core sector communique

State's Blake on Evolution of U.S.-India Strategic Dialogue

U.S. Department of State

Remarks by Robert O. Blake, Jr.

Assistant Secretary, Bureau of South and Central Asian Affairs

Carnegie Endowment for International Peace

Washington, DC

June 7, 2012

The Evolution of the U.S.-India Strategic Dialogue

It's a distinct pleasure to be here this afternoon. I'd like to thank Ashley Tellis for his tireless scholarship and peerless insight into ways to further U.S.-India relations. I'd be hard-pressed to find someone - anyone - amongst the nearly 1.6 billion citizens who make their home in India and the United States, who has written more cogently about our bilateral ties and how we can maximize our cooperation now and in the future - than Ashley.

His work is equally appreciated in New Delhi and in Washington, an impressive feat in two cities where people rarely agree on much of anything!

On a serious note, I'm honored to address this collection of friends, colleagues, and champions of the U.S-India partnership today. The third iteration of our U.S.-India Strategic Dialogue, or the SD as we call it, is but six days away.

I couldn't think of a better place than Carnegie to set the scene for this year's engagement, and attest to why the growing strategic convergence between the United States and India is so important. Carnegie's strong focus on this relationship over the years has been widely appreciated across both governments.

I've been asked to provide an overview of the U.S.-India Strategic Dialogue, and present why it matters to the people of our two great nations. In particular, I want to refute the recent narrative in some circles that somehow the U.S.-India relationship has been 'over sold.' If you believe that then you haven't been paying attention to the great strides we've been making over the past few years. This is a relationship that matters more than ever, and both governments are powerfully committed to meeting that challenge.

The U.S.-India partnership is much more than a quest for "the next big thing" - or in diplomatic-speak "the next big deliverable." The United States and India have proven year after year that our annual dialogue has produced a widening record of cooperation and dividends.

Both countries leverage a whole-of-government approach in order to address global challenges like energy security, global prosperity, women's empowerment, and health. We also make sure that our work draws on and is informed by the work of our businesspeople, scientists, social entrepreneurs, and others. The synergy of this collective effort is one of the strength of our relations.

Our objectives are simple:

.. To leverage all aspects of bilateral cooperation, in order to improve the lives of the nearly 1.6 billion citizens in our countries;

.. To push the envelope in already thriving areas of cooperation, like our exceptional S&T partnerships and defense trade, and to set ambitious benchmarks for our trade and economic relationship including progress on our Bilateral Investment Treaty (BIT) negotiations;

.. To ask ourselves "what are we missing?" and "how can we do more, now?"

Under the auspices of the SD, our two governments will have substantive exchanges in more than 20 distinct policy areas this year.

At the heart of our bilateral relationship are people-to-people links - students, businesses, and tourists along with the three million strong Indian-American communities. Minister Krishna, who is leading the Indian delegation to the Strategic Dialogue, is a former Fulbright scholar at Southern Methodist University.

At the Higher Education Dialogue, we will celebrate the more than 100,000 Indian students studying in the United States. Nearly 60 percent of these are studying engineering, math, and computer science - learning the skills that will drive the technological innovations of the next century.

Today, I will briefly set forth the case for why our strategic ties - enhanced by our U.S.-India Strategic Dialogue - have resulted in greater convergence between our two great nations on the issues of our time, but how our growing trade and our cooperation on innovation has benefitted not only our people, but increasingly those of the world.

What my boss Deputy Secretary William J. Burns said when he previewed the first SD in 2010, still rings as true today as it did then: "Never has there been a moment when India and America mattered more to one another. And never has there been a moment when partnership between India and America mattered more to the rest of the globe."

I.

Any discussion of our strategic ties must begin with Afghanistan. The United States and India share a commitment to Afghanistan's stable and prosperous future and have each signed Strategic Partnership Agreements with the Afghan government. So, what are our two countries actually doing?

The Indian government has committed more than $2 billion in assistance since 2001. India is helping reconstruct Afghanistan's Parliament building, equip the Indira Gandhi Children's Hospital, and train students as farmers, tailors, plumbers, carpenters, and welders.

India also shares our objective to develop the Afghan economy and put it on a more sustainable, private sector led footing to help reduce reliance on aid. For example, it will invest billions to develop Afghanistan's Hajigak iron ore deposit.

India also will host on June 28th a conference to examine ways to boost international private sector investment in Afghanistan. This conference will feature over 50 Afghan firms - with at least 10 of the companies owned by women - whose presence will spur direct business-to-business links between Afghan and international firms. It will inform a July 8th government summit in Tokyo that will develop strategies for Afghanistan's economic development after 2014.

A crucial part of helping Afghanistan to establish an economy that is based on trade and the private sector will be to enhance regional economic integration by embedding Afghanistan into the South and Central Asian region through a network of roads, railways, and energy infrastructure. Here too, India is playing a major role. India joined Pakistan in signing recently gas sales purchase agreements with Turkmenistan, an important step in moving forward the Turkmenistan-Afghanistan-Pakistan-India gas pipeline. It will be the major regional market for the exports of Afghanistan. And it will continue to help grow Afghanistan's mining, health services, agriculture, and energy sectors.

For centuries, the historic Grand Trunk Road connected the bazaars of Kabul with Punjab and Bengal. Now, from a Northern Distribution Network that helps link the markets of northern Europe, Central Asia to Mazar-e-Sharif, to the critical links being established through the Afghanistan-Pakistan Transit Trade Agreement, along with the promising trade normalization being forged between India and Pakistan, it is possible to envision new trade corridors linking the markets of Europe and China to India and beyond.

This brings us to a new are of opportunity that is now under discussion between our two governments and others in the region - that is integration to India's east. India and Bangladesh have made important progress to improve their relations and we all are encouraged by the progress in Burma. On her recent trip to Bangladesh and India, Secretary Clinton remarked on the opportunity before us:

"India's look-east policy will be essential for the growth of India, but even more importantly for the entire integration of the Asia Pacific region......India is on the old Silk Road, Burma was on the old Silk Road, (inaudible) Bangladesh was on the old Silk Road. This is the kind of vision that I believe should occupy the minds of the leaders of the region right now because we all have to lift our heads up because a lot of the solutions lie outside with having greater peace, stability, and prosperity."

And India is taking the lead. Prime Minister Singh in his visit to Burma in late May placed great emphasis on the opportunities for connectivity: "Myanmar is a critical partner in India's Look East policy and is perfectly situated to play the role of an economic bridge between India and China and between South and South-East Asia." The PM announced a series of measures to think through and act on these opportunities.

As this example shows, India is not only looking east, but assuming a larger role in the broader Asia-Pacific. Both India and the United States recognize the international significance of the waterways that connect the Indian Ocean through to the Pacific, the necessity of defending freedom of navigation, and the importance of cooperating on transnational issues that threaten the free flow of commerce, such as piracy, illegal trafficking, and terrorism.

We are very supportive of India's Look East Strategy, and we are working together in the East Asia Summit and the ASEAN Regional Forum to build a regional architecture that strengthens regional norms and behaviors, upholds universal rights, and supports the peaceful settlement of disputes.

We also agree that a zero-sum relationship with China will have negative results, and will only dampen the opportunity for a stronger, more prosperous Asia. To this end, the United States and India have called for a new trilateral dialogue with China to increase our understanding and cooperation in areas of mutual interest.

In sum, our strategic engagement with India has brought us into much closer strategic convergence on a range of important issues. We will not always agree and India will maintain its strategic autonomy. But our broadening consultations, our common values, and the bipartisan support for expanding our relations suggest that we are likely to work ever more closely in the years to come.

II.

A second major focus of our dialogue is to enhance economic opportunity for our people. Our markets increasingly are integrated, from the trading floors of the New York and Bombay Stock Exchanges, to high tech offices in Menlo Park and Hyderabad.

We share an ongoing commitment to stimulate mutual economic growth, to strengthen global economic governance and multilateral financial institutions, and to work toward regional integration and prosperity. Bilateral trade in goods and services has increased almost five-fold in the last decade, from $18 billion in 2001 to nearly $90 billion in 2011, and is on track to reach $100 billion this year. But there is more.

Governments in market economies do not create or run businesses, but we can help create the environment that allows entrepreneurs to take smart risks that catalyze new business. Whether by strengthening investor protections, providing export financing, or supporting investments in infrastructure and high technology, the U.S. Government is helping American businesses realize the great potential of the U.S.-India economic relationship.

Following the conclusion of the new U.S. model BIT in April, we have actively worked to advance negotiations on a U.S.-India bilateral investment treaty. We had productive negotiations in New Delhi this week, and will maintain an intensified schedule to work towards the conclusion of a BIT, which we hope will accelerate investment flows in both directions, support new jobs, and generate growth.

Foreign Direct Investment into India from the United States reached $27 billion in 2010. In recent years, India has been among the fastest-growing sources of inward investment into the United States, with a total of $3.3 billion in 2010, supporting thousands of new U.S. jobs. As the Indian economy continues to open and grow and the global economy improves, we believe our bilateral trade and investment levels will move even higher.

U.S. firms are well-positioned to support India's economic expansion. Opportunities abound for U.S. firms in the Indian market. India plans to spend more than $1 trillion on infrastructure in the next five years. U.S.-India defense trade already has surpassed $9 billion in the last five years, while U.S. civil nuclear firms are poised to play a significant role in the $40 billion commercial nuclear sector as the Indian government seeks to add 14 new power reactors in the next five years.

Our United States-India CEO Forum brings together key leaders of the U.S. and Indian business communities to engage directly with senior government officials each year. Forum members are particularly focused on clean energy, infrastructure, biotechnology and e-health, and education, among other areas. Joint efforts like these are hallmarks of the economic relationship and reflect the importance both governments place in private sector advice.

To back up the efforts of the State and Commerce Departments as well as the US Trade Representative, the Overseas Private Investment Corporation, the Export-Import Bank, and the U.S. Trade and Development Agency have all dedicated substantial effort to supporting business partnerships with India.

USTDA has expanded its infrastructure portfolio in India through its signature aviation and energy cooperation programs led by U.S. companies, and new projects and initiatives related to emergency response, rail and ports sector modernization.

OPIC, is continuing to diversify its Indian projects in what has become its largest portfolio in the world, including the recently approved $250 million loan to the Infrastructure Development Finance Company to expand its lending to renewable energy and infrastructure projects.

The Export-Import Bank likewise will soon have its largest portfolio in the world, as the bank continues to expand its projects on aircraft, oil, gas, and renewable energy. These examples may not make the front pages of our major newspapers, but they are benefitting tens of millions of people every single day.

III.

Third, let me now turn to how our two countries are using the power of science and technology to create new opportunities and address some pressing global challenges. Both of our countries have world class higher education institutions, market economies, thriving private sectors, rule of law and venture capital that help ensure new innovation. It is no accident that businesses and entrepreneurs are deepening joint research and development and developing tomorrow's technology-based solutions.

By encouraging greater engagement between and among universities, government research labs, entrepreneurs and businesses, we seek to help accelerate the development of all those great ideas and energy into broadly-accessible technology solutions.

While governments play a role in enabling joint S&T activities, private sector, scientist-to-scientist and institution-to-institution ties provide the foundation of U.S.-India cooperation in S&T. I would like to highlight several recent developments that illustrate the strong momentum in S&T and innovation cooperation:

First, the United States and India will hold their second Joint Commission Meeting on Science and Technology Cooperation in Washington tomorrow and Monday. This meeting provides strategic direction for bilateral S&T cooperation, including identifying new areas of scientific cooperation.

Representatives from more than 15 U.S. Government agencies and research institutions will meet with their Indian counterparts this year to expand cooperation in the Basic and Applied Sciences, Health and Medical Sciences, and Atmospheric, Environment and Earth Sciences. The JCM will feature thematic discussions on policy initiatives to strengthen bilateral research cooperation, to commercialize research and to retain and advance women in science.

Our two nations are particularly eager to share science and technology knowledge and experience to enhance research capacity and infrastructure as well. As a result of the first Joint Commission meeting that we convened in 2010, the United States National Science Foundation (NSF) is assisting India's Department of Science & Technology to develop a National Science and Engineering Research Board (NSERB), which will be modeled after the NSF.

A second major initiative is the Indo-U.S. Science & Technology Forum (IUSSTF). Along with its U.S. counterpart the India Science and Technology Partnership , the Technology Forum has facilitated the travel of more than 11,000 scientists between the United States and India, established 24 virtual joint research centers and organized more than 30 training programs and 150 bilateral conferences, many of which have resulted in long-term partnerships.

In May, while Secretary Clinton was in Delhi, she and Indian Minister for Science and Technology Deshmukh announced the first grantee award of the U.S.-India S&T Endowment Board. The Board, was established in 2009 with an annual budget of $2 to $3 million to promote commercialization of innovative technologies.

Grants of up to $500,000 are awarded for jointly-developed technology solutions with the potential to improve health and empower citizens in both countries. The first round winner and runners up include a partnership to create a cold-chain storage solution to keep farmers' produce fresh.

In India up to 40 percent of all produce, valued at $10 billion, is lost to spoilage each year because of inadequate cold chain storage systems. So, U.S.-based Promethean Power Systems and Indian company Icelings together developed technology that relies on phase-change materials combined with solar-powered truck docking stations to create a low-cost, yet rugged cooling system for fruits, vegetables, and seafood. It will help farmers to get a better price for their products by providing them with a more cost-effective, reliable way to get their produce to market.

A third new area of cooperation that will have wide benefits: in December USAID Administrator Raj Shah, the Federation of Indian Chambers of Commerce and Industry and the Indian Government launched the Millennium Alliance - a public private partnership to identify and develop new technologies and innovations targeted at the bottom of the development pyramid. Social entrepreneurs will compete for funds to develop innovative technologies to address development needs and we the Alliance will scale these inventions to markets both in India and around the world to the benefit of the poor everywhere.

In these and so many others ways, transformative technology and transformative diplomacy are helping to respond to global challenges and shape a more positive global future.

IV.

Ladies and gentlemen, there is so much more we are doing that time constraints prevent me from mentioning. All of you are aware of the important strides we are making to broaden our counter-terrorism and defense cooperation. There is much more to tell you about our energy partnership. We will have good discussions on these and many other important topics and we will certainly report publicly on those discussions.

Let me conclude with a quote and a prediction, mindful of the great Yogi Berra's admonition that it is tough making predictions, particularly about the future.

Secretary Clinton wrote more than two years ago that "Today's world is a crucible of challenges testing American leadership. Global problems, from violent extremism to worldwide recession to climate change to poverty, demand collective solutions, even as power in the world becomes more diffuse. They require effective international cooperation, even as that becomes harder to achieve. And they cannot be solved unless a nation is willing to accept the responsibility of mobilizing action."

The Secretary's words succinctly summarize why the U.S.-India partnership matters more than ever to us and to the world. As I have outlined today, two of the world's leading democracies, market economies and net providers of security are working increasingly closely together. We are seizing strategic opportunities to promote integration between South and Central Asia, to India's East and in the Asia Pacific.

We are tapping the amazing talents of our people to generate innovation across a wide range of disciplines that are generating new jobs for our people and helping to address many of the globe's big challenges. As countries willing to take responsibility for mobilizing responses to the world's challenges, the U.S. and India are likely together to influence the course of this new century before us.

(Distributed by the Bureau of International Information Programs, U.S. Department of State. )