Shri Natwar Singh: Good morning ladies and gentlemen. Thank you for turning up in such large numbers.

We are pleased to welcome Dr. Rice to India. This is her first visit, and first visit by a Cabinet member in the second term of the Bush Administration. We view her as a friend of India who led the fashioning of a new policy in the first term. I look forward to working with her and taking Indo-US relations to even higher level and more frequently … and we will continue our discussions during lunch.

The issues (that were discussed) I will just briefly mention. The Next Steps in Strategic Partnership or NSSP Phase – II should be concluded fairly soon. High Technology Trade would continue to grow. We will cooperate more closely in the field of energy. Our defence cooperation will be expanded. Civil aviation is another major area of growth through an Open Skies Agreement. This will impact positively on our economic and trade links. Both governments will encourage their business communities to be more aggressive in exploiting opportunities and challenges.

Madam, we acknowledge your great political vision and I felt that we were on the same wavelength as we look at this relationship not only for what it offers today but at its enormous potential to shape our global future to our mutual advantage. Naturally, we discussed important regional and global questions. We approached these issues from our common commitment to democracy, pluralism and prosperity.

On Nepal, we agreed that recent events have been a setback in these goals. Democratic freedoms must be restored and reconciliation with political parties must lead to return to multi-party democracy in Nepal.

I apprised the Secretary of State of recent developments in our Composite Dialogue with Pakistan which is progressing satisfactorily. We look forward to welcoming General Musharraf here soon and if I may be allowed to say something, I will also respectfully request him that he ensures that the Pakistan Cricket team does not beat our Cricket team. There should be no doubt about our commitment to achieving peace with Pakistan but it is critical that Pakistan implements fully its solemn commitment to cease all cross-border terrorism against India.

On Afghanistan, we assessed our ongoing cooperation and support to President Karzai’s government. We will continue to work together closely.

We also exchanged views on West Asia, what you, Madam, call Middle East. I informed the Secretary of Sate that India would be prepared to contribute to economic reconstruction in Iraq. We will await any requests from the newly elected government and judge them on their merit.

Naturally, we spoke about the reform of the United Nations. It was agreed that as strategic partners we should have a sustained dialogue on this very important issue.

Dr. Rice met the Chairperson of the UPA Smt. Sonia Gandhi earlier this morning. Their meeting lasted half-an-hour. Apart from being extremely cordial and warm, almost all issues of mutual interest were discussed. Dr. Rice will be calling on Prime Minister later in the day. I am hosting a lunch in her honour where we will, as I said earlier, continue our discussions.

Even from this brief stay I am certain that she will get the sense of warmth of the welcome that awaits President Bush. I told Condoleezza Rice that she comes here as a friend and when a friend comes to India they do not have to knock at any door, they will find the door open.

Dr. Condoleezza Rice: I have indeed had a very warm welcome in India. I want to thank you very much Foreign Minister saying for this very warm welcome and for our productive discussions.

I did have very cordial and wonderful meeting this morning with Mrs. Sonia Gandhi, the Chairperson of the Congress Party. We have met before at one time in Washington and it was really very good to have a chance to renew my discussions and my dialogue with her.

The President wanted me to have a chance to come to India early in my tenure as Secretary of State and early in his second term because this is a relationship that has transformed in recent years from one that had great potential into one that is really now realizing that potential. It is based first and foremost on the fact that we share common values and there are no strong relationships than those that are based on common values.

This is a vibrant and wonderful democracy. It is remarkable that this large country with all its ethnic and religious and heritage differences could be such a vibrant and functioning democracy. In fact, the United States is, of course, not nearly so large but we also are a democracy that is multi-ethnic and multi-religious and pluralistic and that is an experience that binds us together and gives us a firm foundation for our partnership in regional and global affairs.

We and India have taken our relationship to a new level through the NSSP - Phase-I of which has been completed and Phase-II of which we look forward to having completed very shortly. I said to the Foreign Minister and will say later to the Prime Minister that there is much more that we can do.

Our defence cooperation is strong - military to military contacts and joint exercises - the United States looks forward to enhancing that defence cooperation over the next several years.

We also look forward to an energy dialogue because the demands for energy of growing economies like India and the United States are demands that will have to be met in order to keep prosperous and growing and expanding economies that can then serve the needs of their people. We look forward to a large scale energy dialogue that looks at ways to meet our energy needs and at the same time to be responsive to environmental concerns.

We, as well, had a chance to talk about American support for the Composite Dialogue with Pakistan. We very much admire what the Prime Minister and President Musharraf have been able to continue. Given the change in government here in India it is heartening that that Dialogue has continued and indeed accelerated and we want to be supportive in any way that we can.

As the Foreign Minister said, we had the chance to talk about Afghanistan, about Iraq and especially about the challenge to democracy in Nepal where we have had outstanding cooperation between our Ambassadors to try and help that country to get back on a democratic path. That simply must happen and we are in complete agreement that it needs to happen very, very soon.

I think it shows that India and the United States have regional responsibilities but also increasingly global responsibilities. We respect this great democracy. We respect what it has been able to achieve for its people. We respect the challenges that it has to achieve even more for its people and we respect the possibilities that the United States and India enjoy for global partnership. I am going to make a promise to the Foreign Minister right now and that is that I will even try to understand cricket. That would help.

Shri Natwar Singh: I will try and understand baseball.

Dr. Condoleezza Rice: Thank You.

Question (NDTV, Abhisar): This question is to Dr. Rice. What do you feel about the cooperation between India and Iran on the gas pipeline since you have just made a statement about expanding the dialogue on energy. Are there any reservations about cooperation between India and Iran on the gas pipeline?
Aapse Natwar Singhji, kya aap ise hastakshep ke roop mein dekhenge agar Anercia is par kuch aapatti jatayega?

Dr. Rice: Thank you very much. I think our views concerning Iran are very well known by this time and we have communicated to the Indian government our concerns about gas pipeline cooperation between Iran and India. I think our Ambassador has made statements in that regard. So, those concerns are well known to the Indian government. We do need to look at the broader question of how India meets its energy needs over the next decades, and whether its rapidly growing economy, an economy that must continue to grow in order for the benefits to be felt by India’s people... Since that is something that is a goal that we very much support, we believe that a broad energy dialogue should be launched with India because the needs are there. We have our own energy needs and indeed given the technological sophistication of our economy, of India’s economy, I would hope that we can also explore ways that new technologies can help us over the next decades to meet what are undoubtedly going to be burgeoning energy needs. So, yes, we do have our concerns. We have communicated those but we intend also to look at this as a broader problem.

Shri Natwar Singh: As you know the discussions are going on between the Petroleum Minister of Government of India Shri Mani Shankar Aiyar and his counterpart in Iran and in Pakistan. As Secretary of State said the energy requirements of India are growing exponentially in the years to come as we become more and more industrialized. We have traditionally good relations with Iran. We expect Iran will fulfill all its obligations with regard to the NPT. We have no problems of any kind with Iran. As Dr. Rice said (regarding) the requirement for energy and the new technology, India, Pakistan and Iran are in touch with each other.

Question (Associated Press): This question is for both of you. In your discussions today did you discuss the sale of F-16s to both India and Pakistan? Did you reach any agreement on that? Does this kind of potential arms pact represents a tacit acknowledgement by the United States that both powers possess nuclear weapons that can be used against the other?

Dr. Rice: It will not be surprising to you that in the context of our discussions about the security environment in the region here and discussions about defence cooperation that the question of arms sale including F-16s did come up. As I have said, we are going to continue to have broad discussions about the security needs, about the defence needs of India and I am quite certain when I go to Pakistan that I will have discussions about the defence concerns and the defence needs of Pakistan. But there has been no such agreement, as you called it, and as I have said to you that I do not expect that there are going to be any announcements out of this. But we, of course, have discussed this, as well as a number of other issues about the defence needs of India.

Shri Natwar Singh: As is well known India and the United States have ongoing dialogue on defence, on various aspects of it, on defence supplies, on defence equipment and every issue was brought up including F-16. As the Secretary has said no announcement is going to be made. We discussed every aspect of our defence relationship with the Secretary of State. If anything else happens between now and lunch I will let you know!

Question (Saurabh Shukla, India Today): Both of you have talked about the UN reforms. I am sure discussion must have happened on expansion of the UN Security Council. There is a sense here that there is some ambiguity on the US’ own position on the expansion of the UN Security Council. First, will United States support the expansion at all, and second will you support India’s candidature as a permanent member of the UN Security Council?
A quick question to Mr. Natwar Singh. Sir, would you have liked the US to have made its position clear with regard to the expansion of the UN Security Council and India’s candidature for the permanent membership?

Dr. Rice: We are at the beginning of discussions about UN reform including, of course, UN Security Council reform. Our view is that the reform of the United Nations has to be understood as a broad process - that there are many aspects of the UN that need reform including, as we have said, the Secretarial issues, General Assembly issues, Security Council issues and agency issues as well as management reforms. And so, it is not surprising that we continue to have these discussions with countries around the world. I believe Secretary General Annan has talked about the need to have intensive consultations. I myself have just appointed a Special Advisor Ambassador Shirin Tahir Kheli who will, full-time for me, be engaged in discussions around the world about UN reforms. So, we are just at the beginning of this and in that context we have agreed to stay in touch with India and with others about how those discussions are going.

Let me make a broader point separate from this, which is that the world is changing obviously. There are countries like India that have emerged in recent years as major factors in the international economy, in international politics, taking on more and more global responsibilities. I was really quite interested in the fact that when we had the Tsunami cooperation which was a kind of ad-hoc arrangement for a while to respond to the immediate needs of the Tsunami, India was able, I am told, to mobilize its ships and go to sea in about 48 hours. That is extraordinary and that shows that India’s potential is very great to help resolve humanitarian and other needs of the world.

So, we will continue to talk with people about Security Council reform, reform of the UN but clearly we also note that there have been great changes in the world and that international institutions are going to have to start to accommodate them in some way.

Shri Natwar Singh: I might add to the previous question on defence issue that we did express certain concerns about certain matters on the defence issue, to how it might create some complications. But I think there are no serious differences of opinion. There are one or two items on which we do not agree. Our relations have reached a maturity where we can discuss these things freely and frankly and place our views firmly on record, and our views with regard to F-16s are well known.

Now, with regard to Security Council, yes, we did discuss and the Secretary of State is fully familiar with India’s stand that India is an aspiring candidate for an expanded and reformed Security Council. We are a democracy of one billion people, our UN record is impeccable, we have been involved in many many peacekeeping operations, we have led discussions on decolonization, we have led discussions on the end of Apartheid in South Africa. I myself was, for many years, Rapporteur of the UN Committee on Decolonization where I worked with your colleagues – Ambassador Clinton, Ambassador …(inaudible)… both of them alas no more and with the father of your Deputy here Bob Blake, who is with us still (the father).

Naturally, we think that the world of 2005 has nothing to do with the world of 1945 and therefore it is imperative that the United Nations if it is to be a relevant and effective instrument of maintaining peace and ensuring development and harmony, then it has to be drastically reformed. I also realize that the amendment to the UN Charter is not an easy exercise. The Charter has only been reviewed once in 1963 when the non-permanent members were increased by 4, so that the Security Council from 11 became 15.

There are many aspirants for the Security Council expansion and permanent membership – India, Japan, Germany and Brazil are working together and we are in touch with all our friends including US. We have got assurances of a very large number of countries but let me add quite categorically that the amendment of the UN Charter is a very, very complicated process. We are studying the Report of the High Level Panel appointed by the UN Secretary General. The Secretary General should be sending the Report, I think today or tomorrow, to member-states and then we will have our comments. Intensive discussions will take place and if I may, Madam in your presence, say that obviously United States will play a very, very important role in this particular exercise.

Question: Madam Secretary the Italian Prime Minister Silvio Berlusconi is indicating that he is willing to pull Italian forces out of Iraq if the security situation in that country does not improve perhaps as early as September. What is the official US response to Mr. Berlusconi’s announcement?

Dr. Rice: First is to note that the Italians have been steadfast in their support of the Iraqi people’s desire to have their aspirations for freedom met. They were early supporters of the Iraqi people for the coalition. The Italians suffered casualties as a result of their commitment there including among the Carabiniere. I remember that when that happened they had more volunteers so that they could take the place of those people. So, the Italians have served, and served bravely, in support of democracy in Iraq. As we move forward we know that coalition partners are beginning to look at what the future of their commitment can be and we understand that Prime Minister Berlusconi has said that they will look at conditions.

They, of course, are also engaged in the training of Iraqi security personnel and for all of us the real issue is how quickly can we get Iraqi police, army, border guards trained so that Iraqis can do the security task necessary to sustain the Iraqi democratic process. Indeed, we were all heartened by the way that the Iraqi security forces stepped up to the play during the Iraqi elections, really being the core. Remember General Casey saying that during that period of time he could not think of one case in which the coalition forcers had to step in for the Iraqi security forces. So, they are making a lot of progress. The real answer to Iraqi security would be when Iraqis can do those security tasks.

So, I am quite certain given the experience of working with the Italian government, given the experience of working with the Italian Minister of Defence, that any decision that the Italians make about their forces are going to be fully coordinated and in a way that does not put at risk the mission and whatever the Italians then decide, I want to make clear that the United States and I think especially the Iraqis appreciate what Italy has done and what Italy will continue to do in the future in helping the Iraqis to sustain their democratic progress.