U.S. Relations with India
Thanks to Marshall and Chicago Council on Global Affairs; time away from Washington and the infamous interagency process is always time very well spent.
I am here to discuss a subject near and dear to my heart which is seizing on the opportunities before us in US relations with India, a country that President Obama called an indispensable nation during the state visit.
Chicago is my first foray inside the US outside of the Washington – NY corridor and that is appropriate.
I know there are more than 120,000 Indian-Americans here in the Chicago area so I extend my greetings to them.
Business relations also strong, with many Illinois firms having a significant stake in India.
Most prominently, Boeing is in the multi-billion dollar race to sell F-18As to India for its Multi-Role Combat Aircraft.
Motorola, headquartered nearby, will rollout with HCL Infosystems a new secure radio network to link government departments and agencies during this year’s Commonwealth Games. This will be the country’s first exclusive government radio network.
The $18.9 billion takeover of Cadbury by Illinois-based Kraft Foods gives Kraft access to the only emerging market to which it has no presence: India. In fact, the head of Kraft’s $11 billion international business outside of North America is himself an Indian American – Sanjay Khosla.
I thought I would use this opportunity today to speak to you about why India is such an important partner for the US, the ways that we are seeking to build that partnership, and describe some of the elements that are most relevant to this audience today.
First some of the headline statistics about why India is important to us:
- Fourth largest economy in the world;
- One of the fastest growing economies in the world, thanks for the reforms begun by PM Singh;
- It has a vibrant private sector and the largest number of billionaires in Asia;
But, as Indians would be the first to tell you, India also faces serious challenges:
- Although it is has reduced poverty by half since independence, some 800 million Indians still live on less than $2 a day
- tt is home to ¼ of the world’s malnourished people;
- 34 percent of India’s adults still cannot read; and
- 11% of the population lacks access to clean water.
But as we look at the web of challenges we face from North Korea to the Middle East and beyond, we see India as a model of a tolerant, pluralistic society with a democratic system of government.
We see a country where increasingly convergent values and interests have allowed us to forge a strategic friendship that benefits both Indians and Americans.
And we see promise that as India’s economy grows and its stature rises, it will be an increasingly important, and influential friend of the United States, buttressed in part by our strong people to people ties.
Indeed, this will be one of the defining relationships this century in American foreign policy.
In recognition of India’s importance, Secretary Clinton visited India last July to launch with her counterpart External Affairs Minister Krishna, a Strategic Dialogue, which called for increased collaboration under five foundational pillars: strategic cooperation; energy and climate change; education and development; economics, trade and agriculture; and science, technology, health and innovation.
In a further signal of India’s importance to the United States, President Obama hosted Prime Minister Manmohan Singh in November for the first state visit of the Obama presidency.
President Obama has further underscored the importance of India to the United States by promising to make a reciprocal visit to India, most likely later this year.
Both countries believe we now have a unique opportunity to make progress on our broad bilateral agenda.
The Congress Party’s unexpectedly strong showing in last year’s elections gives the PM a mandate to proceed with his agenda without the brake of unhelpful coalition allies like the left that he had in his first term.
We have bipartisan support in both countries for pursuing stronger ties.
And we have in PM Singh a leader with vision, experience, and a firm commitment to deepening the warm ties between our two peoples.
Let me now describe a few parts of our agenda that I think will be of particular interest to all of you in Chicago. The first is Agriculture and Trade
The Prime Minister and President acknowledged that our relationship should have a greater focus on working together to improve agriculture.
Agriculture and related activities contribute about 20 percent of India’s GDP, but 70 percent of the country lives in the countryside. And about 50 percent of the population have farm-related jobs.
We have a rich history of agricultural cooperation.
Midwestern land grant colleges played a historic role in India’s Green Revolution. We hope that those colleges will again play a critical role by partnering with Indian counterparts on research and training activities.
The world recently lost Nobel-prize winning agronomist Norman Borlaug last September. Dr. Borlaug attended the University of Wisconsin and Dr. M.S. Swaminathan, another father of India’s Green Revolution, performed plant research there as well.
But Dr. Borlaug’s legacy lives on with the Borlaug Fellowship program sponsored by the U.S. Department of Agriculture that has brought 48 Indian agricultural specialists to the United States to study techniques that enable them to follow in his footsteps in feeding India’s poor.
The American private sector also is playing a significant and growing role in India’s agricultural development and our overall economic relationship with India.
Minnesota-based Cargill has a 1200-person workforce to manage a wide range of operations in India, including handling and processing refined oils, grain, sugar, cotton, and animal feed; producing fertilizer; and marketing two of the leading brands of edible oils.
Walmart, in partnership with Bharti, opened up its first wholesale market in Amritsar last May. The company has worked closely with more than 55 Indian SMEs to develop a wide range of products that the store can sell to its Indian clientele with confidence.
Walmart already is having a positive impact in helping establish supply chains and cold chains to commercialize agriculture. When I visited the store in November, packed with customers doing their Diwali shopping, I saw the management inspect the produce to make sure that the supplying farmers had met the standards set down by Walmart/Bharti.
The Chicago Council’s own Global Agricultural Development Initiative has had a significant impact on food security policy around the world by putting the spotlight on global food security issues.
Secretary Vilsack and Deputy Chairman of the Planning Committee Montek Singh Ahluwahlia signed a wide-reaching MOU on Agricultural Cooperation and Food Security, which lays the groundwork for joint activities such on crop forecasting, getting market information to farms, nutrition, science and research, and encouraging greater private investment.
We hope to have the first U.S. – India Agriculture Dialogue meeting within a few months in New Delhi to explore in detail how we can move these initiatives forward.
This will be a public-private initiative that can build on what our universities, companies, governments, and groups like the Chicago Council have been doing to promote rural development in India.
We also expect the CEO Forum, which convened in Washington on November 23, to contribute to our efforts across-the-board. This Forum, which consists of 12 American CEOs and 12 Indians have agreed to advise our governments how we can stimulate investment, spur job creation, and promote inclusive economic growth in both of our countries. Trade
Earlier I mentioned the stake many Chicago-based businesses have in India so let me discuss briefly our trade relations. Overall, we have established real momentum.
Our total trade has more than doubled just in the last five years. The better news for American companies is that while U.S. imports from India doubled between 2003 and 2008, U.S. exports to India grew by a factor of three and a half over the same time period. Though 2009 witnessed a dip in our bilateral trade relationship caused by the economic downturn, I think we’ll continue to see very strong expansion in the trade area going forward.
One sign of India’s growing importance as a market for US goods is the growing middle class which now numbers about 300 million and is expected to double over the next 20 years to reach 600 million. To put that into perspective, that’s roughly the size of the total population of the European Union right now.
The Department of Commerce is organizing two trade missions, one focused on solar power technology and the other on healthcare and medical equipment, to India within the next several months. Both missions will consist of SMEs.
But there are many other opportunities. To highlight just one: India plans to spend $500 billion over the five years from 2008 to 2012 on infrastructure, and Midwestern companies like Caterpillar and others in the infrastructure and energy market can benefit greatly from this market potential.
Multilaterally, the U.S. wants to work with India to bring the Doha round to a balanced and ambitious conclusion in 2010. Minister of Commerce Anand Sharma has made a concerted effort to change the tone and substance of India’s trade dialogue with the U.S.
We recognize that advanced developing countries like India, China, Brazil, and South Africa have a game-changing role to play, particularly in the issue of market access for the least developed countries.
The April ’09 IMF economic outlook projects that 58% of global economic growth between now and 2014 will be provided by these advanced developing countries. The United States will continue to urge India and the other advanced developing countries to act on that potential. Education
Education, of central importance to Chicago, also comprises a central element of our relationship. We expect significant new opportunities to expand our cooperation in this vital field and better harness the limitless potential of young people in both countries.
India prides itself on being a knowledge-based society and they also know that they will have a huge wave of young people coming into the work force over the next 20 or 30 years. That’s a significant opportunity when most of the rest of the world is facing declining birth rates, but it’s only a good opportunity if all those people can receive a meaningful and practical education, and can be competitive in the increasingly globalized economy of India.
Prime Minister Singh appointed a dynamic and creative thinker to head the Ministry of Human Resource Development, basically their education ministry, Kapil Sibal.
Minister Sibal has promised that the government will introduce in Parliament a new bill that will allow greater foreign participation in education in India, particularly in higher education. Minister Sibal has talked about how there are 220 million Indians who are now in secondary schools, but only 10 million of them have the opportunity to go to college. Many of those, more than 100,000 in fact, more than any other country, attend college here in the United States.
I think this new law should open up tremendous possibilities for American universities of all kinds. Not just traditional research and liberal arts universities, but community colleges, vocational training and distance learning programs, and many other educational opportunities.
During the Prime Minister’s visit in November, the two governments announced a joint expansion of the Fulbright-Nehru Scholarship Program for the exchange of students and scholars, and announced a new effort, the Obama-Singh 21st
Century Knowledge Initiative, to support university partnerships and junior faculty development.
Even without the revised legislation, universities have already started partnering with each other. I heard this morning about the University of Chicago’s initiative to conduct joint research with a counterpart in Delhi. Health, Science and Technology, and Innovation
Such efforts also help advance a third pillar of the Strategic Dialogue: health, science and technology and innovation.
Like education, this pillar really cuts across all sectors and therefore broad cooperation here can yield great benefits for average Indians and Americans. If we can get our scientists working together on the big scientific research issues, the big pandemic health challenges, the technology adoption obstacles, we can make a difference not only in both our countries, but around the world.
Secretary Clinton, during her July visit to India, announced with her counterpart External Affairs Minister Krishna a $30 million science and technology endowment to jumpstart innovation and accelerate market entry for joint U.S.-India science and technology projects – projects that young entrepreneurs in India and the United States could collaborate on to improve the quality of life for citizens in their respective countries.
During Prime Minister Singh’s visit to Washington, the leaders announced India as the site of the seventh Regional Center in the Global Disease Detection (GDD) network. Scientists from around the U.S., including the Midwest, will work side-by-side with their India counterparts on a range of activities, such as emerging disease detection and pandemic influenza preparedness and response.
This Center highlights a continuation and expansion of the U.S. and India’s fifty-year history of bi-lateral innovation and discovery in the medical research field. Our two countries have worked together to translate scientific discoveries into life-saving practices for a very long time and will continue to do so. Energy and Climate Change
Our leaders have also pledged to work together to tackle the challenges presented by climate change and energy resources.
India is a rapidly emerging technological and entrepreneurial giant, and after significant growth in recent years, is on pace for even greater gains in the decades to come.
As McKinsey & Company put it in a recent study, “80% of the India of 2030 has yet to be built.”
India has also acknowledged that it stands to be seriously affected by the impacts of climate change. Uniquely placed to turn the challenge of climate change into a tremendous economic opportunity, India has begun taking important steps to transform to a low-carbon growth model.
India recently launched an ambitious National Solar Mission and plans to produce 20,000 megawatts of energy by 2022. In particular, the U.S. has taken action to catalyze private sector participation in India’s solar mission.
A small U.S.-based business, Azure Power Punjab, is using a $6.2 million loan from OPIC to build the first privately developed solar project in India.
The United States also supports India’s broader low-carbon growth objectives, most notably through the Clean Energy Research and Development Initiative announced this past November during PM Singh’s visit.
We saw India’s leadership on this issue at Copenhagen as well.
The Copenhagen Accord represents a meaningful step forward by the global community to combat climate change. This could not have happened without leadership at the highest levels from India. For the first time, all major economies, including the United States, India, Australia, Brazil, China, the EU, Japan, Russia, and South Africa, have agreed to inscribe mitigation targets or actions and report on their actions and emissions with provisions for international consultation and analysis. This is simply historic.
And the potential reduction in India’s greenhouse gas output as a result of its civilian nuclear energy development cannot be stressed enough. Strategic Cooperation
The nuclear issue brings us to the final pillar of the Dialogue, which addresses strategic cooperation, including global issues, defense cooperation, counterterrorism, and non-proliferation.
On the defense side, our bilateral exercise program continues to grow and to strengthen. We have a robust exercise program that has enabled us to enhance an already great military-to-military relationship with exercises such as Cope India, Malabar, and Shatrujeet.
Defense sales are also of great interest to American companies. We’ve already seen some very important defense sales just in the last year or two of C-130Js and P-8 maritime patrol aircraft.
The Indian government also recently submitted a Letter of Request for ten C-17 aircraft worth about $2.5 billion. And that’s not the end of it.
There are large numbers of important potential deals, up to $18 billion worth of new opportunities that will become available in the next several years, most notably the multi-role combat aircraft purchase which by itself is a roughly $10 billion sale in which two American companies -- Boeing, headquartered here in Chicago, and Lockheed Martin -- are competing. That the Indians are now considering U.S. manufacturers and U.S. technology to meet their military aircraft requirements—which would have been unimaginable just ten years ago—is just one measure of how far and how rapidly our relationship is evolving.
A critical component of the strategic cooperation framework is, of course, counterterrorism. You’ve seen our two countries cooperate more and more, particularly since the horrific November 2008 terrorist attacks in Mumbai, which the Indians refer to as 26/11.
Home Minister Chidambaram’s highly successful visit here last September, which gave him the opportunity to consult with senior officials in just about every U.S. agency involved in the all-important challenge of battling terrorism, underscored the breadth of our still-expanding cooperation on this crucial issue.
When Prime Minister Singh visited Washington in November the two leaders stressed that our partnership in counterterrorism efforts is “indispensable for global peace and security,” and agreed on a Counterterrorism Initiative to strengthen our work together in this vital endeavor.
The last area in strategic cooperation is that of nuclear non-proliferation and disarmament. Now this is an area where there’s a very different and more positive dynamic between our countries as a result of the civil nuclear deal.
Prime Minister Singh also shares the President’s far-reaching vision for a nuclear weapons-free world.
Our broader challenge is to strengthen the global non-proliferation system and I think this is an area where the United States and India can work more closely as partners.
The Nuclear Security Summit President Obama will host in Washington in April, to which 43 nations have been invited and which we expect Prime Minister Singh will attend, provides an excellent opportunity to highlight this evolving partnership.
In addition, the civil nuclear deal turned probably our most significant irritant in bilateral relations into an opportunity for cooperation. This has the potential to lead to billions of dollars worth of opportunities for American companies, and many thousands of jobs as a result of that. A few more steps are still required, and we expect them to be completed in the next few months. Afghanistan and Pakistan
Finally, because I know that you will ask me about it, let me add a few words regarding the regional dynamic between India, Pakistan and Afghanistan.
India, Pakistan and the U.S. all face the common threat of terrorism. While we would like to see India and Pakistan reach a stable relationship, they will do so on their terms at the appropriate time.
At the same time, India has become a valuable, in fact a top five, contributor to Afghanistan’s reconstruction.
India has contributed valuable assistance to Afghanistan’s reconstruction, both in infrastructure, such as construction of the Parliament building and highways, and humanitarian, such as food aid to 2 million schoolchildren. It has pledged over $1.2 billion in assistance.Conclusion
Few relationships around the world matter more to our collective future, or hold greater promise for constructive action on the challenges that matter most to all of us, than the partnership between the United States and India.
That doesn’t mean that we will always agree, because we won’t.
But together we can build on the solid foundation that already exists, an even stronger partnership that serves not only the interests of our two countries, but of the rest of the international community.
The United States and India share common ideals and complementary strengths reflected in our very close people-to-people contacts, our shared embrace of democratic principles and our willingness to work together on issues that matter not only to us, but to the global community.
Thank you again for having me here today.