March 23, 2013

South and Central Asia: The U.S.-India Partnership in the Asian Century

The U.S.-India Partnership in the Asian Century

Robert O. Blake, Jr.
Assistant Secretary, Bureau of South and Central Asian Affairs
University of California, Berkeley Institute of International Studies
Berkeley, CA
March 21, 2013

Thank you, Neil, for that kind introduction and for inviting me here today. I'd like to thank Professor Pradeep Chhibber, Director of the Institute of International Studies for organizing this event. I'd also like to give a shout out to Ambassador Steve Browning, the State Department's Diplomat in Residence here at Berkeley, who has no doubt persuaded countless Berkeley grads to join our ranks.

I met earlier this afternoon with some students studying South Asian issues and, based on our engaging discussion and their provocative questions, I think that they would all make fine recruits. In fact, a notable number of U.S. diplomats received degrees from UC Berkeley, where their interest in foreign affairs was sparked and nurtured. Most notably, my friend the late Ambassador Chris Stevens, class of 1982, is among the ranks of prominent Berkeley alumni.

In Secretary Kerry's first public speech last month at the University of Virginia, he highlighted the role that foreign policy plays in the lives of average Americans. "In today's global world," he said, "there is no longer anything foreign about foreign policy. More than ever before, the decisions that we make from the safety of our shores don't just ripple outward; they also create a current right here in America. Foreign policy is important not just in terms of the threats that we face, but the products that we buy, the goods that we sell, and the opportunity that we provide for economic growth and vitality."

And that is why Berkeley is the perfect venue for our discussion today on the U.S.-India Partnership in the Asian Century. Located near Silicon Valley in a diverse, multicultural community, you understand first-hand how partnerships between American and Indian entrepreneurs can spark innovation, foster prosperity, and contribute to a vibrant, dynamic America.

Just next door, Indian Americans are responsible for founding about a seventh of all of Silicon Valley's startups. And their contributions are seen not just in Silicon Valley, nor are they limited to IT. Indians start more companies than any other immigrant group in California and also lead all immigrant groups in the number of companies founded nation-wide in the industries of bioscience, environment, defense and aerospace.

When we talk about India in the context of the rising Asia-Pacific region, we have to include California, which can be considered a Pacific power in its own right, and one that will play a critical role in ensuring that America is connected with the economic boom happening across the Pacific region. In California alone, our exports to India are worth over $3.7 billion annually.

Today, I will begin with an overview of our relationship with India to illustrate just how far we have come. I will then talk about the education collaboration that is building a vast web of people-to-people ties that will carry our relationship through the next generation. I will touch on our robust economic partnership, and conclude by highlighting our work together to ensure security in the Indian Ocean region and beyond.

U.S.-India Relationship

There is perhaps no nation in the world with which we have traveled faster and farther over the last fifteen years than India. From 1998 when India exploded a nuclear weapon and we enacted sanctions in response, we have seen a remarkable transformation forged on the basis of common values such as pluralism, tolerance, openness, and respect for fundamental freedoms. We have seen important milestones from 9/11 when both our nations recognized the opportunity to work more closely to counter terrorism, to the landmark U.S.-India Civil Nuclear Agreement in 2005.

President Obama and Prime Minister Singh agreed to expand the Strategic Partnership further by establishing a Strategic Dialogue chaired by the Secretary of State and Indian External Affairs Minister to give strategic focus to our widening collaboration. Today, we collaborate on nearly every issue of strategic importance, fully living up to the President's declaration that the U.S.-India relationship will be the "defining partnership of the 21st century." Over the last decade, the United States and India have deepened economic, military, and strategic ties. Let me describe some specific areas of engagement.

Trade, Investment and Sub-National Engagement

Our booming trade relationship already is delivering substantial benefits to the American people. Over the past decade, our bilateral trade has nearly quadrupled, reaching nearly $100 billion last year. India is also among the fastest growing investors in the United States, highlighting the mutually beneficial nature of our economic relationship. As bilateral trade and investment flourish, our software development, manufacturing, aerospace, healthcare, and many more sectors are thriving. To give one example: India has contracted with Boeing to purchase ten C-17 transport aircraft worth $4 billion from Boeing's facility in Long Beach California.

As the Indian market continues to open and integrate more fully with the global economy, the future looks even brighter. A PricewaterhouseCoopers report predicts that the Indian economy will more than quadruple in size by 2030, to nearly $8 trillion, making it the world's third-largest economy. This expanding economic base, which includes everything from high-tech and media to finance and tourism, could be even larger if the Indian government addresses policy and regulatory restrictions that constrain imports from the United States and elsewhere.

Despite this promise, India faces enormous resource constraints, particularly in infrastructure. Current estimates suggest that 80% of the infrastructure required to sustain and support India in 2030 has yet to be built. The United States is home to some of the most competitive road, bridge, water supply, electrical grid, and telecommunications companies in the world. So we see a big opportunity in this growth to deepen our commercial partnership with India, working together with American companies to build the airports, power plants, water and sanitation systems, and fiber optic networks of India's future.

Businesses and citizens on both sides are recognizing the benefits of increased partnership. A 2012 report by the Confederation of Indian Industry noted that Indian companies in America had invested more than $820 million in U.S.-based facilities, had collectively conducted 72 mergers and acquisitions in the United States since 2005, and had projected research and development investments estimated to be over $190 million in 2012 alone. Indian companies operating in the United States are adding tremendous value to the local economies in which they operate, the most tangible effects of which are felt at the state and county levels. That's why one of our top priorities in building the partnership with India is to expand state- and local-level engagement.

This year, at least eight American governors and city mayors plan to visit India with trade and investment delegations, which the State Department is pleased to help arrange. We are particularly excited that Governor Jerry Brown is planning a visit to India. During these visits, state officials and private sector representatives explore opportunities for job creation and investments by American companies in India and Indian companies in America. Our state officials increasingly understand that, as the fastest-growing market for U.S. exports, India provides significant opportunities to drive U.S. job growth and bring economic opportunity to the American workforce.

In February of this year, a 30-member delegation from California traveled to India to explore agricultural cooperation with the Indian state of Haryana. The delegation which included deans from four different California universities promoted the expertise and technological know-how, including in drip irrigation, horticulture, and cold storage facilities, of great benefit to the state's agricultural economy. We look forward to hearing about the business deals and new partnerships resulting from their visit.

Education Collaboration

A cornerstone of keeping both of our economies healthy and growing is to ensure that we have the best possible education systems, particularly higher education, so that our students can receive the education and training they need for our country to compete successfully and to continue to drive innovation and entrepreneurship.

U.S.-Indian collaboration in the sphere of education is growing fast. We are proud that more than 100,000 young Indians study in the U.S., second only to China in numbers. But we want to do more. That's why we have a higher Education dialogue that Secretary Kerry chairs with his Indian counterpart. That's why we have a Passport to India program to provide internship opportunities for young Americans in India. That's why we have made India the recipient of our largest Fulbright scholar program in the world. There are a growing number of collaborative programs between American and Indian institutions, at the cutting edge of creating knowledge and solutions for the future. Leading U.S. universities have established or are currently developing innovative educational joint ventures with India.

Berkeley is a great example of this, with its long history of collaborating with India. With some 70 India-related courses taught here every semester, a significant number of faculty member projects in India and an estimated 800 alumni in India, Berkeley is a leader in forging educational and institution partnerships with India. A UC Berkeley delegation which visited India in 2007 helped enable numerous collaborative research projects, as well as the information exchange and resultant scientific breakthroughs which have real-life impact on the wellbeing of our citizens. Berkeley's collaboration with the Indian Institute of Technology, Kharagpur, in the areas of clean energies, particularly biofuels, and diseases, particularly TB and malaria, are but a couple of examples of the cutting-edge collaboration made possible by this partnership.

Through these kinds of collaboration, it is the citizens of our nations who propel the U.S.-India relationship forward, as relationships between nations are rooted in the relationships between their people.

Clean Energy Partnerships

One of the most exciting aspects of our growing collaboration is the effort to combat the effects of climate change, which has tremendous economic as well as environmental implications. As one of the world's ten largest economies and top five greenhouse gas emitters, India has important stakes in global climate change and clean energy discussions.

Our energy, space, and commercial dialogues include bilateral technical and scientific initiatives that deliver clear, immediate, environmental and economic benefits that promote low-carbon growth. We work together to increase energy efficiency, expand renewable energy, and improve forest and resource management, including weather forecasting to improve farming.

The U.S.-India Partnership to Advance Clean Energy, initiated in 2009, has mobilized more than $1.7 billion in public and private resources for clean energy projects in India, which has also benefited American companies, many of them located here in California. U.S. companies have installed 40% of India's first 1,000 megawatts of solar capacity.

Regional Cooperation

As we build a vital economic partnership with India, we also support India's broader role in the Asia-Pacific region. With many of the world's nuclear powers, half of its population, and some of the most dynamic economies in the world in the Asia Pacific, we firmly believe that much of the history of the 21st century will be written here. That is why President Obama called for a rebalance of U.S. foreign policy toward this region.

We should not forget, however, that for India the notion of the Asia-Pacific region as a key driver of global politics and economics is nothing new. It has shared cultural and historical ties that have laid the foundation for its expanded involvement of today. Through the "Look East" policy it initiated in 1991, India began to link itself more closely with its Asian partners to engage the rest of the world. Today India is forging closer and deeper economic ties with its eastern neighbors by expanding regional markets and increasing both investments and industrial development. India is also seeking greater security and military cooperation with its neighbors through greater commitment with the Association of Southeast Asian Nations.

The United States supports and welcomes these developments. We have encouraged India to not simply look east, but to "engage east and act east" as well. We welcome robust Indian economic engagement with the states of East and Southeast Asia, and we see even greater potential in this region.

Thanks in part to Burma's recent political and economic reforms, we now see unprecedented opportunities for trade and engagement between South and East Asia, especially along the emergent road, air, and sea links between India, Bangladesh, Burma, and the rapidly expanding economies of ASEAN.

In the past year alone, trade between India and the countries of Southeast Asia increased by 37%. This emerging Indo-Pacific Economic Corridor is a boon for the region; at the same time, it also provides our economy with potential new markets. Linkages across the rapidly expanding economies of South Asia with those of Southeast Asia will both accelerate economic development and strengthen regional stability, while helping unlock and expand markets for American goods and services.

Because of our shared interest in a secure, interconnected, and economically prosperous Asia-Pacific region, we have increased our dialogue and cooperation with India in the Asia Pacific. Through the semiannual U.S.-India Consultations on the Asia-Pacific and the India-U.S.-Japan Trilateral Consultations, we share a vital exchange of views on the development of this crucial region. Our discussions emphasize how we can better align strategies to reinforce one another's engagement.

To protect and advance our growing, shared economic interests, we are working together to ensure security in the Indian Ocean and beyond. India transports over 90% of its goods by sea, and shares our interest in ensuring that trade flows remain open. Like us, India understands that economic integration, enabled by the improvements in connectivity across Asia, will lead to prosperity that benefits all countries in the region. Already in the Western Indian Ocean region, India is demonstrating its growing maritime capabilities with a robust counter-piracy approach that serves common regional interests. As a founding member of the international Contact Group on Piracy off the Coast of Somalia, India has shown great leadership in the efforts to combat piracy stemming from Somalia, which threatens trade flows to and from Asia.

South Asia

Our interests also increasingly converge on issues such as promoting democracy and peace in India's neighbors to the north, east and south. As you may have heard, earlier today the UN Human Rights Council, including India, voted in favor of a U.S.-led resolution calling on the Government of Sri Lanka to fulfill its commitments to its people on post-conflict accountability and reconciliation. India's support and close coordination has been crucial. The United States and India are Sri Lanka's largest trading partners, and we share a mutual desire to see peace and reconciliation among all Sri Lankans.

We both want to see Nepal's transition to a full constitutional democracy come to fruition and welcome the formation of the Interim Election government. And we are glad to see India's increasingly close cooperation and progress in addressing long-standing disputes with Bangladesh. With all three, we have strongly welcomed India's regional role as a beacon of democracy and economic prosperity.


Nowhere is India's role more critical than in Afghanistan, particularly as we prepare for the 2014 transition. The Afghan government looks to India as a regional source of economic, political and security support. India is the largest regional investor in Afghanistan, led by a planned $10 billion mining investment, and has committed more than $2 billion in official assistance for reconstruction purposes. Last year New Delhi hosted a major summit on international investment in Afghanistan's economy. As Afghanistan shifts its economy from aid to trade in the coming years, India's regional role as a driver of economic prosperity and anchor of democratic stability becomes even more important.

Next month in Almaty, India and other countries of the region, will meet to discuss how they can best support a secure and prosperous Afghanistan, integrated into its region. This gathering is part of the Istanbul Process, in which Afghanistan's neighbors and near-neighbors support Afghanistan through a range of initiatives that advance security and regional economic cooperation. For instance, India chairs a working group focused on expanding cross-border commercial and business-to-business relations. We welcome India's leadership, because the United States and India have a shared interest in Afghanistan's security and prosperity as well as a shared vision for increasing regional cooperation in support of Afghanistan.


In conclusion, I am proud to report that our partnership has achieved much, whether it's creating jobs and economic opportunity for American and Indians; meeting the need to educate the next generation; promoting security and prosperity in Afghanistan and the region; or countering the effects of climate change. But this partnership holds the promise for even more – and for that we look to you. If the next generation of students, educators, businesspeople, and artists have the same opportunity that I have had, to build new collaborations and form lasting friendships with the people of India, I am confident you will help fulfill the promise of this "defining partnership of the 21st century." Thank you.

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1 comment:

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