The United States and India: A Vital Partnership in a Changing World

The issue that I’ve been asked to address today — India‘s rise and the promise of U.S.-Indian partnership — is one of those rarest of Washington species, especially ten days before a Presidential election, a genuinely bipartisan policy priority. I have been fortunate to play a small role in building our relationship with India over the past five years, spanning two U.S. Administrations, including the completion of the historic civil nuclear agreement by then-President Bush and Prime Minister Singh in 2008, and the landmark visits of Prime Minister Singh to the U.S. in 2009 and President Obama to India in 2010. I just returned from another visit to New Delhi, at the end of a fascinating trip across Asia, surely the most consequential region of the world in the new century unfolding before us.

I remember well all the questions that spun around our relationship four years ago, as the Bush Administration gave way to the Obama Administration. Would we “re-hyphenate” relations with India, and see India mainly through the prism of preoccupations in Afghanistan and Pakistan? Would we be tempted by visions of a “G-2” world, subordinating relations with India to the significance of a rising China? Would India see as clearly as others how important its role in the world was becoming, and see beyond its G-77 past to its G-20 future? Would Indians embrace the rising responsibilities that come with rising influence?

Debates were held. Papers were written. Hands were wrung. But together we’ve largely moved beyond those honest questions and concerns. Of course some suspicions linger, and some differences persist, which is only natural. Of course we have a great deal more work to do. But there is growing confidence in both our countries about what my longtime colleague and friend, India’s National Security Advisor Shivshankar Menon, has recently described as a steady convergence of interests and values. Indians and Americans, it seems to me, understand that the only “hyphen” we will pursue with respect to our relationship is the one that links the United States and India.

The essence of the vital partnership that we’re building lies in a simple truth. For the first time, for both of us, our individual success at home and abroad depends significantly on our cooperation.

Progress between us won’t always be measured in dramatic breakthroughs, like President Bush’s civil-nuclear initiative, or dramatic moments, like President Obama’s declaration of support for India’s permanent membership in a reformed UN Security Council. It won’t be measured in diplomatic honeymoons which never end. It won’t be measured in some special alchemy that magically transforms strategic convergence and powerful aspirations into meaningful cooperation.

The real measure of progress in our increasingly vital partnership will instead be steady focus, persistence, hard work, systematic habits of collaboration, and methodically widening the arc of common interests and complementary actions. With that in mind, let me highlight quickly three important dimensions of the work — and the promise — that lies ahead of us: strengthening strategic cooperation; building shared prosperity; and deepening people to people ties.

I. Strategic Cooperation

First, as India’s recent economic rise has expanded its role and deepened its stake in shaping the international system, we are counting on India’s rise as a truly global power — one that looks east and west, a strategic partner for economic growth, security, and the provision of public goods.

Last December in Pune, I spoke to Indian international affairs students. I told them that the U.S.-India relationship must be a cornerstone of the Asia-Pacific century ahead. And as the world’s economic and strategic center of gravity shifts east, the United States is not the only nation emphasizing its role as a resident diplomatic, economic and military power in the Asia-Pacific. India’s distinguished former Foreign Secretary, Shyam Saran, has also observed that India’s own engagement in East Asia reflects “the concept of the Asia-Pacific, which hitherto excluded India, expanding westwards to encompass the subcontinent as its integral part.”

India and the United States have a powerful and shared interest in an Asia-Pacific where economic interdependence drives growth and shared prosperity … where disputes are resolved peacefully… where rules are respected and patterns of political and economic behavior favor openness. So we are working to define a shared agenda to help achieve and assure those goals.

India has shown increasing signs that it intends to build on its longstanding “Look East” policy. I came away from my recent visits to India and Burma with renewed admiration for the East-West connectivity agenda India’s leadership is advancing across Southeast Asia. India is revitalizing centuries-old commercial ties with countries to its east and making headway on an Indo-Pacific corridor through Bangladesh and Burma that connects South and Southeast Asia.
India just hosted the Mekong-Ganga ministerial meeting and held 2+2 consultations with Japan, and next week will host the U.S. and Japan for trilateral consultations. The ASEAN-India Summit will come to New Delhi this winter. Some may dismiss India’s efforts to become more embedded in the regional diplomatic architecture of the East Asia Summit, ASEAN Regional Forum and APEC as maybe good for India’s hotel industry, but really just so many talk shops. But consider this: last week, India’s External Affairs Minister was in Brunei celebrating $80 billion in India-ASEAN trade this year — up 37% in the last year alone. We should all find talk shops as profitable as these.

We all obviously also have to keep a very careful eye on less promising trends across the region, and the revival of old animosities that can quickly undermine the promise of economic interdependence and easy assumptions about shared prosperity. Recent frictions in both the East China Sea and the South China Sea are a sobering reminder of how fast nationalism and maximalism can rear their heads. All that should simply reinforce the interest of the U.S. and India in encouraging dialogue and diplomacy, instead of intimidation and coercion.

Looking westward, both the United States and India have a strong interest in a peaceful, stable future for Afghanistan. The same week the U.S. and Afghanistan signed the Strategic Partnership Agreement in May, New Delhi hosted the inaugural meeting of the India-Afghanistan Partnership Council and in a few weeks President Karzai will pay a return visit to Delhi. India and the U.S. share a long-term commitment to pursue sustainable economic growth, strong democratic institutions and an Afghan-led process of peace and reconciliation — commitments reflected in the first United States-India-Afghanistan trilateral dialogue in September.

For our part, the United States will lead a security transition in — not a departure from — Afghanistan. As Secretary Clinton has made clear, none of us can afford to repeat the mistakes that followed the Soviet exit from Afghanistan. With coalition forces drawing down, Afghanistan will need massive private investment and far greater economic linkages to its neighbors.

India has committed more than $2 billion in development assistance to Afghanistan since 2001, building on ties that go back to the early Indus Valley civilizations. Even without direct access to India’s growing markets, Afghanistan already sends one quarter of its exports to India. Extending trade and transit agreements outward to India and Central Asia will allow Afghan traders to return to the marketplaces of Amritsar and Delhi. In June, when India hosted its own investment conference with Afghanistan, attendance far outstripped expectations, reminding us how organic these connections are. There has also been good progress on the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, though a great deal of work still lies ahead. The vision of a “New Silk Road” is not a single path, it is a long-term vision of economic, transit, infrastructure and human links across Asia. And India is its natural engine.

Deeper defense and security ties have become another leading indicator of a burgeoning strategic partnership. As India’s military influence grows, our hope is that our partnership can become one of our closest in the region. We are united by our experience of tragedy and terror, shared threats in Afghanistan and a shared vision for a peaceful and open Asia-Pacific. We are proud of our robust counterterrorism cooperation, which simply didn’t exist until a few years ago — and now extends to all levels of policy and law enforcement.

Since 2008, India has bought over $8 billion in U.S. defense equipment, up from effectively zero less than a decade ago. When we complete delivery of India’s $4 billion in C-17 aircraft, our combined fleet will represent the largest air lift capability in the world. These are indispensable assets for global response to crisis and disaster; last year’s delivery of the C-130J Hercules came just in time for rescue operations after the Sikkim earthquake. Our military services conduct some of their largest joint exercises with India, including over fifty formal engagements in the past year. As our defense relationship evolves from “buyer-seller” to co-production and joint research, we will be ambitious, and we ask India to be equally ambitious in sharing this vision of a new security partnership with the United States.

As our partnership matures, we will continue to seek India’s help in building what Secretary Clinton has called “a global architecture of cooperation.” While it is true that the international architecture has sometimes struggled to keep up with the emergence of a rising India, it is equally true that India has sometimes bristled at the burdens of global leadership. Both need to change, and both, I would argue, are changing. As President Obama said in his 2010 address to the Indian Parliament, the United States looks forward to “a reformed UN Security Council that includes India as a permanent member.”

But India is not waiting for a permanent seat to begin exercising leadership. The list of India’s global contributions is long and growing: deep engagement in the Global Counterterrorism Forum … tough votes at the IAEA against Iran‘s failure to meet its international obligations, and a lowering of dependence on Iranian crude … election support in Egypt … and peacekeepers around the globe. In the UN Human Rights Council, India made a powerful call for enhanced efforts to achieve reconciliation and accountability in troubled Sri Lanka. While we certainly don’t agree on everything, or see eye-to-eye on every issue, what matters is that India is continuing to use its resources and standing to help others enjoy the peace, prosperity and freedom its own people have worked so hard to achieve for themselves.

II. Shared Prosperity

The second critical area of cooperation is economic, consistent with Secretary Clinton’s greater emphasis on economic statecraft in America’s relationships around the world. But in this case, it is also a reflection of India’s vast potential and the realization that America’s and India’s long-term economic interests are essentially congruent and mutually reinforcing.

Each of us is eager to put to rest questions about our economic staying power. In America, we obviously have to continue to put our own economic house in order. India has seen currency devaluation and high inflation, and its economic growth has slipped. We can and must help each other grow, and prove our doubters wrong.

India’s modernization and the lifting of hundreds of millions of its own citizens out of poverty rightly remains the focus of the Indian government. In this endeavor, India has no more important partner than the United States. Our total direct investment in India in 2000 was $2.4 billion. By 2010, it was $27 billion. By the way, over roughly the same time period, the stock of Indian direct investment in America grew from a little over $200 million to nearly $5 billion – more than a twenty-fold increase. So we have literally never been so invested in each other’s success.
Our economic relationship is very much a two-way street. Both of us are focused on attracting growth and investment to our shores. An Indian-owned Tata factory in Ohio puts thousands of Americans to work, part of the over 50,000 jobs Indian firms have created in the United States. And the opportunities for small, medium and large American businesses in India are staggering. While it’s well-known that India is projected to be the world’s third-largest economy by 2025, what is less well-known is that 90% of India is still without broadband; that 80% of the India of 2030 hasn’t yet been built, according to McKinsey; that India plans to invest one trillion dollars on infrastructure in the next five years alone. That is why Maryland Governor Martin O’Malley visited India, and came back with $60 million in two-way business. That is why Kentucky Governor Steve Beshear visited India three times and helped bring about a $7 billion private sector energy deal. That is why Norfolk has a sister-city alliance with Kochi in Kerala that has helped Virginia export nearly $300 million in goods to India each year.

Of course, for our companies to provide the technology and expertise to help India prosper, India’s government must create an environment that encourages growth. That is why India’s recent easing of some restrictions on Foreign Direct Investment are so promising. Indian multi-brand retail, aviation, power grid and broadcasting companies and markets will be more open to investment, technologies, and best practices from all around the world. It will be easier to bring food to market. India’s Commerce Ministry estimates these changes will create 10 million jobs for its young and growing population. As encouraging as these changes are, we all know there is more to do to bring predictability to the Indian market — for India’s sake and for the sake of our economic relations.

Greater economic openness is not a concession to the United States. It is one of the most powerful tools India has to maintain and expand its growth. In New Delhi last week, I urged my Indian counterparts to address non-tariff barriers, favoritism for local companies, restrictions on foreign investment and intellectual property protection — because progress and predictability will only shore up India’s economic foundations.

So will a U.S.-India Bilateral Investment Treaty. We are aiming for a high-quality agreement that expands on recent reforms to provide still greater openness to investment; strong rules to protect investors and guarantee transparency; and effective means for resolving disputes should they arise.

So will the Infrastructure Debt Fund, a consortium of Indian and American corporations and banks — created by the U.S.-India CEO Forum to finance India’s massive investment in roads, grids, seaports, airports and all the necessary building blocks of a modern economy.

And so will a steady supply of energy. The Civil-Nuclear Initiative still holds remarkable promise for the people of India and the United States. Without diminishing the very real and often frustrating challenges we have faced, both our governments are now engaged in realizing the practical benefits of the civil-nuclear agreement, especially reliable electricity for India’s homes and businesses. Our companies are making good headway in negotiations with their Indian counterpart to complete pre-early works agreements by the end of this year. In June, Westinghouse and India’s Nuclear Power Corporation took important early steps that will lead to Westinghouse nuclear reactors in Gujarat. We hope General Electric can follow suit. The Indian government has clearly indicated that nuclear energy will remain an important part of India’s energy equation, and we are equally committed to expanding cooperation in other areas, from wind and solar energy to natural gas and biofuels.

Of course, there is still more we can do. If we do not seize these economic opportunities, others will, and we will fall behind. Japan, Canada and the European Union are all moving to open up trade with India. Our goal should be to think ambitiously about the opportunities we can offer our businesses — including our small business and globalized entrepreneurs — through deepened economic engagement with India.

III. People-to-People

As important as economic resources and capital are, India has no greater resource and no richer source of capital than its own people. That brings me to my third area of cooperation: people-to-people ties. Some might think this “soft” or besides the point with hard security issues at stake. Diplomatic and economic dialogues are critical, but they are not enough for a twenty-first century friendship like ours. As Secretary Clinton has said, our greatest friendships have never been confined to the halls of power. They live also in the aspirations and interactions of our people. The phrase “people to people” actually covers tremendous ground in our relationship: science and technology, educational exchange, civil society engagement and innovation. The organic growth of people-to-people ties is what has set the pace in our relationship for many years, and our governments are only now catching up.

The talents of the Indian diaspora are creating wealth from Calcutta to California. At a time when Indian immigrants comprised less than 1% of America’s population, they founded more than six percent of America’s startups, and over thirteen percent of the startups in Silicon Valley that powered our economy through the 1990s. We can all be proud of the successes of Indian-Americans in the U.S. and their contributions in boardrooms, classrooms, laboratories and now in the governor’s offices of South Carolina and Louisiana.

We support student exchanges because we know from experience that today’s participants become tomorrow’s constituents for a strong U.S.-India relationship — from business leaders like Ratan Tata, educated at Harvard and Cornell; to statesmen like India’s External Affairs Minister, SM Krishna, a Fulbright Scholar who studied at Southern Methodist University in Dallas and George Washington University just up the street.

In 2011, we held a U.S.-India Higher Education summit to usher in a new era of government support for people-to-people ties. 100,000 Indian students study in the U.S. every year, and we created a program called “Passport to India” to increase the numbers of young people heading in the other direction to learn and serve. A common determination to educate our children is one more tie that binds America and India together.

And when tragedy strikes, as it did last August at a Sikh Temple in Oak Creek, Wisconsin, we come together to mourn and to heal. American police officers risked their lives to stop the gunman before he could do any more harm. The President personally reached out to India and to Indian-Americans, calling the Sikh community, “a part of our broader American family” and ordered flags to be flown at half-staff at every U.S. federal building in America and every U.S. mission around the world. The First Lady went to Wisconsin to show her support in person. The powerful response to this tragedy showed the very values of tolerance that the gunman sought to threaten. These, too, are values that Indians and Americans share.

Conclusion

While the potential of our bilateral relationship is limitless, I want to assure you that my remarks this morning are not.

Much is possible as we deepen strategic cooperation and strengthen our economic and people-to-people ties. But we have to tend carefully to our partnership. Further progress is neither automatic nor pre-ordained. Keeping a partnership on track between two proud, noisy democracies takes vision and steady commitment. It’s a little like riding a bike; either you keep peddling ahead, or you tend to fall over.

I remain an optimist about what’s possible for Indians and Americans. The truth is that there has never been a moment when India and America mattered more to one another. And there has never been a moment when partnership between us mattered more to the rest of the globe. As two of the world’s leading-democracies and most influential powers, we can help build a new international order — in which other democracies can flourish, human dignity is advanced, poverty is reduced, trade is expanded, our environment is preserved, violent extremism is marginalized, the spread of weapons of mass destruction is curbed, and new frontiers in science and technology are explored. That is the moment, and the promise, which lies before us.

(Speech delivered by US Deputy Secretary of State William J. Burns at Center for American Progress, Washington DC October 26, 2012)