 You know, for anybody that's watching online right now from India, I'd also have to mention that you may feel a little bit lonely right now because I do believe almost every single citizen from India is in Washington, D.C. this week. We've got the delegation from the Ministry of Finance, the major health event that Kieran Mazumdar Shah and others were at yesterday at Carnegie. There's a civil aviation delegation, other members of parliament and such. So it's quite an India week, a tour de force here in Washington. And I think this day compared to a year ago, the mood is considerably more positive. Now the numbers, as we talk about the ACON relationship are pointed exactly in the right direction where we'd like to see. U.S.-India trade is up by 4 percent. Foreign direct investment into India is up by about 40 percent over the last 12 months. And foreign institutional investment is up about 400 percent, so 4, 40 and 400. So directionally that's terrific. But is that the level that it could be? And what are the kinds of things that we should be working on to try to pick that up to a new level? And what's the impact? Why is it that we're trying to work on policy reform and increasing investment in trade? And that's what we're going to talk about today. And to talk about that and to help frame it, we're going to look at three of the major initiatives the Modi government has been talking about, skills development. How can we grow if there's not enough people ready to take those jobs if and when they become available? Part cities. And lastly, make in India. What's the prospects of this major campaign the Modi government has initiated? To get the ball rolling today, let me start by welcoming and introducing up to the lectern Dr. John Hamry. You know Dr. Hamry is the president and CEO of CSIS since January 2000, served before coming here in several senior roles at the U.S. Department of Defense. Lastly is the deputy secretary of defense. And I'd also say that he is a bit of an entrepreneur at heart as well. I joined CSIS just a year ago and I find that what he brings to this place so far, looking for the great ideas that the staff come up with and trying to leverage technology and every tool available to try to promote those ideas. So I think he'd have done a pretty good job next to Dr. Wadwani in Silicon Valley because he's really got the heart of an entrepreneur and it's a pleasure to work here. So Dr. Hamry. Thank you, Rick. Thank you. No, no, no. Thank you. Rick started off by saying that he was impressed by the weight and the gravity of the people who are here today. Well, I represent the weight and you all are the gravity and I can hardly wait to hear what you all are going to say. I'm going to learn a lot from you. Thank you very much for coming. First before we begin, when we have public events like this, we always begin just with a little safety announcement. Nothing's going to happen. I'm here to guarantee that. But I'm also the responsible safety officer. So I'd ask you to follow my directions if I ask you to do something. The exits are going to be right here. We're going to go out. The stair is right to my right. We're going to go out and across the street to the Beacon Hotel and out by drinks for everybody. So we're going to be fine. So don't worry, but do follow me if anything does come up. Let me say, you know, the secret motto of every think tank is, oh, no, no. It's much worse than you think. I mean, we make a great living off of doom, you know? And I think I've got three other conferences going on here at CSIS right now. And they're about some dire, terrible thing that's going on. I'm so glad that we can have a conference where we're talking about opportunity. When things are buoyant and getting better. And that's the case. This is what's happened. I think Prime Minister Modi's arrival has really transformed the landscape. It's given a sense of energy and lift and direction at a time when we need it. India needs it, of course. America needs it. I think we're needing opportunities to look at Asia in a different way. And everything right now is very dynamic in Asia as we know. We have, we're finally at the stage to move the Trans-Pacific Partnership. I think the president will submit the trade promotion authority sometime this week. We have, of course, our friends in China that are promoting a new infrastructure bank. And that has ignited a great deal of interest. And I think that we're starting to see finally India standing up and taking a much larger role. It should. You know, it's such a powerhouse. But it's been undervalued, underweighted in the national stage, the national landscape. I think that's now changing. We're going to get into that today. We're going to discuss that today. And I'm very glad that all of you will be a part of that. And Secretary Kumar, we welcome you. We thank you for being here. We thank you for your leadership at the Commerce Department. You're going to be leading the Strategic Dialogue later this year. And we're very proud of that and look forward to having a chance to hear you. So let me just, I will quickly get off the stage, but want to say thank you. I'll be back with you periodically. I do have to go off to my three, you know, doom and gloom conferences right now to say something inspiring to them. But I do want to say how grateful I am to all of you that we have something that we can do. We have things we can build. And that's what this conference is going to be about. Now let me, my real role today is to introduce to all of you Ramesh Wadwani. I have, my time in knowing Ramesh, this remarkable man, is only about four years and maybe four and a half years ago. And one person brought us together who we all know this, Siddhartha Shadoy. If ever you want an optimist in life, talk to Siddhartha. And Siddhartha introduced me to Ramesh. Ramesh has been active in building a better world for many years. Not only for himself, it's a remarkable success as an entrepreneur, but he's converting and using his personal wealth to build good things for the rest of the world, especially for India and America. And I must say, it's an inspiration. I'm very grateful. He's on my board. He's a challenging director on my board. But he makes me do a better job every day and we're delighted that he's here today to open this conference. Ramesh, would you please come up? Thank you for being here. Ramesh Wadwani It's wonderful to be here and to see all of you. As you know, the economic agenda between the U.S. and India is now in the forefront as it should be, but it has not been for the last many, many years. So finally, I think we are taking the right steps in the right direction and I think it will be great for both countries as we will learn today. Just by way of background, I want to thank both the CSIS and the Anand Center for helping to organize today's event. And obviously, the pace of today's event will pick up towards the afternoon, starting with the bar at five o'clock, but working backwards, Finance Minister Jetli's presentation at 4.30, which will be the pre-bar celebration. The mission of the Wadwani Foundation is to accelerate economic development in the emerging economies with a particular focus on India. And we've had this mission for over 10 years when the foundation was started and I'm giving essentially all my wealth and my net worth back through the Wadwani Foundation. And our focus in accelerating economic development is primarily through entrepreneurship, small business growth, and skills development. So we have large scale initiatives in each of these areas. The scale that we are building is growing from the hundreds to the thousands to the hundreds of thousands. And now, for the first time, we feel somewhat confident in talking about strategies and plans to affect the lives of millions. We've started in India, but a few months ago, about a year ago, we also launched initiatives in Pakistan, Malaysia, and Indonesia. And before the end of this year, we would like to kick off similar initiatives in entrepreneurship, skills development, and related areas in three African countries. So we are in the process of selecting them. We have to build a staff. Because we are trying to do things at scale, it's very difficult to work with NGOs in India because many of them are unable to scale at the rate at which we need them to scale. So we have a combination. We have a full-time staff of 100 people. And we also work with half a dozen of the better NGOs in India to achieve this kind of scale. I met Prime Minister Modi in September in New York when he was here. And I came away. It was about an hour meeting, very, very engaged. Even though he had 12 advisors on his side, the conversation was entirely 100 percent between him and me. And that's good, in the sense that he knew absolutely what he was talking about, and he was completely in command of the subject. It did seem to suggest that there wasn't very much oxygen for anyone else in the room. But it was a great conversation. And I came away with the impression that, first of all, he's very strongly pro-business. Secondly, that he's extremely high energy. Thirdly, he's willing to take risks and make commitments that previous Indian administrations have been unwilling to do. And fourthly, that he completely understands the importance of foreign direct investment and the engagement of the U.S. business community as a critical success factor in driving job creation and skills development in India. So in his mind, as it should be, these are very tightly connected together. One of the thoughts that I left him with, which he wasn't aware of previously, is that in a recent seven-year period, India had GDP growth of 40 percent. Not surprising, right? Six, seven percent a year, seven years, cumulatively 40 percent. But job growth was 1 percent. So we only created 2.7 million net new jobs in India during that same period. That means there's clearly a huge disconnect between economic planning for GDP growth and economic planning for job growth. Now, in the U.S., that disconnect, first of all, is much less. But even if it was large, it would be okay because the base employment is so large as a percentage of the population. In India, particularly in the organized sector, the need for job growth to be more or less equivalent to GDP growth is absolutely paramount, but on the other hand, is not the case. So the whole point of my discussion with him was around the kinds of strategies and initiatives that are required to fix this enormous gap. Even today, today's newspapers, for example, talk about the fact that Chinese growth will be six and a half percent a year, India's GDP growth will be seven and a half percent a year. If India's GDP growth of seven and a half percent a year is similar to qualitatively, what it was over the last seven or eight years, it means that job growth will lag significantly behind. And I think that would be catastrophic. Now, when Finance Minister Jetli talks this evening, he will be talking about the importance of India's demography and youth being translated into a dividend rather than a disaster, but it could go either way. And if you don't have enough focus on job creation and skills development, India's demographic growth could actually be a disaster. On the other hand, if India does things right, if the U.S. business community takes advantage of that opportunity, it could very much be a demographic dividend, which is, of course, what we are hoping for. So there are a number of key initiatives. There's the whole idea of job growth planning, simultaneous with GDP planning and connecting the dots, which has not been the case before. There's the acceleration of entrepreneurship to create millions of new jobs. There's the need for innovation and small business, so we can add another 10 million jobs. The skills development, because sometimes the availability of skills is in itself a job creator because of the cause-and-effect relationship. So helping to skill 25 million people over the next five years, that's going to be a very important growth driver. But ultimately, India is going to have to connect the dots between creating 25 million new jobs over the next five years and filling those 25 million jobs with very high quality human capital. Now, for large businesses in the U.S., that may raise the question of why do we care? And the answer is you should care very much because this is exactly what opens up the opportunity for foreign direct investment in India. So I was in India in February. I met four of the key ministers in Prime Minister Modi's government, and I came away with three impressions. The first is they're energized, so whereas the ministers in the previous cabinet were essentially half asleep and half unsure about what their future would be. Here, I had the feeling that these guys, these ministers, were feeling strongly pressured by the Prime Minister to work long hours, do good things, and actually be measured by outcomes and not just by words, which again has been part of India's history. So the sense of energy was actually quite energizing for me as well. The second thing is that many of them are starting to think about initiatives that will make a difference, and the third is each of the four of them indicated a strong desire to work with U.S. business because they realize that between the U.S. government and U.S. business, that's where the magic of the relationship lies between U.S. and India. It is not just government to government. And on the business side, there are lots of opportunities in India. So one very good example is the Make in India initiative where the Prime Minister and a number of his other ministers are committed to expanding manufacturing, but in consideration for that, they're also beginning to open up investment rules that will make it easier to invest in India. So it started in the insurance industry. There's been progress in the defense industry. And I think progressively you will see a lot of progress on the relaxation of the regulations that I think hurt the performance of the Manmohan Singh government. Similarly, the Smart Cities Initiative, great opportunity for innovation, great opportunity for U.S. companies and companies from other countries to invest in India. And through a combination of initiatives like Make in India, Smart Cities, Innovation, Entrepreneurship, I think we can achieve the best of both worlds, which is great business opportunity for American companies and job creation and skills development in India. So what could be better than that? And that's the spirit of today's conference. And of course, we're all looking forward to what Finance Minister Jetli has to say, but I think you will find his remarks in some ways, you know, will cover, will focus on this particular topic. One final word, the Badwani Foundation has, as you know, funded a policy chair at CSIS. This is of course, Rick is the policy chair, and Rick has been a key organizer of today's event. But we are also building up towards a major leadership event in September or October this year. It will be in Washington, D.C. And at that particular event, we hope to have perhaps 50 to 100 of the key policymakers from the U.S. And an equal number of policymakers from India, including critical ministers of Prime Minister Modi's government, as well as a number of Chief Ministers and the Secretaries and the staffs so that through this very active and engaged dialogue, we'll be able to move these initiatives forward at faster and faster speed. Thank you, sir. Thank you, Ramesh. Now it gives me great pleasure to introduce the chair of our other co-organizer for today's proceedings, Mr. T.N. Ninen. For those of you that have bothered to read any kind of business or recon article in the Indian press, he probably wrote it. So I can very much leave that part of a journalistic experience at that. But also chairing the Ananta Center. Ananta Center, of course, does events covering a very wide range of different topics, the arts, the sciences, but also business. And so having such an astute business journalist leader of the organization, they've proven to be exactly the right kind of partner for this type of event. So apart from his work with business standard, apart from his work with the Ananta Aspen Center, he also is chosen by his peers frequently to help lead their work as well. So he's president of the Editors Guild of India, chairman of the media committee at CI, and a variety of other roles kind of proving that, indeed, his leadership in the industry, his leadership on business issues has been critical at important times. So Mr. Ninen, please, I welcome you to the lectern. Thank you, Rick, and morning, everyone. Thank you for that introduction. And thank you also for helping to engage with this partnership and to take it forward and develop it in new ways. I would also like to acknowledge and thank Dr. Hamry and Mr. Adwani for the role they're playing and the leadership and drive they're giving to building this partnership, to doing events like this, and partnership with the Ananta Center as well as with India and the U.S. as a whole. I won't take long, but I do want to say that the new government has created a sense of purpose, and therefore there is energy, both domestically at home and in international relations, particularly in the bilateral relationship with the U.S. Everybody knows that this is a unique bilateral relationship, not just specifically because it's not just government to government. It's not just business to business, it's also people to people, and there is no other bilateral relationship which has all three elements as strong as they are. Within government to government, we have an astonishing number of sectoral dialogues that go on. The last count I think was 40 or thereabouts, in everything ranging from trade and investment to defense and security, science and technology, cyber security, space, agriculture, education, clean energy, you name it. And then on top of those 40 sectoral dialogues, we have interministerial consultations. So there is a range to this relationship which is quite unique. We do need to build depth as well. Bilateral trade is about $100 billion, and the President and the Prime Minister have agreed to try and take us up to $500 billion. That's an ambitious target. But I think the fact that the government in India has launched a whole series of initiatives does create opportunity. And the international diplomacy that Mr. Modi has launched is specifically focused on also creating a link to his domestic agenda. And the obvious example is the focus on building the physical infrastructure in the country and things like the railways where he's looking for partnerships with China, with Japan, with France most recently. He's looking at building a manufacturing base and he's opened up on direct investment for defense and of course on insurance a little more. He's looking for partnerships in urban development and creating smart cities. He's got a hugely ambitious program in clean energy. He's taken the target for 2022 for solar energy from 20 gigawatts to 100 gigawatts, which is astonishing. And then he's taken up the target for wind energy to 60 gigawatts. One, this makes a huge difference to India's ability to talk in the climate change negotiations multilaterally. Two, it creates opportunity for bilateral initiatives, trade, investment, and so on. So I think it's a good time for India and the US to be talking across a whole range of issues. We are now more or less acknowledged by the fund, the bank, and almost all international observers as being the fastest growing economy in the world, overtaking China. It doesn't say very much when the Chinese economy is four times our size, but at least you begin to start showing some real momentum. The Swadwani spoke at length on several issues and all of those comments are very pertinent and relevant. I do have a slightly different view on the employment question, which is that if one sees it in purely macro numbers, the net addition to the workforce each year is about 8 million. Now, that sounds like a very large figure. But the overall workforce is 480 million, so the actual growth is about 1.6%. Now, for an economy growing at 7%, it's not that difficult to create 1.6 million growth in employment. And then if you leave out agriculture, which is half, and say all the growth has to come in non-agriculture, which is what it is, even then the growth in employment has to be only 3% a year. And it is a challenge and it is a daunting task, but it is not the impossible task that very often people portray it as. I think the fact that we are looking at creating a manufacturing base is central to this challenge, that our manufacturing sector is only about 17% of GDP. That's not, I think it's also important to recognize what international comparisons are, that Brazil's share of manufacturing in employment is 17%. Russia's share of manufacturing in employment is 17%. So the only BRICS country which is an outlier is China, which is way out. And then there are several East Asian economies which are tied into the Chinese manufacturing base, which are about 24%, 23%. So it's not that we've completely failed in manufacturing, but it is true that the opportunities are enormous, that our own policies have held us back, and there is no reason why we cannot be like the East Asian countries and now 25% of our GDP come from manufacturing, which is the official goal. So with a sense of purpose across the government, with ministers under pressure from the prime minister to be seen to be delivering and doing things, and with the macroeconomic picture improving in every way possible, the fiscal situation, I don't know what Mr. Jetty will say in the afternoon, but if you take the central and the state fiscal deficits combined, all the focus has been on the fact that the central deficit is what it is, and that it's under control and it's fine, but it's difficult to try and shrink it further in the way he's looked at it. But you need to look at the gross national deficit, which is the central government and the state governments, and if you do it that way, this is one of the most significant corrections we've done in our fiscal picture, because the transfers to states is substantial, and despite that, the center's kept its deficit under control, so there is very real fiscal correction that's happened. Monetary policy is responding, the inflation rate is down, the counter-count deficit is under control, fortunately because of the oil price situation, so the macroeconomy is under control and there is new energy taking place, and if in the course of this new financial year for us, which runs from April to March, we're actually able to see investment pick up, which I expect will happen towards the second half of the year, we will be well on our way. So I think the context for the subject of this seminar today on building the bilateral relationship is that India's very well poised to be taking those initiatives, and I'd like to close those comments, and thank everybody present for being here, to see if we are delighted from the Ananta Center to be here as a partner in this with CIS, the Nardwani Foundation, and look forward to these deliberations, and thank you very much, Rick. Well, that's a pretty stunning start to today's discussions. As I sort of mentioned at the outset, if we were to do this conference I think a year ago, the mood would have been extremely different. Near the end of the UPA government, there were dramatic concerns that American companies were raising about cross-border tax issues, about patent issues, about local manufacturing rules, and also I think what we saw is slower progress on encouraging new reforms, FDI caps and things like that, and it triggered what I think we all saw in Washington as a pretty big backlash. There were congressional hearings, there's requests for the U.S. International Trade Commission to conduct surveys on how American companies see the business environment, whether or not it's gotten better or worse in India. So it really, I think, things began to escalate pretty dramatically and in a very negative fashion. Since the time I think that the election has taken place, I still personally find the mood in Delhi is still a little bit wait-and-see in Washington, I would say, kind of the same thing, but at the same time there has been, as our speakers have pointed out, movement on a number of issues. You know, even a thing like insurance, which moving the foreign investment cap from 26 to 49, and I think those of you that know me know that I've spent a lot of blood, sweat, and tears on that issue over the years, you know, it's a small issue, but to see that the government actually was going to spend political capital on something that is only so targeted on foreign investment and on changing the environment is a great signal, I think, for investors across the board that indeed, you know, the government's first priority is spending political capital on issues that will stimulate growth. Foreign equity changes in defense and a variety of other sectors, I think, too, have given a bit more enthusiasm and partially I think that's contributing to the strengthening of numbers that I mentioned during my opening. So, you know, I feel that there's been great steps taken. I mean the coal reforms, I don't think get nearly enough attention, but India imports about 1% of GDP in coal. There's coal in the ground, but they have to import 1%, because, you know, the way that the sector is structured, the companies just weren't getting it out fast enough to get to the places that needed to go. So, reforming the coal industry and allowing private companies to come in and foreign companies to come in, you know, these are, I think, some pretty substantive reforms, too, that may be a fall in a bit under the radar screen. So, I think that's a great setup for what we're going to discuss for the rest of the day. The speakers so far have been far more efficient than you typically see at conferences, so I think we got a little bit ahead of who is scheduled to be our next speaker, Catherine Novelli. But I see that Arun is here already. So, allow me to introduce our Assistant Secretary of Commerce, Arun Kumar. So, we'll jump the order a little bit here if that's okay with you, Arun. Great. So, Arun Kumar, many of you, I think, have already known, especially if you're coming to an India conference, he must be a very familiar person to you. So, he took over as the Assistant Secretary of Commerce for Global Markets and as Director General of the U.S. and Foreign Commercial Service. So, he leads America's trade and investment promotion efforts. And if any of you had the opportunity to attend or to watch the Select USA Summit last month, that was Arun Kumar. So, he's one person in this room. I can't complain about the organizational efforts about this conference because that was about 150,000 times as large. So, Arun has done even bigger events than this. I go back with Arun for quite some time. Arun was a member of the Board for KPMG and led the West Coast Operations and got them active on India. He was also a board member of the U.S. India Business Council at the time. So, I always feel I have to act on my best behavior since he's been overseeing my work for quite some time. So, Arun, please, welcome you to the lectern, sir. Thank you, Rick, for that very kind introduction and also for the opportunity for commerce to step ahead of state. It is very rarely that this would occur. So, it's also great to be here with Ramesh, whose accomplishments, intellect and humanity I greatly admire. And also his wicked sense of humor. You must have caught that in the description of his meeting with Prime Minister Modi. But discussions like today are very valuable for U.S. government and the private sector as the United States deepens a strategic and commercial relationship with India. So, let me start with a slice of history pertaining to the U.S. and India. U.S. diplomatic relations with India started in the commercial realm. In November 1792, President George Washington named Benjamin Joy, a merchant from Newbury Port, Massachusetts to the United States consul in Calcutta. The British government accepted him but only as a commercial agent because our convalescent just left Calcutta a few months before and the memories of convalescent defeat were still fresh in the British leadership of India. Well, today we are delighted that under our 44th president, our commercial and economic partnership with India is central to our relationship. While commercial ties between the U.S. and India date back, as I said, 220 years, the ability to optimize and grow this relationship has never been as high as it is right now. The reason I say this is because of the alignment between our countries along three dimensions. Incredible growth potential, robust economic policies, and deep motivation in spurting greater trade and investment. In fact, much of this is driven by the Indian economy. In terms of road potential, IMF estimates of India's growth at 7.2% this year and 7.5% next year suggest that India will soon become the fastest growing large economy in the world. The U.S., of course, welcomes India's growth. In terms of robust economic policies, Prime Minister Modi's electoral victory last spring has been seen by many observers as a message from the Indian people on the need to revive India's economy. And a piece of good news recently was that Modi's reaffirmed India's BAA3 rating and revised the outlook from stable to positive. So U.S. businesses too are hopeful about the changes in the business environment based on the initial steps that have been seen to date. For instance, a new government committee dedicated to fast-tracking American investments has already made a positive impression. Last month, the Indian Parliament, as you know, passed legislation allowing for more foreign direct investment in insurance and defense as referred to just a few minutes ago. And the U.S. business community is watching closely to see what happens when the land acquisition bill that will open investment by what happens with the land acquisition bill that will open investment by easing industry acquisition of land. In terms of deep motivation to spur greater trade and investment, India has to cater to the needs of a growing population, which is expected to exceed China's by 2030. That means