Remarks by Ambassador Nancy J. Powell at the American Chamber of Commerce’s 20th Annual General Meeting (As Prepared for Delivery)

New Delhi | April 27, 2012

Introduction

Dr. Rangarajan, Mr. Singh, Ladies and Gentlemen, Good afternoon everyone.  I would like to thank the Executive Board of the American Chamber of Commerce for inviting me to speak at your 20th Annual General Meeting today.  I would also like to welcome and congratulate the new board members.  It truly is a pleasure to be here so soon after my arrival in India.  I only just presented my credentials to President Patil on Tuesday, so this is the very first speech I am giving in India.

Meeting you today and learning more about how American businesses are succeeding – and struggling – is an excellent opportunity to expand the already vibrant commercial relationship between India and the United States.

My Objectives

I firmly believe the partnership between the United States and India will deepen in every sense in the coming years.  It is my privilege to have been entrusted by President Obama and Secretary Clinton with the job of fostering that partnership.

The number and kinds of interaction between our two countries at all levels are staggering in their breadth and depth.  At their heart are the people-to-people links –students, businesses, and tourists along with the three million strong Indian-American community.

Based on this shared bedrock, my top objectives as Ambassador for this partnership are going to be:

•        Bolstering bilateral trade and investment and expanding business opportunities – about which I will say more in just a moment.

•       Expanding our defense cooperation across all the military services and at all levels.

•       Enhancing our cooperation in international and multilateral fora.

•       Encouraging India’s role in promoting a peaceful, prosperous, and democratic Indian Ocean region and

•       Increasing cooperation on counter-terrorism and global threats.

Economic Statecraft

President Obama has encouraged the United States government to undertake a full modernization of our agenda on trade, investment and commercial diplomacy to deliver jobs and economic growth on both sides of this bilateral relationship. Secretary Clinton has put economic statecraft at the heart of our foreign policy agenda.  I am pleased to note that this Chamber was represented by Executive Director Ajay Singha at Secretary Clinton’s conference on this subject in Washington.

I am delighted that my first remarks in India are being made today to this important and dynamic group of American businesses.  This helps me to emphasize a point I intend to make again and again: the business of the U.S. Mission in India is business.

My team and I are going to do everything we can to bolster two-way trade and investment between the United States and India.  We seek to help companies take full advantage of the talent and innovation available in both our countries.  I pledge to work with you, with other business organizations and with my esteemed colleagues in the Government of India to reduce the barriers U.S. businesses face here.

Economic Partnership Then and Now

I have served much of my career in South Asia, so coming to India to serve as U.S. Ambassador feels like a homecoming.  I had a wonderful three years in India from 1992 through 1995, first as Consul General in Kolkata and then as Minister-Counselor for Political Affairs in New Delhi.  I am looking forward to traveling around this marvelous and diverse country.  I know it will be fun to see old friends and revisit favorite places, but I will be focused on looking forward, not backward-- to embrace the incredible changes that have taken place over the last two decades. Much of India looks as I remember it – the vibrant colors, the lively markets, beautiful children walking to school in crisp uniforms, red chilies in Old Delhi, green fields in Chanyakapuri, and white Ambassador cars.  But very much is different – the gleaming new Terminal 3, the Delhi Metro, and the high rises of Gurgaon and Noida.  Internet cafes are competing with chai wallahs, and Fords and Chevys are competing with those Ambassadors for dominance on the roads.

When I left India in 1995, the value of U.S. goods exports to India hovered just above $3 billion.  Last year, our goods exports topped $21 billion.  Our total bilateral trade in goods and services is expected to reach $100 billion this year.  India leaped from our 25th largest trading partner to our 13th largest trading partner in just over a decade.

In 1995, U.S. FDI into India was negligible; it now stands near $30 billion.  Equally impressive is that Indian FDI in the United States now tops $3 billion.  In the early 1990s, it would have been difficult to imagine that flagship U.S. companies such as GE, Cummins, and Microsoft would one day employ tens of thousands of people here in India, let alone imagine a day when Indian companies would invest billions in the U.S. economy.  India has become one of the fastest growing sources of investment in the United States, creating well-paid jobs for tens of thousands of Americans.  Nearly 49 percent of the high-tech startups in Silicon Valley and Washington, D.C. are owned by Indians or Indian-Americans.

Our business-to-business and people-to-people ties will increasingly come to define the U.S.-India relationship as the bilateral trade in services and high tech goods continue to increase and reshape our partnership.  Microsoft entered the Indian market during my first tenure here and now employs thousands of people in 13 Indian cities.

Microsoft India quickly moved beyond software sales and customer support to harness India’s innovative skills for research and development.  Other U.S. companies such as General Electric and Google have established strong R&D centers in India, creating innovative products for India and global markets.

The United States and India over many months have engaged in technical discussions on a Bilateral Investment Treaty (BIT) that would help foster  investment opportunities.  We are hopeful that Washington’s announcement last week of a new model BIT will provide a basis for us soon to launch formal negotiations.  A BIT would enhance transparency and predictability for investors, and support economic growth and job creation in both our countries.

Another recent success story is that Boeing and Air India finally completed the most publicized aviation deal in recent history.  Air India’s purchase of the Boeing 787 Dreamliner aircraft will be a significant boost for U.S. jobs and exports and the Indian aviation sector.  The fuel-efficient Dreamliners are a key component of Air India’s restructuring plan as India positions itself to become a global aviation hub.

In the defense sector, equipment sales are critical to India’s military modernization.  In this area, the U.S.-India partnership has experienced one of the highest growth rates in the Pacific.  With the C-17 and C-130J sale, we have more than doubled our total Foreign Military Sales and posted sales making India the 3rd largest FMS market for 2011.  We are poised to sign an additional $8 billion in Direct Commercial and Foreign Military Sales.  As we share more common equipment, our bilateral defense ties will become stronger.  India will be able to assume a larger leadership role in the region and effectively respond to security concerns and humanitarian relief operations.

President Obama recently called for reforms to our export control system which will create a more streamlined approach to secure trade. This new approach will help U.S. exporters to be more competitive and reliable suppliers of innovative technologies.   We in turn expect India to sign up to and adhere to appropriate international regimes.

Some Challenges

Over the last several weeks, I met with American and Indian business leaders in Washington.  I listened to stories of the obvious potential as well as their tremendous successes.  I also learned about their concerns.  I came here with a commitment to improve our trade relationship with India.  I am therefore naturally concerned by ongoing challenges to trade and investment, including high tariff and non-tariff barriers, restrictions on foreign investment, lack of transparency, and defense offset requirements.  There are also several recent policy decisions that cause significant concern and dampen sentiment about India's investment climate.  The adoption of manufacturing policies discriminatory to foreign companies and the inclusion of retroactive tax provisions in the Finance Bill are two examples.  Last week, Treasury Secretary Geithner encouraged Finance Minister Mukherjee to reassure foreign investors that India will continue to welcome foreign capital by advancing important economic reforms that will increase opportunities for bilateral trade and investment.

I look forward to working with the Indian government and the private sector to find mutually agreeable solutions that take our economic relationship and our business ties to the next level.  As India's business climate becomes more transparent and predictable, it becomes more attractive to companies that will create jobs in India and the United States and improve the quality of life of our people.

Opportunities

Our relationship with India will remain strong because of common democratic values, entrepreneurial vigor, and diverse societies.  Our shared passion for innovation will help power our strategic partnership.

India is on track to have the largest population on the planet by 2030, and already has the fourth largest economy based on purchasing power.  India’s rise is fueled by an optimistic, dynamic, educated population.  There continues to be enormous potential for U.S. businesses to expand their presence in India’s market given the growth of the Indian economy.

According to a McKinsey report, India will need to invest $143 billion in health care, $392 billion in transportation infrastructure, and $1.25 trillion in energy production by 2030 to support its rapidly expanding population.  India is looking for private partners to accomplish these ambitious goals.  U.S. companies are already improving India’s infrastructure by modernizing supply chains, building new airports and power plants.  Many leading U.S. firms just visited India with Commerce Secretary Bryson on his infrastructure trade mission that included a stop in Jaipur, as well as Delhi and Mumbai.

Our bilateral trade spurs innovation in both our countries.  Software development, hardware manufacturing, aerospace, and healthcare industries are all thriving in India, building-out a diversified economic base.  An impressive 60% of Indian software and services exports support businesses in the United States.

There are opportunities for innovative public-private partnerships in the areas of nano-technology, biotechnology and homeland security. Often the most creative businesses are small to medium enterprises that given the right support can enter the Indian market with products that will make a better life for millions of Indians.  Sam Pitroda told Secretary Bryson that India needs new technology tailored to address India’s unique growth challenges.  Mr. Pitroda believes the creative minds behind many small U.S. businesses are the go-to source for innovation and he urged Secretary Bryson to encourage these small companies to bring their ideas to India.  Target Engineering, one of the small companies on the trade mission plans to open an office here in May.  Several other companies have already committed to returning to India this fall for a Commerce-led trade mission to East and South India.

Many opportunities for economic partnership exist in India - opportunities that are not limited to large international businesses and do not exist only at the national level.

There are dynamic Indian leaders at the state level open and willing to engage with the U.S. Government and U.S. businesses.  As more Indians move to urban centers, state and local governments need creative solutions to energy and infrastructure challenges. Progressive states like Gujarat, Haryana, Rajasthan, and Karnataka present an incredible opportunity for U.S. businesses of every size to enter this market.  I applaud AmCham’s outreach to state-level leaders.

I, too, want to continue to look beyond our usual capital city contacts to progressive Chief Ministers for opportunities to develop strong business ties.  The U.S. Mission in India is committed to supporting and expanding state-level trade and investment between the United States and India.  This facet of our cooperation holds enormous potential as we seek to leverage the innovative work and broadened connections across financial, technology, and human capital at the state, city, and local levels.  Just as state leaders from Maryland, Virginia, and Delaware have recently come to India to expand business, educational, and cultural ties, we encourage India’s state level leaders to do the same in the United States.

Conclusion

I cannot stress enough how impressed I am with the strides our bilateral relationship has taken over the last 20 years and I know the next 20 years have the potential to create an even more robust economic relationship.

I want to end by thanking you all.  The American Chamber of Commerce in India has been a great supporter of the U.S. – India strategic partnership and is a key partner in our Mission’s efforts across the board.

I encourage all of you to keep reaching out to our officers in India because you serve as an invaluable source of information for our advocacy efforts.  I am committed to ensuring that U.S. companies can compete on a level playing field in India and operate in the same open and fair environment that Indian companies enjoy in the United States.

I view our people-to-people ties as absolutely central to our partnership with India.  As Secretary Clinton underscored in her speech in Chennai last year, the United States is betting on India’s future - betting that advances in science and technology will enrich Indian lives and advance human knowledge everywhere.  I believe many of these advances will develop from strong partnerships at the business-to-business level and the U.S. Mission to India stands ready to support U.S. businesses as they form these ties in India.