 Thank you much so much for being here at CSIS for this event. I'm Carl Linda Firth and I'm the Chair the Wadwani chair for us Indian policy studies Here at CSIS very delighted that you could all be here for this occasion We are honored to have four distinguished speakers here with us this morning Beginning with the Minister of Commerce and Industry Arnan Sharma want to welcome him Not only the CSIS, but to Washington. He's just arrived from New York City We're delighted to have you here, and he's got a number of very important meetings here over the next Two days, and we're so pleased that he could be here to share his thoughts With us, and he's our keynote speaker, and he will be speaking on emerging economies and evolving partnerships So that will be his remarks We're honored to have with us again The ambassador of India to the United States Mira Shankar ambassador. Thank you so much for being here. We are Almost feeling like family these days as many of you know on June 9th. We had a major event on Capitol Hill With the Senate India Caucus Senators Warner and Cornyne and Ambassador Shankar graced us with her presence there Along with Assistant Secretary Robert Blake to talk about our relations. So thank you again. You are certainly Always so welcome at the events that we have at CSIS. We're delighted to have you here We also have two additional guests that are here From the Federation of Indian Chambers of Commerce and Industry We have with us Mr. Harsh Marawali who is the president of Vicky all of you know this important Organization the largest and oldest business organization in India We're delighted to have him as well as Having with us. Dr. Rajiv Kumar who is general secretary of Vicky. So we're so pleased to have both of our Guests from Vicky and they will be speaking on the subject of US India cooperation in high technology and innovation Which has been identified as one of the key areas that That the United States and India wish to pursue We have bios for all of our speakers and guests. I trust that you have picked those up We only have until one o'clock To hear from them. So I will let their bios speak for themselves You all know these individuals very well and rather than taking valuable time to go through their very distinguished CVs I will ask you to take a look closely at those bios that we have passed out I'd like to begin with just two very brief comments That will hopefully Place what you will hear from our speakers in some context The first one is our assistant secretary state. I just mentioned Robert Blake has been in India and Recently just this week. He spoke in Kolkata and He said in his remarks that and I'm going to read you what Robert Blake had to say He said in an age where innovation Entrepreneurship and economic power are as important as military and political power America's future will rest on the power of knowledge ideas and economy in this context We see no better partner than India. I think that partnership, which he is referring to is one that certainly Minister Sharma will be discussing in his remarks on partnership Secretary Blake also said American businesses see in India a vibrant laboratory for research and innovation that will produce Tomorrow's goods and services. I think I also read at some point. I think it was Former Commerce Secretary Locke who said India now has 45 million entrepreneurs All of this adds up to a great potential for the US-India relationship to explore our commercial ties and To pursue innovation that will be important for the 21st century now having said this is the as they say the proverbial good news There is some not so good news And that is a piece that I saw in the Indian Express just this week That said that direct foreign investment FDI into India declined in the most recent quarter by 9% over the previous year and According to experts the government should further streamline FDI policies and make the environment more investment friendly to attract investments I'm sure that this is something that the minister will be addressing in his remarks clearly we want to see the investment opportunities increase and to see that kind of indicator Moving upward and I think that there are certainly ways that that can be accomplished And I'm sure that that's going to be discussed by all of our speakers So we're going to have the following format. We're going to start with Mr. Mariwala to speak For about 10 minutes and then I'm going to ask Ambassador Shankar to take the podium and make a few remarks and introduce the minister and then we'll follow at the end of those remarks with Dr. Kumar To end up our speaking portion and then we're going to turn to your questions and comments Immediately after that. So I'm delighted that you're all here. I think we've got a great program for wonderful speakers and May we start honorable minister, Mr. Anand Sharma Our Excellency Ambassador Meera Shankar ladies and gentlemen Good morning to all of you. I'm very happy to be here on behalf of FICI we have I must say that we have a big partnership with us in the area of high technology group and We also have partnership with Lockheed Martin and University of Texas at Austin in the area of innovation program wherein we obtained 240 innovators and entrepreneurs and commercial management So FICI has had its relationship with us in this area and Going forward, I believe that if India has to change its course of direction if India has to maintain its high GDP growth rate Innovation is going to be very very crucial our reliance on traditional technologies and Old methods will not do we will have to reinvent them Not only technologies, but processes also and in this respect We need to look at India as a pop as a size of the population in terms of Its poverty and we need to innovate more for what we call the bottom of pyramid opportunities in This area we have seen many Indian companies taking lead We've seen companies like Tata's coming out Tata nano car at $2,000 price point You've seen the one rupee sachet for shampoos You've seen telephone calls mobile calls available for one fourth of a cent And there are many other innovations the pipeline in this regard Tata also are pioneering or they have pioneered verification of drinking water Which is available at almost one and a half percent One and a half of a cent per liter And I'm sure there are many other opportunities in this aspect So going forward I believe that the bottom of pyramid opportunities are are very very high We also need to innovate in the area of sustainability social and financial inclusion Mainly for the benefit of our masses If you have to do this we need to co-create and Cross-fertilize our technologies with those of advanced nations. I am coming from a sector where In package goods manufacturer where PNG procter and Gamble has adopted a different approach to innovation What they call the C&D approach connect and develop approach So instead of developing or doing research in each and everything what they do is they interact with global organizations through an internet search and They have developed through this approach many new products. They've also cut down substantially on their R&D Manpower cost and I think they've been far more successful I think the whole belief is that you can't do everything on your own and in this interdependent world It is important for organizations and nations to lever each other in terms of their capabilities In this respect the cooperation is very very important between you are India and USA More relevant in specific technologies Where US is way ahead of many other nations? I met Senator John Cornine yesterday and I must say that his defense committee's direction for greater cooperation Between India and US producers is a very big step in this direction More importantly, it is President Obama's initiatives on environment clean energy and education Which we need to take further We believe that US economy will be revived much sooner on the back of innovation and Pioneer of new technologies in this aspect India can also play an important role we have developed capabilities in science and technology Which can be used to provide detailed engineering and testing inputs This is already happening in sectors like KPOs and clinical testing of pharmaceutical products Fiki can play a very important role a catalytic role in promoting this and removing impediments in expansion of bilateral relationships Let me end by saying that we see tremendous opportunities for mutual benefit, and I'm sure that the seminar will contribute positively Towards this I Now look forward to our Honorable Minister address to give us further leads in this direction. Thank you very much Honorable Anand Sharma Commerce and Industry Minister of India Ambassador Carl Endeforth Harsh Mariwala President of Fiki Rajiv Kumar ladies and gentlemen Let me at the outset thank CSIS and Fiki and Ambassador Endeforth in particular for organizing this interaction Allowing us to share thoughts on the growing India US trade and economic engagement I think this has become a key element of the India US strategic partnership and As the Indian economy Continues to grow We will have enhanced requirements of both capital and technology Where there will be a natural synergy with the United States? As we look ahead it is not just innovation which mr. Mariwala spoke about but other sectors as well which will provide enormous opportunities And I would like to mention too in particular I think infrastructure where India will need to invest something like a trillion dollars may be over the next five years 2012 will be the next planned period and the requirement of investment in infrastructure will be huge There'll be an enormous business opportunity in the entire infrastructure sector be it in terms of finance Be it in terms of participating in bids be it in terms of actually investing in particular projects through public-private partnerships and The Indian government has created a facilitative framework for this through its FDI policies where hundred percent investment is allowed in most of the infrastructure sectors including power roads ports and so on Electricity where you can invest hundred percent in generation transmission and distribution So this I would see as one particular opportunity The other would be manufacturing now I know this is not something which has been a focus of the India US relationship where the Interaction and the synergies have come from the services sector so far Particularly the knowledge based services sector such as information technology that will continue to grow But where there's a new opportunity which fits in with India's priorities and the need to create More employment within India for those who are not so highly skilled is the manufacturing sector This sector has seen a turnaround We've seen growth rates last year of over eight percent and for several months growth rates have been more than double digits It continues to be a priority for India. We are setting up several industrial zones There's the Delhi Mumbai Industrial Corridor which will be along the Delhi Mumbai High-speed rail freight corridor Basically building on the advantages of connectivity I think there will be something like nine industrial zones Along this corridor in six states Most of which are investment and industry friendly there will be ports and airports for quick connectivity So it might be of interest to US companies to look at taking a sector You know for themselves in one of these new industrial townships which are coming up Or zones which are coming up. Some are taking off quicker Some are taking off slower depending on the state But some for instance in Gujarat have already begun to take off because they had the land already So this will be a big opportunity both in the high-tech segment of manufacturing as well as in other segments of manufacturing and this can also be in Sectors which then you know relate to Indian demands because the market is going to grow for instance of infrastructure is going to be a key area then you know construction equipment and machinery is going to be something for which there will be heavy demand and Boring machines and so on and it makes sense to produce these in India because they're large huge moving them around is not that cost-effective and if you have a growing market for several decades then production in India makes sense So these are the two new areas I would like to suggest as opportunities in addition to the innovation sector It is my pleasure and honor today to introduce our keynote speaker Minister Anand Sharma, who is the Commerce and Industry Minister of India India-US trade and investment is robust and growing rapidly Our two-way trade and goods reach the highest level ever of 48.75 billion dollars in 2010 a 30% growth on the previous year There's also been strong growth in trade and services in a broadly balanced manner and The full figures which are available for 2008 Show that it was 38 billion dollars These growing economic ties have given weight to our strategic partnership One of the key leaders Which has been one of the key leaders in Developing this partnership and of course Minister Sharma has been at the forefront of Proposing and supporting an expansion of our bilateral ties He has taken personal interest in driving the growth of bilateral commercial linkages and has always focused on cooperative interests His focus on diversification of economic ties has resulted in Exponential growth among private sector stakeholders including in the fields of innovation and technologies One of the measures that Minister Sharma has led in India is Simplification of the foreign investment policy He oversaw consolidation of the FDI policy guidelines Into a single document and this has been done in a transparent way in Consultation with all stakeholders. It will be periodically updated every six months again through a process of transparent consultation with all stakeholders The other innovation I mentioned are these industrial or manufacturing zones Which are being set up across the country with a view to providing a Philip to manufacturing? He has also taken the initiative to crystallize a national policy on manufacturing Which is due to be out shortly and which we hope will provide added focus to this sector As commerce and industry minister He has been India's leading voice in international trade negotiations He's put in a strong personal focus in reviving the stalled Doha round Including through convening a ministerial meeting in Delhi during his leadership in India During his leadership India has also advanced the economic partnership with several countries including through the India-Azien free trade agreement and the comprehensive economic partnership and cooperation agreements with Korea Malaysia and Japan which were all concluded during his tenure I know Carl Inderforth mentioned FDI Well, I think FDI in flows into India have increased quite substantially in recent years though. They did fall in 2010 I think in 2008 and 2009 they were over 37 billion dollars Which is a high for India some of the Reduction in 2010 is because both in 2008 and nine there were very high value purchases for instance of Ranback C or The very big Vodafone investment which sometimes can create a distortion in terms of how you see the statistics But I'm glad to say that in April this year in 2011 we are seeing FDI inflows increase It's in one month. We've got Over three billion dollars Which is the same as what we got in the first quarter, which was a bit low So it's showing a sign of increase But clearly we are conscious of the need to create a Facilitative environment because we would like to encourage more foreign direct investment into the Indian economy And we believe that there is an opportunity and that this economy will provide the economic momentum in a major way in the years ahead I'm sure that under Minister Sharma's leadership We will continue to look for ways to optimize avenues for international trade creation Through more such agreements. We are negotiating one with the EU with the US we have discussions on a bilateral investment treaty and We would hope that those could be accelerated Minister Sharma has also played a sterling role in Indian politics and in managing India's foreign relations Having served for many years as Minister of State for external affairs In India and in countries of Africa. He is known for his personal commitment to the struggle against apartheid He's been in the forefront of driving the trade and economic engagement between India and Africa He's a leader with grassroots political support and Has been one of the key voices of the student and youth movement in India Having been one of the founders of the National Student Union of India Which is the student wing of the Indian National Congress? We look forward to hearing Minister Sharma's thoughts on the opportunities that India offers as a Dynamic emerging economy for evolving a long-term mutually beneficial partnership with the United States. Thank you Ambassador Karl Inderforth Ambassador Meera Shankar Mr. Harsh Mariwala Dr. Rajiv Kumar members of the CSIS Scholars ladies and gentlemen, I'm very happy to be here once again in Washington My last visit was in September, but that doesn't mean that during the Intervening period we have not remained engaged with our friends and the leadership of this great country India and the United States In a relationship, which is strategic Which is of special Significance not only to our two countries But to the entire world We had a path-breaking visit by President Barack Obama to India in November and he in his address Which is very well received and applauded by the Indian Parliament Had said that this relationship Will have a defining influence in the 21st century world. I do subscribe to that optimism and confidence because the way the Relationship has evolved embracing core sectors The trust the respect that we have for each other and also considering that Both the countries are Pluralistic societies We have respected diversity multilingual multicultural The different ethnic groups come and live with each other Do not tolerate each other's existence but happily Co-exist that is the difference Which our two countries have demonstrated To the rest of the world which in my view is important given the conflict the distrust that has Enveloped many parts of the world today as We see the global scenario it is important for us To remain connected with the changes that are taking place to adapt to them and to respond before I make A comprehensive observation on what about two countries can do together To further consolidate the existing relationship. I would like to mention that this period The history of the world is Not different from the periods that we have seen in the last century or before there always decades Which are defining which bring about transformations and changes Political as well as economic and those changes have taken place in Europe in America But now in Asia Africa and South America's There was a time after the renaissance when the western Europe developed and Determined the global economic agendas But in the last century During and after the Second World War It was the emergence of the United States of America as a preeminent power And it's the Europe and America together Who wielded tremendous influence in determining changes that were taking place in the world Until the last decade of The century that we have left behind when we saw Tectonic changes the collapse of the Soviet Union the fall of the Berlin Wall the emergence of new countries which were Confident and asserting themselves through their growth and development. So the world has been Changing and so is the order many of you would recall It was said in the 90s early 90s That the world has shifted To become a unipolar world There were many of us Who had a different view? I also belong to that group of people Who were clear that the world is complex The challenges confronting us are overwhelming When we look at each one of them individually From poverty to climate change to terrorism pandemics hunger unemployment For any country or group of countries To address and resolve Single-handedly or together. I don't think That it is possible without a strategic cooperative global partnership and that would Call for a world Which is inclusive and democratic and order which is representative Not unipolar Not bipolar, but a multipolar world that is a reality of today European Union is a reality There are integrations taking place in other parts of the world whether in Asia Africa South America's the emerging economies and the developing countries as We are referred to are also making Some contribution in driving the global economic growth today Close to 47 48% of the world's population is living in These emerging countries the brick countries brick countries are contributing almost half of the global economic output and in the coming years in this decade itself The emerging seven countries This besides the brick countries also include Indonesia or Mexico and Turkey will overtake the G7 in PPP terms and In less than a less than two decades in real terms if you look at what has happened between the last two decades especially After the turn of the century the emerging countries contribution has grown up From 16 percent to 30 percent Well, and now moving towards what whereas the developed countries When we look at the production when we look at The growth has come down unfortunately from 70 percent to 40 percent So we have to relate to these changing dynamics and accordingly Create institutional linkages so that we can Do more than what perhaps we have been able to do so far the numbers are always interesting but in two years From now the GDP of Europe America and Asia will be equal-sized Each contributing 25 percent to the world's GDP and the rest will come from the remaining country and this will keep on changing as I make this observation we have to be clear that It is that the world is witnessing is a rebalancing of the global economy and which was required For historical reasons the overwhelming majority on this planet Earth for centuries Was left behind the still developing countries which we are We have not reached that stage in our development where we can say That our per capita Incomes have reached anywhere near the levels of where the developed countries per capita incomes were even in the 20th century or 19th century and of 19th century Many countries are still there where Europe and Americas were in 1914 or 1940 so there is a huge gap But still these changes are very important When we look at production when we look at consumption some countries have shared approaches and similar models Some do not in India the consumption and production For the growth model is completely different from that of our big neighbor China Which is driven more by exports It's the largest manufacturer exporter in the world today whereas India's vibrant economic growth Has been influenced by domestic consumption by domestic demand and our share in the global trade Is still very low Considering the fact that we are home to 17 and a half percent of the world's population to have Less than two percent or two percent share in the merchandise trade and almost the same in services is Not adequate. We are growing But we are mindful of the fact that we need to do more But these consumption patterns are also changing take the case of Asia and America again Asia is home to 45 percent of the world's population and the consumption had has been Seven trillion dollars In case of you as it's ten trillion dollars as the population share in the world is five percent That's the gap But in the next decade for the Going to change dramatically us will still keep on growing But it'll move to 15 trillion as per the projections in consumption Whereas Asia will move from seven trillion dollars to 20 trillion dollars certainly That will have an impact in the living Standards improving the living standards of the countries which are still grappling With the issues of poverty of education and health care But going beyond that the challenges which are referred to earlier briefly Would demand that the leaders the governments the policy makers Focus their attention in all sincerity to working out on forging partnerships or Strengthening existing partnerships To meaningfully and effectively address these very challenges They are not going to disappear We have seen the various results the turn of the century when the millennium developmental goals were spelled out The progress is weak The gap is increasing and That will continue to test The leadership of the world. I didn't refer to the subsequent challenges Which have surfaced with the vengeance and two of them have resurfaced in less than three years The financial crisis Unlike the previous one That how devastating it was when you look at the sheer space At which it spread affecting all continents and countries and then followed the economic crisis Though in common parlance, it's only referred to as the economic crisis But we must not forget that unlike the previous economic crisis which have come with regularity whether the 70s 80s The Argentinean crash the East Asian crash This one was different Because it followed a financial crisis, so it was deeper and that's why Longer lasting There's no recovery. We have not left it behind It's still very much there because it's the recovery is uneven It's wobbly as we see what happens in Europe the demand has not returned to pre recession levels Even in the developed countries. It's a matter of concern and In many cases if the growth has returned moved to the positive territory It is without the return of jobs so what This calls for in our considered view. That's what my prime minister has said in the 2020 meeting in London that shows in April 2009 that the time is to engage more and To resist the tendency Towards protectionism that has happened in the past and nations and the world as such Learned bitter lessons. I hope that those lessons are fresh in our minds because protectionism is Has always been and shall always be Counterproductive it will deepen the recessions delay the recoveries Which the world needs and that's why What ambassador Meena Shankar was referring to There's some of the steps which we took those were consciously taken We were questioned. I Was asked by many of my colleagues That are you show Anand Sharma what you are doing? You're going to sign free trade agreements. This 2009 was not 2011. It was very Grim environment But we did we moved ahead because we believe That this is the time to dismantle barriers not to add extra new ones and we shall continue doing that without repeating what we have Been able to achieve We are presently negotiating many more comprehensive Economic cooperation agreements of the FTAs as they are referred to with a number of countries With Indonesia with Canada with Australia with New Zealand We are engaging more as As is reflected in our concluding successfully ambitious agreements with Japan and Korea Malaysia and others which ambassador referred to To be integral to the process Of a dynamic development that is taking place in our extended region That Asia is moving towards Larger economic integration It had never happened in the past North America saw through NAFTA the economic integration and the rich dividends South America has moved in that direction the countries of the ASEAN countries as they referred to That's again a very vibrant region and the economic integration that has taken place The same is happening in Africa At least seven of the regional economic communities there Some have overlapping membership are working closely and there is the Africa Union which has overarching Umbrella all these wrecks as they call it the regional economic communities Therefore it has Become an imperative That Asia is also part of this global process of regional integrations Besides these agreements There's the other stream which is now flowing in the right direction That's the ASEAN plus six the comprehensive economic partnership of East Asia and Plus six are China India Japan Korea Australia New Zealand We know that United States of America has also taken a number of initiatives Including now the much discussed which when we meet we do talk and I'll be asking Ambassador Ron Kirk later about the progress on the trans-specific partnership. So it is good that leadership here is also Connecting with the trend and US has to do it because the United States of America Respective or whatever changes take place in the world Remains the pre-eminent economic power and will continue to be there as One of the most influential countries for decades to come even as other countries rise This because of the institutions that this country has its universities The number of PhDs in mathematics and science who come out the investment in Technologies investments in innovation That's we are also seeking to do so as partnerships are forged between countries through various agreements They have to be partnerships within the countries between the government and the industry Which we are Very much committed to in India It has to be partnerships between institutions that's what India and United States of America should do Not that we have not taken steps these priorities stand identified We have economic dialogue commercial dialogue strategic dialogue With the trade policy forum Right from space sciences to nuclear sciences The general science and technology Education these are identified as the priority sectors of engagement and also agriculture Which is important if we have to ensure that One of the two challenges which has resurfaced which has never actually went away That is a food security is interest I will not go into details of these sectors, but I have just listed them that what the two governments are doing We should Ensure that More traction is there in each of these sectors and also in working together in innovation in the new technologies which are Going to come in this decade and the decade to follow Because technologies do make enormous difference We have seen what they did the last century here in this country The defense technologies the defense manufacturing Gave a real trust To industrial capacity building because many of these technologies have dual uses or multiple uses India was able to move forward because we Had built the capacity had the human resources and the institutions To connect with the new technologies which came they brought about a Transformation in the world that's the information technology the communication technologies and those few years Really changed The way we Connect with each other between countries and between continents That at the press of the button. There's a flow of capital flow of information knowledge Nobody would have thought at least my generation We would not have thought that we will live to see that day and it is happening so fast and it just keeps on moving forward But the technologies which can be used for the welfare for the humankind Manufacturing policy was referred to and what we are keen to do in the manufacturing sector Yes, it's true that We have been working on a national manufacturing policy for the last one and a half year and very soon It will become a reality This will be the biggest policy initiative which India would have taken after we took the Initiative for opening up India's economy the reforms and the liberalization When dr. Manmohan Singh was India's finance minister and it is he who chaired this meeting on the ninth of this month and This entire process has been transparent open democratic. We believe in Engaging with all stakeholders so that the policy formulation is Inclusive and Has broad-based consensus. They cannot be any unanimity on any policy There will still be many critics who will find two faults or 20 faults and that should be there That's part of democracy That discourse will not change in any country But through this policy we aim to increase the share of manufacturing in India's GDP From 16 percent where it has been stagnating not that it has not grown it is growing But so is the economy and We want to take it to minimum 26 percent in less than 15 years It is an imperative for India to do so and we are determined to do it Because we're a country of 1.2 billion people with 100 million joining the workforce in the next 10 years if not less That's the only area where besides growth Job opportunities will be created and sustainable employment will be there So what we have proposed to do in addition to what Ambassador Meera Shankar referred to as the nine smart cities Which are coming up along the daily Mumbai industrial corridor to have mega Manufacturing and investment zones not too many maybe five but these will be Integrated mega greenfield industrial townships where infrastructure would be created We hope that these regions will become in the coming decades hubs of innovation hubs of manufacturing and also Converting India into a workshop of the world because we have the human resources and the institutions when we look at This most important partnership for our two countries between the two largest democracies We want America These institutions its industry its investment investors to be our partners in this journey also looking at the knowledge Sectors of the economy some of which we refer to but also biotechnology nanotechnology Value-added manufacturing precision engineering These are the areas we need to look at but how will we be able to do it? Unless and until We invest more in Creating the human resources in empowering other people Which can only be done through training in skills through vocational education our present capacity is to train in skills Maybe five million Annually and we want to take it to at least 15 million in less than five years We are investing in institutions industry and government a partner new at the high end we have new IITs and IIMs the Indian institutes of technology and management coming up for the first time in 50 years We are more than doubling these institutions They require enormous resources and we do not have too many when you look at the IITs and IIMs of seven and eight Now we're going to more than double but again in the same range in eight and nine Which we are also Presently setting up sixteen hundred more industrial training institutes to be adopted by the industry 10,000 vocational training centers 50,000 skills development centers that is Not something which is a dream or on paper actually it is now moving There's a national skills in an initiative There's a dedicated corporation and corpus that has been created We are tying up with industries We're encouraging industry. We are going to double up Our own government's contribution also to innovation There have been has been a regular dialogue between Indian industry and also between us and our global partners We have brought in many modules of these trainings in industrial clusters Some of which are successful. I Proposed to discuss all this During my stay and as I mentioned that this is a dialogue which continues Yesterday I had very purposeful Exchange with the leading captains of the US industry Tomorrow we shall be doing that in Washington and the dialogue the interaction Helps in creating a better environment a better understanding Before we walked into this all We were in the holding room and Carl and first was saying As to what the mood in the Congress is and how clear the India caucus is In enhancing the partnership and the economic engagement. They cannot be a Partnership which is complete without the economic component and A partnership as we've said Which has enormous potential? therefore we need to create better awareness in both of our countries Particularly among the policy makers So their decisions are taken in the spirit of positivity keeping in mind The larger objective Which are the correct objectives? Our leaders and our countries have said for ourselves. Thank you Honourable Minister Sharma Ambassador Indefat and Ambassador Meera Shankar President Harsh Mariwala Friends who had to recognize a few here ladies and gentlemen Great privilege to be here at CIS CSIS for this seminar on innovations and cooperation between our two economies and Having that sort of following from the minister's remarks and also having Transited very recently from the academic and think tank world where I was for a number of years To the well-grounded realities of Indian industry where and I will now belong I want to actually emphasize that the huge potential that the minister pointed out And the others have referred to Between the two countries will be achieved if we emphasize on the practical side of it and if we emphasize on the Implementation of what we have you know what we've agreed to and in if we actually focus on the you know the agents of production and the agents of exchange in the two economies and I say this also on the basis of the paper that I had written for the Center for New American Security on the eve of President Obama's visit and which has been published where I sort of where I pointed out that India and the US related three levels very distinctly one is a G to G The other is the B to B and the third is a civil society to civil society And these are three kind kind of almost parallel tracks that go that go on sometimes with ups and downs in one and And the sort of steady state than the other that sector and I now believe quite firmly That the B to B relations You know which are there are actually going to be the driver of this relationship as we go forward Simply because in our two countries in the these two economies which are primarily entrepreneurial driven which are private sector driven the Intensification of the ties between the businesses that we have in these two countries will in a sense Inform and not just inform but drive as it were the relationship the political relationship And even I say this civil society Relationships and these relationships that these business B to B relationship as her harsh pointed out are going to be based increasingly on the innovative capabilities and the capability for India especially to absorb the innovations Which will be generated in the US as it starts to rejuvenate itself as it tries to you know sort of Go forward in the area that that the president of President Obama as you know pointed out And I and I feel very Confident that we in India have the capabilities in India have the science and technology capabilities and the entrepreneurial Dynamism and capability to not only just absorb these innovations, but to adapt them use our famous techniques of Jugal as we as we as you would get to know as when you get to know India and Also to you know and then to innovate further on them to make it possible for them to be transferred To other countries in Africa and in South Asia and so on So I think that's the route that that that I would like to emphasize that you know that that we need to go forward on and here I think It is therefore the sort of quite important to For me to give you some examples of what is happening already in the India US relationship at the very practical level one is for let's say is the is is is a cooperation that we've got where we've identified more than 2,000 innovators and out of which 240 have been commercially trained under our Lockheed Martin University of Texas the University of Texas at Austin programs cooperation between them and Fiki where we send these budding innovators in incubate them and then send them for commercial training That was a Lockheed Center where they come back after four weeks and now According to the data monitor. They have created about 80 million dollars worth of value for the Indian GDP from new technologies from new You know from new from new innovations There are similar initiatives that are going on in the field of under the US India Agriculture knowledge initiative where again we need a huge new burst of you know technologies Which will which will increase yield will increase productivity and we'll keep up with the demand Which we as we know that today in India the demand for agriculture products only 18% is that for cereals The rest 82% is the non-serial demand which is vegetables fruits and etc. Where the logistics the air conditioning supply chains where the You know where the where the supply networks have all to be created and again their innovation as jointly created between India and US firms will be will be will be most will be most important and I I don't want to go on Here because I know that you are all waiting for us to you for you the opportunity to ask questions The minister who is present here and and but just to say that between 1974 and 2011 more than nine more than ten Agreements have been signed between India and the US on the science technology and knowledge front alone And these are there in various stages of exploitation and implementation and I dare say the time has come for all of us To focus much more sharply and put our energies together on removing the impediments which Preventing the fuller exploitation of these agreements and as far as I am concerned I have transited from the think tank world to the industrial world to try and put my shoulder to this most important task Because I think otherwise we will we will remain at the level where we don't want to be and will not see the enough Sufficient progress as we should be doing in these in these two most critical ties in the ties between this You know the two most important countries in the new centuries. Thank you very much Rajiv, thank you very much Thank all the speakers for their excellent remarks And I think we've got about 20 minutes left and I am not going to take the prerogative of the chair to ask Questions because I want you to do it. So we'll immediately go to the floor and we'll start here if We can have The mic will come around to you and if you could identify yourself and your affiliation And who you would like to address the question to that be one. Okay. Yeah, thank you Jim Berger from Washington trade daily I just have a question for the minister is actually related to the last point of mr. Kumar All right, mr. Minister. Are you satisfied with the pace of progress on? U.S. India high technology trade the U.S. Had promised to make India a strategic partner when it came to high technology trade and Reduce the present barriers that that exist I Guess that it's a load of question. Are we are we moving fast enough matter of detail? You know, I think we've welcomed the Readjustment of us export Control policies or the regulatory framework as they apply to India I think this was a major step forward Which was announced during President Obama's visit since then I think the You know entities list Has been reduced, you know companies like DRDO the defense research and development Organization and its allied companies the Indian Space Research Organization and its allied companies Dynamics limited have been removed from the entities list this opens up the possibility of more high technology trade We've also agreed that India will be moved up in terms of how it's categorized under the different export controls So we were at the bottom Along with I think countries like Sudan and Djibouti and so on and now we will be moved up Into the friends category which hopefully should make it easier to process license applications pertaining to India we've also agreed to some reciprocal steps on Removing U.S. unilateral controls Which are there for crime control or regional stability reasons and We have the U.S. has agreed to support India's membership of four multilateral Export control regimes including the national The NSG the empty CR the Australia group and the Wasanat agreement. So it's a pretty substantial package It's in the process of being implemented clearly. We'd like it to be implemented fast Because this is an area where I think there are natural synergies between the two sides as you heard from our speakers, you know technology and innovation will be very important in terms of the ability of our companies to realize the potential for strengthening trade and business ties between the two countries Wolfgroves recently retired from the defense industry and my question follows as the day the night from Ambassador Shankar's just completed comments What has not happened to date is The Indian government in particular testing the bona fetus of the U.S. Relaxation of high technology trade we have Indian services which are perfectly willing to ask for technology From the U.S. suppliers the commercial suppliers and the U.S. commercial suppliers hands are tied unless the government of India Indicates its interest in these technologies on an official level with that We can work miracles and I would ask Minister Sharma to carry this message back to his colleagues in the Ministry of Defense I've never met a bashful Indian when it comes to business, but a lot of them seem to be sitting in South Block See policy formulation within this sector and in other sectors. She's referred to earlier by Mr. Khan and the first also is a continuous process and That's what India has Seen it and those who have engaged with us are fully aware. It's always incremental It is progressive and moves forward. For example in the defense sector We didn't have the participation of the private sector at all Now for the private sector Indian private sector Is hundred percent participation investment in manufacturing defense equipment and technologies is allowed and 26 percent foreign direct investment But that does not preclude the foreign companies From entering into a joint venture with the Indian entity and many of the leading defense Manufacturers from this country from UK and Europe. They are already doing it They afford some very important partnerships So that move manufacturing can take place in India, too that sharing of technologies Which have Dual use of multiple industrial uses uses also So we are moving in that direction. We had been discussed through a paper With the stakeholders as you would be aware as to what more can be done in the defense sector and those discussions are still on they have been Two brainstorming sessions very recently Between five ministers Since defense is a strategic and sensitive sector So the defense establishment has to be there on board to the meetings Have been chaired by finance minister the defense minister myself the home minister We have been together and we'll be meeting again And it's also when we look at other areas We are conscious of what the industry has said and what the partners and Investors have said so we are always Working to bring about a greater degree of rationalization clarity simplification Also definitional clarity's on ownership and control which we have done But the policies as such we'll move forward Only in one direction that's ahead. There's no question of a pause or a reversal As I said that We believe in a process that is inclusive when we are doing that, you know defense Engagement I mean I just point out that we never used to buy any equipment from the US But we bought four billion dollars worth of equipment from the US Including through the foreign military sales route in recent years and have just placed an order for another 4.1 billion in terms of the C-17 So clearly as far as India is concerned the government is willing to test The US government's willingness to share up-to-date technologies with us Could I ask For a couple of innovation questions the reason I'm saying that is that Fikki is a leader in this field doctor Kumar has written about that mr. Marwala has a foundation on innovation And Fikki, I think you I've heard that you're gonna add another eye to Fikki for innovation Place that into the title of your organization So if I could ask for a couple of innovation questions, please But I thanks for the segue. I was interested in hearing honorable minister Where you see the innovation and high-tech piece in the national manufacturing policy that's about to come out I don't know if there's something that you can offer in more detail here for this audience Well, we are discussing there is innovation is very much reflected in the policy But there is a national innovation council for the prime minister We have declared this decade as a decade of innovation and for the industries we are setting up Sectoral councils innovation councils which will Then merge with the national initiative That process is also in a advanced stage Which we seeking for innovation is the special treatment special dispensation Which has been there in the budget? When we look at some tax incentives weighted deductions and this particular aspect where revenue comes in So in principle agreement has been reached but the revenue officials and Our secretaries concerned There's a committee of secretaries which is presently meeting by the time I return to Delhi I'm sure that the final recommendations would be there Because we are keen to put in place this policy As early as possible, I'll be happy to do so in July itself Add to that which is the minister referred to in the national innovation council Which is headed by samford mr. Sam Pitroda, and they're actually what they're trying to do is to set up what they call Innovation clusters whereby they are trying to bring innovative capability within the production clusters that have been identified already I think this is something that the industry chambers in some industries are actually sort of you know quite Quite actively involved in identifying them and this is where I think the US industry You know can actually really participate in a very active way in creating for example The textile or the auto component or the you know or or or the it sector, you know the where there are clusters of you You know firms already to bring in the innovative capability You know and then try and create a sort of Italian sort of model Whereby these units around them upgrade their technology and their global Competitiveness through the use of innovative capability which is enshrined then within these clusters I think that's the big initiative that is starting off of there and the last thing That I kind of wanted to mention is that you know, there are these incubating center which have been established now in every in the Institute of Indian technology Indian sort of technologies You know through government Grants, but also through very active industry Participations for example the Bombay IIT is a case in point, you know where you know There's a lot of this going on and there is the also, you know So and foreign companies are actually actively participating in those so on the innovation side And and finally the CSIR system, you know and led by the earlier Amazing doctor, you know professor Ramesh Mashalkar had created this whole new system about public-private partnership between the CSIR and the Private industry which is yielded lots of innovative, you know You know ideas and lots of innovative, you know advances in several sectors So all of that together means that the innovative climate is you know and the policy environment ecosystem Is getting more, you know sort of vibrant in India as we speak Let me add one more thing to what Rajeev was saying. I think Fikhi has also been invited by the NIC to recommend take one or two clusters and prototype certain studies which will make this cluster flourish so we have two three options and The good thing is that they're inviting other associations to partner with them and arrive at what will make this cluster succeed So currently we have decided to prototype one or two areas where we'll work And actually work with those clusters find out what what can be done over a period of time It'll be more a prototype project and the learnings of that will get rolled out to other sectors It's not necessarily innovation, but it's use of technology to improve The environment for instance if you have a cluster of leather Companies and then you put in a common effluent treatment plant There may be small scale but in public-private partnership with government you upgrade their capacities to treat the discharge Which comes out there by improving the environment So you're using technology to improve the capacities not just of the companies But of the overall environment and their business practices or where you have a chemicals cluster in Bapi and so on So it has both the purpose of encouraging the development of new ideas and products But also improving the overall business practices of the companies Particularly where they are in a group and where then it becomes far more economical to upgrade in these areas Further innovation questions, I'd like to have in the back here This gentleman and I particularly would like to hear about frugal innovation if anyone wants to ask about that Washington is trying to be frugal Minister Sharma Peter Garrett's and recently returned from the Institute for Defense Studies and Analysis in New Delhi One of the priority sectors you mentioned was the space sector and I'm curious if there's anything exciting being contemplated in the space sector That might be beyond the typical government the government civil space because the United States has a very burgeoning entrepreneurial space Segment where we're where that space sector is looking at a great deal of interesting innovations There's been this interesting NSS column initiative looking at space solar power. Is there anything particularly interesting happening there? well, the institutions are linked when we look at the commercial usage of Space technology That's happening here. That's also happening in India is through has a subsidiary it's called the anthrax which is tying up with the industry so industrial usage of also of the technology or the commercial launches that is being done space Cooperation is one of the priority identified areas which I mentioned to earlier And surely the details I wouldn't be aware of as to what particular project is in the pipeline, but those can be made available to those who are interested in that But one thing on innovation Moving away from the space question is that They are institutional Linkages which have been established IIT Mumbai Rajiv Referred to I was recently in Bangalore in the CMTI Is a National Institute of excellence Responsible for having a developed many technologies Which have applications in? nuclear sector in space and also Technologies for precision engineering. I saw with my own eyes the technologies which are being developed Is set up new centers or nanotechnology? on manufacturing technology But the linkages CMTI has with the one of the recent ones with the Fraunhofer Foundation and Within months they have moved to set up a green manufacturing center in CMTI Bangalore They have developed technologies which have precision well beyond one millionth of A millimeter These are what is important the question which I had asked Then and then talk to the leaders of the industry is the commercialization of innovation So that it's not restricted though. There are many of the technologies at same state, but they have dual uses So that industry comes in and these technologies are available for industrial manufacturing at United States as I had mentioned in my Remarks Will be a very important partner for India In innovation and manufacturing technology. My name is Ahmed Mir. I was a foreign service officer science counselor in Delhi for five years and Similarly worked in Mexico It's very interesting the tremendous progress that has been made between India and the US across the board And Mr. Shankar has mentioned so many options even though I'm sort of very sympathetic to the progress that has been done through government channels as I see from my US background is that innovation is very central to freedom and independence and very central to the importance of young performers and As you have been talking With regard to clusters and with regard to government programs and so on and CSIR What one realizes that there is a very strong component of government and organizational involvement, but as you see in Southern California and in Boston and so on innovation and what the US really has to offer the world and India is actually very well connected with that is through non-governmental sort of connections and What I would like to ask the mr. Shankar is are we doing more with regard to that? communications magazines scholarships and Participation because I think that really will grow very rapidly What your goals are? Government engagement I also spent five years on after and I would go regularly to Mexico and I'll tell you just free trade engagement doesn't Result in the progress that we expected of US Mexico relations Fortunately, the India relations have been Much more successful even without a free trade agreement. Sorry. It's didn't want to be long. That's it No, I think the main innovation Partnerships between India and the US are private sector driven, you know The government basically has a few programs which act as catalysts But the bulk of it is really from the private sector if you take a look at the whole you know information technology sector it is Entirely driven by private companies most of the research and development which is being done in India Is being done much of it in the private sector on a commercial basis either by multinational multinational companies themselves who have an R&D center in India and many of the fortune 500 companies have R&D centers in India in a range of areas again, there are institutional linkages because our Universities are connected in the sense that there are hundred thousand Indian students in the United States today in US Universities many of them working on cutting-edge research, you know, I attended the science national foundation You know annual award said watermen award ceremony last year and Out of the three people who are being given awards two were of Indian origin They were Indian Americans and they had done excellent work. You know, this is these are young people who will go forward And then you look at the academic community in the US the Indian American academic community particularly in the sciences maths engineering economics And that also becomes an enormous asset and many of these institutions have their own linkages It's not through government in any way. It is direct the government has two very small programs one is You know the science and technology endowment fund where both countries contribute 15 million dollars For small projects, which will join projects, which will be which will have commercial applications and 40% of the new Administrative board for this which has been set up is from the private sector Similarly, we have the You know joint clean energy research center, which is a virtual center with both governments contributing 25 million dollars each over a period of time and The ability to raise another 50 million from the private sector. So these are really catalytic programs They are not really huge programs the bulk of the energy and drive towards innovation linkages is Coming from the private sector But within India, I think our our industry Needs to focus more on innovation in terms of spending more of their budget on R&D if their private sector spend on R&D in India of Indian companies is still very low I think we need to wrap this up I would like to ask one five second question and a five second response Do you think we'll be able to reach agreement on a bilateral investment treaty this year between our two countries? That shall be our endeavor and we are keen to take it to an early conclusion