The transformation (of the India-US relations) has been truly extraordinary. Let me give you two examples to illustrate this transformation: first, Indian and American firms are working to build nuclear power plants in India using US nuclear technology. And second, our militaries have rapidly developed the practice of regular bilateral exercises to the extent that India’s military forces exercise more with US military forces than with any other partner.
The second point is that the transformation has been so rapid, and so overdue, that it appears entirely normal for us to be working together across some 35 official dialogue mechanisms that are resulting in what we all an “all-of-government” partnership. So much is happening and so quickly that it seems almost inevitable that there is now a strong sense of expectation within government and outside it that more ambitious and extensive areas of cooperation will commence between our two countries.
When ambitious and growing expectations do not match up with the pace of transformation on the ground, there is sometimes disappointment amongst people. But these are largely transitory matters, which change over time.
To bring a little perspective, it is worth recognizing that today, we in India have more goods and services trade with American firms than with most other partners. We import more American cultural products than from anywhere else, and our bilateral technological engagement is more intensive with the US than with any other country.
Blue chip US firms keep their competitive edge as a result of their partnership with India’s leading IT companies. They in turn earn their global recognition—and not to mention a significant proportion of the profits on their balance sheets—from their US clients. A senior representative of a leading US aerospace firm told us the other day that Indian IT firms have written over 3 million lines of code for one of their signature products, which, in a neat piece of synergy, are being purchased by Indian firms.
Today, bilateral investment flows move in both directions, with US government estimates suggesting that between the year 2002 and 2012, Indian firms have brought in as much as 5 billion dollars, and US FDI stock amounted to around 28 billion dollars in India, as of 2012.
Another barometer of the relationship is a statistic our US colleagues cite to us. That is the fact that US strategic trade exports, or the export of products requiring specific licensing, to India amounted to 5.8 bn dollars in 2012.
Even in the instantly-symbolic sphere of security cooperation, our Air Force fleet today includes US-built heavy lift aircraft like the C 17 Globemaster and the C 130J Super Hercules. Our Navy has taken possession of state of the art P8I maritime reconnaissance aircraft—becoming the first Navy in the world to do so—and our militaries train together regularly, helping us evolve new military capabilities and tactics.
Our strategic and foreign policy establishments consult each other on issues as wide-ranging as global energy markets to the regional situation in East Asia, West Asia and Central Asia. We have dialogues ongoing on cyber security, counter terrorism, health, science and technology, defence, and even in space and the peaceful uses of nuclear energy. During Prime Minister’s summit with President Obama last week, we have just agreed to begin consultations on the Indian Ocean, and a Joint Working Group on Climate Change
All this, fifteen years ago, would not even have been possible to imagine, quite apart from being considered to be a new ‘normal’ in our partnership.
The Road Ahead
There are of course issues in the partnership today that we are happy to try and address. Let’s look at some trendlines on what the future might look like:
A more prosperous future: Vice President Biden said that bilateral trade had grown five times in the last decade. We agreed that there was no reason why we cannot replicate such growth in the decade ahead. Business, investment and trade are not merely pillars of our partnership, they also key drivers of a modern bilateral relationship. It is in our collective interest to recognize in this process the leading role of our private sector industry in creating the wealth that generates growth. We will also need to ensure that the regulatory and standard-setting role of the government is best used to frame the rules of the road and ensure the flow of ideas between the state and business on both sides.
A strategic partnership in energy. This is an extremely important area of progress. India’s energy relationships, including with Iran, are important issues, although our US partners are sometimes not happy with this aspect of our ties with Iran. If India’s strategic dependence on limited sources of energy are diversified more broadly, this will be in the interests of both our sides.
Investing in people: India’s demographic dividend can be meaningfully realised by harnessing the potential of its increasingly youthful population. For this, we need to provide much more in terms of quantity and quality of health care, nutrition and through a quantum leap in educational opportunities. Partnerships in these areas is, again, not only strategically vital for India’s future, which is of interest to us, but will also offer US partners beneficial partnership opportunities in education, healthcare, and even in creating India’s second green revolution in agriculture.
4. Securing the future: As open, pluralistic societies, India and the US recognise the value of vigilance in the defence of our freedom. Recognizing the continuing threat posed to our open and pluralistic societies by terrorism and radicalisation must have our paramount attention. We recall the painful incident in April this year in Boston. This underlines the strategic imperative of enhanced cooperation between our countries. It is now important for us to focus on the sources of such terrorist groups and their ideology. Similarly, there is value in our defence partnership, which we want to upgrade beyond purchase to identifying areas in which co-development and co-production partnerships can be implemented.
So how does it grow further? The habit of consulting is very important; it is the phrase we use for the expansion of the partnership. The more we consult each other about issues, the better we will understand each other. As India’s strategic interests enlarge and as the impact on us from the external world increases exponentially, we will need to expand our bilateral and multilateral conversations with the US
As I said, there are a few issues that separate us still, but we are working very hard to address these matters. On one side, there is a sense of something missing or incomplete, now that the India-US Civil Nuclear Agreement has been set in pace.
Businesses on both sides seem to have some concerns and there is a degree of negativity amongst some sectors of business. While there are always specific reasons for irritation amongst particular companies, perhaps some of the negativity also emerges from the pessimism in India and the US about growth and economic prospects. Policy choices and legislative measures sometimes also add to a sense of alarm. But policy measures can be fixed, and sentiment does change. These issues were brought to the table during the meeting between President Obama and our Prime Minister also. As long as there is an overall sense of confidence in the intentions of the other side, long-term interests and opportunities should inspire us to look beyond short-term difficulties.
A Winning Journey
Having outlined the road ahead and suggested how to drive around a few potential pitfalls, let me also offer you a few ideas for making the journey a better and more rewarding one for both of us.
First, closer and more effective cooperation between us on terrorism is critical, especially as we continue to face regular outrages from beyond our borders. There is strong public support in India for this aspect of our partnership. This is, of course, one area in which we can separately talk seriously with Pakistan and ensure that it comes on board very seriously on issues on which the world has concerns.
Second, the relationship between us must continue to be seen to stand entirely upon its own merits. We have only recently stopped viewing each other from the prism of each others’ relationships with third countries. In fact US policy makers have only recently stopped consideration of India in the context of India and Pakistan or India and China. The future transformation of our strategic partnership needs to be based on the strategic value that this partnership provides to both of us in the fulfilment of the strategic aspirations on both sides.
Third, there is an exciting opportunity to make defence cooperation a much stronger pillar of the relationship. We need to ensure that we can move defence ties toward co-design and joint production of defence material. The Joint Declaration on Defence Principles, announced during the Summit meeting between our Prime Minister and President Obama last week, should provide a much higher level of strategic focus to our defence ties.
Fourth, let us recognize that trade and economic cooperation must be about more than finding fault with each others’ policies. Both of us need significant investment in industry and manufacture and the jobs that they create. We must find ways to work more closely together in this context. As India industrialises, the scope for beneficial cooperation will only increase; our markets will become more attractive in terms of R&D, technology agreements, integration of manufacturing processes, and trade. All of this will keep us busy for a long time to come.
Fifth, as we realize the latent potential for much more investment in each other’s economies, we must not allow differences in trade in goods or in the movement of services to dominate the discourse. At the same time, we have to create forums to discuss these issues openly and with a forward-looking approach.
Sixth, energy and education are strategic openings for the US to invest in the future of India. As many of our American friends remind us, enabling the rise of India is, or should be, a strategic end in itself for the US. Like defence, these are sectors in which more cooperation with the US actually helps expedite progress that is beneficial for both sides.
Seventh, we have begun to work together well in a number of multilateral fora. We appreciate the support of the U.S. for our membership in various multilateral export control regimes: this is a logical conclusion of the cooperation we have had following our India-US civil nuclear initiative. We also appreciate your support for a permanent seat for India in a reformed UN Security Council. Recent developments in Syria and elsewhere in the world are a clarion call for a reformed UN Security Council.
For our partnership to expand, it is important on both sides for the signalling to remain positive. If the U.S. has indeed placed a strategic bet on India’s rise, it makes little sense not to push back counter-narratives from those working to make you lose that bet. Instead, we should get you to win that bet.
It is essential that we continue to invest in our engagement at the highest levels, because this partnership is really in our respective national interests. The India-US partnership is actually all about making our people safer and more prosperous and to jointly work together to address the challenges of an increasingly complex and troubled world. What could be more fundamental to the service of national interest than meeting these objectives?
Therefore it is in working towards addressing this strategic reality that our partnership will be defined in the decades ahead: as two democracies working together for development.
(This is the edited text of the speech delivered by India’s External Affairs Minister at Kennedy School, Harvard, October 4
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