Speeches and Remarks
OFFICIAL TEXT
January 18, 2012
Consul General Jennifer A. McIntyre Remarks at IACC colloquium on ‘Doing Business With USA’
INDO-U.S. ECONOMIC ENGAGEMENT
As Prepared Text
Vannakam. It’s a great pleasure to join you this evening. I’d particularly like to thank Mr. Raman Govindarajan, Chairman of the IACC; and members of other commerce chambers joining us this evening.
I'd like discuss the U.S.-India economic relationship, U.S. views on economic relations across the broader region, and finally, the work of the U.S. Consulate in Chennai at a local level, to assist businesses such as yours, and facilitate stronger economic and people-to-people ties between the U.S. and India.
When Secretary of State Hillary Clinton traveled to Chennai last July, she became the highest-ranking U.S. official to ever visit the city.
It was no accident that Secretary Clinton chose Chennai as the venue for this policy speech.
For centuries, South India has served as a trade hub for Asia, Africa, and the Middle East.
The phenomenon of globalization is often measured in years and decades but South India has enjoyed global connectivity for centuries.
Other cities in South India, such as Bangalore, Hyderabad, and Trivandrum also have their own success stories.
In the coming years, cities such as Madurai will play an ever increasing role in commercial and transit linkages throughout South Asia. These emerging links across South Asia can bring peace and prosperity to region.
During her groundbreaking visit to Chennai, Secretary Clinton delivered a speech that called for the creation of a “New Silk Road.”
Secretary Clinton described this New Silk Road as an international infrastructure network that would remove barriers to the flow of goods and people between the countries of South Asia.
The New Silk Road is a vision of a network of economic and transit connections running throughout Central and South Asia.
Part of this is about energy and infrastructure – roads, bridges, railways and pipelines connecting goods, services, and people.
The other part is about trade liberalization – the reduction of non-tariff trade barriers, improved regulatory regimes, transparent procedures at borders, and coordinated policies, to speed up the flow of goods and services throughout the region.
The New Silk Road concept is rooted in the belief that opening South Asia’s markets will produce a more prosperous India and a more prosperous South Asia.
The idea is simple: by maximizing the use of transportation and energy infrastructure, and actively promoting cross-border trade, Central and South Asia can once again become a hub for global commerce.
At the moment, South Asia is one of the least economically integrated regions in the world.
While accounting for nearly 23 percent of the world’s total population, its share of global GDP is less than 3 percent.
Both the United States and India believe that economic integration can play a crucial role in furthering South Asia’s long-term stability.
We hope to build commercial connections to link India to other South Asia markets.
To that, we congratulate the Governments of India and Bangladesh for their efforts to improve bilateral relations, enhance trade, and resolve longstanding conflicts.
We also appreciate the success of India’s free trade agreement with Sri Lanka which has quadrupled trade over the last ten years.
On the open border between India and Nepal, the free flow of goods, information, and people, has been a positive development for both countries and the implementation of the Comprehensive Peace Agreement promises to open the door for furthering the India-Nepal economic partnership.
In Afghanistan, Indian companies have built over 700 kilometers of roads, in addition to the new Afghan parliament complex.
Indian companies have also constructed 157 kilometers of double-circuit transmission lines between Uzbekistan and Afghanistan, and installed 700 pre-fabricated high-voltage transmission towers throughout the country.
Whether building electricity substations outside of Kabul, installing solar power generation modules for rural electrification in Kandahar, or designing electro-mechanical equipment for hydroelectric projects in Herat, the Indian government and private sector are pursuing economic opportunity in Afghanistan, not only for the sake of development, but also because it’s profitable.
Finally, there is Indo-Pak trade.
We applaud Pakistan’s approval of the path to normalize trade relations with India which will lead to expanded economic opportunity and stability for the people of both countries.
These new projects and initiatives, particularly in energy and transportation, will have multiplier effects on the regional economy and drive increases in GDP and employment.
With India as an anchor, increased economic integration will support stability and prosperity throughout South Asia and beyond, generating new economic opportunities for one of the world’s youngest and most vibrant populations.
As Prime Minister Singh eloquently said, “I dream of a day, while retaining our respective identities, one can have breakfast in Amritsar, lunch in Lahore, and dinner in Kabul.
That is how my forefathers lived. That is how I want our grandchildren to live.” This is a vision we all share.
While the New Silk Road concept seeks to spur economic interaction within the region, the United States is equally committed to expanding bilateral economic ties with India.
U.S.-India economic ties are as promising as they have ever been.
Fred Hochberg, chairman and president of the Export-Import Bank of the United States, recently noted that EXIM bank has “more commitments in India than in all countries except Mexico and Mexico shares a 2,000 mile border with the U.S.”
He posited that if current trends continue, EXIM’s loans for Indian business could exceed that of Mexico in the next year to year and a half.
Economic cooperation has been the driving force behind our transformed bilateral relationship and, in many ways, it is the decisive factor behind India’s achievement of greater influence and responsibility in the international system.
Our perseverance and hard work on the U.S.-India economic relationship will improve the lives of hundreds of millions of people throughout the 21st century.
Today, U.S.-India trade continues to flourish. U.S. investment in India is strong, and Indian investment in the United States has been increasing substantially.
The United States is the third largest foreign direct investor in India, with substantial investments in computer software and hardware, telecommunications, housing and real estate, and construction.
U.S.-India foreign direct investment increased by nearly 165 percent between 2005 and 2009.
In 2010, the United States provided over 27 billion dollars of foreign direct investment.
These increases are impressive, but inadequate.
McKinsey and Company estimates that India will need 1.2 trillion dollars of additional infrastructure development.
Through a U.S.-India initiative called the Economic and Financial Partnership, the U.S. government is working with India to develop financial instruments and public-private partnership models to mobilize the significant private capital needed to build the India of tomorrow.
In the nineteenth century, foreign investment in railroads and industry helped finance the economic rise of the Unites States.
Today, partnerships between U.S. and Indian companies can provide the goods and services to upgrade India’s railroads, airports, power plants, and fiber optic cables.
Lower barriers on foreign direct investment would help India modernize its infrastructure and create new jobs in both countries.
To move our investment relationship forward, we recently resumed technical discussions on a bilateral investment treaty, or BIT.
We believe a BIT will provide added confidence to investors, deepen our economic relationship, and support job creation in both countries.
Like foreign direct investment, bilateral trade has increased dramatically, tripling over the last decade.
U.S. exports to India have quadrupled over this period, while Indian exports to the U.S. have grown by 180 percent.
India is the world's second fastest-growing major economy, and is projected to become the world's third largest economy in 2025.
India will soon be the world's most populous country.
India has 1.2 billion of the world's consumers, whose per capita incomes are forecast to grow at 8% over the next several years.
India is an enormous market for U.S. and other countries' goods and services.
Not only for that reason, but also because it will support India's continued rise as a global power, the U.S. is eager to assist as appropriate in building the physical and virtual infrastructure that India needs to sustain its impressive economic pace.
As a former Speaker of the United States House of Representatives, Tip O’Neill, once famously said, “All politics is local.”
O’Neill was suggesting that simple, mundane, everyday concerns—rather than big philosophical ideas—are the issues that matter the most to people.
The U.S.-India Strategic Partnership includes many bold, dramatic initiatives.
But ultimately, our most important objective is to facilitate basic human interaction between the United States and India.
As Secretary Clinton said during her visit to Chennai, “We have a great commitment
to our government-to-government relationship, but we have an even greater commitment to our people-to-people ones.
And we view them as absolutely central to the partnership and friendship between our countries.”
In that sense, U.S. Consulate in Chennai plays a special role. We implement American diplomacy at the local level, directly addressing the needs of everyday Indians: we help a business delegation in Madurai find a commercial partner in the U.S.; we facilitate the travel of a young girl from Chennai to attend space camp in Florida; and we assist a grandfather from Kerala who wants to visit his grandchildren in Chicago. Our two countries can benefit from sharing our resources, experiences and expertise.
That’s why the United States also works closely with India on a number of education and exchange programs.
The Consulate in Chennai contributes to these efforts through facilitating introductions and exchanges between our countries’ educational institutions; administering the Fulbright scholarship program in South India --a program which has exchanged over 17,000 U.S. and Indian professionals and researchers between our two countries since the 1960s; and providing counseling services to prospective Indian students wishing to study in the United States.
Over 100,000 Indian students are currently studying in the U.S. In October of this year, and concurrent with the first U.S.-India Higher Education Summit held in Washington DC., the Director General of the U.S. Commercial Service, Suresh Kumar, led 21 American universities on the first-ever U.S.-India Education Trade Mission.
These universities, representing the full diversity of American higher education institutions, visited New Delhi, Chennai and Mumbai.
The group met with prospective Indian students, sought out partnerships with Indian universities, and looked for new opportunities to increase Indo-U.S. educational exchanges.
Initiatives such as these, and the people-to-people connections they engender build mutual understanding and trust.
In the past, unfamiliarity between our peoples and cultures often inhibited cooperation, but each of the millions of people-to-people connections can strengthen the bonds between us.
In his November 2011 visit to India, President Obama stated our policy towards India is open and unequivocal: the Indo-U.S. relationship is one of the defining partnerships of the 21st century.
There are still challenges to overcome, but the United States is betting that India’s greater role in the regional and global economy will pave the way to prosperity worldwide.
I’m grateful for the opportunity to speak with you today, and look forward to working with you to strengthen the economic partnership between India and the U.S.
Thank you.