US has enormous stake in India’s emergence as a global power: Obama Official

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June 21, 2012

By Geeta Goindi

WASHINGTON D.C. – Completely cognizant of India’s rise on the world scene, a top Obama official has underlined that the US has “an enormous stake in India’s emergence as a global power”.

June 21, 2012

By Geeta Goindi

WASHINGTON D.C. – Completely cognizant of India’s rise on the world scene, a top Obama official has underlined that the US has “an enormous stake in India’s emergence as a global power”.

At the USIBC Leadership Summit are seen from left to right: Ron Somers President of USIBC; Terry McGraw, Chairman, President and CEO of the McGraw-Hill Companies; External Affairs Minister S.M. Krishna; Michael Froman, Deputy National Security Advisor for International Economic Affairs; Indian Ambassador Mrs. Nirupama Rao; and Ajay Banga, new Chairman of USIBC, President & CEO of MasterCard Worldwide. Photo credit: Ian Wagreich at the US Chamber of Commerce.

Capping the 37th Anniversary Leadership Summit of the US-India Business Council, Michael Froman, Deputy National Security Advisor for International Economic Affairs, told a distinguished gathering of business leaders that “President Obama views India as one of his top foreign policy priorities and one of the most important bilateral relationships.  It’s important because the relationship represents one of the most significant strategic opportunities for both our nations and, indeed, for the world.  We have an enormous stake in India’s emergence as a global power”, he said.

The summit, whose theme was ‘Securing the 21st Century Partnership’, was held on the eve of the third US-India Strategic Dialogue co-chaired by Secretary of State Hillary Clinton and External Affairs Minister S.M. Krishna.  Wrapping up a day of discussions, Minister Krishna delivered the keynote address at the USIBC meet.  The closing session also featured remarks by: Froman; Ajay Banga, the new Chairman of USIBC, President & CEO of MasterCard Worldwide; Adi Godrej, President of the Confederation of Indian Industry (CII); Francisco D’Souza and Rajesh Subramaniam, board members of USIBC.  On hand, were: Indian Ambassador Mrs. Nirupama Rao; Ron Somers President of USIBC; and over 300 business leaders keen on strengthening India-US commercial ties.

Articulating the views of the White House, Froman told the audience that “President Obama came to office committed to forging a long-term, truly global partnership with India, recognizing India’s increasing role as a 21st century power”.  In keeping with that commitment, he pointed out that Prime Minister Dr. Manmohan Singh’s visit to Washington, in November 2009, was the first state visit of the Obama administration.  “In November 2010, when President Obama went to India, he raised the relationship to the level of a strategic partnership, a partnership where the US and India could cooperate across a broad range of shared goals and face shared challenges in the region and across the globe”, he said.

The senior White House official underscored, “India, of course, is the largest democracy and soon to be, perhaps, the most populous country.  India’s economy is growing at a rate that is the envy of industrialized nations and has the potential to be a significant driver of global growth.  India’s participation is increasingly vital to meeting a whole range of global challenges”, he said, including the challenges facing the global economy, the future of trade, efforts to fight disease and poverty, the imperative of ensuring that the world is safe from terrorism and the proliferation of nuclear weapons of mass destruction are dealt with.

Michael Froman, Deputy National Security Advisor for International Economic Affairs, addressing the USIBC 37th Anniversary Leadership Summit, ‘Securing the 21st Century Partnership’. Photo credit: Ian Wagreich at the US Chamber of Commerce

Regarding the bilateral economic relationship, Froman noted that “US firms have increasingly grown concerned, fearing that the investment environment has deteriorated or that domestic political challenges are slowing the pace of reform.  As a consequence, the economic relationship is not achieving all that it might be.  As co-chair of the US-India CEO Forum, I hear this from our participants and the USIBC has been an important contributor in this regard”, he said.

President Obama’s top advisor on international economic issues told the USIBC gathering, “This is worrisome because the business community and I know that I am preaching here to the converted, has been among the strongest proponents of a strong US-India relationship and it is important that it remains so”.  While acknowledging that bilateral trade has continued to grow at an impressive pace, he said “much more can be done.  There is much greater potential to be achieved and, as strategic partners, it is important that we be open and frank about how best to go about that”.

Among the issues which need to be addressed, Froman mentioned the civilian nuclear power agreement, taxes, and the implementation of regulatory reforms.

He said the US shares “India’s concerns about unfair competition and unfair trade practices and understands India’s goal of wanting to expand its manufacturing sector.  We are eager to work with India” to deal with the challenges in a manner that avoids constrained environments, mandatory licensing and indigenous industrial policies that may create unnecessary obstacles.

“When we think about India as an emerging power, one of the key components on which India will build its influence is its economic strength and attractiveness.” he pointed out.

Froman continued to emphasize the importance of the bilateral economic relationship, noting that, in many ways, it was “the driver of our transformed relationship.  Before political leaders recognized the changed relationship, it really was the business community and the commercial and economic engagement that helped to drive the overall relationship”, he said.

Indian Ambassador Mrs. Nirupama Rao (left) and US Ambassador Nancy Powell at USIBC’s 37th Anniversary Leadership Summit, ‘Securing the 21st Century Partnership’. Photo credit: Indian Embassy

“Many people see strategic or foreign policy issues and economic issues as two distant tracks, but the fact that Minister Krishna is here (at the USIBC summit) demonstrates the commitment that he and his prime minister have to keeping our economic relationship energized and it is a key component of our overall partnership”, Froman stressed

While expressing “great confidence in the future of India-US economic partnership”, Minister Krishna said he knows “that this is a time when a degree of skepticism has entered into the sentiment of the business on both sides.  I am aware of the concerns of the US businesses.  USIBC has been forceful in articulating them”, he told the gathering.

On his part, he clearly conveyed India’s concerns.  “For our businesses, too, there are pressing issues, whether it is the worsening environment for mobility of professionals, the protectionist sentiments against the global supply chain in services industry, the refusal to even consider a Social Security Agreement that affects the lives of 300,000 non-immigrant Indian professionals in the US, the unresolved market access issues or the persisting presence of India in the Super 301 Priority Watch List and the US Department of Labor’s list”, he said.

While acknowledging that it is “natural, if not inevitable, that as our economic engagement grows, the range of issues that we face will also expand”, Krishna pointed out “that as our inter-dependence deepens, it becomes even more important to address the issues with a sense of urgency and purpose”.

At the same time, he made it clear that “in an era of global inter-dependence, not everything is within the powers of national governments”.  Still, he said, “we are confident that we will restore investor confidence and regain economic momentum and growth”.

Continuing to assure corporate America, Krishna said, “Our confidence stems not just from the strong fundamentals of our economy, but also from the fact that virtually every political part in India has been at some point part of the reform process.  We have to respond to the aspirations of an increasingly young, empowered and energized India that has experienced enormous change in a short span of time, and we will do so.  But, we will also need a stable and supportive international environment, including an open and growing US market and the flow of capital and technology”.

External Affairs Minister S.M. Krishna delivering the keynote address at USIBC’s 37th Anniversary Leadership Summit, ‘Securing the 21st Century Partnership’. Photo credit: Ian Wagreich at the US Chamber of Commerce.

The Minister pointed out that “bilateral trade in goods and services has reached a milestone by crossing 100 billion dollars last year.  India has been one of the fastest growing destinations for US exports” and “the US remains a major source of investment in India.  Indian companies, too, have established their presence in at least 40 states in the US with a significant part of their investments going into the manufacturing sector and generating more than 80 percent of their employment locally from the US”.  Furthermore, “in the last four years, defense contracts for US companies have amounted to 9 billion dollars.  India’s planned investment of more than a trillion dollars in infrastructure development over the next 5 years offers enormous opportunities for expanding our economic partnership”, he said.

Regarding the neighborhood, Krishna disclosed that India is purposefully seeking to shape its external environment in support of its national development goals.  In this regard, he mentioned, “We are working with Pakistan to define a new paradigm of trade relations.  We are supporting Afghanistan with investment, development partnership and regional integration … Across South Asia, we are seeking relationships of shared prosperity through increased trade, assistance and connectivity.  With Myanmar, we are not only rediscovering our natural economic partnership, but also building a bridge to Southeast Asia with which we have a robust and mature economic engagement.  We are building strong economic ties and seeking improved market access with China.  Our exports to West Asia have expanded at a faster rate than our imports from there”, he said.