Speeches and Remarks

“U.S.-India Relations: The Making of a Comprehensive Relationship”
by Ambassador David C. Mulford

Boston University Alumni Reception

Taj Mahal Hotel, Mumbai
September 15, 2004

As prepared for delivery

This is an exciting time for the United States and India.  Relations between our two countries have never been better.  There has been a remarkable transformation of our relationship – remarkable in magnitude, diversity and the speed with which it has emerged. 

In the 1980’s, when I served as Under Secretary of the Treasury for International Affairs, my memory of U.S.-India economic relations is of two countries always seemingly on opposite sides of almost every major issue.  Today we are engaged in countless ways on the same side of issues.  We have a genuine partnership, with closer cooperation, stronger ties, and a clearer recognition of our shared values than ever before.

During the past few years, we have seen a fundamental transformation in relations between the United States and India.  People ask me when this transformation began.  Although there have been many key points, perhaps the most significant event was the end of the cold war, which forced India itself to face the reality of a changed world, a world in which India realizes it can rise to the status of a true world power.  Another key event was the decision by President George W. Bush that the United States should develop a major strategic relationship with India going forward.

In any case it is now clearly established that our two countries should not be burdened by the decisions and actions of the past.  The current transformation has its roots in our common values and interests as democratic societies committed to political freedom, tolerance and representative government.  We have common interests in the fight against terrorism and other transnational threats such as the spread of weapons of mass destruction, the drug trade, HIV/AIDS and trafficking of women and children.  And we have our expanding military to military relationship as well as countless contacts in trade, business and education.

There has been some speculation and even some reporting that as the United States prepares for its Presidential elections in November, our bilateral relationship may lose some of its momentum – or get sidelined by domestic concerns.  Let there be no doubt – the U.S. commitment to this bilateral relationship is deep and growing.  And if the past is any guide, the commitment to India seems bipartisan as well.

U.S.-India Bilateral Ties

First, let me set the stage by saying that the United States recognizes the vitality and importance of India to American long-term interests.  India's emergence as a rising world power and a mature market economy are significant to the region and the world.  We have jointly taken important steps to bridge previous mistrust and to lay the basis for a solid partnership for the 21st century.

As I’ve said our common interests are growing. We are committed to defeating terrorism.  Both of our nations have suffered at the hands of terrorists and recognize the necessity of eliminating this inhuman threat to our people.  We are committed to preventing the proliferation of weapons of mass destruction and increasingly we are cooperating to stop their further spread.

We both seek a freer and more equitable international trading system. The cooperation between India and the United States was a key factor in the recent agreement on a framework at the World Trade Organization meeting in Geneva.  While we may differ in our understanding of the pace and sequencing of such liberalization, we recognize that more trade and freer trade are essential for strong economic growth, rising prosperity, regional stability, and the reduction of poverty.

To help promote regional stability in South Asia, the U.S. and India meet regularly to discuss mutual concerns in Afghanistan, Nepal, Bangladesh, Sri Lanka, and Bhutan.  The U.S. also supports continued efforts by India and Pakistan to improve their relations in the search for true, long-term peace.

India and the U.S. seek a permanent and equitable peace in the Middle East. The U.S. continues to consult with India on the evolving political, economic and military situation in Iraq.  We both believe that representative government that protects human rights and accommodates diversity is the best hope for progress and stability in Iraq.  India and the U.S. share a strong interest in assuring the stabilization and reconstruction of Iraq so that Iraq does not become a platform for the export of terrorism and a source of instability in this vital part of the world.

As our ties mature into a comprehensive relationship, our two nations will benefit from an increasing range of scientific and commercial opportunities that use cutting edge technologies for both civilian and military uses – for education, economic development, and space exploration, to take a few examples.  Add to this the already rich tapestry of cooperative bilateral programs in health care, fighting dread diseases such as HIV/AIDS polio and tuberculosis, educational exchanges, agricultural programs, and military training, and it is clear that the opportunities for U.S.-India cooperation are endless.

The Beginning of a Comprehensive Relationship

I have no doubt that close and collaborative relations between America and India will flourish in the next few years.  But let me be equally clear that the full potential of our relationship has still to be achieved.  This will not happen on its own.  The responsibility, and the vehicle to make it all happen, lie chiefly in the creative dynamism of our people and private societies.  It is the duty of our governments to make sure we can engage in many fields, look for opportunities to catalyze people-to-people contacts and public-private partnerships, do business together, and trade and invest in each other's futures.  You have my personal commitment, as well as that of everyone in the U.S. Mission to India, to work tirelessly to make this happen.

However, the unusual history of U.S.-India relations – marked by years of differences and mistrust – has left us in this early phase with what I would call a new frontier of opportunity.  There is still an imbalance in our relations in that the government-to-government element currently outweighs that of our respective private sectors.  This is beginning to change, which is the basis for this new frontier of opportunity.  We now have a freestanding nation-to-nation relationship that is limited only by what we decide not to do together.  What has been declared to be a strategic partnership will now become a comprehensive relationship.

The Military Relationship

Without doubt, military cooperation remains one of the most vibrant, visible, and proactive legs powering the transformation of U.S.-India relations.  This cooperation succeeds because of the Indian and U.S. military establishments’ mutual desire to move our relationship forward.

There is a growing mutual desire to expand defense cooperation.  Much of what has been accomplished from the U.S. side has been a result of the U.S. military’s carrying out the spirit of President Bush’s desires for creating a fundamental shift in U.S.-India relations articulated shortly after he took office.   On the Indian side, there has been a tremendous effort to look to expand areas of mutual benefit, to look for partnerships, not antagonisms, and to look for regional collaboration.  India’s service chiefs have translated this positive direction into a coordinated program of military engagement priorities with the U.S.  In sum, military cooperation across the board has seen dramatic improvements in the number and quality of training exercises, seminars, personnel exchanges, senior visits, functional visits, unit/ship visits, subject matter expert exchanges, organizational/agency relationships, technology cooperation, and defense sales.  This last item – defense sales – is key.  We have not yet scored the kind of breakthrough we need and are capable of here.

Military Exercises

Let me highlight just a few examples of this growing relationship.  During exercises in Agra in 2002, Indian and American Special Forces paratroopers jumped from Indian and U.S. Air Force aircraft to learn about each other's formation flying techniques and to coordinate dropping ground support cargo.  While Special Forces operations are often the stuff of classified information, they are important measures of our cooperation because they also showcase the cutting edge of interoperability, especially as both armies gear up to tackle terrorists and guerrilla and clandestine warfare.

Last April, Jeannie and I welcomed the assault ship USS Boxer to Goa and we have visited India’s Jungle Warfare Training Center in Mizoram, where 55 American soldiers were training there with Indian commandos.

Next Steps in the Strategic Partnership

Another area of great promise – and one that is of major strategic and commercial importance, is the Next Steps in Strategic Partnership initiative – or NSSP – that President Bush and former Prime Minister Vajpayee launched in January of this year.  This initiative includes expanded engagement on nuclear regulatory and safety issues and missile defense, ways to enhance cooperation in peaceful uses of space technology, and steps to create the appropriate environment for successful high technology commerce. In order to combat the proliferation of weapons of mass destruction, relevant laws, regulations and procedures will be strengthened, and measures to increase bilateral and international cooperation in this area will be employed. These cooperative efforts will be undertaken in accordance with our respective national laws and international obligations.

The NSSP initiative brings into play a number of important but complex issues.

Over time, as we continue to collaborate and cooperate on these strategic issues including strengthening export controls and preventing the proliferation of weapons of mass destruction, we will witness a growing set of commercial opportunities in these strategic areas.  There is much work to be done but the benefits are great, which is why the highest levels of our two governments are deeply committed.  So it is with optimism that I view the future of U.S.-India relations as marked by the NSSP.

Economic Relationship

In the midst of this great and growing relationship, there is one area that needs a push.  And as I mentioned in the beginning of my remarks, it is the area that is most symbolic of the comprehensive, people-to-people relationship that I believe our two countries must embrace even more.  Here, I speak of the economic relationship between our two countries.

With the wave of reforms of the early 1990s, India and the United States began a steady, if at times bumpy, drive towards a closer economic partnership.  For example, today, about one thousand American companies are doing business in India, which is 14 times more than in 1991.  Bilateral trade has almost doubled over the last decade, to 18 billion dollars, more than 82 crore rupees.  There is no doubt anymore in the U.S. that India is a natural trading partner.  In the words of Scott Bayman, the CEO of GE India, “there is now a greater recognition of the large intellectual talent pool in India.  I no longer have to ‘sell’ India.”  So after this good start, how can we get it to the next level?

The United States, with its open markets and fundamental commitment to private sector leadership, is a willing partner. That is the present reality. The good news here is that India has brought economic growth and development to the top of its priorities. The current election may well demonstrate that in this great democracy there is a political consensus that strong growth sustained over a long period will advance the prosperity of India's people, reduce overall levels of poverty, integrate India more fully into the global economy, and transform India's power status in the world. Achieving a consensus of this sort would be a major achievement. Realizing the objective, however, will not happen without new reforms and continuous efforts that restructure and open India's economy to the global economy at large.

Prime Minister Singh and other Indian leaders have clearly projected their intention to undertake a new generation of economic reforms.  There are significant efforts underway to revitalize the U.S.-India Economic Dialogue.  I would like to take a few moments to identify a few key areas that will be crucial to building a stronger economic partnership with India.  And, I should add, I see the private sector as the driving force behind these reforms.

If India is going to make the great leap forward it hopes for, there is short list of “must do” items.

First, India must build a world-class infrastructure.  To do this requires that infrastructure is more than just a priority.  Infrastructure needs to be put on a war footing, and the private sector has to be enlisted as the major force for transformation

• Second, financial market liberalization.  India already has a high rate of savings and a sophisticated financial market.  But to finance growth and infrastructure development, further reforms must be introduced to make more efficient use of private capital. 
  
  
• Third, intellectual property rights and biotechnology.  India and the U.S. are both world leaders in knowledge-based industries, but India needs to do more to harmonize its rules and regulations with world standards. 
  
  
• Fourth, Investment and deregulation are needed in the agribusiness, food processing, and retailing sectors.  Foreign capital, and domestic capital, given free range in India’s internal markets, will lower prices for food and services to India’s consumers and voters.

Next, India has to liberalize its trade and investment regimes and have more faith in the creative energy and skills of India’s individuals and businesses to compete, solve problems and grow.  I like to say that India needs to negotiate a free trade agreement with itself that allows the formation of a truly national market.

Finally, there will have to be a reduction in subsidies to unlock India’s more efficient use of resources.  Free power in India means no power.  Free water means overuse of water and the lack of a credible delivery system that provides clean water.  Agricultural subsidies often benefit business and politicians but seldom reach the poor farmer.  Re-deployment of India’s economic and fiscal resources could be a boon to development and rising standards of living.

Fighting Terrorism

The last area I will mention is marked by great resolve and commitment; that is the cooperation that has developed between our two countries in the area of fighting terrorism.  As all of you know, 9/11 marked a turning point for the United States in its perception and understanding of terrorism. We appreciate the early support India offered to us in the hours after that terrible attack.

Today, we have come a long way in expanding our cooperation and dialogue with India on terrorism. It is our duty to ourselves, to our nations and to our children, to fight this evil so that our peoples can live peaceful and prosperous lives for generations to come. Those who attack our societies, be it in New York, in Washington, in Mumbai, in New Delhi, or in Jammu & Kashmir, must be stopped.  We condemn all terrorist violence, and let there be no doubt, we are with you 100 percent on this issue.

History will attest to the fact that great national partnerships and alliances in the modern world thrive when all elements of government, corporate and civil societies are engaged.  This is where we are moving with India.  History is also likely to record that the 21^st century will mark the rise of India as a global power.  The United States welcomes this phenomenon – the vision of two great democracies working together to bring the creative power of freedom to the world.