 asked that we start getting back to our tables actually I think probably some of the discussions and networking that are going on now may be some of the most useful part of our half day together but I would like to ask Ambassador Shankar and Ambassador Blake to join me in the front thank you so much alright again we'll be locking the doors now hope you've all had a chance to get your coffee actually I don't think we need to lock doors because I think that you are all here to hear our next speakers as well Ambassador Mira Shankar of India and Assistant Secretary of State for South and Central Asian Affairs Bob Blake I've been asked by both not to do long or even medium introductions so I will take them at their word because I think that you're here to hear them we do have in the back a table with multiple handouts including bios of all the speakers but truly I do not think that the two speakers that we now have India's ambassador to the United States and the Assistant Secretary of State dealing with India need any further introductions they've had long distinguished careers and their respective foreign services they are deeply engaged and furthering this very important strategic relationship so I think that I will just ask Ambassador Shankar first to come to the podium to speak for about 10 minutes and then Ambassador Blake and then we will take questions from the table here I do want to mention one technical point there is a video recording of this event and we will post it on our website so if you have to step out for a moment and say what did they say you can actually go to our website and see it again so that is being done so Ambassador Shankar if you would please take the podium thank you Carl Assistant Secretary Blake, Ramesh Wadwani, Ambassador Hills, Dr. Hamre I think this is a great opportunity for us to see how far we've come in the India-US relationship and what we need to focus on in future to ensure that we continue to progress on this relationship for India I think development today is the key priority we need to accelerate our economic growth to between 8 to 10 percent and to sustain it for the next several decades in order to be able to deal with our developmental issues including the backlog of poverty and other social issues that we have in doing so we see the United States as a very important development partner for India and also as a key partner for building peace and security in our region we've had different templates which have been discussed I thought Dr. Wadwani did an excellent job in putting forward the template of India and the US focusing on economic development on knowledge and skill development and defense and security and broadly that's how we've been looking at the relationship we have dialogues and agreements today in these three areas you know economic development including trade and investment peace and security which would include counter-terrorism defense and political consultations and then of course the whole basket of development related issues which cover knowledge and skill development or education which cover health which cover agriculture and which also cover science and technology so as you can see it's a fairly broad based agenda that we have built for the relationship and we have of course achieved a very significant momentum with the visit of our Prime Minister here in 2009 as the first state guest of the Obama administration and with the visit of President Obama to India in November last year which saw some very significant breakthroughs in important areas to these three templates I would add actually one more and that is how India and the US can work together in meeting global challenges because if we are looking at a global strategic partnership then clearly that has to be an element of the relationship that we are trying to build now if we look at the basket of you know economic development or economic cooperation which covers trade and investment and so on I think there's been considerable growth in the relationship last year we've seen the trade grow by 30% to about 48.75 billion dollars two ways but still if you look at the total volume it's still low because the growth has been on a low base since India was not a trading nation till we opened up our economy in the early 90s so the potential for further growth is huge similarly in terms of investment flows we've seen that these have become two way and that there's been growth in foreign direct investment in both directions but again the potential is considerable and we should ensure that we are able to maximize the opportunities which have arisen with India's sustained economic growth because as India continues to grow it will need both flows of capital and flows of technology and that is where the United States and its businesses could have a real business opportunity the Indian economy is also becoming more broad based and that provides further opportunities because initially in India it was the services sector which first took off you know the IT sector but now we are seeing that while the services sector is continuing to grow to become broader and more sophisticated in terms of the kind of operations it performs we're also developing capabilities in manufacturing and that remains a key priority for India to grow the manufacturing sector so for India I mean if you take a look at the sectors where we've become competitive in manufacturing it's automobiles auto components you know which grew at over 30% last year similarly pharmaceuticals and chemicals particularly generics again some of the infrastructure related industries such as steel and cement which are growing fast because of the growth of infrastructure in India but and and we have developed what I would call you know some particular advantages in I think what has been described by Mr. Mahindra Anand Mahindra as frugal engineering driven by the nature of the market which is very price sensitive but is large and yet wants you know technologically sophisticated goods so you see that in the development of the nano which is a small and very cheap car perhaps the cheapest in the world but which saw over 30 patents being generated in the development of that product you see it in the area of nuclear power for instance where India perhaps is the most cost-effective producer of small nuclear power plants in the world you know below 500 megawatts not the big ones and that's the challenge that we have how to scale up you see it in our moon mission which we did at one-twelfth the cost of similar moon missions elsewhere so this is an area where I think US and Indian companies could partner for mutual benefit it would benefit India to have more manufacturing and if we had access to US capital and investment and technology in the manufacturing sector I think it would also benefit the US businesses because it would give them the ability to develop models which when applicable and relevant in the Indian situation would also be relevant in other developing countries and we are seeing some companies who do this in India who are developing products which find a market not only in India but worldwide but so you know for the governments we really need to see how we can facilitate this process and maybe I should also focus on services trade because that's also been an important element of our trade relationship and sometimes I think in the US we see that there is this feeling that somehow India has an advantage in services but if you look at the figures of trade and the latest figures are 2008 full figures and these are US figures not Indian then you see that two-way services trade was 38 billion dollars and it's the US not India which has a small surplus about 19 billion dollars of US exports 18 billion dollars of Indian exports so growing in both directions and broadly balanced and I think that's an important element of our two-way trade and economic relationship that it is a relationship which is bringing benefits to both sides so what can we as governments do to facilitate this process to accelerate the degree of cooperation between India and the United States I think there are some reforms which India itself has on the anvil for instance in the budget this year we have proposed a the adoption of a direct taxes code by next year which will streamline the whole taxation system and make it much easier for companies secondly we have proposed a goods and services tax which would do away with these different octroys and things like that and create an integrated market reducing the cost of transactions there we don't have a time frame because if this involves consensus development with the states but we've done it earlier for the value added tax now I know that's a dirty word in the United States but when we introduced it it actually increased the revenues that the states had and we worked it by telling the states that look if there is a revenue loss the center would be willing to compensate for it in the event when it was actually implemented the states got far more revenues and this really didn't need to be you know had recourse to so these are two major things on the anvil one of the other reforms which was announced during this budget was to increase the ceiling for corporate infrastructure debt bonds which would create the ability for Indian businesses to have a higher level of corporate debt bonds for infrastructure projects in India we also reduce the tariffs on a large number of items including cranberries raisins and pistachios which would have you know business potential for the US but also on a much broader range of equipment and machinery for coal storage and the entire coal storage change and for agricultural machinery because agriculture is a key priority for India since 55% of our people continue to be dependent on agriculture for a livelihood and we need to trigger the next leap in agricultural productivity so here again is a huge opportunity for the US infrastructure should be a big opportunity because as dr. Vadvani said it's not really at a level which we want it constrains our economic growth but it's a huge business opportunity because we would need to invest a trillion dollars in developing infrastructure while some of this will come from the government we hope that a lot of this will come from the private sector and so there would be opportunities for US companies to be more actively engaged in the infrastructure sector in India as we move ahead we have been discussing a bilateral investment agreement with the United States perhaps that's one area where we could accelerate negotiations but I think the US has been conducting its own internal review of its bilateral investment treaty framework and so this hasn't progressed as fast as we would hoped but clearly it's something which is on the agenda we're looking at a bilateral aviation safety agreement which will again be a potential booster for trade because it will provide a trigger to more flows trade flows in the aviation sector which has emerged as a key area of cooperation for the US which supplies a lot of aircraft and other aviation equipment to India this should be of interest but equally to Indian companies who may be you know producing sub-assemblies and components and so on this would provide them easier access to the US market because of safety benchmarking of their product so again this will open considerable potential as far as a free trade agreement is concerned I you know I think that from the Indian side we have discussed the possibility of having a study conducted which would look at the pros and cons of such an agreement for both sides but it's an idea which remains to Chris which still has to crystallize you know with acceptance from both sides on the knowledge and skill development in the knowledge and skill development sector and the other development sectors I think these will be the next frontier of India US cooperation I mean education is such a huge challenge for India and a priority because we want to make our economy not only grow fast but also have inclusive growth so that the growth doesn't benefit only a small section of people and their education becomes the key so after a long time we have seen the government of India invest in education in a very major way to give you some idea we will be stepping up outlays on education from something like 8% of government outlays to about 19% of government outlays that's the kind of leap in investment and it's across the sector it's across the spectrum from school level education where we have a compulsory right to education bill which provides for free and compulsory education to all children between the ages of 6 and 14 now in the second phase we are going to extend that further then at the university level where we are creating through government investment after many years you know many new institutions including institutions of technology of information technology of management of advanced science and research of central universities and so on we're also creating a broadband network or call it's called the you know knowledge network which will link all these universities together particularly their libraries and so on enabling some pooling of resources and then in the second phase the idea is to also extend this network to the villages using technology to leapfrog some of the problems of delivery of government services that we have faced we are looking to us and the third element is vocational education and skill development which will be critical for those who don't want to go on to higher education but still want employable skills in the Indian economy and here the challenge is to fashion the vocational education and you know skill development space in a way which is more closely allied to industries needs or to the needs of the Indian economy because still now till recently we were really you know having our vocational training framework run in a relatively bureaucratic fashion without that constant osmosis and you know coordination with industry and that's the big challenge for us because we have to expand this enormously but we also have to upgrade and remodel this whole and this whole framework so this is a huge opportunity for Indian and US institutions to work together we will be having an education summit later this year in the fall and we hope that that will be a catalyst in you know throwing up ideas for how we can intensify cooperation between Indian and US higher education institutions then if you take the whole area of energy I think that will be a key area for our cooperation because for India's economic development we will need to grow our energy basket very very significantly at the moment because we have 600,000 villages and people living in this decentralized fashion almost 400 million people don't have access to commercial energy so we not only have the challenge of ensuring that our you know energy production can sustain a high rate of growth we also have issues of you know basically providing the service to people across India we will be looking at a basket of energy which doesn't rule out any option despite what has happened in Japan nuclear energy will continue to be an important option for India and we hope to scale up our nuclear energy program with the assistance of international partners including the United States which had taken the lead in this you know seminal India US nuclear agreement and the waiver at the nuclear suppliers group but beyond nuclear energy we also look to renewable energy where already I think about 9% of our installed generating capacity comes from renewables but it's mainly wind and micro hydral where we need breakthroughs as solar and we have a new solar energy mission where we have announced that the government will procure 1000 megawatts of solar energy 500 photovoltaic 500 solar thermal with a view to kickstart the program and I think we've got a good response and tariffs in terms of the competitive bidding have come down to rupees 13 a unit but still high compared to conventional energy so here I think this could be the answer to India's energy requirements because whatever we may have or not have we certainly don't have a shortage of Sun but how do we ensure that we can use it in a way where it is commercially viable vis-a-vis conventional energy maybe in future the curves will cross but if we can get this 1000 megawatts started with some you know production in India to reduce costs because the key is reduction of costs for scalability of the program and that's where technology cooperation or investments by US companies in India for solar you know equipment production would be really in increasingly important and the third area would be energy efficiency for buildings and so on because we are beginning our you know cooling of our buildings through air conditioning can we do it in a more efficient way so that right from the beginning we can reduce the amount of energy required for cooling so this would be an important area and finally of course the shale gas where the US is helping us through the shale gas initiative to map our reserves and we have identified shale gas in West Bengal which would be you know one of the major you know new fines outside the United States of course we need to do it in an environmentally sustainable way but this could be a very important area of cooperation which would help to build India's energy security and also be beneficial to the world because it will reduce pressure on hydrocarbons and also enable India to meet its energy needs in an environmentally friendly manner of course if you take the whole rubric of peace and security and defense I think we share increasingly convergent interests for building peace and stability within our region if we take a look at Afghanistan then both of us share an interest in ensuring a stable prosperous democratic and independent Afghanistan and in dealing with the you know terrorist safe havens which are making this you know a volatile and unstable region again if we take a look at the broader Asian continent both our countries share an interest in building open inclusive and balanced architecture of cooperation in Asia which would enable or contribute to peace prosperity and security on the Asian continent and if we look at the Indian Ocean then you know clearly we both have shared interest in keeping open the sea lanes of communication and this area of maritime security cooperation is one where we have been working together for anti piracy efforts humanitarian disaster relief and so on and will be an important area of our cooperation in future we just had the visit of Secretary Napolitano for the Homeland Security Dialogue we have a counter terrorism initiative also both these really focus on capacity building intelligent sharing and experience sharing and I think and sharing of information and intelligence so this will be a very important area of cooperation for both our countries the defense sector our exchanges have intensified we're also buying equipment from the United States which we weren't doing before in recent years we bought four billion dollars worth of equipment which includes ship which includes C-130J aircraft which includes maritime surveillance aircraft and we just had a decision for the C-17 transport aircraft which is another four billion I know I heard some of the previous speakers express disappointment about the decision on the MMRCA but this was a technical decision based on very detailed evaluation by the Indian Air Force as to which you know technologies would best meet their requirements because this will be a platform for the Air Force for several decades to come but I think the important thing is not to focus on one contract or the other the important thing is to focus on the long-term potential which where there will be many more opportunities for the US where we buy equipment from the US both through the foreign military sales route as well as through the you know in international competitive bidding route and when you go to the international competitive bidding route I think the level of technology offered will also be important because there are other competitors who also offer you know a state-of-the-art technology but looking beyond the buyer-seller relationship I think the real potential will be in building defense partnerships for production and research because India is trying to build its defense sector in a different way than it did in the past by a greater role for the private sector we've opened up defense production to private sector companies in India and probably one of the few countries which has also opened it up to 26% foreign direct investment so if the offset policy which India has put in place can be utilized to create defense partnerships or investments which enhance India's defense production capabilities I think this will be a long-term defense partnership which has enormous potential and then of course looking beyond these if you look at the broader framework then there is a comfort level in the interaction we have with the United States because we are both broad sprawling democracies I heard somebody say that the US is now becoming more like India but I would say that India is a very robust democracy where everything is constantly under debate discussion agitation protest consensus building and so on the interesting thing about Indian democracy is that it has greatly broadened over the years you know with the kind of very innovative features which we introduced in our Constitution in the beginning you know for affirmative action for vulnerable sections we have seen the broadening of the participatory base of Indian democracy also increasingly it's moving towards coalition governments rather than any dominance by any particular party and you're seeing the locus of power also devolve to the states particularly in terms of economic decision-making so this is a very important shared perspective which gives us a comfort level in terms of fashioning our relationship into the future it is a relationship where as Prime Minister Manmohan Singh said not only do we have shared values or shared interests we have both you know we have values which are common and to which we both subscribe and we also have increasingly convergent interests so as I look ahead I think this will be a key relationship for both our countries in not just in the near future but looking ahead to the 21st century itself thank you well it's a pleasure to for me to share the platform with my friend and colleague Mira Shankar who's done a terrific job here representing India here in Washington DC I also want to add my thanks to Rick Interforth and to Dr. Ramesh Vodvani who have brought this great group together and who more importantly have really helped to invigorate I think the India policy studies here in Washington so I think it's really a terrific addition to the community it's always a bit of a hazard for me to come after Mira Shankar because we often have quite similar things to say reflecting the growing convergence of our views and our policies we sometimes joke that perhaps we could just exchange our speech writers and see if anybody would actually notice but in this case I've been busily scratching out large swaths of my remarks so I don't repeat what she's already said but let me so I'll skip all of the introductory comments and just say that as all of you know we've made extraordinary progress over the last 10 years between the United States and India we are cooperating across virtually every field of human endeavor from counterterrorism to non-proliferation from economic growth to reconstruction in Afghanistan from food security to energy security as Senator Warner said of course we've got to take a pause from time to time and consolidate what we've already done and make sure that we're really taking advantage of everything we've already put in place and we're certainly doing that but we also have to look ahead and try to build on that progress and Secretary Clinton will be going out in mid-July to Delhi for the next round of our strategic dialogues that she chairs with her partner and colleague external affairs minister Krishna so we look very much forward to that opportunity. Let me just tick off a couple of areas very similar to what we are did of areas that we see as real opportunities for growth where we've already seen quite a lot of progress. First is of course trade. The robust health of our commercial relationship I think really provides an example of how our strong and growing people-to-people ties complement and in fact are often well out in front of our government efforts. As many people have already said trade between our two countries has doubled twice in the last 10 years and I think we'll continue to drive our partnership. In 2010 two-way trade was up almost 30% from the year before and India has gone from being our 25th largest partner in the year 2000 to our 12th largest partner and will continue to grow in the years ahead. As Dr. Vodwani pointed out India's foreign direct investment into the United States is also growing very fast. It was 5.5 billion at the end of 2009 making India now the 7th fastest growing source of FDI into this country. India and the United States have the potential to be each other's largest trade and investment partner with significant benefits for both of our peoples. We've already made significant strides but economic barriers on both sides make it hard for US exporters to gain access to some Indian markets especially in the agricultural area. Restrictions in retail, in insurance, in defense and other areas continue to limit our company's ability to expand their investment overseas and that obviously remains an important focus of our dialogue. So we must continue to encourage market openings on both sides that will allow both countries to capitalize on these tremendous opportunities. We want to seize opportunities such as renewing progress on a bilateral investment treaty which would help lower the risk of investing in India by establishing safeguards and provide for an independent arbitration process that would provide our investors maximum protection. A bit would also protect growing Indian investment here in the United States. On defense, as Zordy Poon pointed out, India is now engaged in a massive military modernization program. It's expected to spend over $35 billion over the next five years in defense acquisitions. Of course we regret the MMRCA decision but again we want to look forward at some of the big opportunities that are out there and we also want to recognize that we've already had some good successes. Everybody's already mentioned the C-17s but other examples include the Air Force's purchase of six C-130Js, the first of which was delivered in February, and the purchase of eight P-8 long-range maritime patrol aircraft. Our defense cooperation also complements the ongoing slate of very robust exercises that we have between our two countries. Let me turn again to visas since Senator Warner mentioned that. Visa insurances to Indians are another very good indicator of our thriving relations. For the past four years Indians have received about half of all of the H-1B visas issued worldwide and 44 percent of all the L-1 intra-company transfer visas. 650,000 Indians travel to the United States in 2010 marking an 18 percent increase over 2009. And of course India has historically been one of the largest sources of international students to our colleges here with well over 100,000 students coming here to study last year. As previously pointed out we look very much forward to hosting a US India Higher Education Summit in the fall sometime which will bring together a huge range of our educational institutes. Not just the higher end colleges but also the community colleges, vocational training, and other institutions that have a great interest in doing more in India. Educational linkages will also bolster the efforts that we've made to foster innovation. The National Oceanic and Atmospheric Administration has established a monsoon desk to help bring monsoon forecasting data to India's farmers in cooperation with the Indian Space Research Organization. We've also established a new public-private partnership the Science and Technology Endowment Fund which will award $2.5 million a year to new innovative projects that could produce material benefits for both of our countries. And under our partnership to advance clean energy we've established a joint clean energy research and development center that will mobilize up to $100 million in public and private sector funds. This new energy research initiative is the most integrated joint clean energy undertaking that the United States has ever undertaken with another country. And since the passage of the US civil nuclear deal we stand poised to contribute to the growth of India's civil nuclear energy sector and we continue to urge the Indian government to put in place a good regulatory and legal framework that will allow that cooperation to proceed. I'd also like to just take a moment to recognize India's regional and global leadership. Prime Minister Singh's recent visit to Kabul underscores India's strong efforts and initiative to support international efforts to rebuild a secure stable Afghanistan. The Prime Minister raised India's assistance pledge by $500 million to now a total of $2 billion. India has assisted with critical infrastructure projects as well as smaller development projects like health care facilities and wells and we also greatly appreciated the Prime Minister's public support for Afghan-led reconciliation efforts. Prime Minister Singh likewise has shown great leadership and courage in advancing the current thaw in Indo-Pakistani relations. Following the cricket diplomacy launched by the two prime ministers the commerce secretaries of the two countries met last month in Islamabad and announced ambitious commitments to enhance trade and commercial ties. So India's economic rise presents a huge opportunity for Pakistan. A bilateral breakthrough could provide a catalyst for wider economic integration in the South and Central Asian region. But India's efforts to make the world a more safe and secure place do not end at its regional borders. Prime Minister Singh recently undertook a momentous trip to Africa in which he pledged $5 billion in development deals, encouraged counterterrorism cooperation and pledged to create an India Africa Institute of Agriculture and Rural Development. The India model for encouraging growth in Africa is very impressive. This month we will see bilateral ties on arms control and international security in Vienna. We will see a visit by the head of the opposition BJP. The high technology cooperation group will be meeting very soon and we're stepping up our cooperation with India in multilateral and regional forums such as the ASEAN regional forum that will be held in July. And as Mira said we see very promising opportunities to work more closely with India in Asia and also in the Indian Ocean. I expect these to be areas of a conversation at the upcoming strategic dialogue. So in conclusion the global strategic partnership between the United States and India is founded on shared values and exceptional people to people ties. But we must remember this is a long-term project. Neither country can take the relationship for granted. We need to work together to ensure that the spirit of President Obama and Prime Minister Singh's November 2009 summit and President Obama's highly successful visit last year to India is carried forward with concrete steps. Such achievement will help build a political support in Washington and Delhi as well as Mumbai and Manhattan to think more ambitiously about what we can achieve and where our partnership will go in the rest of the 21st century. India is on track to have the largest population in the world by 2030 and may well have the largest economy in the world by 2050. It's a rising giant whose influence is not only felt in the Indian Ocean but in the Americas, Africa, the Middle East and Central Asia. Its rise will be one of the great stories of our time. Our strategic relationship can make the world more secure and democratic while our commercial partnerships can produce novel products that will meet the needs of the 21st century consumer and create millions of new jobs for our peoples. So once again, I want to thank Rick and I want to thank Ramesh and everyone else for coming and I look forward very much to a good dialogue with all of you. Thank you. Okay, I feel like I've actually been participating in an episode of Dancing with the Stars with our five presentations. If I had a card here I'd give everyone a 10. I think we would all agree with that. That's applause now. So once again, thank everyone for these great presentations. I am not going to take the proverbial prerogative of the chair to ask the first question because you've all been wonderful to be here and I'm sure after all that you've heard you want to ask our two speakers questions. So I'm going to turn to the floor. We have microphones, I believe, on either side so if you could stand up and pose your question and we'll get a microphone to you very quickly. If you would identify yourself and your affiliation if you wish and then we will have I think about 20 minutes for questions. So let's begin. Who would like to start with the questioning? All right, we'll start right here in the middle. I can't see people very well so I can't identify you by name but please do that and then we will have these two questions in the middle to keep the mic close together as we move around. Thank you very much. My name is Kumar from Amnesty International. I have two questions for Ambassador Shankar. You mentioned about regional stability and Afghanistan is the issue. Prime Minister Manmohan Singh was there and he supported dialogue with the Taliban. Obviously India's interest in Afghanistan is different from US interest in Afghanistan. US, of course, is having troops. They have to leave one day or another. India, of course, it's in the neighborhood and Pakistan complicates the situation. So during this dialogue which India is supporting, do you have any red lines that you would urge Kassai government not to cross? So I just want, I also want one other just a side question. You mentioned in your speech about peaceful protest will be allowed but as we are here yesterday and day before they were protest against corruption in India and excessive forces for use and massive people were beaten up. I need comments on that as well. Thank you. First of all let me say that I think what Prime Minister Singh has said is that we support an Afghan-led reconciliation process because it's for the Afghans to determine what kind of society or polity they want to build but within the red lines that had been agreed upon at the London conference including by the Afghans themselves. I think President Karzai himself had agreed to these and that is that you know they must for swear links with Al-Qaeda, lay down arms, give up recourse to violence and accept the Afghan constitution. So it has to be within the four corners of the constitution with acceptance of political pluralism as well. With regard to the other issue I would say that there is a you know strong discussion right now within India on the issue of how to deal with corruption and an emerging consensus that the framework to deal with it could be strengthened including for instance that India has just ratified the UN Convention Against Corruption. We have also various proposals on the anvil including for creating an ombudsman you know who would have the authority to look at this issue but the details of these are still to be evolved within the parliamentary framework but there are proposals currently which are very vigorously being discussed. I think at another level if I may you know point out to the institutional changes which have taken place in India many of them have had the effect of reducing corruption because as we have moved to an economy of less regulation of less discretionary government decision making I think we have done away with whole sectors of corruption. The second has been a moving from an economy of scarcity to an economy of availability and competition. If I give you an example for instance in my lifetime you take a look at telecom I mean I recall when I was growing up that when we joined the government that we had one telephone provider and there was a long waiting list of people waiting for telephones and if you approach the department they would say well you know you have to wait so many years because we have such a big list and either you had to know somebody or you know to try to get a connection quickly today it's a very different situation where companies are chasing mobile customers phone customers and sometimes we are adding 15 to 20 million new mobile connections every month so that's the kind of difference which has taken place where one whole segment which used to be an area of you know concern for people because of the kind of services which were not available has changed for the better. Similarly if I take the automobile segment you know we had the good old ambassador car which India used to produce from the 50s we were producing the same car in the 80s it's a nice car I mean I have nothing against it but then we had the Maruti which was the first joint venture between an Indian public sector company and the Suzuki company from Japan and there were huge wait lists for the car you had to apply if you were lucky enough to get an allotment of a Maruti the market value was much higher than the you know the cost and with the car was being sold similarly for the two wheeler the Bajaj two wheeler there were wait lists for several years today you have all the car companies in the world producing in India it has become the world's single largest hub for producing small fuel efficient cars there are Indian car companies which have emerged like Tata's and Mahindra's who are developing their own stable of products and they're running after the consumers to buy their products and you know you get confused with all the fine print of the various offerings that they make so again a whole segment of you know what used to be harassment of people unavailability of services leading to corruption has vanished I think the third element I would say is using technology to leapfrog because say for instance railway reservations now you can do this online and again that has done away with the whole segment of you know middlemen and so on and it's become very much easier for anybody who wants to book a railway ticket online so if we can improve the delivery of government services using technology to leapfrog if we can make institutional arrangements which open up sectors of the economy reduce discretionary government decision making to the extent possible and you know do away with monopolies introducing competition both in the public and private sector then I think we would have dealt with this problem in a very major way. Can I just make one additional point about corruption one of the themes of my remarks is how the United States and India are working more together internationally on the big challenges of the day and one of those is corruption and we have a very important multilateral initiative on open government underway India's on the steering committee that with the United States and India's right to information law is really quite a powerful example for other countries and I think has been a very effective tool for anti-corruption activists inside India and as somebody who's served in South Asia we have we and other people inside South Asia have sought to duplicate that example elsewhere because I think it would be again a very helpful tool in other countries. I actually saw an article about India's right to information law that it uses that law per capita more than any other country including the United States with our Freedom of Information Act so it's a valuable tool for the populace of a country to keep their officials accountable. Another question right here there we go David Scruggs renaissance strategic advisors I have a question for each of you if that's okay. From Ambassador Shankar the question is you're coming about the 26 foreign limitation of ownership of companies there to increase FDI and foreign investment in India is there any movement in the 26 upward if so when and how that's my question the other question is like is India has been very clear they want to broaden their technology capabilities and want to broaden their defense production capabilities in particular our restrictions on technology transfer seem to be an impediment and I think you would point to the MMRCA at least I think that's the indication that that was an impediment is there any movement in how India is perceived or classified in the State Department's political military calculations thank you me clarify that the 26 limitation is not across the board I think in most sectors India allows 100 percent FDI there are only very few sectors where there are some caps and these are largely for reasons of political or social sustainability or in the defense sector because most countries don't allow any FDI at all in the defense sector or allow it within certain norms because of issues of security or national sovereignty but I think as our you know we would probably look at our experience in terms of how this 26 percent investment occurs and you know where it leads to because you know we have just undertaken a major change in our offset policy which will help investment and that is we have broadened the scope of offsets earlier we insisted on defense to defense offsets that means limited to the defense sector we've broadened the scope of offsets to include civil aviation technologies and also homeland security technologies which greatly expands the basket of areas where offsets could be met in terms of this 26 percent I think the current view of the Indian government is let's see the companies come in let's see how they you know fair and then if there is a need to review we will but a priori I think they find it a bit difficult right now because they want to test you know the experience with this 26 percent on the question of defense trade and first of all I would I would gently disagree with the premise of your question which is by saying that I don't think technology transfer was a major factor in in India's decision from the United States perspective we were prepared to offer some of our very best technology on both the Boeing and Lockheed platforms for the MMRCA including the IESA radar so and more broadly I would just point out that there's been a remarkable trend over the last 10 years in which we've significantly relaxed our export controls on India because of the enhancements that India has made to its own export control regime we've one of our most successful dialogues has been the high technology control group where we where we've really sought to again significantly reduce the the controls on trade with India and we continue to make progress most recently as a result of the president's visit where both the Indian Space Research Organization and the Defense Research and Development Organization were taken off the Department of Commerce's entities lists that action was actually completed in February of this year so again we are I think taking a quite expansive view of the opportunities for greater defense trade with India and we'll look I think very favorably on transferring more and more high technology in that area to to India. I would endorse what Bob has said I think the recent agreement to you know streamline export controls as they apply to India will have a very positive impact on our ability to engage in high technology trade dual use technology trade or even defense trade and as part of this we also have the US commitment to support India's membership of the four export control groups that is the nuclear suppliers group the missile technology control regime the australia group and the vasanar arrangement and this also will facilitate I think the levels of technology that India would have access to. Yes sir. I'm Manohar Thiyargaraj just a broad question that I'd like to ask about this relationship one would see as being unique between two large interagency processes the US and India so is there a point to be made that big initiatives you know big ideas are the driver for this relationship or would you believe you know opinion wise that this relationship has to be routinized before broad big initiatives are necessary which one do you see as being the bigger vehicle the bigger highway to to the next 10 20 years. Well I would say it's both I mean in the early part of of the relationship certainly of the last 10 years big ideas were very very important particularly the civil nuclear deal which took which was probably our most significant irritant in our bilateral relations and turned it into a significant opportunity for cooperation so that certainly was a very big idea and a very important one but now is as our interests and our cooperation have really converged you're not going to find those kind of big ideas out anymore because we are cooperating in virtually every area but we're now looking to seize those opportunities by for example the educational cooperation that I talked about and increasingly through a lot of the global cooperation that we're undertaking where we are really working together on the big challenges of the day across the board and if you read the joint statement that was put out by our two presidents that really comes forth in a very concrete way. I would second that I think we need to do both we need to consolidate our cooperation in a manner which is very specific and detailed and at the same time not shy away from bold initiatives or bold ideas to drive the momentum in the relationship so I think it really should be a combination of both rather than an either or approach and in terms of you know our cooperation and meeting global challenges I think it would also be important to see how India can be brought into the systems of global governance in a more participatory way because if you know our cooperation is required to deal with many of the challenges that we face then clearly within India there is the sense that we should also have the ability to shape the decisions whose outcomes we would be expected to implement so in this context we greatly appreciated the support that President Obama extended to India's permanent membership of the Security Council to India's membership of the four export control regimes and to carrying forward the process of you know broader participation in international institutions of financial and economic governance in that same vein if I could put a plug in for our work at CSIS you have in the back a our monthly newsletter USNT insight and we address that question of what should we be doing now in the relationship we've had some very big ideas and some very big events what we should be doing now in terms of taking this relationship forward so I obviously endorsed my colleague Amir Latif and I obviously endorsed looking at how we proceed to the next step could Ambassador Shankar you just mentioned one thing that I'd like to ask a question about because of my previous experience at the United Nations and that was a very important statement that President Obama made in New Delhi of publicly endorsing India's bid for a permanent seat on the UN Security Council would like to simply ask you both six months and counting after that event what is the prospects for that to actually be realized what steps are our two governments doing to pull together a roadmap for expansion that would obviously include not only India it wouldn't just be a one-off expansion but a broader expansion of the Security Council where do we stand with that today in a general debate in the security in the UN which has moved beyond the ad hoc working group which was working on this and what we do see is that there's much greater support for a reform of the UN including the UN Security Council both in its permanent and non-permanent membership I think where we still need to forge a consensus is in terms of how that reform should be carried out there are different groups of countries which have different views but India along with the group of four countries that is Germany Japan and Brazil has put forward its own proposal for UN Security Council reform and as far as India is concerned I would say that four out of the five permanent members of the UN Security Council have supported India's membership and nobody has opposed it well I would say that as the president of course is as endorsed India's candidacy but it's a very it's going to be a very complicated process because of course there are a number of other aspirants and our goal is to ensure both a council that reflects the weight of countries such as India they're merging powers of the 21st century but also a council that is able to maintain its efficacy and so we're trying to find that sweet spot and figure out how to do that and that's a very complicated process so that process is underway but I don't want to make any predictions about when that might end because it's it is going to involve a very substantial process with a number of our very close friends for the question my name is Seema Sirohi I'm a journalist from India I am a little struck by the fact that we're talking about regional security issues and we haven't really discussed or you haven't really mentioned much about Pakistan a country that is in deep distress and has a direct impact on India's security and and the issue of terrorism so I'd like to know how you see the future of Pakistan in the medium term and in the long term and how what what the US government is doing to sort of put pressure on Pakistan about Lashkar-e-Taiba a group that we don't hear as much about in this city as as we should I think that's a big question let me try to answer it in as short a way as I can which is to go back to what our president said during his visit in Mumbai and also in Delhi which is that Pakistan is a very big and complicated and important relationship for the United States and also for India the president was quite eloquent in the town hall meeting that he had in in Mumbai where he talked directly to the Indian people about how they share the United States interest in helping to stabilize Pakistan and I think that the leadership that Prime Minister Singh has shown in reaching out to the Pakistani people even though Pakistan has not done everything that India wanted in terms of finishing the trials of those who were responsible for the Mumbai attacks in terms of closing down many of the camps that still threaten India even though Pakistan has not done that the Prime Minister recognizes that it's in India's long-term interest to try to help Pakistan particularly as I said through the the commercial side of it to help create jobs on both sides of the border and realize many of the potential that has not yet been realized so I think it's a very very important step but in the meantime we have to still not lose track of the very significant security threats that remain and I think the Homeland Security Secretary Napolitano's recent visit underscored the very very close cooperation on counterterrorism between the United States and India that has grown substantially since 2008 since those attacks and will continue to grow because it is very much in our interest to prevent such an attack and to work in the closest possible way to help increase India's own counterterrorist capabilities to work on the intelligence front with India and of course to work together to help Pakistan The I think Senator Cornyn in his remarks also addressed that important issue of our collaboration with India on these issues within the region I think his remarks were very important in that regard and we will also be discussing that issue in our next discussion when Bruce Rydell who has just been has just had published his book Deadly Embrace the relationship of the United States and Pakistan so I think we will have more on that topic coming up in a moment I want to keep on schedule so I would like to now use that that prerogative of the chair to ask both of our speakers one final question something that Bob Blake mentioned he recently was at Wharton speaking there and let me preface it by saying that in terms of our overall relationship we recently did a head count of the formal dialogues and working groups that have been established over the last number of years we asked both the Indian Embassy as well as Bob Blake's office and as a total of 31 formal dialogues and working groups have been established most recently the formal dialogue on homeland security and that's why Janet Napolitano was just in India and we're pleased to say reported back to CSIS on her return to talk about that very very important new dimension or added dimension we've been discussing this for some time but something that Bob said at Wharton and I'll just read it and having served in government as well I fully ascribed what he has to say he said we're in the business of creating the environment the role of government we're in the business of creating the environment for these deals to take place not to actually conclude them ourselves he said the point is now the private sector has eclipsed what the government is doing and that's a good thing that's exactly what we'd like to see happen I'd like you both to comment on who you see as the principal drivers in this U.S.-India relationship has the government actually now taking something of a secondary role to our private sector and our people-to-people exchanges Bob and then I'll let Ambassador Shanker wrap up well I don't think we've quite put ourselves out of a job yet I think there's still quite an important role for government to play on both sides of the relationship but I do think that the drivers of our relations really have been these remarkable people the people ties between our two countries and increasingly the private sector not only is there tremendous dynamism in the trade and investment in both directions as Mira pointed out in her remarks but increasingly every one of those dialogues that Rick mentioned as some sort of private sector component because we we do rely on the dynamism and the advice of the private sector to help inform those dialogues and to help sort of propel them forward because we don't talk just for toxic we talk because we want to again create opportunities for our people and for our businesses and for our scientists and for our lawyers and everyone else and so I think we've made a lot of progress but there's still a role for government but more and more it will be the the private sector and others that will I think take the four and I think that's particularly true in the United States where let's let's not kid ourselves as Senator Warner said we're facing some quite significant deficit challenges of ourselves so increasingly the United States is looking to public private partnerships and other mechanisms like that to work much more closely with the private sector to drive our foreign policy and I think that's a trend that you're going to see accelerated over the next 20 or 30 years. I would agree I think government can work to create a framework to you know to enhance understanding to act as a catalyst and to put in place facilitative policies but the substantive elements or density of the relationship if I may say that would emerge from the networks of private initiatives that occur. So whether it is you know if you have say 10,000 students in the United States and these are you know individual actions by individual students or you have 100,000 students in the United States as we have today then you see the nature of the interaction becomes far more broad based and solid and you see the impact of that in a number of ways you know from you know college university groups performing Bhangra rap when I go there in a joint you know American Indian venture to people learning yoga to many young people in the United States all telling me you know oh I have an Indian friend and I attended his or her wedding so everybody now knows what a big fat Indian wedding is so it impacts in many ways and gives the density and solidity to the relationship similarly in terms of business it's governments which can create a facilitative framework but the actual risk taking the actual business of business if I may say that will have to be with the private sector and how they seize the opportunities which are there at this moment of of transition and transformation in India which is a very very exciting place to be so I would agree with Bob says with what Bob said that yes governments will continue to play a role particularly on the strategic and political side but the nature of the relationship will also be shaped by how we create and expand individual networks across the two countries well if I could also concur with both of you I think these are the ties that will bind the two countries together could we express our appreciation to our speakers thank you both wonderful wonderful and let's um we have uh about five let's say 10 minutes to just mill around get some refreshments and then we'll have our final discussion so look forward to seeing you back here thank you very much no thank you he's foreign minister you know listen I knew that the curve is greatly appreciate you're doing this and thank you this is super you guys we're just calling attention