Indian Defence Review

Growth Through Partnership

Put simply, in a region of enormous consequence, India has enormous opportunities for trade integration:  Blessed by the Arabian Sea on one side, the Bay of Bengal on the other.  Astride the busiest sea lanes in the world.  And, I think you would agree, one of the most entrepreneurial societies in the world.

Even more impressive are India’s demographics.  India’s median age is 23, it has 600 million people under 25, and India’s “consumer class” is expected to double to 575 million people by 2025.  If India can help nurture the talents of its people and provide them with productive outlets, India will greatly benefit from its youth boom.  We are betting that by 2030 Indian can and will grow to the third largest economy in the world in terms of nominal GDP and not just purchasing power parity.  Some even predict that India could be the largest economy by 2050.

Yet alongside these tremendous assets, India faces significant needs.  India is improving its energy and infrastructure, modernizing its agriculture, developing health solutions, and providing higher education and skills to a broader population.  Businesses are driving this progress – yet India still ranks poorly among all countries as a hospitable place to invest and start a new business – 134 out of 189 countries.  And if India’s enviable demographic boom is to be harnessed, India must make an unprecedented commitment to skill and knowledge development across all sectors of the economy.

But remember this, there is no challenge that India can’t overcome and that our two countries, working together, can’t tackle more efficiently.  First and foremost, we need to keep focused on growing our trade and investment ties.  The United States are committed to this.  If we’re to quintuple our current trade to half a trillion dollars over the next ten years, as Vice President Joe Biden challenged our two nations to do, international firms need to believe that the benefits far exceed the costs and challenges, and that India remains committed to economic growth.

One of the most significant endeavors in world economic affairs since WW-II has been the creation of a rules-based trading system that has sought to increase commerce, connectivity, and prosperity, across the globe.  Ask anyone in the audience here today and they will tell you, the more India is integrated into global markets, in the key economic architecture in Asia and beyond, the more India’s economy will grow, and benefit the entire global economic system.  India has come a long way: import tariffs, on average, are more than 30 times lower than they were in 1991 when then-Finance Minister Manmohan Singh kicked off its modern reforms.

Like any trading partners, we do have our differences, and the willingness to talk about them indicates that we are in fact confident, mature partners.  We are concerned that domestic content requirements here are discouraging investment into India, inhibiting innovation and holding India back from developing the world-class manufacturing sector it needs to compete and generate jobs for the millions of Indian youth entering the job market.  Equally important is the need for transparency in India’s tax policies, timely regulatory approvals and contract enforcement, and a commitment to strengthening protection of intellectual property rights.

We’re addressing these concerns them head-on as good partners do: either bilaterally in our long-established dialogues or multilaterally through the World Trade Organization.  Again, the solution is to talk and trade.

There’s no question India’s economic success is vital to achieving the strategic aims our leaders have laid out.  Our ongoing bilateral investment treaty (BIT) discussions when completed will bring greater investment and innovation to India and stronger partnerships between our firms.

We’re each making progress to remove impediments to commerce.  From India’s recently announced visa-on-arrival program, to our partnership on the U.S. Global Entry program – we’re enhancing the way real-time business will be conducted between our two nations.

Nowhere is U.S.-India collaboration more important than on global environmental challenges.  We’ve sought common ground on climate change issues, through multi-lateral discussions and bilateral cooperation in forestry, adaptation, clean and renewable energy, and on HFCs through the creation of the Climate Change Working Group.  As broad as our engagement on global issues is, we can expand it even further to engage on other critical cross-cutting issues such as preserving our oceans.

We’re actively working together to mitigate the causes of climate change through our energy and science and technology cooperation.  Our nations are together improving the prediction of weather and monsoon forecasting, saving both lives and money.  U.S. and Indian scientists, entrepreneurs, and government officials will gather next week in Delhi for the next Energy Dialogue, led on the U.S. side by Secretary Moniz.  From clean energy technology to non-renewables, energy efficiency to civil nuclear energy, these ideas and programs will benefit consumers and businesses in both countries.

And don’t forget, our cities and states are partnering more extensively than ever before, embodying the very essence of our broad strategic partnership.  States like California and Maharashtra are sharing ideas on how to improve fuel quality for India’s fast growing vehicle fleets, which, we hope, can lead improved health of urban inhabitants, and contribute important climate benefits.

And what is the foundation that enables and propels all this cooperation?  Knowledge and education.  President Obama and Prime Minister Singh’s 21st Century Knowledge Initiative has seen our governments give $10 million to projects that strengthen collaboration and build partnerships between American and Indian institutions of higher education.  Yet, we want more Indian students taking advantage of the top universities in the United States, and we’re keen to send more American students to India.

In closing, we want to work with India, trade with and invest in India, innovate with India, and grow with India.  To take what three successive presidents and two prime ministers, 15 years, and our 1.6 billion citizens have created – and make it even better.  I take that responsibility seriously, and I assure you we are committed to cooperation and ambition in our ties with India.  The India – and the Asian continent – we know is possible, is the very one we wish to support and partner with.  Thank you.