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Washington, DC
December 9, 2009

Thank you for inviting me to speak about developments in India-US relations and India’s perspective on security and stability in South and Central Asia. I am pleased to be part of such a distinguished series of lectures on national security issues of global interest. But, I am particularly delighted to have the opportunity to reflect on India-US relations at the Brookings Institution, less than two weeks after a very successful visit by Prime Minister Dr. Manmohan as President Obama’s first State Guest, because, in so many ways, the remarkable story of the transformation of India-US relations had its beginnings in the dialogue that the President of this institution, Mr. Strobe Talbott, began with our then Foreign Minister, Mr. Jaswant Singh. Many others have been part of that journey or have provided the intellectual sustenance for the vision of a strong India-US partnership. 

A strong, durable and productive partnership with the United States is a high priority in our foreign policy and important for our national development goals. Emergence of the United States as one of our key partners is the result of a number of factors, including economic reforms that have deepened India’s external engagement and provided new opportunities for growth in our economic relationship; the increasing connections between our peoples; the changing global order and security environment that has led to a growing convergence of interests between our two countries; and, I believe, a fundamental shift in the framework in which we perceive and relate to each other.

We share a strategic interest with the United States in fostering security and stability in a rapidly changing Asia; keeping safe the vital sea lanes of communication in India’s extended neighbourhood; in reversing the tide of violent extremism and defeating terrorism; combating proliferation of weapons of mass destruction; and addressing a range of other challenges from humanitarian disasters to piracy and narcotics trafficking. 

Above all, we in India recognise that we are at a moment in history, when the global order is not characterized by frozen great power rivalries, when the opportunities for cooperation far exceed the potential for division, and when we are in a rare position of having the opportunity to shape the architecture for our future. We see our relationship with the United States as a key element in seeking to build a new global order shaped by consensus and cooperation, rather than by division and domination.

Our growing economic ties are also raising mutual stakes. Our bilateral trade has grown ten-fold since 1991 and has doubled in the last four years with US exports to India growing three times. In the much scrutinized services trade, we have a balanced and growing trade in both directions, around USD 10 billion in US exports and around USD 12 billion in Indian exports of services in 2008. Today, the US is not only one of our leading trade partners, it is also a leading source of technology collaborations and foreign investment, including portfolio investment. 

A new phenomenon is that investment flows now move in both directions with Indian companies investing in the United States. In fact, on the basis of annual flows, Indian FDI into the US exceeds US foreign direct investment into India in recent years. But, beyond the statistics, India-US economic ties, driven by information technology and services, have been very people-centric and this has brought an expanding constituency of people in both countries in closer interaction and has also played a strong role in modernizing the Indian economy. 

We have a 2.7 million-strong Indian American community, which has more than doubled in the past decade alone. There is a hardly a middle class family in India that does not have some ties of kinship in the United States. In addition, there are over 100,000 students from India in US universities, the highest from any foreign country, who are sowing the seeds of future partnerships. These ties bring a unique human dimension to our relationship and, indeed, the Indian American community has been both a window to India’s potential and a strong proponent of the relationship both in Delhi and in Washington DC.

Our converging interests and our growing partnerships, nurtured in an environment defined by democracy and diversity, have produced broad-based political support and public goodwill in India for this relationship. We have, therefore, experienced a seamless transition in our relationship across election cycles in India, mirroring the bipartisan support through different Administrations that we have seen in the United States.

Over the past ten years, our political dialogue has become strategic in nature and global in its scope. It takes place in an atmosphere that is increasingly characterized by candour, mutual confidence and willingness to look for common ground. And, across a very wide range of human endeavour - in space, nuclear energy, intelligence sharing, military exchanges, defence trade, counter-terrorism, education, science and technology, energy, trade and investment -we are developing new avenues for cooperation and building pathways for new opportunities in the future.

Nothing was as much a symbol and the instrument of transformation in India-US relations as the civil nuclear agreement. It was a radical idea, and the product of a monumental effort in both countries. Neither government could have persisted with this extraordinary endeavour without a strong belief in the importance of the India-US relationship; and without the recognition of the need to address a complex issue, which had shadowed relations for three decades. 

As we implement the agreement fully in the spirit of partnership that underpins this agreement, we will not only boost our economic engagement, but also contribute to advancing our shared interests on energy security, climate change and non-proliferation. 

Yet, another example of a new dimension in our relationship – and one of the most visible symbols of change – is our growing defence engagement. Our militaries, once unfamiliar with each other, now hold regular dialogue and joint exercises in the air and on land and sea. We coordinate anti-piracy efforts and have worked together on humanitarian missions. Our defense trade, which was negligible a decade ago, is growing. We placed orders worth U.S. dollars 3.5 billion last year, and it could grow even more in the future, as India seeks to diversify its sources of supply for defence systems and to build its defence production capabilities with an increasing role for the private sector. From our perspective, defense trade is not merely a commercial transaction; it reflects mutual confidence and investment in a long-term strategic relationship.

We have always attached great importance to cooperation with the United States on counter-terrorism, not only to strengthen our own capacity to reduce our vulnerability to terrorism, but also because of our long-held conviction that the source of threat, and often its motivation, was the same for both countries. We launched a Joint Working Group on counter-terrorism with the United States in February 2000, and over the years, our mutual understanding on the source and nature of the problem and our cooperation has increased. Cooperation has grown in the wake of the Mumbai attack in November 2008 not only in terms of engagement between our agencies, but also in the perception of the political leadership and our people on the importance of this engagement, particularly in terms of intelligence sharing and capacity building. 

The charge sheet against David Headley, who was arrested in Chicago, links him not only to the Mumbai attack, but also to the continuing efforts of Lashkar-e-Taiba to wage terrorism against India and other countries. It shows how important it is for our two countries to intensify our counter-terrorism cooperation.

It is against this backdrop of the transformational progress in our relationship that started in the last years of the Clinton Administration and accelerated during the two terms of President Bush, that Prime Minister and President Obama had their first substantive bilateral engagement in the Thanksgiving Week in Washington DC. Their meeting took place in the context of a fragile and uncertain global economic recovery; a global quest to reach a fair, equitable and effective agreement on climate change; changing dynamics in Asia; and, mounting challenges in Afghanistan and Pakistan.

The visit, we believe, has renewed the commitment of the two governments to this partnership and has laid the foundation for strengthening cooperation across an extraordinarily broad spectrum of bilateral engagement. 

The two leaders reaffirmed the importance of the strategic partnership between India and the United States, to work together for global peace and stability; accelerate economic recovery and put it on a more sustainable and balanced path in the future; and, to ensure a comprehensive and balanced outcome at the climate change meeting in Copenhagen. 

The visit also saw productive discussions on expanding cooperation in areas that increasingly reflect the priorities for the future, including agriculture, education, health, clean energy and energy security, science and technology. Prime Minister and President Obama placed strong emphasis on growth in bilateral trade and investment. They also agreed on expeditious completion of the remaining steps in the implementation of the civil nuclear agreement.

Prime Minister and President Obama had very productive discussions on Afghanistan and Pakistan. They recognized our shared stakes in a stable, moderate, united, prosperous and democratic Afghanistan and in the defeat of terrorist safe havens in Pakistan and Afghanistan. President Obama appreciated India’s role in reconstruction and rebuilding efforts in Afghanistan. The two leaders agreed to enhance their respective efforts in this direction. They recognized our shared threats from terrorism and agreed to further strengthen and intensify bilateral cooperation in counter-terrorism.

For India, the primary national goal is the pursuit of economic development. We are encouraged by our performance, which has made India the second-fastest growing economy over the last two decades. We are confident that with a domestic savings rate of 35% of GDP, and with prudent policies, continuing reforms and sound investments, we will be able to restore the momentum of our economic growth to around 9% a year, which we had achieved for four years before the global economic crisis. While growth moderated last year to 6.7% there are encouraging signs that the economy is regaining momentum with growth in the first six months in this fiscal touching 7% and second quarter growth reaching 7.9%. The challenge for us is to ensure that growth is inclusive and benefits all sections of our people, particularly those that are most vulnerable.

Our economic progress will be based primarily on our national efforts, but it will increasingly depend on the existence of a stable international order and global peace and security, but above all a peaceful periphery. But, we live in a difficult neighbourhood. Some countries face internal instability and uncertain political transitions. Afghanistan is at a crossroad. Terrorism emanating from the epicenter in Pakistan remains a regional and global threat, but is now increasingly engulfing Pakistan in a rising tide of violence and threatening its fragile polity. The rise of extremism is a threat to India’s own secular democracy and multi-religious society. 

We see our security and prosperity linked to stability and progress in our neighbourhood. We have vital stakes in a stable, moderate, democratic and prosperous Pakistan. Our Prime Minister has often said that India and Pakistan have no choice but to live in peace and harmony, and to seek a relationship defined by the power of cooperation rather than the perils of conflict. He has invested heavily over the past several years in normalizing relations with Pakistan and we had made considerable progress. Unfortunately, political instability in Pakistan and the terrorist attack in Mumbai, which came after a steady escalation in terrorist violence against India in 2008, including an attack against the Indian Embassy in Kabul, put the process on hold. 

Our commitment to peace with Pakistan remains undiluted, but it is difficult for dialogue to proceed in the face of continuing terrorist threats. It would be important for Pakistan to abjure terrorism and come to the table with good faith and sincerity. And, it must begin with sincere efforts to bring the perpetrators of the Mumbai attack to justice and take steps towards dismantling the infrastructure of terrorism that continues to nurture a broad array of terrorist groups. 

For what is at stake in Pakistan’s effort is not merely the relations between India and Pakistan, but also the success of international efforts in Afghanistan and Pakistan’s own future. Pakistan has made considerable efforts against the Pakistan Taliban, but it must act against groups operating from its territory, because, as terrorist groups become increasingly fused, a selective approach that targets some and leaves out others will not help Pakistan, will not lead to success in Afghanistan and will not make our countries safer. Pakistan needs the support of the international community, but above all, what is required is the will in Pakistan to re-orient its approach.

The evolution of Afghanistan as a stable and moderate nation state is vital for the region and the world. The road to peace in Afghanistan will not be easy. The threat from Afghanistan has a global reach, but it is a battle that must be won, above all, by the people of Afghanistan. But, for that, the commitment of the international community must be sustained by firm resolve and unity of purpose. We have noted President Obama’s announcement that 30,000 additional US troops would be deployed in Afghanistan in the first part of 2010. We welcome the emphasis in the US strategy on the strengthening of the Government of Afghanistan and Afghan security forces.

We do not see Afghanistan as a theatre of influence. Our interest is in building a region of peace and stability and to assist the Afghan people and Government as they build a peaceful, democratic and pluralistic Afghanistan. India will continue to assist Afghanistan in building its institutions and its human resources. Our assistance, now over US$ 1.3 billion, is spread across Afghanistan and spans a very broad range of economic and social developmental activities from schools to hospitals from roads to power transmission lines from training women craft workers to human resources development.. 

Stability in Southwest Asia will have a salutary impact on Central Asia, which is emerging as an important area of global interest. India has civilisational links with Central Asia and strong relations with the countries in the region, but our ability to harness the full potential of our cooperation is constrained by the difficulty of access, because we do not have transit rights through Pakistan and Iran remains our primary surface link with Central Asia. We will continue to build cooperation with Central Asian countries, and will work with regional and major powers for stability and a cooperative framework in Central Asia.

The traditional discourse on Asia tends to see the vast continent as fragmented sub-regions, each with its own dynamics. Asia, at least, here in Washington DC, has often been a euphemism for East and Southeast Asia, reflecting remnants of Cold War thinking. Located at the strategic and cultural crossroads of Asia, where different Asias meet at our borders, we do not have the luxury of a segmented approach. 

Asia’s surge to prosperity is shifting the center of gravity of global opportunities towards Asia, while the rise of Asian countries is reordering the role of extra-regional powers and their relationship with rising Asian powers. The rapid transformation of Asia across its immense diversity has thrown up new questions about co-existence and cooperation, conflict and competition in the wider Asian region. 

We believe that we must work towards the evolution of an open, inclusive architecture of economic and security cooperation in Asia, which accommodates the interests of all countries. It must be an Asia not defined in terms of traditional theories of the last century, but one that recognizes the growing inter-dependence, not only between countries in Asia, but also with countries outside the region. Prime Minister Manmohan Singh has often said that the world is large enough to accommodate the growth ambitions of two large countries such as India and China and that if they continue to grow they could, in future, become motors for the global economy. We also recognize that the United States is in many ways an Asia-Pacific power, that it has a role and stake in the future of Asia. And, one of the important goals outlined by the two leaders for India-US strategic partnership is to work together, and with others, for security and stability in Asia and the Indian Ocean region. 

As the world’s second most populous country with one of its fastest growing economies and as a democratic nation rooted in a strong tradition of pluralism, both in its society and in its outlook to the world, India is willing to assume its responsibility to meet the global challenges of our times. We believe that the architecture of global governance, be it in the political or security field or in the financial or economic field, must be reshaped to give greater voice to emerging powers both in the interest of greater legitimacy and to enhance their effectiveness. In a world of growing inter-dependence and inter-connectedness, we must recognize the indispensability of strong and productive global partnerships to fulfill our responsibilities and pursue our interests. We see our relationship with the United States as an integral part of that vision.

Thank you.