 Okay, folks, and the reason I needed to get you all seated is because the most precious time up here on Capitol Hill is a senator's time, and fortunately, Senator Cornyn has arrived, and we know that there are short windows available, and so I wanted to be able to get us all started. My name is John Hamry, I'm the president of CSIS, and this is a very important event for us in really a partnership with the Senate India Caucus, and I want to say special thank you to Senator Cornyn and to Senator Warner, who have agreed to work with us on this endeavor. It was about six months ago that President Obama went to India, had a very good visit, a very successful visit, and laid out a very ambitious agenda between our two countries, and we thought it was a very good time for us to use this six month window to say, let's reflect on it, where are we? And that's going to be part of our conversation today, and I look forward to hearing our panelists that are going to be with us. At this stage, what I would like to do is to turn the podium over to Senator Cornyn. You know, this is, it's exceptional when members of Congress are willing to take on duties of this scale and importance, and Senator, I want to thank you and congratulate you for it, because clearly, you know, this growing relationship, we went through a very long period of kind of mutual amnesia, you know, where we kind of forgot about each other, and it set everything back in my view, and we're finally recovering from that, and we've got so much that we can work on together. It's probably the most strategic development of this century, and we need to have the kind of political leadership that you're demonstrating, Senator. Let me turn to you and ask you to kick this off. Thank you, sir. Thank you, John. It's good to be with all of you today, and I appreciate CSIS taking up this important relationship. I agree with everything you said about it. I'm also delighted to see my former chairman, John Warner, here. It's great to see John, and then I want to express my appreciation to Mark Warner, my colleague from Virginia, current colleague from Virginia for joining me as the chairs of the US India Caucus in the Senate, and I traveled to India in early last decade after I got to the Senate at the invitation of one of my constituents who happened to be very active in one of the largest US Indian chambers of commerce located in Dallas, Texas, and I've had the chance to visit a couple of times since then. But suffice it to say that Texas, like so many states in the country, is the home to a very large and dynamic Indian American community, and they contribute a lot to the character, to the productivity of our state, as well as the United States. Now, there's a lot about the relationship between our two nations that I could talk about today, but I know time is short and I know Senator Warner, Mark Warner, is going to cover a significant amount of his remarks, part of his remarks talking about our trade and investment relationships, but I could talk about energy cooperation and, of course, educational exchange as well. I think President Obama did, John, get his foreign policy priorities right when his first state dinner at the White House was in 2009 in honor of Prime Minister Singh, and he visited India a little bit later himself. But my concern today for the purpose of my remarks is not about the relationship between India and the United States, which remains very strong, but that our foreign policy perspective in the region be not looked through a soda straw, that we pull back a little bit more and expand our field of vision to include the regional and global realities that we face. We know India is modernizing its military forces, and the United States is active in helping India to do so, but it's important to realize why that's important to us and to them. Why did our nation find a 10-year defense agreement in 2005? Why is it that India conducts more joint military exercises with the United States than any other nation? Why did India see fit to buy six C-130 military transport aircraft in 2008, which was at the time the largest sale to date? Why did India just this week decide to purchase 10 C-17 Globemaster aircraft? And why do a lot of Americans think what I think that the United States should not only allow India to purchase the F-35 Joint Strike Fighter, but that we should also encourage India to do so? Well, the answer to all these questions is pretty straightforward. It's that the United States and India see the same regional and global security challenges, and I'd like to mention two of those security challenges briefly. Of course, the first security challenge is terrorism. In America, we associate 2001 with the 9-11 attacks in New York and here in Washington. But in India, they remember 2001 as the year that the terrorist attacks on the Indian parliament. More recently, we know, of course, in Mumbai in 2008, terrorists killed or wounded hundreds of people, including six American citizens. So our two nations have suffered from violent extremists in similar ways. Of course, the death of Osama bin Laden was a huge victory in the war on terror, and I just had the opportunity to congratulate Director Panetta, who's now being nominated for Secretary of Defense for not only his contribution, but to the entire presidential team, national security team. But I also believe that, as President Obama has said, that with this event, as important as it has been, it's no time to spike the football. Al-Qaeda is not the only terrorist group that represents a threat. Others include Jamai Esmalaya, Tariq Atalaban, Pakistan, and, of course, Lashkar E. Taiba, that was directly involved in the Mumbai attacks in 2008, in which we are reading more about, given the trial taking place, even as I speak, in Chicago, involving the testimony of David Headley, among others. But LET was responsible for these attacks and received substantial report from Pakistan's security agencies in carrying them out. And some are recognizing the fact, I had a chance to talk with Ambassador Romer recently, that LET's aspirations are not just regional, but indeed larger than that in even global and scale. Admiral Willard, who leads the U.S. Pacific Command, testified before the Senate Armed Services Committee in April that LET is one of the largest and best funded militant groups in the region, and that India remains LET's main target. But as I said a moment ago, that its aspirations are larger than that, being ideologically driven as they are by their Islamic extremism. LET's also declared Holy War on America and is responsible for attacking some of our forces in Afghanistan. Admiral Willard also said that we have evidence that of LET's presence in Europe, in Canada, and even right here in the United States. LET terrorists should be captured and brought to justice, and that's what India and the United States are doing. I mentioned the fact that the trials taking place in Chicago, as I speak. The U.S. granted India access to David Headley, who's a very important part of that link in the Mumbai attacks. But of course, Mr. Headley is a U.S. citizen of Pakistani descent who pled guilty in federal court to his participation in those attacks. And just this week, U.S. federal prosecutors, I mentioned in Chicago, are concluding the trial of one of Headley's co-conspirators, who's charged with providing material support to LET through planning the Mumbai attack and helping Headley secure targets in Mumbai. Pakistan has moved much more slowly in prosecuting the LET terrorists that they have in custody. They have brought charges, but they have in fact not prosecuted any of them. The U.S. and India must continue to press Pakistan to prosecute these terrorists who were implicated in the Mumbai attacks and who were involved in killing six American citizens in addition to all of the other casualties of that attack. One other country I'd like to focus on in my brief time remaining is China. We know that terrorist groups like LET are the primary non-state challenge that India and the United States have to deal with. But the state actor that we need to keep our eye on is China. And we know that our concerns are not alone those of the United States. Lots of China's neighbors are concerned that it's military about its military buildup and its territorial aspirations. The fact that it's invested a lot of money in energy reserves around the world and of course is wants to protect those not only sea lanes but also those investments as well. We know that last year China claimed that the South China Sea is a core ass interest, which of course unsettled Vietnam, the Philippines, Indonesia and a lot of other nations in the area. China's renewed a long-running dispute with India over the borders of the Armanashal Pradesh region. And last week Google publicly reported that a Chinese entity had been targeting the personal email accounts of U.S. and South Korean government employees. And Pakistan's defense minister recently revealed that they'd like China to build a naval base at Guadar, Pakistan, which is already the home for a new strategically important port at the Gulf of Oman. Now each of these actions represents a deliberate provocation and together they represent a pattern that we need to keep our eye on as well as other countries need to take seriously as well. But let me just leave you with this final thought. Both the terrorism challenge and the China challenge have something in common and that's Pakistan. Secretary Clinton visited Pakistan in May and said that our relations were at a turning point and I agree with that. Pakistan is being exploited by others both inside and outside its territory and the time is now for Pakistan to start making much better choices. Finally, the administration should not take its eye off of India or South Asia or take that relationship for granted. I hope the President will continue along the lines that he started with early on in his administration. There's a lot to celebrate we know about our growing bilateral cooperation, but I believe it's important for the United States to continue to make our relationship with India a priority. And I will let me just close John on a bit of good news. The U.S.-India caucus in the Senate that I co-founded was now Secretary Clinton, then Senator Clinton and that Mark Warner is now the co-chairman of. We now are up to 38 members. Senator Mark Kirk, one of our most recent additions to the Senate, has joined and of course as the Ambassador knows this is unique in the United States Senate to have a U.S. caucus in the Senate with another country as opposed to a broader categorization of that caucus's interest. So thank you very much for letting me come by and share a few words with you and thank you for convening this important meeting on one of our most important strategic partnerships in the world. Thank you. Thank you so much, Senator Cornyn. It's a real honor that you would be with us today and we're very pleased. Please go ahead and eat. You're all very polite. You don't have to worry about me. You can eat while I'm talking. That's perfectly fine. I would like to say special thanks to some people who have joined us today who have made it lifted up the caliber of this. First of all, Ambassador Shankar, thank you for coming. We're delighted to have you here. You're doing such a fabulous job in Washington and we're really grateful that you've lifted up our session today. And thank you so much for that. Assistant Secretary Robert Blake, I realize you're sitting right next to Rick, your predecessor at some point in time. And so I realize that you guys are co-conspirators, but it's really great that you would be with us today. Thank you. Thank you so much for being here. As I said, there are a few other people I would like to especially thank, Carla Hills and Siddhakar Shanoi. They are members of our advisory committee. They're helping to guide the new Watwani Chair of Indian Studies at CSIS. And we're very, very pleased that both of them are willing to give their intellectual energy to give us some direction. Thank you. Thank you very much. And welcome to Senator John Warner. He said, don't recognize me. And I said, well, what the heck? We have to do that. John Warner, who's been a stalwart here in the Senate and it's great to see him back. I think maybe the period of isolation is over and you're allowed to come back to Capitol Hill, which is something that we welcome. Now, I would like to, if I may, just take a moment and Ramesh, I hope we've coordinated this with you. I'd like you just to say a few words. I would like to introduce to you Ramesh Watwani. Dr. Watwani is the benefactor that's made possible this new India program at CSIS. He's on the East Coast. Normally he's busy doing quite big deals on the West Coast, but he decided he was going to come here and we talked him into joining us today. Ramesh, let me ask you just to say a few words, your vision for what you think we need to be doing in Washington on the U.S.-India relationship. Thank you. Well, I've been in the U.S. for a little over 40 years. I got my PhD at Carnegie Mellon University in Pittsburgh and I built three successful companies, two in Pittsburgh, one in Silicon Valley, and today I run a large group of companies, about 14 companies doing around $3 billion a year. So the U.S. has been the country which has given me the opportunity and the privilege to have achieved. And once you have that kind of privilege, you also have an obligation to give back. So I established the Watwani Foundation about seven years ago, basically to define and support large-scale initiatives that would drive economic development in India and in other emerging economies and strengthen the bonds between India and the U.S. in that process. We have a number of large-scale initiatives going and entrepreneurship and helping, providing jobs for the disabled and skills development in innovation. But this chair in U.S.-India policy is the first policy initiative of the Watwani Foundation and to make sure that this is a balanced perspective on strengthening the relationship between the U.S. and India. We have also funded a counterpart chair at IKRIER, a major economic policy think tank in Delhi and India. And the idea is for these two chairs, the U.S. chair being represented by RIC and CSIS, the India chair being represented by their counterparts. I thought this would be an interesting opportunity to just share with you a framework for thinking about policy as it relates to the U.S. and India. You are obviously very familiar with all the statistics, you know, the size and scale of India, the complexity of India, the comparisons between India and China, and I'm not going to take you through all that because you already know that. There are a couple of interesting points, though. India is a republic just as the U.S. is, and I might even say India is a republic perhaps because the U.S. is, because when the Indian constitution was being written in 1947, the framers of the constitution looked at the U.S. constitution. Unfortunately, they took an extra 4,800 pages to write it. They should have just followed the brevity of the U.S. constitution, but it is what it is. India is a chaotic and sometimes dysfunctional democracy. I think you see that in the newspapers, you see that in the behavior, and I'm pleased to see that the U.S. is now trying to do its best to emulate India in terms of a certain amount of chaos and dysfunction in our great democracy here. The relationship between the two countries is perhaps the single most important relationship each can have, geopolitically. I think it's very important for the U.S. because, to Senator Kahnin's remarks, it is a good way of preventing China from having complete hegemony in not just Asia, but in many other parts of the world as well. I think it's great in terms of trade, because to the extent that India continues to be a vibrant economy, the opportunity for exports from the U.S. to India is large. And in terms of talent, I'm just an example, but there are thousands of examples, like me, of very talented people who have come from India to the U.S. and have made very important contributions to the U.S., including, for example, paying large amounts and taxes to the IRS. I just had a very large payment to the IRS a couple of weeks ago, so it's very fresh in my mind right now. On the flip side, the relationship is very important to India, because it's a way of compensating against the risk of encirclement by India and China. That's from a geopolitical standpoint. It's a great opportunity for India to export to the U.S. from a trade standpoint, and it's a great opportunity for India to gain knowledge from the U.S. in a number of areas where India is quite far behind. So early on, when Rick joined this particular program, he went around and talked to many of you to gain inputs in terms of how to define the policy agenda against which policies could be considered and evaluated in strengthening the relationship between the U.S. and India. And he sent me a list. There were 31 topics on it. Everyone obviously weighed in with their particular policy areas. And as I was thinking about it, I thought it might be good to put all of these different ideas into some kind of framework, a simplified framework, by which we could think about it and then begin to address it and then use that as a foundation for greatly strengthening the bonds between the two countries. So I've broken it up into three major areas. The first of these is economic development. The second is knowledge and skills development. And the third is defense and regional security. If I take economic development, there are a number of key areas that I think we need to address. And the first of these is foreign direct investment. In India and China and other countries that are emerging at that kind of speed, economic development and regional security cannot be divorced from each other. The quality of economic development within the country completely influences its perspective on the rest of the world and completely affects its regional security, whether homeland or outside the country itself. And that's why I've put economic development at the top. And if I take the three major elements that could be translated into policy, the first would be around foreign direct investment. And on that topic, about seven years ago, India received foreign direct investment of about $5 billion a year. The Prime Minister of India at that point and today Manmohan Singh asked a few of us, non-resident Indians in the U.S., to pull together a team to help increase foreign direct investment in India. I co-led a team, Siddhartha was on that team. We were successful in increasing FTI in India from $5 billion to $20 billion. That was two years ago. Because of a whole bunch of governance problems in India and changing competition around the world, that has fallen to $14 billion. So it's actually declined by 30%. At a time when China's has increased by 30%, India's FTI has declined by 30%. China's at $100 billion, India's at $14 billion. There's a massive imbalance there and I'm hopeful that in consideration of policy, this will be one of the key elements that is addressed on both sides because this is not just a U.S. problem, it's a bigger problem in terms of Indian policies and tariffs and restrictions in terms of the ability of U.S. companies to invest there. And by breaking down those barriers, which we hopefully can make progress in, this will help the economic development agenda. The second big dimension of the economic development agenda is around trade. The trade between the two countries has grown dramatically, but is a tiny fraction of what the trade is between India, between the U.S. and China. There are a number of things that can be done to reduce tariffs on both sides. There is a vision of a free trade agreement that, by the way, the Indian government is as much against as the U.S. government is. So there are equal objections on both sides, I guess. But I think those objections can be overcome, should be overcome, and that will dramatically cause a step change in the amount of trade between the two countries. The third element on the economic development side of the framework is infrastructure. India has, to put it bluntly, crappy infrastructure. It is years and years behind China. It is going to be an absolute impediment to India's future. And at the same time, it's an enormous opportunity for American companies like GE and others to make high quality technology available for completely transforming infrastructure in India, but it has to be done in a localized way, because the needs of villages in India are not exactly the same as the needs of New York City, and we have to localize the technology that's available in the U.S. But it seems to me those are the three big policy angles within the economic development part of the framework. If I take knowledge and skills development, I've picked that as a key part of the policy framework for a very specific reason. A couple of important statistics that you should know. Of the number of kids who enter school in India, only 12% end up completing high school and going to college. So there's 88% of India's school going population that is left with the opportunity of either carrying bricks and baskets on their heads at construction sites or becoming rickshaw pullers or rickshaw drivers or other very, very low skill occupations. This is not exactly the way in which you build a truly world-class country of the future, and this whole area is badly served. I think a second important statistic is that of the kids who enter the 10th grade in high school, 15 million every year drop out do not go to college. They do not complete 10th, they do not complete 11th, they do not complete 12th, and these become part of the unemployed. The reason these numbers are extremely important is many of you have read this phrase demographic dividend applied to India, and there is a claim being made that as India's population grows the youngest part of the population is growing faster, whereas in China it's going the other way because of the one child policy and therefore somehow this is a huge advantage for India, and I've made the point to the Prime Minister and to Monte Calawalia in India that this is completely false thinking. Correct thinking would be this could be a demographic dividend, it could also be a demographic disaster because if you increase the population in this age group and 15 million of them dropping out of high school and college becomes 20 million and then 25 million and then 30 million people drop out, this is not a recipe for a great economy, it's a recipe for a disaster. Now there are ways to correct this through skills development and that's why I wanted to focus this whole area of knowledge and skills development as a very important part of our joint policy framework, it's not one that's talked about enough and I wanted to simply raise it. So within this whole area of knowledge and skills development there are a number of areas of you know sort of policy potential entrepreneurship. India is a land in which entrepreneurs succeed in spite of the government, China is a country in which entrepreneurs succeed because of the patronage of the government, this provides an incredibly powerful foundation but entrepreneurs in India need more help in terms of tax policies, in terms of access to growth capital and anything we can do on the policy agenda side to help that will dramatically accelerate entrepreneurship and that in turn will drive all the other positive elements. Innovation, I think this is an area in which the cooperation between the US and India can be far greater than it has been. There's an opportunity for US universities to be setting up research operations in India, there's an opportunity for Indian pharmaceutical companies and IT services companies to be setting up innovation centers in the US, this mutual exchange of innovation where ideas about emerging economies can come from India, ideas about proven technologies can come from the US, the sole exchange in innovation is very poor today and there's enormous scope for improvement and then the third idea is skills development through vocational training and just as I believe that the US needs to do a lot more in terms of skills development as the world economy has changed and as our structural unemployment rate is sitting at 9% instead of 3% India has a far bigger problem but both countries have a problem and I think there's a shared benefit to be gained in terms of developing the right kinds of vocational training programs that serve today's economy on both sides of the ocean. The third element of the framework is around defense and regional security. Senator, you mentioned the recent award of the C17 contract, it's a great $4 billion win for the US, I would point out though that there was a $10 billion loss to France which was the fighter jet program so I think making India a partner in the F-35 program will be very helpful but I would suggest that there's an even stronger way for US defense companies to win more business in India which is by taking the offset program as you know when foreign country buys military equipment from the US typically they last for 25 or 30% of that to be spent locally in offsets. Now much of the time that offset money is used as a boondoggle is used on you know I mean the military contractor in the US doesn't really care it's simply part of the price of doing business in the you know in the foreign country. I think India should be treated differently in that context and I think if US military contractors were encouraged to use the offset funds to fund research and development locally in India to fund innovation in India to fund job creation through skills development in India the positive impact of that commitment on the Indian government would overcome price differences geopolitical issues and so on that might otherwise cause the Indian government to pick the Rafael fighter from France over the F-15 or you know some other fighter from the US so this is not purely altruistic it's about helping US military contractors think a little more comprehensively and holistically about how to conduct their businesses in India that's the defense side in terms of homeland security you correctly pointed out the issues with the LET in Pakistan fundamentally in India homeland security and regional security are all tied up in three simple words Kashmir, Pakistan, China. There's an approach to Kashmir which is based on economic development and skills development as compared to purely security forces that I think has promised and it's worth debating at some future forum there's an approach with Pakistan which can lessen the historical enmity between our two countries India and Pakistan which is worth debating again at some future forum again based on the core of economic development and knowledge and skills development rather than military forces and you know nuclear capability on both sides of the border and then there's this whole notion of establishing geopolitical and economic almost equivalence with China which I think will help shape the right kind of strategy for the US so I'm sorry to have spent a long time giving you all these thoughts but basically I would propose that we establish a policy framework for discussion at least these are three big buckets that I've proposed there might be a lot of other ways and better ways to do this and within each of these to take a few key elements and then to drive deep and try and make it all come true thank you very much for coming today it's a great event I just was talking with Senator Warner's staff he's in the middle of what they call his gang of six negotiations so he thank you Senator great to come thank you delighted to have you and we're not thank you we're a little unsure because they've now kicked out the staff which usually means something important is happening okay so we're not exactly sure when when we will see senator Warner what I think we're going to do is we'll just finish up our meal for a few minutes and then I'm going to turn to rick into first unless you want to get started now rick what do you let's just finish up the meal well this table hasn't even started so let's finish up the meal and then we will begin in a few minutes and I would especially like to say thank you to to the speakers who have agreed to be with us today and let me just recognize them myself I know that more is going to be said about that I'd like to say thanks to Bruce Rydell who is joining us thank you very much Bruce I'd like to say thank you to Ray Vickery and to Richard Fontaine we're delighted that both of you could be here and we look forward to hearing you enjoy the rest of the meal and then we will we will reconvene as soon as we see senator warner