It is indeed an honor for me to again address the 5th Annual US India Business Summit and 20th Annual Georgia Tech Business Forum. This is the largest conference in Southeast USA to promote growing partnership between India and United States.
As you are aware, this year, the world’s largest democracy carried out the biggest ever democratic and logistical exercise – the Indian elections where 66 percent of the electorate, i.e. 553 million out of 834 million voted for a new government. The new government of India led by the Honorable Prime Minister Mr. Narendra Modi has taken office in May this year backed by strong public support and a stable mandate for positive change.
Finance Minister Arun Jaitley presenting the Indian government’s 2014 budget in July 2014 set the goal of attaining 7-8 percent growth over the next three to four years. The budget contains a variety of proposals to improve business climate, encourage foreign investment and bring a transparent and non-discriminatory regulatory regime for investors.
The development of a robust manufacturing sector is the priority of the government. It has the potential to not only take the economic growth to a higher trajectory, but also to provide employment. The government is committed to remove all bottlenecks and develop India as a manufacturing hub. A number of measures have been taken in that direction.
During the last three months, the economic activity has picked up as reflected in the quarterly growth figures of gross domestic product which grew at 5.7 percent in the first quarter of April-June 2014. Industrial growth in general and growth in the manufacturing sector in particular has shown significant improvement with growth rates becoming positive as compared to negative growth rates in these sectors in the corresponding period of last year.
This perceptible improvement in the economic performance in last three months is a reflection of the improved business environment and market sentiment, an outcome of the series of initiatives taken by the Govt. to bring about positive changes to revitalize the industrial sector in general and manufacturing sector in particular. A number of positive announcements have already been made in the Union Budget 2014-15 in that direction.
Providing an enabling and conducive environment for doing business in India is an important factor contributing to industrial growth. The emphasis of the government has been on simplification of the procedures, rationalization of the existing rules and increased use of information technology to make governance more efficient, effective, simple and user-friendly.
Foreign Direct Investment (FDI) being an important resource, the government has taken a number of steps to attract more FDI inflows into the country. The FDI policy in defense sector has been liberalized and FDI cap has been raised from 26 percent to 49 percent; 100 percent FDI under automatic route has been permitted in construction, operation and maintenance in specified rail infrastructure projects. FDI inflows have increased by 75 percent during June and July, 2014, over the corresponding period in previous year.
To provide impetus to India becoming a manufacturing nation, industrial corridors and smart cities are being developed at a fast pace.
Shares of Indian stocks have risen to a record high as S&P BSE Sensex index has gained 27 percent so far in 2014, making it one of the top performers in Asia. Indian shares have been rising on optimism that the country’s new government would speed up policy changes which would help the economy recover this year. Most recent data show economic activity is beginning to rebound. In fact, after 100 days of Prime Minister Modi’s government, rating firm Maplecraft has ranked India No. 1 in terms of economic opportunities. Moody’s have commented that modest reforms could easily boost Indian GDP growth to 7 percent.
Therefore, the new government led by Prime Minister Narendra Modi is focused on growth with good governance and transparency with an eye on manufacturing, infrastructure and trade.
Fast Track Indian Diplomacy: Intensive State of Global Engagement
Japan
Japan has promised an investment of US$ 35 billion after conclusion of Prime Minister Modi’s visit to Japan earlier this month for infrastructure and other projects.
China
Chinese President Xi Jinping is on an official visit to India today. China, reportedly, would be investing in infrastructure, railway and industrial parks in India.
Indo-U.S. Growing Strategic Relations
President Obama had characterized India-U.S. relationship as a defining partnership of the 21st century. The strategic partnership between India and United States is now broad-based and multi-sectoral. Bilateral partnership enjoys bipartisan support in both our countries.
India’s Ambassador to USA, H.E. Dr. S. Jaishankar in a speech at the Carnegie Endowment for International Peace on January 29, 2014 had said, “…three key drivers of our ties today. First is our geo-strategic and political convergence, something which could only manifest itself after the Cold War. The second is our intersecting economic interests. These are the consequence of higher Indian economic growth rates as well as the broader rise of Asia. The third is a mix of our shared values and societal contacts. These reflect the expanding Indian-American community and the growing middle class in India…….”
As far as political relations are concerned, we have higher comfort levels than they have ever been before. This can be seen from the visit of U.S. Secretary of State John Kerry and Secretary of Commerce Penny Pritzker for the 5th India-U.S. Strategic Dialogue in July this year – followed by the visit of U..S Defense Secretary Hagel. The message they delivered that USA was prepared to be full partner in India’s growth.
In fact, Secretary Kerry welcomed the raised foreign investment ceilings in several sectors of the Indian economy, including defense, railways, e-commerce and insurance. He agreed with our External Affairs Minister of India Sushma Swaraj to identify specific areas for investment in India’s manufacturing and infrastructure sectors through establishing a new initiative and empower the India-U.S. CEO Forum to build a better business environment. They hoped that the Ministerial trade policy forum of both government’s would meet in the fall of 2014 focussing on key trade and investment issues.
Minister Swaraj welcomed the United States as a partner country, for the first time, at India’s annual Technology Summit in November 2014. The two leaders looked forward to the convening of the next bilateral Joint Science & Technology Committee meeting and Secretary Kerry welcomed India’s commitment to the Global Health Security Agenda (GHSA) including in the areas of anti-microbial resistance and immunization. They also welcomed work under the Partnership to Advance Clean Energy (PACE) in its research and deployment components. They reaffirmed their commitment to the full implementation of the India-U.S. civil nuclear agreement.
Minister Swaraj and the Secretary Kerry welcomed civil space cooperation between India and the United States in earth observation, space exploration and satellite navigation. The two sides identified education and skills development as an important area of future cooperation. They also recognized that a truly strategic India-U.S. partnership was a significant contributor to regional peace, stability and prosperity in Asia, and globally. They also reiterated their condemnation of terrorism in all its forms and reaffirmed their commitment to eliminating terrorist safe havens and infrastructure.
U.S. Commerce Secretary Pritzker expressed that the U.S. was keen to invest in India’s infrastructure and manufacturing to build on growing trade ties.
Trade
The trade and economic partnership remain a central pillar of our expanding bilateral ties. The two way trade in goods and services has risen to nearly $ 100 billion while the two way foreign direct investment has crossed $ 50 billion. The U.S. businesses are becoming strong partners in India’s economic growth story; and Indian businesses are creating value, wealth and jobs in the United States. Ford is spending US$ 1 billion to turn its new auto plant in Gujarat into a regional manufacturing hub. The effort by both countries is to reach the ambitious goal of US$ 500 billion in two-way trade by 2020. Also discussions on bilateral investment treaty will be continued.
Defense
The visit of U.S. Defense Secretary Hagel in August 2014 led to discussions on military exercises, defense trade, coproduction and co-development and research and new technology for defense. This is important because US has become India’s largest defense supplier in the past 3 years.
India has placed orders worth nearly $ 9 billion. The Indian Air Force remains second only to the U.S. Air Force in its fleet of C17 Globemaster heavy lift aircraft. The Indian Navy introduced P 8 Poseidon maritime surveillance aircraft at the same time as did the U.S. Navy. Government of India has also cleared an additional order of C130J Super Hercules aircraft being made by Lockheed Martin in Marietta. Indian aircraft orders support 40,000 jobs in US defense industry. The United States is the country with which our Armed Forces conduct the maximum number of exercises. Our policy dialogues and military exchanges have also grown in their frequency and comfort level.
Energy
India in order to fuel its economy, is addressing its energy security needs, which is one of the robust areas of cooperation between the two countries. As Ambassador Dr. S. Jaishankar had stated on Feb. 28, 2014, “…….. American LNG (Liquid Natural Gas), which could soon account for 40 percent of India’s current imports and 15 percent of its total gas consumption, could actually become a game-changer……”
Pharma
India is the second largest supplier of over the counter and prescription drugs to the U.S., which relies on foreign drugs to meet 40 percent of its total requirements. In 2013, our exports of drugs and pharmaceuticals to the U.S. amounted to US$ 4.47 billion. Several US pharma companies like Abbot, Hospira, Mylan and Gilead have made big investments in India through acquisitions and greenfield projects to manufacture drugs for domestic market and export.
Information Technology
Indian IT companies operating in the U.S. have contributed significantly in providing high-end support to 480 of the Fortune 500 companies plus thousands of other clients. Similarly U.S. IT companies are also doing significant business in India.
Education
Over 100,000 students from India are benefitting from the U.S. higher education and U.S. benefits from $ 3 billion contribution from the students make in to the U.S. economy.
Our Higher Education Dialogue is also promoting strategic institutional partnerships, deepening collaboration in research and development, fostering partnerships in community college education, junior faculty development and empowered classrooms through online education.
Health
India has collaborated with Centre for Disease Control and Prevention (CDC) based in Atlanta on 14 projects. They have also assisted in establishing the Global Disease Detection Center in India. In fact, the Health Minister of India Dr. Harsh Vardhan paid a visit to CDC in June this year and had wide ranging discussions on major health issues and ways for further collaboration in major areas in health sector.
Indian-American Community
Above all people-to-people relationship is the strong element of our partnership. The three million strong Indian American community that has come of age and includes a large number of professionals, educationists, and entrepreneurs, who have been increasing their economic and political strength e.g. Two Indian Americans are occupying high level posts of Governor, a Congressman and several other representatives of the States legislatures and Administration as well as in the business, like CEOs of Pepsi and Microsoft who name a few. Over 60,000 doctors in USA are of Indian origin. More than 40% of hotel rooms are owned by the Indian Americans.
Industry associations such as Asian-American Physicians of Indian Origin (AAPI), Asian-American Hotel Owners Association (AAHOA), based in Atlanta, and The IndUS Entrepreneurrs (TiE) supporting this business forum confirm the fact that the Indian-American community, is also acting as a catalyst to forge closer and stronger economic ties with India. They are the real brand ambassadors of India.
In response to growing potential for commercial and consular activities, the Indian Consulate in Atlanta for Southeast USA was opened in October 2011. Trade from Georgia has gone up by 17.5 percent in the year 2013 (from US $ 450 in 2012 to US $ 523 million in 2013). Some major Indian investments are also in Georgia, e.g., Novelis was acquired by Hindalco of Aditya Birla Group for $ 6 billion in 2006. Some major U.S. companies have announced huge interest and expansion projects in India. The Coca-Cola Co. has announced US $ 5 billion investments in India in the next five years. Similarly United Parcel Service and International Paper Mills have announced expansion projects. Beaulieu International Group would be investing US $ 200 million on their flooring and cushion vinyl project in India.
The point I am trying to make is that India-US cooperation is multi-faceted and touches almost every aspect of human endeavor – from developmental issues such as education, health, agriculture and energy, to defense and security for our common peace, stability and security.
It is in this context that the maiden visit of Prime Minister Narendra Modi to United States later this month at the invitation of President Obama assumes significance. The two leaders will discuss a range of issues of mutual interest in order to expand and deepen the US-India strategic partnership. They will discuss ways to accelerate economic growth, bolster security cooperation, and collaborate in activities that bring long-term benefits to both countries and the world.
Prime Minister Modi will also address a Community Reception on Sept. 28 at Madison Square Garden in New York to be attended by 20,000 Indian Americans.
In fact, the visit of Prime Minister Modi to U.S. would generate new dynamism in the India-U.S. partnership as India views relations with USA as a great priority in the 21st century. I am confident that the landmark visit of dynamic Prime Minister Modi would rejuvenate our strategic partnership to new heights.
The 5th Annual USA India Business Summit also marked the 20th annual Georgia Tech Global Business Forum and the 1st USA-India Forum on Vaccines and Immunotherapy. The sessions were held at the Historic Academy of Medicine at the Georgia Instiute of Technology Sept. 17-18.
As consul general, Ajit Kumar leads the Consulate General of India, which opened in Atlanta in 2012. He arrived in Atlanta from Germany, where he served as Consul General of India in Frankfurt from 2007 to 2011. He was also Ambassador of India to the Republic of Zimbabwe (2004-2007) and Consul General of India Durban, South Africa (2000-2003). Mr. Kumar first joined the Indian Foreign Service in 1979 and has held posts in Damascus, Syria; Mexico City; Islamabad, Pakistan; and New Delhi. As the deputy leader of the Indian delegation to the Conference on Disarmament in Geneva, he participated in multilateral negotiations on the Comprehensive Nuclear Test Ban Treaty (CTBT) in the 1990s.
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