints of the past and laying the foundation for the future. It was an ambitious enterprise that required great political investment in both countries. And, even as our relationship has matured, it continues to be infused with dynamism and momentum.
In the year since President Obama’s visit to India in November 2010, we have sustained an unprecedented level of bilateral engagement, launched new strategic consultations that cover key regions of the world; begun our first trilateral consultation with Japan; advanced our cooperation on non-proliferation and nuclear security; deepened counter-terrorism and intelligence cooperation; launched a new Homeland Security Dialogue; made steady progress in our partnership on export controls, non-proliferation and nuclear security; concluded the largest defence deal yet in our bilateral relations, sustained exercises and broadened defence strategic dialogue; taken forward the incipient cooperation for development in third countries, especially Africa; held a very successful Higher Education Summit in Washington DC; and, made innovation driven progress in areas such as clean energy, food security and healthcare. We resumed negotiations on a Bilateral Investment Treaty and expanded opportunities for economic cooperation through measures like the Infrastructure Debt Fund and tariff reductions on products with potential for bilateral trade.
Indeed, I do not think that we have had as much convergence, or spoken more transparently and extensively with each other, as we do now on some of the most important issues in our engagement: terrorism, and key regional issues, Afghanistan, Myanmar and the future of Asia Pacific.
These developments would constitute a remarkable year in any bilateral relationship. Yet, there are, in both countries, questions about the state and the direction of our relationship. Some of this, as we all realize, comes from the fact that the relationship no longer derives its intensity and excitement from the pursuit of one transformational idea, and has matured into a solid, broad-based relationship. There are, of course, tangible issues – in the U.S., worries about the commercial implementation of the civil nuclear agreement and lingering disappointment with one major defence contract; In India – there is wariness that relationship may be turning transactional, with an emphasis on immediate returns rather than upward trends. There is anxiety about protectionist trends in the U.S., especially in the IT industry that has been the bridge between our two economies so far. And, in both countries, developments in West Asia have raised questions whether our approaches, if not interests, are consistent, at least in the immediate future. It is important to address these issues.
As Prime Minister Dr. Manmohan Singh said, the India-U.S. civil nuclear initiative is a symbol, instrument and platform of a transformed India-U.S. relationship. We are committed to translating the success of our diplomatic partnership in changing the global nuclear order into an equally productive commercial cooperation in civil nuclear energy. We have the reality of our law passed by our Parliament. And, as we have said before, we will provide a level playing field to U.S. companies, and are prepared to address specific concerns of U.S. companies within the framework of that law. We have remained engaged and must now take practical steps to advance our cooperation, as we have done over the past year. We have just had a round of discussions between our legal experts. The commencement of discussions between the Indian operator, NPCIL, and U.S. companies in regard to an Early Works Agreement is an encouraging development.
Our defence procurement in India has to be based on the best techno-economic choice, in accordance with procurement guidelines, and it must also meet the test of Parliamentary scrutiny on procurement process – an obligation not unfamiliar to you in Washington DC. It also bears repeating that our defence trade has gone from negligible levels a few years ago to a cumulative value of USD 9.0 billion in the last four-five years, and is set to expand further. On both sides, we are making continuous progress in understanding each other’s procurement and approval process; extending our engagement from simple trade to technology transfer and joint research, development and production.
Our dialogues on regional issues have been expanding. Let me start with the developments in West Asia in 2011 which may have taken us all by surprise. In our discussions we were all trying to comprehend the underlying causes and the forces involved, and striving to grasp the consequences and sense the outcomes of changes that generated both hope and concerns in a region of global significance. Six million Indians live in that region; they constitute the largest expatriate group and obviously their welfare is matter of high priority. The region is critical for our economy, contributing over a 100 billion dollars by way of export markets, over 40 billion dollars in remittances and more than two-third of our petroleum imports. This in a country dependent on imports for 75% of its oil consumption. Peace and stability and a climate of moderation in the region are absolutely vital for India.
We not only have strong political and economic ties with countries in the region, but also enjoy a warm relationship with their people. Since before the time when India became one of the earliest destinations for the three great religions from West Asia, India and the West Asian countries have shared close and natural ties as neighbours. Ties of religion continue to bind us. India has always had and will remain sensitive to the interests, aspirations and rights of the people in West Asia. And, we do expect that their governments, too, will respect their rights and respond to their aspirations. However we look at the developments there, we are all united by the desire for peace and stability in the region and we must seek to forge the broadest possible consensus on our collective response.
It also follows from our stakes in the region that we do not wish to see the spread of nuclear weapons in West Asia. India’s position on the question of Iran’s nuclear programme is well known and our votes in IAEA speak for themselves. We believe that while Iran has rights to peaceful uses of nuclear energy, it must also fulfill its international obligations as a non-nuclear weapon state under the NPT. We would like to see the issue resolved peacefully through negotiations. We also hope that negotiations between P5+1 and Iran would resume soon and contribute to a positive outcome. Iran is our near neighbor, our only surface access to Central Asia and Afghanistan, and constitutes a declining but still a significant share - currently under 10% - of our oil imports. For us, there are also broader and long term geo strategic concerns that are no different from what we face elsewhere in the Asia- Pacific region. Our relationship with Iran is neither inconsistent with our non-proliferation objectives, nor is it in contradiction with the relationships that we have with our friends in West Asia or with the United States and Europe.
These are important, even if difficult, issues and one of the heartening aspects of India-U.S. relationship has been that we are able to discuss them respectfully and candidly, with a sense of appreciation of each other’s perspectives, and a recognition, I believe, that while the choices that each makes may have a bearing on the other, they are not directed against each other.
Beyond that, we continue to be guided by the larger vision for our strategic partnership and the value of all that our two sides have built together. In India, we are confident that the long term framework of our partnership will continue to become stronger and more broad-based. Let me highlight the priorities.
India and the United States can and must strengthen their economic partnership. The flow of trade in goods and services, and investments in both directions has grown several times in the past two decades. Today we have almost $ 40 bn of US imports, both goods and services. Indian businesses have invested perhaps 26 bn in the US in 5 years. All this has created new job openings in the US. It is also natural that as the Indian economy continues to grow and modernize, as the U.S economy recovers its momentum and as the global economic situation improves, our trade and investment relations will surge to higher levels. India’s planned infrastructure spending of USD 1.0 trillion in the next five years; the modernization of our agriculture sector; our shift to clean energy; the implementation of the civil nuclear agreement; the burgeoning defence trade; cooperation in higher education; and, the growing ability of the Indian companies to compete in the U.S. market could take our economic ties to an entirely new level.
We remain committed to pursuing economic reforms in India in their broadest sense. The debate in India is not a question only about economic growth, efficiency and openness, but about equity, empowerment and opportunities for a large section of the population, which feels left behind during the country's two decades of rapid economic growth.
We are of course affected by the international debate on globalization and its discontents. We do hope the current economic challenges in the US would not lead to protectionism and that concerns of Indian IT industry will be addressed quickly. NASSCOM estimates that Indian industry employs over 100,000 in the US up from 20,000 six years ago. It supports 200,000 other jobs including indirect ones, apart from enhancing the competitiveness of some US industries. Most Indian companies are setting up development centers. Indian IT industry contributed $ 15 billion in taxes over the last 5 years. This success story should not be set back by stringent visa regulations which act as a non tariff barrier. According to a back of envelope calculation – Indians paid over $ 200 million in visa fees. Perhaps $30-$50 million has been taken from young aspiring Indians working in businesses whose US visas were rejected. The pink slip has become a greenback! It needs reiteration that the targets of these discriminatory actions are precisely those who have contributed intellectually to the climate of reform in India, and who have been votaries of strong India-US relations.
As our economic ties deepen, we will obviously have a growing range of policy and regulatory concerns with each other. But, we have in place an elaborate set of bilateral mechanisms to address them. While we should expeditiously conclude a Bilateral Investment Treaty, we must look beyond it, too. The United States is the only advanced economy in the world with which India has not concluded or is pursuing a Comprehensive Economic Partnership Agreement.
So, we should not only focus on expanding trade and investment, but also use the power of innovation to make our economies global leaders in the 21st century, and at the same time, address the needs of the poorest sections of the population in the world and find solutions to the challenges of clean energy, food security, health, education. It is gratifying that we have powerful examples of innovative India-U.S. partnerships, often forged by the youth of our two countries. Initiatives like the S&T Forum, S&T Endowment Fund, the Joint Clean Energy Research Center and the Singh Obama Knowledge Initiative, the Nehru-Fullbright Programme, are collaborative ventures of great importance. The enthusiastic response in both countries to these mechanisms demonstrates the enormous potential for collaboration between our two countries.
Energy security is of such vital economic and strategic significance for us that we must treat it as a priority in itself. We have a number of financial, technological and exploratory initiatives with the U.S. in clean and renewable energy, and energy conservation and efficiency. And, as part of our wide-ranging official energy dialogue, we also plan to launch a dialogue to share experiences and perspectives on low carbon growth. I believe that we also need to build on the potential for increasing natural gas production in India. This energy source could be a significant bridge to a future based on clean energy. In the transition period, we have to balance our requirements for massive industrial, infrastructural and transport growth without expanding our carbon footprint excessively.
We must also extend the benefit of our cooperation to other countries, building on our incipient cooperation on food security in Africa or the Open Government Platform that we are developing jointly for application in other interested countries. We must do this not merely as a moral imperative of making economic development more broad-based and inclusive globally, but also for the strategic reason of promoting stability and security in vulnerable parts of the world, and to underline the strength of our democratic and liberal values.
Our partnership is important for building a stable, prosperous and secure Asia-Pacific region - or, as some here have begun to call it, the Indo-Pacific region. This is a region of unprecedented transitions and unsettled questions, but what is clear to most us is that many of the greatest opportunities as well as challenges of the 21st century lie in this region. India’s engagements with Southeast and East Asia, and, increasingly, the Pacific, have expanded over the past two decades. It is an engagement characterised by strong bilateral ties extending from Myanmar to Australia; deepening linkages with regional organisations, especially ASEAN; a web of comprehensive economic partnership agreements and ambitious plans of surface and air connectivity. While our Look East Policy began with a strong economic emphasis and content, we now have growing strategic and security engagement in the region
China is our largest neighbour, a major country in the Asia Pacific region and a country with great global influence. We have considerable challenges in our relationship, but also enormous opportunities for mutually beneficial partnership at the bilateral and global levels. We will continue to invest in building a stable and cooperative relationship with China that is mutually beneficial, and also a source of regional stability and prosperity. There are a number of global and regional challenges on which India, China and the United States must work together. We welcome the proposal Secretary Clinton made last July in Delhi for a trilateral dialogue between India, China and the United States.
The Indian Ocean is central to India’s economy and its security, and it is also a region of growing global strategic attention. India does not want to see this ocean emerge as a contested common or remain vulnerable to natural disasters, piracy or instability in coastal or littoral states. For this reason, we not only have robust bilateral economic and security relationships in the region, but through regional initiatives like Indian Ocean Naval Symposium and the IOR-ARC, we are seeking to promote comprehensive economic cooperation.
Maritime security, more broadly, has emerged as a key national security priority. We believe that maritime security requires, first and foremost, a collective affirmation of the principles of freedom of navigation, unimpeded commerce and peaceful settlement of maritime disputes, in accordance with international law. This must be an important priority for regional diplomatic and political efforts, and it is an area of growing importance in the India-U.S. relationship.
The future of Afghanistan and Pakistan will continue to engage our two countries. Their future is inseparable from the destiny of India and our region, and, therefore, India has a vital stake in their stability and progress. With Pakistan, we will continue our endeavour to seek a peaceful, cooperative and normal relationship.
Over the past year, India and the U.S. have had close consultation and coordination on our shared vision of a stable, democratic and prosperous Afghanistan. It is a vision that can ultimately only be realised by the people of Afghanistan, but they need the support, assistance, facilitation and sustained commitment of the international community. The quest for a settlement in Afghanistan must ensure that the enormous sacrifices and efforts of the past decade are not in vain; it must build on the progress and change that Afghanistan has experienced in the last ten years; and, it must embrace all sections of Afghan society, including women and minorities.
Any landlocked country's fortunes are linked with its neighbours; in the case of Afghanistan, it is even more so. So, we believe that Afghanistan's regional economic integration - whether we describe it as the New Silk Road Initiative or as Ambassador Rao has called it, the Grand Trunk Road Initiative, or by any other name- it is important for Afghanistan's and the wider region's stability and prosperity.
India's commitment to Afghanistan is reflected in our Strategic Partnership Agreement of October 2011; our two billion dollars of assistance; our support for building Afghan capacity for governance, security and development; Afghanistan's preferential access to the Indian market and our efforts to improve its connectivity to the world; our commitment to invest in Afghanistan's mining sector; and our willingness to use regional cooperation frameworks with the other neighbours of Afghanistan including Pakistan and Iran. We should also explore avenues for collaboration between India and the U.S., with others such as Japan, for Afghanistan's development, including through development of its natural resources.
Terrorism remains a major security challenge for India and the U.S.. Our convergence on the source and the nature of the threat, emanating from India’s neighbourhood, has never been greater; and, our cooperation on combating and protecting our people from terrorism has never been stronger than today. This is a very important aspect of our relationship, with a strong public resonance, and one that we must continue to strengthen in all its dimensions.
We should continue to further strengthen our growing partnership in leading international efforts on non-proliferation, disarmament and pursuing the goals of Nuclear Security Summit. India was pleased to host the Sherpas meeting of the Nuclear Security Summit in January.
We must also continue to work together to reform and adapt the global architecture of governance, security and non-proliferation to reflect contemporary realities and enable our two countries to work together more effectively for our shared interests.
Taken together, this is a rich and broad canvas of priorities that also address some of the core interests of India and the United States. The question that is often asked is whether our two sides can translate our shared goals into a sustained and effective strategy of engagement and cooperation.
India's enduring commitment to strategic autonomy is a reflection of its democratic tradition and a conscious policy given our external environment and national development goals. But, it does not mean that India will not assume its international responsibility, nor is it is mutually exclusive to building a strong strategic partnership. Indeed, it is natural that our shared values and the wide range of convergent interests will lead to deepening partnership of shared endeavours.
However, given our different circumstances, history, location and levels of development, we will occasionally have differing perspectives and policies. But, this can be a source of great value and strength in our dialogue; and, it also enables us to work together for a broad global consensus on issues of common interest. But, for that, we should attach real value to each other's perspectives and appreciate each other's interest and sensitivities; and, when we differ, we should be able to speak candidly and respectfully to each other, and insulate the vast common ground between us from the differences in our relationship.
We must remember that while we may have occasionally different perspectives, we are also united by a fundamental stake in each other’s success, because in succeeding individually, we can advance our common interests and inspire a world mirrored in our ideals.
And, even if our two governments did nothing, it would still be an extraordinary relationship, because of the growing ties of kinship between our people and the vitality of private partnerships of enterprise, innovation, research and education across every field of human endeavour.
But, I believe that we have the political momentum, public goodwill, a comprehensive architecture of engagement, comfort and confidence in the relationship, the experience of bold and ambitious undertakings, a proven capacity to work through challenges and, as we have seen in recent years, a growing habit of taking tangible steps on a regular basis to advance our cooperation.
So, as I look ahead, we will continue to consolidate and affirm our strategic partnership, by completing existing projects and focusing on the wealth of new opportunities that we have. We should continue to stay in close touch on the current challenges in the world, in our neighbourhood and beyond. And, we should, above all, continue to strengthen and expand the long-term strategic framework of our relationship, so that we can fully harness the boundless opportunities that this relationship has for our people and the substantial benefit that it can bring to this world.