Washington, DC
September 14, 2009

FREDERICK KEMPE: Thank you and welcome to the Atlantic Council. I’m Fred Kempe, president and CEO. It’s a pleasure for me to welcome you to this very important event, for a couple of reasons.

First of all, the South Asia Center, in a very short period of time, has become one of the most valuable innovations of the Atlantic Council, having been opened in January 1st after an intense recruitment period of – Shuja Nawaz is director of the center. We’ve put ourselves on the map in a very short period of time on many issues related to South Asia, and particularly at this point Afghanistan and Pakistan.

The second reason that I’m happy to welcome you here is now we move on to India. And from the very beginning we knew this was going to be a central area of interest and focus of the center and we wanted to really highlight this focus and underscore this focus with the right speaker.

And that’s the third reason why I’m delighted to welcome you all, because we have the pleasure of welcoming to the Atlantic Council Her Excellency Ambassador Meera Shankar, the India ambassador to the United States.

The ambassador was appointed in April. Previously she was ambassador to Germany, so – (speaks in German). And she’s held numerous other positions within the Indian government, including stints at the Ministry of External Affairs of the Office of Prime Minister during the tenure of Rajiv Gandhi.

This is her second time in Washington, having served here as minister, I think dealing with commerce, in the early 1990s. The ambassador is here with us today to discuss a very important topic: U.S.-India relations, the next phase under President Obama and Prime Minister Manmohan Singh.

The last few months have seen a historic election take place in India, a visit to India by the new national security advisor and our former chairman of the Atlantic Council, General Jones, and Undersecretary of State Bill Burns in June.

There has been a successful visit by Secretary Hillary Clinton to the region, where she outlined a five-part strategy for the U.S.-India relationship. And there was the signing of the end user agreements enhancing defense commerce between the two partners.

This will of course be followed by the G-20 summit scheduled to take place later this month, where Prime Minister Manmohan Singh will be coming, and then the prime minister’s state visit to Washington in November.

I think we can truly say that Indian-U.S. relations, in a very short time in the Obama administration, have become deeply a bipartisan matter with so much having been done in terms of breakthrough in the Bush administration and now picked up and having been carried forward quite dramatically in the Obama administration. But more important, we’re here to talk about a relationship that can help define the dynamics of the international system going forward.

People talk about a unipolar world becoming a multipolar world, but we don’t know for sure whether that multipolar world is going to be an effective multipolar world, and I think the bilateral relationship between the U.S. and India will not solve that entirely, but without a good one it won’t be solved.

With this in mind, we are delighted to welcome the Indian ambassador of the Atlantic Council this evening to share her thoughts on this topic. I would like to thank the Indian Embassy and of course Shuja Nawaz and his South Asia Center at the Atlantic Council for coordinating this event.

Briefly, the South Asia Center is focused on the practical promotion of peace and cooperation in the region, linking South Asia with Afghanistan, Central Asia, Iran and the Gulf States.

The South Asia Center is intended to be a forum for dialogue between decision-makers in South Asia, the United States and Europe. The Center’s director is one of the world’s leading experts on the Pakistani military and has written extensively and is a great expert on the India-Pakistan relationship as well.

What we’re really trying to do here, though, for India and for South Asia, is what we’ve done with Europe, which is this isn’t an American institution to which you visit now and again; this is a place that is also your place. This is a place where we want India, Pakistan and other countries from the region to see as home when they are in Washington.

So Ambassador Shankar, thank you very much for being with us this evening, and we all look forward to hearing your remarks. (Applause.)

AMBASSADOR MEERA SHANKAR: Mr. Frederick Kempe, distinguished guests, I am honored by the Atlantic Council’s invitation today. The Atlantic Council’s mission and focus has evolved in keeping with the changing international landscape, and its growing focus on Asia is welcome.

Your decision to start a South Asia Center last year is, I believe, an appropriate one, and I compliment Mr. Shuja Nawaz for imparting great momentum to this new enterprise.

I am delighted to be here and I do agree that it is an opportune time to look ahead on the next phase of the relations between India and the United States. We have a new administration in the United States and a government in New Delhi which has just returned to office with a fresh and a stronger mandate.

Future historians would look upon the past decade as an important, integrated and a distinctive phase in India-U.S. relations which could be described in a single phrase: a period of transformation in bilateral relations.

My own perspective is shaped by the personal experience of having served in Washington, D.C., in the late 1990s and returning to this city a decade later. The transformation in the relationship has five different aspects to it.

One, the level of engagement and dialogue has become intense and broad-based, strategic in nature and global in perspective. It is conducted in a spirit of warmth, candor and mutual confidence. We now speak to each other on crises and challenges in our neighborhood and around the world and work together where we can in a way that was unimaginable a decade ago.

I sense a greater appreciation of and sensitivity to each others’ concerns and interests and a belief that in a fundamental sense, we are on the same side of the table. We have learned to discuss our differences and not allow them to affect other aspects of our relationship.

We recognize that our relationship could be of immense value to both countries and to the world. Governments in India and the U.S. across democratic transitions have invested extraordinary and sustained political attention and effort into the relationship over the past decade.

Second, beyond the political dialogue, India and the United States have over 25 bilateral mechanisms for consultations, the most wide-ranging that India has with any country. These have brought not only a broad range of people on both sides into closer engagement, but these mechanisms have opened the doors to new possibilities of cooperation, creating a constantly expanding base for the relationship.

Third, our cooperation has entered new territories and explored new frontiers. 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 was negligible a decade ago. We placed orders worth U.S. dollars 3.5 billion last year, and it could grow even more in the future.

Defense trade is not merely a commercial transaction; it reflects mutual confidence and a long-term strategic relationship. Our counterterrorism cooperation has acquired new momentum and depth after the Mumbai terrorist attacks in November 2008.

The India-U.S. Civil Nuclear Agreement, signed in October 2008, is as strong on symbolism as it is on substance. The agreement not only removed a major problem that shadowed and constrained bilateral relations for three decades, but it has created a basis for closer relations, deeper economic ties, and a more productive partnership on energy security, lessening reliance on fossil fuel, and combating proliferation.

We have also, in yet another sign of mutual confidence, overcome concerns of the past on India’s space program and have made a promising beginning to a new era of cooperation. Indeed, the Chandrayaan moon mission of India carried a U.S. experimental payload.

Four, the political perspective on the relationship has seen an enormous change in India and the United States with growing, broad-based support in the two countries, providing an enduring foundation for the relationship.

Five, the bilateral context of the relationship has also undergone a change, especially with India’s economic reforms and acceleration in its economic growth. India-U.S. trade has doubled just in the last five years. U.S. exports to India have grown three times during the same period.

While the U.S. is the largest source of foreign investments in India, Indian direct investment into the U.S. has also been growing rapidly and, in fact, on the basis of annual flows, exceed U.S. foreign direct investment into India in recent years.

Beyond the statistics, though, is the fact that because Indo-U.S. economic ties have been knowledge-, technology- and people-intensive, it has had a profound impact on the relationship that goes beyond the business sector.

Further, 2.7 million Indian Americans, 95,000 Indian students in the U.S., and hundreds of thousands of people traveling between the two countries are shaping political perspectives in the two countries.

The government in Delhi has entered the second term with the priorities of restoring the momentum of economic growth, expanding infrastructure, emphasizing rural development, improving basic social services, and strengthening internal and external security.

We do so in an environment of global economic stress, profound geopolitical changes, especially in Asia, as also regional instability and the continuing threat of terrorism in South Asia.

External relations will remain vital to our national policy, and in this context we will continue to attach importance to our relations with the United States for meeting our national development goals.

The next phase of the relationship will be marked by continuity and would be a period of consolidation and expansion. We have set a vigorous process of bilateral engagement immediately after the elections in India were completed.

On the Indian side, we have had visits from Home Minister P. Chidambaram, Commerce and Industry Minister Anand Sharma, Minster of Surface Transport Kamal Nath, and the prime minister’s top economic advisor, the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia.

In the past three months, Secretary Clinton, National Security Advisor General Jim Jones, and Undersecretary for Political Affairs William Burns have visited India. On November 24th this year, Prime Minister Manmohan Singh will be the first state guest of President Obama, which we see as a sign of the President’s personal commitment to the relationship.

As we look to the future, we hope first to substantially expand our economic ties and help create jobs and prosperity in both countries. In part, this will be driven by global economic recovery and the relative health and competitiveness of the Indian and U.S. economies.

But we also recognize that the two governments, working in partnership with the private sector, can create conditions that raises our economic ties to an entirely new level. We are optimistic that we in India can return to the path of 8 to 10 percent economic growth annually.

The Indian economy will continue to be a huge economic opportunity, whether it is increasing power generating capacity fivefold in the next 20 years, or connecting India with itself and with the rest of the world, or providing a wide range of services to the burgeoning urban city dwellers and farm-dependent rural population in India.

Our investments in infrastructure alone over the next five years would require, at the very least, 500 billion U.S. dollars at India prices. This is an enormous challenge for India, but also an enormous business opportunity, and I would encourage U.S. companies to look more closely at the opportunities which this affords.

We will also seek to build an innovative and vibrant partnership for developing clean, renewable, affordable and reliable energy supplies. It is important for India’s economic future, energy security and our goal of minimizing the environmental impact of our development.

As India prepares to bring commercial energy to the 400 million people who still don’t have access to it, we hope we can make a strategic shift to reduce dependence on fossil fuel.

The India-U.S. partnership, in seeking a greener future, can help us in achieving our goal and will in turn be as productive and economically beneficial to both countries as our partnership in the knowledge economy has been.

The Indian government has set up various missions to deal with the impact of climate change in India, and one of these pertains to solar energy, where we hope to be able to build our solar energy generation to about 20,000 megawatts by 2020.

Now, that’s a very ambitious target, given that we don’t have solar energy generation on any significant scale today, but we have plenty of sun, and if we are able to work together to develop a technology which is more robust and to bring down the cost of solar energy generation vis-à-vis conventional energy, I think this would be a huge opportunity.

Another area would be biomass fuels. In India, we are probably amongst the largest users of biomass fuels in the world because we use it in a traditional way, with the dried cow dung cakes being used in the villages for fuel. Now, that’s inefficient and it’s also bad for the health. Can we find ways of transforming this into biomass fuel in more modern and clean ways which could help to meet energy demands in rural India?

Now, these are just some of the examples I want to put before you to show the kind of opportunities that we have to work together in ways which will benefit India’s development, will benefit the environment, and also provide an impetus to technology development and commercialization of green technologies in the U.S.

In the coming years we will also pursue cooperation with renewed vigor in developing agriculture, improving food security, advancing health care, expanding and reforming our higher education, and leveraging our scientific and technical resources to bring innovation and human empowerment to the center of engagement.

Even as we focus on the economy, environment, energy, education, enterprise and empowerment, we will also seek closer partnership in meeting our increasingly convergent interest on traditional, unconventional and new challenges.

We in India have vital stakes in the stability, unity and prosperity of Afghanistan and Pakistan, and in the elimination of extremist sanctuaries in the region. We have regular and candid bilateral dialogue on the situation.

We also exchange views and discuss approaches on other developments in South Asia, and we now increasingly talk about the wider Asia region – Africa and Latin America.

The Indian Ocean, vital to global commerce and energy flow and home as much to natural disasters as to piracy, is becoming a strong focus of India-U.S. engagement and lies at the forefront of our growing security cooperation.

This fall, APEC’s joint defense policy group will meet to outline the strategic context of defense engagement, a roadmap that builds on the impressive growth in military ties in recent years, and extend it into defense trade and collaboration.

I believe that Home Minister Chidambaram’s visit last week laid the foundation for a more robust and productive cooperation in the future in counterterrorism, especially through improved institutional linkages, intelligence sharing, and threat assessments.

Given the similar framework of democracy and federalism in both countries, we hope to learn from the U.S. as we reform our internal security structure, institutions, systems and technologies to make them better capable of meeting the challenges that we face.

India and the U.S. have shared more deeply than many other countries the goals of nonproliferation and a nuclear weapons-free world. The Civil Nuclear Agreement has now created a platform for us to cooperate more on advancing our shared goals.

On a global platform, we do face asymmetry of resources, scale and capacity, but in our own ways, India will work with the U.S. and others for strengthening the global economy, achieving a successful outcome to the Doha Development Round, and reaching a fair and equitable agreement in accordance with the U.N. Framework Convention on Climate Change in Copenhagen.

Of course, from the Indian point of view, the recent developments in the global economy and the challenges that we face underscore the need to reform the global architecture, whether in the field of politics and security or in the field of economics, to give greater voice to emerging countries.

Following the global economic crisis, we have seen greater representation for the emerging economies by way of their inclusion in the Financial Stability Forum of the IMF in the Basel Committee by way of their inclusion in the Basel Committee on Banking Supervision and so on.

But we need to extend it to give greater voice and voting share as well as a greater say in the governance of these structures. The reform of the U.N. Security Council is, we believe, another important area which would help to strengthen the legitimacy and efficacy of the U.N. as an instrument for dealing with some of the challenges that we face.

India and the U.S. have been described as natural strategic partners. However we choose to describe the relationship between the world’s two largest democracies, there is no denying that there is enormous comfort and good will in the relationship and a great sense of optimism, excitement and purpose in our joint endeavors.

Our partnership with the U.S. is not directed against or influenced by any other country, and it does not affect India’s relations with any other country. We do not see this relationship in traditional paradigms.

We move forward on the basis of potential and opportunities in the context of our bilateral relations, and then what we can do together, mirrored in our shared ideals and hopes, to meet the important challenges of our times and to advance peace and prosperity in our increasingly interdependent and interconnected world. Thank you. (Applause.)

MR. KEMPE: Madame Ambassador, thank you very much for what I – and I think people in the audience think was a very important address. And I think, listening to you, it strikes me – a couple of things strike me.

First of all, you really captured the excitement of how much India has changed and the impact that can have on the world. Second of all, the huge potential of the U.S.-Indian relationship. And as you go over issues – trade, climate, security, your home minister, multilateral institutions – there really is not a subject where this relationship has not been key.

But let me start the questions – and I’ll just ask a couple and then I’ll turn to the audience – on areas where there may be some friction.

AMB. SHANKAR: Sure.

MR. KEMPE: You’ve spent a lot of time talking about climate. During Secretary Clinton’s visit we saw a little political dissonance. Potentially contentious debate is brewing about binding emissions reductions, as both India and the U.S. move toward Copenhagen.

Is it possible we’ll see a change in India’s stand going up to Copenhagen? If not, how does this get sorted out?

AMB. SHANKAR: Well, let me say that India treats the issue of climate change very seriously. We have, as I said, adopted a national action plan with regard to climate change, which has both the mitigation aspects as well as aspects for adaptation. So it deals with both sides.

Looking at the negotiations in Copenhagen and on climate change, I think that for India, what we would have a problem with is to look at ways to deal with climate change which would, in a sense, deny us the right to develop. I think that is really the crux of the dilemma that we face. We would like to develop in a way which is environmentally sustainable, but it’s not an easy choice. You know, how do you do that with limited resources?

We are also in a position today where our energy consumption levels are very low. As I mentioned in my speech, 400 million people in India, particularly in rural India, are without access to commercial energy.

So you’re looking at an energy scenario where India has to grow its energy basket anywhere between five to seven times in the next 20 years. In such a scenario, absolute reductions in emissions may become very challenging and perhaps almost impossible.

But if you take a look at what has been said, you know, in the statement which emerged at the end of the meeting of the last Major Economies Forum, which was held in Washington. Then, I think – no, I think it was held on the sidelines of the G-8 meeting earlier this year in Europe.

But that statement said the developed countries will commit to emission reductions while the key developing countries will look at – or will commit to meaningful deviations from business as usual, which means that if, in the normal course, your emission growth would have been a certain factor, by taking action you would see that the growth of emissions would reduce.

And I think that provides a more realistic basis to move ahead and represents the consensus that could be forged at the end of that meeting of the major economies on climate change.

MR. KEMPE: In Copenhagen. Thank you very much for that answer.

On trade, the numbers are amazing: two times growth in trade. As you said, U.S. exports tripled. This is over the last five years. Bilateral goods trade now above $45 billion and services over $20 billion.

AMB. SHANKAR: True.

MR. KEMPE: I see Carla Hills here. USTR is identifying, quote, unquote, “challenges,” including India’s tariff and tax regime, intellectual rights policies, non-tariff barriers, investment climate. Do you see these barriers being removed, being addressed, over what period of time?

AMB. SHANKAR: I mean, I would imagine that this has to be a two-way process and that barriers to trade and investment on both sides should gradually be removed to encourage the free flow of trade and investment.

There are equally concerns which, you know, India companies have about growing protectionist trends within the United States and the use of non-tariff barriers including various standards to keep out goods from developing countries. So I think this is a two-way process, and we have a dialogue forum called the Trade Policy Forum, which we hope will contribute to this process.

We’re also – at present we have begun discussions on a bilateral investment treaty. We’ve had one round of discussions and we hope to carry this forward. So once that treaty is in place I think that would also be an important instrument for providing confidence to investors on both sides.

MR. KEMPE: Thank you very much. And just one more question from me and then I’ll turn to the audience.

Afghanistan. There are voices emerging in the United States and some important voices in Washington, D.C., calling for withdrawal of U.S. troops, or at least certainly not an increase, as some commanders on the ground might be seeking.

How would New Delhi view this? I realize it’s not your decision; it’s a U.S. decision, but on the other hand, it affects your region. And so I’m wondering whether India is ready to see U.S. troops pull out of Afghanistan. What is your view of how that could affect stability? What interest do you have in this?

AMB. SHANKAR: Well, we believe that bringing peace, stability and moderation to this region will require sustained engagement and will not be a short-term enterprise. We do think that the imperative to stay the course is strong and we would hope that this is something which the U.S. would find its way to accept.

MR. KEMPE: You would hope the U.S. would stay the course.

AMB. SHANKAR: Yes.

MR. KEMPE: Thank you very much.

Let me turn – please. And if you could identify yourself also as you ask your question.

Q: Thank you. I’m Dana Marshall with Dewey and LeBoeuf. Ambassador, thank you very much for those comments. They were very interesting.

As has been noted already, the subject of trade has exploded again in the front pages today – U.S.-China trade, of course. But of course India has had its own challenges with respect to its trade with China.

I just wonder, in light of the new Indian trade leadership that you have – of course the ministerial meeting you just had in New Delhi – what advice you might be able to provide from an Indian perspective about how the imbalances can be rectified and how we can put world trade growth and globalization on a more sustainable basis, from the Indian perspective.

AMB. SHANKAR: Well, from the Indian perspective, actually I think the first thing we would need to see is a global economic recovery to put world trade on a more stable basis.

As long as the economic downturn continues, bringing with it various problems for different countries, the tendency towards protectionism is one which many governments have to face in terms of the political pressures which are generated, or economic pressures which are generated.

So I would say the first requirement is to work for a sustained global recovery. And there I think India is doing its part because we did face a downturn in terms of the reduction in growth, but our growth continued and we had growth of 6.7 percent.

We ourselves adopted a stimulus package by way of a cut in value added tax and excise duties, as well as targeted government procurement to provide a stimulus to domestic demand within India as a way of regenerating economic growth.

And, as I mentioned, the Indian economy has continued to grow at a reasonable pace, hitting 6.7 percent GDP growth last year, and this year it’s slated to grow by between 6 to 6.5 percent. So in terms of sustaining domestic growth, I think India is doing its part.

The second is that India actually imports more than it exports. In terms of the total amount of goods that we trade in, our import bill is higher than our export bill. So we are not really contributing to global imbalances.

Our domestic economy is largely driven by domestic demand, the growth in middle class consumption, and also now consumption in the tier 2 and tier 3 cities in India, which are seeing exponential growth.

The next big leap in expansion of demand might occur in the rural economy. So the potential for growth in domestic demand in India is high and we will continue to leverage this as the key instrument for Indian growth.

Even if you take trade in services, for instance, about which sometimes there is some expression of concern in the United States, our bilateral trade in services is more or less balanced. We have exported about $9.6 billion worth of services and imported about $9.2 billion worth of services. So it’s largely balanced.

I think most countries would have to focus on expansion of domestic demand to, in a sense, compensate for the fact that the U.S. consumer may begin saving more and spending less.

MR. KEMPE: Thank you very much.

Please.

Q: Thank you very much. My name is Josh Rogin. I’m with Foreign Policy Magazine. In recent days, former Pakistani President Musharraf has given interviews stating that he diverted large amounts of U.S. military assistance away from their intended purpose, namely to fight extremists in Pakistan’s northwest area toward the Pakistani-Indian border.

I’m wondering, what’s your comment on these revelations, and also, what has the Indian government done, or what does the Indian government plan to do to respond to these actions? Thank you.

AMB. SHANKAR: I don’t know. We are not the ones who gave the aid to Pakistan. (Laughter.) So I think it’s more for the United States – the government of the United States to see how they are going to respond to this.

But as far as India is concerned, we support the economic and developmental assistance which is being given to Pakistan because we think – as I said, we share the objective of a stable and moderate Pakistan.

We do feel that in the security field, the assistance should be more tightly focused on building counterinsurgency capabilities rather than conventional defense equipment, which can be diverted for other purposes. And of course, there may be need for greater accountability in terms of how the defense assistance is used.

MR. KEMPE: Let me interrupt just with one question and then we’ll go back to the audience. I’d really like to have you talk to us a little bit about the Sino-Indian relationship, also in light of how much attention this relationship is getting in the United States – strategic economic dialogue.

Some people even talk about a G-2, which gives our European friends of the Atlantic Council a little heartburn. And I’m sure that if we want to expand it to G-3 with Europe, you’d probably say G-4, and before you know –

But could you talk about it a little bit? China and India in some ways are providing the bulk of the growth right now in the world economy. How do you see the relationship unfolding? And then, how do you see its dynamic with the United States?

AMB. SHANKAR: Well, you know, our prime minister has said that the world is large enough to have two big economies like India’s and China’s growing simultaneously, and if they continue to grow, then they could in future become an engine for the global economy.

India’s own trade and economic relationship with China has been growing very rapidly. We have – you know, they’re set to overtake – if they haven’t already overtaken the United States as the largest trading partner that India has.

I think our trade with China is now more than our trade with the United States. But it’s not without its problems because, you know, quite often we find that there are below-value goods being sold in the Indian market. We are, of course, largely providing raw materials to China. Because of their huge growth, I think their appetite for raw materials worldwide is quite large.

But there is a potential for productive cooperation between India and China. We have a strategic dialogue with annual meetings – summit-level meetings between our leaders. As I said, the economic relationship is growing. We have also commenced defense confidence building measures, including a defense dialogue and some level of, you know, early-scale joint exercises by way of defense confidence building.

The border problem is, however, not moving as quickly as we would have liked, but we have escalated the – or elevated the discussions to a political level. And in the meanwhile, both governments have an agreement for maintaining peace and tranquility in the border areas, bending the conclusion of a border agreement, as also we have reached an agreement on the principles that should govern a border settlement.

MR. KEMPE: Do you feel any suspicion from the Chinese side to the growing, quote, unquote, “strategic” relationship with the U.S.? And is the relationship with the U.S. in any way a hedge against China in the future that may not go in the direction we would wish it would go?

AMB. SHANKAR: Well, you know, as I mentioned in my speech, I don’t think the India-U.S. relationship is directed against any country. And indeed we see that there is a degree of fluidity in the international situation at present where all countries seek avenues of productive cooperation with other major powers as well as emerging powers, and at the same time seek to ensure better balances. So I would say that a bit of both operates.

MR. KEMPE: Thank you.

Please – many more questions I see here. Yes, please.

Q: Thank you. Madame Ambassador, I’m Alan Kronstadt from Congressional Research Service. In your opening remarks you had mentioned a strong mandate, one by the UPA government. Obviously there’s no doubt it was a convincing victory for the incoming government.

AMB. SHANKAR: Sure.

Q: But I’m curious; within the UPA coalition there is a lot of disparate views, and maybe even within the Congress Party itself. Realizing that foreign policy was not a leading issue in the election, I’m curious; what do you see as the mandate in the realm of foreign policy in maybe U.S.-India relations?

I mean, what are the leading issues that are important in that realm to the Indian people and the people who – the government in office?

MR. KEMPE: Did the election send any message in this regard as well, right? Is that –

Q: Sure.

MR. KEMPE: Yep.

Q: Thank you.

AMB. SHANKAR: Well, I don’t think – as you mentioned, I don’t think foreign policy was a key aspect of the, you know, electoral campaign on any side. It was primarily focused on the domestic economy.

I think the main message was really to, A, get back onto a high-growth path of 8 to 10 percent; B, look at inclusive growth so that it is not just growth which benefits, you know, a small section of the people, but to put in place policies to ensure that all sections of our people are in a better position to benefit from this growth; and, C, the whole program of social development and empowerment.

I think these were the three key messages. But in terms of foreign policy, I would say the priority for the government is to have a global environment conducive to the achievement of the national development goals. And I think that is really the key foreign policy imperative for India at this juncture.

MR. KEMPE: Please. The gentleman –

AMB. SHANKAR: Oh, sorry; you also mentioned India-U.S. relations. Again, as I’ve said, I think this is a relationship which has broad spectrum political support across the political spectrum in India.

I think the left parties did raise objections during the campaign to the India-U.S. nuclear agreement, which is the reason why they had withdrawn support from the government prior to the elections.

But, by and large, this is an agreement which has widespread public support, and the India-U.S. relationship is also one which has broad-spectrum political support and also a great deal of public support.

MR. KEMPE: Please.

Q: Howard Walker, formerly of the National Defense University and other places. Would the ambassador comment – back on Afghanistan – comment on India’s actual and anticipated presence – diplomatic, consular and military – in Afghanistan and the countries to the north of Afghanistan?

AMB. SHANKAR: Well, we do not have any security role in Afghanistan and nor do we seek one because we do not, you know, want to complicate the situation, in deference to regional sensitivities.

We do have a fairly significant development role and have committed over $1.2 billion worth of development assistance to Afghanistan, which is being used for road-building projects, repairing transmission lines, building new power generating facilities, building schools, medical facilities, hospitals, and also quite a number of local development projects at the grassroots level, which are small in nature but where we actually work with the local people to ascertain their priorities before defining the projects that we are going to undertake.

And we’ve found that that has been quite successful in terms of fulfilling gaps in needs that people feel at a grassroots level. I think that would broadly be, you know, in terms of our relationship there.

MR. KEMPE: Please, here, and then – yes, you had a question.

Q: Hello, I’m Amina Khan (ph) from Georgetown University.

So in your closing remarks you mentioned that India-U.S. relations would not affect India’s relations with other countries. In light of that and the spirit of transformation and bilateral relations that you mentioned between the U.S. and India, would you think this relation could be explored further to engage constructively with Pakistan, or would you consider the relation too delicate at this stage?

AMB. SHANKAR: I think that India has said that, you know, it seeks to deal with Pakistan on a bilateral basis and we are comfortable with that.

Q: I’m Ravi Khanna from VOA Television. You mentioned about cooperation and counterterrorism.

As long as the United States keeps on differentiating between the terrorists on the western border of Pakistan from the eastern border of Pakistan – and we talked to Robert Blake last week about the Mumbai attacks and Pakistan’s reluctance to prosecute the terrorists. What kind of impact that is having on Indo-U.S. relations right now?

AMB. SHANKAR: Well, we’ve had very good cooperation with the United States in the wake of the Mumbai attacks. The agencies – the U.S. agencies assisted us in the investigation of the attacks in unraveling some of the evidence and the data.

The FBI also testified – FBI witnesses also testified in the trial, which is currently underway for the terrorists who had been apprehended in India. And we continue to look at how the action in Pakistan is proceeding.

And certainly we do hope that there will be more effective action to bring to trial and to bring to book all those involved in these attacks.

Q: So what signals did Chidambaram get from his meetings in Washington?

AMB. SHANKAR: I think that there is a shared interest in seeing that those responsible for the attacks are brought to justice.

MR. KEMPE: Are you disappointed thus far in efforts to do that, or –

AMB. SHANKAR: Well, it hasn’t proceeded on the – I mean, it hasn’t – I think Pakistan is yet to bring those responsible for the Mumbai attacks to trial. I don’t think the trial has commenced. They’re still in a pre-trial phase.

In India, our trial against Kasab, the terrorist who was apprehended in India, is proceeding and we hope that it will come to conclusion sometime early next year. So we would hope for the same kind of vigor in terms of prosecuting the trial of those apprehended in Pakistan.

Besides, we would like more vigorous investigation of people who might have been responsible for the terrorist attacks and who at present have not been apprehended, including several key leaders.

MR. KEMPE: I wonder if you – oh, I see a question in the back.

Q: Mandafa Balbrian (ph), Brookings. Madame Ambassador, over the past year or so, Kashmir has seen a significant flare-up in violence on the Indian side as well as increased military engagements across the line of control. What do you believe are the challenges for pacifying Kashmir on the Indian side and opportunities for the bilateral relationship with Pakistan over Kashmir?

AMB. SHANKAR: I’m afraid I didn’t hear that very clearly. If you could repeat it, I’ll be happy.

Q: Sure. The increased violence in Kashmir over the past year, both on the Indian side as well as exchanges – military engagement with Pakistan across the line of control.

What are the opportunities for pacifying or using the flare-up of violence in Kashmir on the Indian side as well as moving the bilateral relationship with Pakistan on Kashmir forward, and what are the challenges to both of these aspects?

MR. KEMPE: And let me add to that, whether Kashmir is something for the agenda for the prime minister and President Obama, or whether this is something to be kept off.

AMB. SHANKAR: Well, I think Kashmir is something which we are dealing with domestically within India, and we’ve had elections in Kashmir where the participation was over – state elections participation was over 60 percent, which, you know, despite calls for boycott from militant groups, showed that people are really interested in seeing that democracy moves and that things get done at a grassroots level.

That was followed with national-level elections. And so I would say, actually, that the situation in Kashmir has been better than it has been for many years. Yes, we’ve seen stepped-up efforts at infiltration across the line of control, unfortunately, this year and that is a cause for concern.

As far as, you know, the India and Pakistani dialogue is concerned, our government has made it clear that we would need to see more definitive steps from Pakistan to address our concerns on terrorism before we can really move towards a fruitful dialogue.

MR. KEMPE: Thank you for that answer. Let me ask you a final question. And I’m sorry but this one is going to be a large question, but you seem to be enormously expert in speaking concisely and brilliantly to these points.

I think as countries emerge, whether it’s China, India, as global players – and that’s essentially what’s happening – there is this moment of questioning of what sort of strategic player, what sort of global player will India be? So my question on the one hand is, what is India’s strategic vision, and is there one at the moment?

And the second is, as you look – we are the Atlantic Council. As you look at Europe and the United States, is there anything trilateral that’s useful? Is there something where the U.S., India and Europe can work at common purpose on something? Is there any advantage to this? Do you see it happening anywhere? And maybe I’ll leave the question at that for now.

AMB. SHANKAR: Well, I think India will be a force for the good. If you take a look at India’s history, we have really never attacked any country. We have expanded our influence largely through peaceful purpose, whether it was the spread of Buddhism in Asia through the messengers and disciples of the Buddha who went across Asia, or through trade and commerce. And that has been the historical role of India.

In more modern times I think India has been and is a bridge country, which is a developing country but a democracy. It shows that you don’t have to choose between the two, that it is possible to develop through the consent of those governed rather than through, you know, benevolent authoritarianism or not-so-benevolent authoritarianism.

And we also, because we combine elements of underdevelopment with elements of developed excellence, we are in a position to straddle both sides of many problems. For instance, on intellectual property rights we are both a consumer and a producer of IPR. The level of technological innovation in India is very high. So we are able to see both sides of the issue.

Similarly, if you look at the development challenges and the development paradigm, we understand the concerns of the developing countries and we also have pockets of excellence like the developed countries, so we are in a position to see that.

And I think this ability to straddle different points of view stemming from our own position as a country which encompasses different aspects at the same time I think is a unique perspective that India can bring to the global table.

So I would say, in short, that India would be a force for the good and that what we seek is a role commensurate with the demands which are being placed on us.

MR. KEMPE: And the U.S.-European, is there something Atlantic linking with India that you can imagine on specific issues?

AMB. SHANKAR: Well, I think – I haven’t really given this thought and I was not really in a position – I mean, I didn’t think that this would be the subject of today’s discussion, so offhand I don’t think I can really come up with anything.

MR. KEMPE: But what I’m hearing is a move from non-alignment to multi-alignment, in a way, with various groups and various issues with the developing world, with the world of democracies, and certainly multi-lateral institutions.

AMB. SHANKAR: I think in some sense that is how we define non-alignment. It meant that we were not tied to any particular set of countries or a country or group of countries, but that we could decide on merits based on our perspective where our interests would lie on a particular issue.

In a sense, the desire to seek expanded autonomous space for decision-making after hundreds of years of colonialism underlay our choice of non-alignment as a foreign policy principal.

Today I would say that most countries have become, in a sense, non-aligned or multi-aligned and therefore the world is moving towards a moment where alliance structures are more fluid than they have been for a long time.

MR. KEMPE: Madame Ambassador, thank you very much. Before I close and ask the audience to thank you with me, let me just tell you how important I think your voice is in this city, how welcome you are in Washington, and how glad we all are that you are here.

It really is remarkable, the breadth of issues that we’re talking to each other and the depth with which we’re – about which we’re talking about.

We are at an inflection point of history, and we at the Atlantic Council see it as absolutely crucial at this time that likeminded countries work ever more closely and intelligently together because at inflection points these small decisions and this cooperation makes a lot more difference than it does at times of relative stability.

So thank you so much for taking this time, and thank you for a very rich discussion and address, on my behalf and that of the audience. (Applause.)