Showing posts with label U.S.-INDIA RELATIONS. Show all posts
Showing posts with label U.S.-INDIA RELATIONS. Show all posts

Tuesday, January 29, 2013

STATE DEPARTMENT OFFICIALS REMARK'S ON 'EMERGING GLOBAL ECONOMIC ORDER'

Photo:  Taj Mahal.  Credit:  U.S. State Department.

FROM: U.S. STATE DEPARTMENT

The New Emerging Global Economic Order: Taking the U.S.-India Example
Remarks
Robert D. Hormats
Under Secretary for Economic Growth, Energy, and the Environment, Bureau of Economic, Energy and Business Affairs
Agra, India
January 28, 2013
As prepared for delivery

Thank you for that wonderful greeting. I am honored to accept your invitation to participate in the Partnership 2013 Summit. For me this is an excellent opportunity to learn from so many distinguished women and men from across India and from around the world. To be back in Agra, against the backdrop of one of the great works of art and love of mankind, the TajMahal, is a distinct and profound pleasure. I am always happy to be in India. On Saturday, I fulfilled a long held wish, when I was able to witness Republic Day in all of its splendor. It is a remarkable event that I will long remember.

I first came to India as a young man. I traveled the Grand Trunk Road and discovered for myself "incredible India" – long before that term became a common one. My month-long journey on buses and trains – and sometimes on top of buses and trains – was one I have never forgotten. I saw up close and in action this country’s vibrant democracy, and rich, diverse, creative society. I was left with a deep and enduring affection for both India’s people and its indomitable spirit.

It is common knowledge that we are in the midst of an historic realignment in the locus of economic growth and demographics globally. Emerging economies in South and East Asia in particular are making, and are projected to continue to make, historical gains.Some in the developed world may find this threatening. I view the growing regional linkages and rapid economic growth in Asia as an opportunity to expand the economic pie and create additional growth for all.

A New Silk Road linking Central and South Asia as well as an Indo-Pacific Economic Corridor linking the rapidly expanding economies of South and Southeast Asia would help unlock and expand markets for global goods and services.

I will speak more about regional economic integration on Wednesday, in Delhi. But today I want to focus on the role industrialized countries and emerging economies can play together in the rapidly changing global economic order.

I believe nations like mine can seize this opportunity to develop new sets of cooperative relations with emerging economies to increase trade, encourage closer cultural ties, boost energy production and reliability, address environmental challenges, and improve global stability. We seek new partnerships to address the needs of the 21st century.

The burgeoning U.S.-India economic relationship is a prime example of how this is unfolding. I am not a believer in a zero sum game. The more we, and other nations represented here, can cooperate in ensuring a fair, transparent, rules based trading and financial system, with broadly shared responsibility, the more we all will prosper. The New Global Economic Order will require both the utilization of current institutions, but also pragmatic bilateral and regional cooperation.

The depth and breadth of U.S.-India ties make this relationship a model for discussing Global Partnerships for Enduring Growth – the theme of our conference. I’d like to discuss why we take this relationship so seriously.

As President Obama told the Indian parliament last year, the relationship between India and America will be one of the defining partnerships of the 21st century, rooted in common values and interests. We not only welcome India as a strong and influential participant in the world economy, we fully support it. I would say the same about the nations of ASEAN and others in this region. Indeed, we see ASEAN and India as two of the strongest pillars of the global economies in the 21st century.

When people ask why the United States is so interested in expanding its ties with India, my response is three-fold – One, our ties make geo-strategic sense. Two, they make geo-economic sense. And three, and most importantly, our citizens will benefit from it.

In India, Prime Minister Singh has labeled this the "Decade of Innovation." He concurrently established the National Innovation Council to create policies that support medium-to-long term innovation in India. As the Government of India notes in its draft National IPR strategy, "for innovation to create any impact, it is imperative to take the idea from the mind to the laboratory to the market."But to do that, innovators in areas such as information technology, pharmaceuticals, and clean energy need assurance that their ideas will be protected throughout that process. This is not only for them. It encourages more innovation and investment in these and other sectors. That is why we strongly support working together with India and other nations of Asia to ensure a strong intellectual property rights system that will encourage high-technology innovations, providing wide-spread benefits to all of our nations.

We also encouragethe Indian government and all of our trading partners to considera range of market-based solutions that can better support jobs and growth, while creating a level playing field.Predictable and clear policies will encourage businesses to expand, and to devote the long-term capital and resources required for further growth.Working together, the United States and India can realize the kind of innovation our leaders envision.Science, technology, and the environment are areas characterized by mutual interest and expanding cooperation.

Our collaborative effort in agriculture includes efforts to stop food loss between the farmer and the consumer, increasing prosperity for both. Such losses are enormous and a great tragedy. This can be prevented by cold chain storage and other methods. Companies are willing to invest in such systems if given the right opportunities and a welcoming environment.

On the investment side, the U.S. and Indian governments have engaged in Bilateral Investment Treaty (BIT) negotiations. We’re aiming for a BIT that gives a high level of openness to investment across the economy, provides strong rules on investor protection and transparency, and offers effective means for resolving investment disputes.Our S&T cooperation includes cutting edge work in space science, where we work together on Earth observation satellite projects that help us predict monsoon patterns and respond to natural disasters.

The Clean Energy Finance Center in New Delhi represents U.S. agencies that have mobilized more than $1.7 billion for clean energy projects in India, working in tandem with Indian government and industry partners. We both benefit from our comprehensive strategic dialogue on energy, in light of dramatic changes in technology and in the global energy market . This dialogue takes on even more importancewith the growing role of the Indian Ocean in global energy shipments, regional energy and maritime security, growing power needs, and sustainable clean energy objectives. We seek a broader and deeper dialogue on energy, for similar reasons, with countries in south and east Asia. We do not see the American energy boom as a reason to pull back from engagement, but as an opportunity to expand mutually beneficial engagement.
In addition to business connections, people to people connections are one of our strongest links.

More than 12,000 American alumni of Indian institutions are part of our efforts to strengthen and broaden relations with India.So are the more than three million Indian-Americans living in the United States. And last year, over 100,000 Indian students came to the U.S. to study.

With the increasing connectivity of our universities, our businesses, and our civil societies, we are seeing more engagement than ever. And I think thatincreasingly,state-level and city-level leadersin both countries, see great opportunities for their citizens from new city-to-city and state-to-state partnerships. Theseare creating the next generation, and a deeper level, of economic diplomacy. More and more international economic diplomacy will be the work of mayors, governors, chief ministers and their teams.

For example:

• Madhya Pradesh Chief Minister Chauhan recently visited the U.S. to describe his state’s ambitious agriculture reforms, including loan guarantees to farmers, improving irrigation, and "a single window system" for expeditious foreign investment approvals;

• CII—our hosts today—recently brought a delegation of business leaders from the state of Jammu & Kashmir to visit several U.S. cities. J&K has developed cold chain infrastructure with the help of U.S. partners that preserves apples as they go from farm to market, much as Tamil Nadu has done for bananas. Both are very positive examples;

• Kentucky Governor Steve Beshear just announced a 25-year coal deal between American companies and India;

• Washington state’s Governor Christine Gregoire has established partnerships in energy, life sciences, and film; and

• City mayors like San Antonio’s dynamicJulian Castro—who will also be participating at this summit tomorrow—are building ties with new and existing India partners.

• Our Maryland Governor Martin O’Malley led a trade mission to Andhra Pradesh, Maharashtra, and New Delhi. Thisrepresented the largest ever state trade mission to India. Because Maryland is my home state I am especially proud of this.

In the Third U.S.-India Strategic Dialogue, Secretary Clinton welcomed Minister Krishna’s proposal for a "Conversation Between Cities" to take place in 2013 to address "urban challenges and solutions in the 21st Century."

Our states and our cities are the real laboratory test tubes of democracy and creative economic policy —where our citizens are in close and direct contact with their local governments, where our entrepreneurs establish and develop new business that drive employment, and where our institutions of higher education help us all enhance our skills and retrain for new opportunities.
So the robust connections between Indian and American states and cities are a welcome commercial development, and offer both countries more ways to take the strategic partnership to an even more ambitious level. We seek to do the same with others in this region.

While we have come far, we still have more work to do to ensure this relationship achieves its potential. The United States is enormously optimistic about India’s future –

(1) that India’s greater role on the world stage will enhance peace and security;

(2) thatfurther opening India’s markets will pave the way to greater regional and global prosperity;

(3) that Indian advances in science and technology will improve lives and advance human knowledge everywhere; and

(4) that India’s vibrant, pluralistic democracy – where the rights of men and women are equally represented and both have an equal opportunity to succeed and contribute – will produce measurable results and improvements for its citizens.

But our governments cannot assume the relationship will be self-sustaining without mutual effort. This is the challenge we all face today. We have the opportunity to establish a framework for enduring growth for our two countries. And all of our countries together need to establish a series of bilateral and regional partnership for Central Asia, for East Asia, and for connections between them. Now each of us individually and – all of us– need to take the next steps to ensure that this process continues and strengthens.

Friday, January 25, 2013

INDIA REPUBLIC DAY

Map:  India.  From:  CIA World Factbook.

FROM:  U.S. STATE DEPARTMENT 
India Republic Day
Press Statement
Hillary Rodham Clinton
Secretary of State
Washington, DC
January 24, 2013

 

On behalf of President Obama and the people of the United States, I am delighted to send my best wishes to the people and government of India as you celebrate your 64th Republic Day this January 26th.

The United States and India share an unwavering commitment to democratic government. Our shared values are the foundation for the innovative, entrepreneurial drive that is allowing more and more of our 1.5 billion people to realize their potential. My three trips to India as Secretary of State reinforced my unyielding belief that the U.S.-India strategic partnership is making the world more united, prosperous, and secure. Together we are strengthening our ties and working to address some of the most difficult global challenges.

As you celebrate this special day, know that the United States stands with you. Best wishes for a year filled with peace and prosperity.

U.S.-INDIA RELATIONS

President Obama has called India one of the defining partnerships of the 21st century, one which will be vital to U.S. strategic interests in Asia-Pacific and across the globe. Presidents Clinton, Bush and Obama all visited India, underscoring the increasing importance of the bilateral relationship. Our relationship is rooted in common values, including the rule of law, respect for diversity, and democratic government. We have a shared interest in promoting global security, stability, and economic prosperity through trade, investment, and connectivity. The United States and India have a common interest in the free flow of global trade and commerce, including through the vital sea lanes of the Indian Ocean.

The U.S. supports India's critical role as a leader in maintaining regional stability. Security ties are robust and growing with bilateral defense and counterterrorism cooperation reaching unprecedented levels. The United States and India also look continue to develop their defense partnership through military sales and joint research, co-production and co-development efforts.

The U.S.-India
Strategic Dialogue, launched in 2009, provides opportunities to strengthen collaboration in areas including energy, climate change, trade, education, and counterterrorism. The third annual meeting was held in June 2012. In 2012 alone, seven Cabinet-level officials made visits to India to deepen bilateral ties.

The strength of people to people linkages between the United States and India has come to define the indispensable relationship between our two countries. The increased cooperation of state and local officials to create ties has enhanced engagement in education. Additionally, state to state and city to city engagements have created new partnerships in business and the private sector and enhance our robust government to government engagement.

ADDITIONAL INFORMATION FROM U.S. STATE DEPARTMENT

Bilateral Economic Relations

The United States is one of India's largest trade and investment partners. U.S.- India bilateral trade in goods and services has increased four and a half times over the last decade, to more than $86 billion in 2011. Bilateral trade between our two countries is up 40 percent since we began our Strategic Dialogue three years ago. The stock of Indian FDI in the United States has increased from $227 million in 2002 to almost $4.9 billion in 2011, supporting thousands of U.S. jobs.

The United States and India are negotiating a bilateral investment treaty as a key part of the effort to deepen the economic relationship, improve investor confidence, and support economic growth in both countries. India continues to move forward, albeit haltingly, with market-oriented economic reforms that began in 1991. Recent reforms have included an increasingly liberal foreign investment regime in many sectors.

On energy cooperation, the United States and India also share a strong commitment to work collaboratively in bilateral and multilateral fora to help ensure mutual energy security, combat global climate change, and support the development of low-carbon economies that will create opportunities and fuel job growth in both countries. The two countries consult regularly on the future of global oil and gas markets, expanding sustainable energy access to support jobs and economic growth in both countries, collaborating in research and technology, and increasing U.S. exports of clean energy technology.

U.S. exports to India include diamonds and gold, machinery, oil, and fertilizers. U.S. imports from India include diamonds, pharmaceutical products, oil, agricultural products, organic chemicals, and apparel. U.S. direct investment in India is led by the information, professional, scientific, and technical services, and manufacturing sectors. India direct investment in the U.S. is primarily concentrated in the professional, scientific, and technical services sector.

India's Membership in International Organizations

India and the United States share membership in a variety of international organizations, including the United Nations, G-20, Association of Southeast Asian Nations (ASEAN) Regional Forum, International Monetary Fund, World Bank, and World Trade Organization. The United States supports a reformed UN Security Council that includes India as a permanent member. India is an ASEAN dialogue partner, an Organization for Economic Cooperation and Development partner under its Enhanced Engagement program, and an observer to the Organization of American States. India is also a member and the current chair of the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC). In November 2012, the United States was admitted as a dialogue partner in the IOR-ARC with India’s support.

Monday, January 7, 2013

U.S.-INDIA RELATIONS


Map:  India.  Credit:  CIA World Factbook. 
FROM: U.S. DEPARTMENT OF STATE

President Obama has called India one of the defining partnerships of the 21st century, one which will be vital to U.S. strategic interests in Asia-Pacific and across the globe. Presidents Clinton, Bush and Obama all visited India, underscoring the increasing importance of the bilateral relationship. Our relationship is rooted in common values, including the rule of law, respect for diversity, and democratic government. We have a shared interest in promoting global security, stability, and economic prosperity through trade, investment, and connectivity. The United States and India have a common interest in the free flow of global trade and commerce, including through the vital sea lanes of the Indian Ocean.

The U.S. supports India's critical role as a leader in maintaining regional stability. Security ties are robust and growing with bilateral defense and counterterrorism cooperation reaching unprecedented levels. The United States and India also look continue to develop their defense partnership through military sales and joint research, co-production and co-development efforts.

The U.S.-India
Strategic Dialogue, launched in 2009, provides opportunities to strengthen collaboration in areas including energy, climate change, trade, education, and counterterrorism. The third annual meeting was held in June 2012. In 2012 alone, seven Cabinet-level officials made visits to India to deepen bilateral ties.

The strength of people to people linkages between the United States and India has come to define the indispensable relationship between our two countries. The increased cooperation of state and local officials to create ties has enhanced engagement in education. Additionally, state to state and city to city engagements have created new partnerships in business and the private sector and enhance our robust government to government engagement.

Bilateral Economic Relations

The United States is one of India's largest trade and investment partners. U.S.- India bilateral trade in goods and services has increased four and a half times over the last decade, to more than $86 billion in 2011. Bilateral trade between our two countries is up 40 percent since we began our Strategic Dialogue three years ago. The stock of Indian FDI in the United States has increased from $227 million in 2002 to almost $4.9 billion in 2011, supporting thousands of U.S. jobs.

The United States and India are negotiating a bilateral investment treaty as a key part of the effort to deepen the economic relationship, improve investor confidence, and support economic growth in both countries. India continues to move forward, albeit haltingly, with market-oriented economic reforms that began in 1991. Recent reforms have included an increasingly liberal foreign investment regime in many sectors.

On energy cooperation, the United States and India also share a strong commitment to work collaboratively in bilateral and multilateral fora to help ensure mutual energy security, combat global climate change, and support the development of low-carbon economies that will create opportunities and fuel job growth in both countries. The two countries consult regularly on the future of global oil and gas markets, expanding sustainable energy access to support jobs and economic growth in both countries, collaborating in research and technology, and increasing U.S. exports of clean energy technology.

U.S. exports to India include diamonds and gold, machinery, oil, and fertilizers. U.S. imports from India include diamonds, pharmaceutical products, oil, agricultural products, organic chemicals, and apparel. U.S. direct investment in India is led by the information, professional, scientific, and technical services, and manufacturing sectors. India direct investment in the U.S. is primarily concentrated in the professional, scientific, and technical services sector.

India's Membership in International Organizations

India and the United States share membership in a variety of international organizations, including the United Nations, G-20, Association of Southeast Asian Nations (ASEAN) Regional Forum, International Monetary Fund, World Bank, and World Trade Organization. The United States supports a reformed UN Security Council that includes India as a permanent member. India is an ASEAN dialogue partner, an Organization for Economic Cooperation and Development partner under its Enhanced Engagement program, and an observer to the Organization of American States. India is also a member and the current chair of the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC). In November 2012, the United States was admitted as a dialogue partner in the IOR-ARC with India’s support.


The Ganges River forms the largest tide-dominated delta in the world where it empties into the Bay of Bengal. This false-color satellite image vividly displays the large amount of sediment (violet), carried from as far away as the Himalayas, that precipitates when it abruptly encounters the sea. The delta is largely covered with a swamp forest known as the Sunderbans, which is home to the Royal Bengal Tiger. Image courtesy of USGS. Credit: CIA World Factbook.

FROM CIA WORLD FACTBOOK

The Indus Valley civilization, one of the world's oldest, flourished during the 3rd and 2nd millennia B.C. and extended into northwestern India. Aryan tribes from the northwest infiltrated onto the Indian subcontinent about 1500 B.C.; their merger with the earlier Dravidian inhabitants created the classical Indian culture. The Maurya Empire of the 4th and 3rd centuries B.C. - which reached its zenith under ASHOKA - united much of South Asia. The Golden Age ushered in by the Gupta dynasty (4th to 6th centuries A.D.) saw a flowering of Indian science, art, and culture. Islam spread across the subcontinent over a period of 700 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established the Delhi Sultanate. In the early 16th century, the Emperor BABUR established the Mughal Dynasty which ruled India for more than three centuries. European explorers began establishing footholds in India during the 16th century. By the 19th century, Great Britain had become the dominant political power on the subcontinent. The British Indian Army played a vital role in both World Wars. Nonviolent resistance to British rule, led by Mohandas GANDHI and Jawaharlal NEHRU, eventually brought about independence in 1947. Communal violence led to the subcontinent's bloody partition, which resulted in the creation of two separate states, India and Pakistan. The two countries have fought three wars since independence, the last of which in 1971 resulted in East Pakistan becoming the separate nation of Bangladesh. India's nuclear weapons tests in 1998 caused Pakistan to conduct its own tests that same year. In November 2008, terrorists originating from Pakistan conducted a series of coordinated attacks in Mumbai, India's financial capital. In January 2011, India assumed a nonpermanent seat in the UN Security Council for the 2011-12 term. Despite pressing problems such as significant overpopulation, environmental degradation, extensive poverty, and widespread corruption, rapid economic development is fueling India's rise on the world stage.

Sunday, October 21, 2012

U.S.-INDIA SECURITY TIES

Map:  India.  Credit:  U.S. State Department
FROM: U.S. DEPARTMENT OF DEFENSE

Pacom Chief Encourages Closer U.S.-India Security Ties

By Donna Miles
American Forces Press Service


WASHINGTON, Oct. 15, 2012 - In his first visit to India as commander of U.S. Pacific Command, Navy Adm. Samuel J. Locklear III encouraged a closer defense relationship between the United States and India in which they address shared interests to promote long-term regional security and stability.

Locklear emphasized the U.S. interest in taking its relationship with India to the next level during meetings with Defense Minister A.K. Antony, Chief of Integrated Defense Staff Vice Adm. SPS Cheema and other officials in New Delhi.

"Building a strong military relationship with India builds understanding and deepens established ties that will contribute to the larger Asia-Pacific region," Locklear said during an Oct. 12 roundtable discussion at the Observer Research Foundation think tank following the sessions.

Locklear, who made a priority of developing the U.S.-India strategic partnership when he took the helm at Pacom in March, noted the two countries' common values and their mutual interest in a secure environment that promotes stability and allows economies to grow.

He emphasized the impact of globalization, which has increased the importance of sea lanes as a conduit of global commerce and the free flow of information in cyberspace.

"The economic system is so interlocked that a disruption of the flow of ... goods that disrupts the economy, in and of itself, is a security threat," the admiral told a Hindustan Times reporter.

But globalization also has given rise to terrorist structures and groups conducting illicit activities no longer limited by national borders, he noted. That demands closer cooperation among regional nations so they can work together to support their shared concerns, Locklear said.

"We're seeing an environment that demands more multilateralism," he said. "A regional environment utilizing strengthened partnerships and alliances will uphold long-term diplomacy, security and prosperity."

Locklear noted a "quite productive" effort to increase compatibility between the U.S. and Indian militaries, particularly in the maritime domain. But he encouraged closer future cooperation in two additional areas: counterterrorism and disaster response.

"I believe that where we have the most to gain in interaction is counterterrorism," he said. "We both have similar concerns, not just about counterterrorism in the immediate area of any one country. It's the spread of that terrorism, and its ability to upset the security environment in a way not productive for the future."

Locklear also recognized the value of regional collaboration to provide better responses to natural disasters and reduce suffering. "Militaries have a role in being able to respond early and jump start [that response]," he said. "I believe the United States and India share a very similar perspective on the importance of that."

To improve their ability to work cooperatively, the admiral acknowledged the need to increase technology-sharing. Defense Secretary Leon E. Panetta made that point when he visited India in June, and Deputy Defense Secretary Ashton B. Carter re-emphasized it during his follow-up visit to New Delhi in July.

"When it relates to our defense trade initiatives, there needs to be some streamlining, with more efficiency in it," Locklear agreed. "Certainly the timelines and bureaucracies on both sides need to be streamlined."

He applauded efforts both countries are making in that direction, recognizing that increasing compatibility benefits the entire region.

"We ... need the Indian military to have the very best equipment it can," Locklear said. "It is in the best interest of Pacom, and I believe of the security of the Asia-Pacific region, for the United States and our partners and allies in this region to be able for us to come together in a military way and be able to operate together effectively when necessary."

Asked about China's role, Locklear emphasized the importance of engaging positively with China as it emerges as a regional and global power and leader.

"If you step back and look at the strategic rise of China, it shouldn't be unexpected that as China rises in both economic and military power, they will start to have a greater influence on their neighbors and the region in which they live, and eventually, on the global environment," he said.

"The question is, 'How do we as a global community ... attempt to allow China to ... become a productive member of the security environment?'" Locklear said. "India and the U.S. share that as a common concern, and it should be a common objective."

The alternative, he said, is not good for anyone. Historically, turmoil has occurred when emerging powers like China entered into mature security environments that included a superpower like the United States. "In the past, we haven't had a lot of success with that happening without conflict," Locklear said.

"But today, the stakes are different. The world population is much more interlocked than in the past," he said. "We must see a future where China emerges productively and is contributing to a secure, peaceful environment and is not on the outside, looking in, or vice versa."

(Army Staff Sgt. Carl N. Hudson of U.S. Pacific Command contributed to this article.)

Tuesday, July 24, 2012

DEPUTY DEFENSE SECRETARY CARTER SPEAKS TO CONFEDERATION OF INDIAN INDUSTRY

FROM: U.S. DEPARTMENT OF DEFENSE
Presenter: Deputy Secretary of Defense Ashton B. Carter; Director General of the Confederation of Indian Industry Chandrajit Banerjee; and Chairman of the CII Defence Council Dr. V Sumantran July 23, 2012

Remarks by Deputy Secretary of Defense Carter to the Confederation of Indian Industry, New Delhi, India

DIRECTOR GENERAL CHANDRAJIT BANERJEE: Doctor Ash Carter, Deputy Secretary, Department of Defense, United States, Her Excellency, Nancy Powell, United States Ambassador to India, -- Dr V Sumantran -- distinguished ladies and gentleman, on behalf of CII, a very, very warm welcome to Dr. Ash Carter, deputy secretary, Department of Defense, United States.

Your presence is of significant importance to each one of us in India and particularly to CII. We're indeed very happy that you could make time to address this very important session on U.S.-India defense cooperation, the way forward. It shows the type of importance that you and your government attaches to this very important and -- important and emerging sector for India.

Also, a very warm welcome to excellency the Ambassador. Thank you very much for being here. A warm welcome to you from CII.

Also like to welcome all of the dignitaries present here at this session and for everyone who conveniently made it here with us today.

CII has 7,500 corporate members, has a very strong defense set up -- defense sector set up within the system, defense, aerospace and the entire gamut. And we see the type of opportunity and interest that this sector really has, especially when we work with together with the United States. A country where -- with CII, that is again predominantly addressed with one of our oldest offices we've been fortunate to have -- since quite some time and this sector will always be -- merged on the top in our discussions and in our -- as we have moved forward given our relationship with the United States.

Ladies and gentleman, we've transformed the international, geopolitical fabric in the post-Cold War era. It's interwoven by changes -- changed priorities and realigned -- possibilities. The foundations of -- (inaudible) -- converted -- (inaudible) -- between the United States and India in the last one and one half decades by -- within the opportunities for cooperation that this -- (inaudible) -- has offered. Both the nations are working toward enhancing and strengthening the engagement. India is viewed upon by the global community as a very strong, emerging power. And India's strategic relevance in the region have increased manyfold in keeping with its expanding strategic reach and depth.

India will be expected to discharge its responsibility as a regional power. The Indian armed forces are making efforts to enhance their military capability and preparedness.

It is the violence of defense weapons and they are huge all of us know that -- making an effort to diversify the sourcing of weapon systems. It is estimated that India will be procuring anything between $80 billion to $100 billion of defense equipment in the next five years.

It's a huge market and the potential to attract the U.S. defense industry and also a great opportunity for building a long term relationship with the defense industry. India will no longer be satisfied with a buyer/seller or patron/client type of arrangement. It is expected that the future of defense acquisitions will emphasize on transfer of technology as well as joint research and development of weapon systems. We understand that the U.S. has begun to move towards India beyond just sales of defense equipment.

Keeping in view the opportunity of cooperation arising out of the defense offset, there is a need to enhance the interaction between the tier one and tier two companies of both countries. We at CII are working towards it. We have been facilitating the interaction between the U.S. aerospace supply mission interactions with the Indian companies in different parts of the country. CII also has mounted several missions. But I must mention of a mission to Maryland and Virginia in June 2011 with the aim to enhance such interactions. We suggested an --inaudible-- and institutional arrangement for these -- for -- for such missions and such exchanges.

CII has been actively participating in the institutional arrangements that we have, which is the DDDG and the ACCD to discuss issues of mutual concern. The efforts being put in by the governments on both sides towards resolving the issues affecting the transformation is indeed very encouraging. The recent visit of the U.S. Defense Secretary Panetta to New Delhi signifies the interest and intent of cooperation.

During the last -- (inaudible) -- meeting in 2011, it was commented that the U.S. should publish a list of technologies for which there would be no requirement of export licenses. We in CII believe that such positive steps will definitely go a long way in taking the U.S. defense industry -- U.S. -- India-U.S. defense industry cooperation to a different plane.

Ladies and gentleman continuing the ongoing momentum, India and U.S. need to identify the new ideas of cooperation. Currently industrial cooperation in defense can be ensured as India's skilled labor force -- skilled labor force can be a lot of advantage to the United States.

Joint research and development can be undertaken. In the future this offset --(inaudible)-- that are part of the cost of developing of defense equipment and India can play a major role in this respect. It is evident from the fact that today all known defense industries of -- of the U.S. have established their offices in India and are engaged in dialogue with Indian industry.

There are several MOUs that have been signed between the United States and the Indian industry for joint partnership and cooperation. CII would wish to facilitate their engagement with Indian industry and other stakeholders in a much larger way than what has been the trend in the past. CII can play a significant role in facilitating offsets.

The Indian industry respects and understands the internal processes of export control and technology sharing of the U.S. Of military indutries we have, CII comments that India should be a special status as a country for defense cooperation. This will go a long way in giving a tremendous boost to the industry in defense cooperation. This will help the industry from both the countries to focus more on substantial -- substantial cooperation issues and will take a lot of precious time to understand the procedural gaps in both our countries.

Ladies and gentlemen, I just wanted to highlight some of these points before requesting Dr. Sumantran to give his remarks and thereafter listen to Dr. Ash Carter for his views and for his comments.

With that ladies and gentleman, once again a very warm welcome to each one of you for participating in this afternoon's session. Thank you very much. (Applause.)

CHAIRMAN V. SUMANTRAN: Doctor Carter, Deputy Secretary, Department of Defense, United States; Excellency Nancy Powell, U.S. Ambassador to India, Chandrajit Banerjee; visiting dignitaries from the U.S , colleagues from India and other defense industries, friends from the strategic community and friends from the media, good afternoon and welcome. It is indeed for me a privilege to address this very august gathering, a gathering of eminent policymakers, strategic thinkers and even businessmen from India and the U.S.

I have been given the honor of introducing a person who actually doesn't need much introduction. But, indeed, for those of you who are not familiar with Dr. Ashton Carter, allow me to very briefly introduce him.

That he would have a long biography would be no surprise. That he would have an industrious biography would also be no surprise. But he also has an exotic biography. (Laughter.)

Dr. Ashton Carter is the Deputy Secretary Of Defense with the United States. Previously, Dr. Carter served as Undersecretary of Defense for Acquisition, Technology and Logistics from 2009 until 2011. Over the course of his career in public service, Dr. Carter has three times been awarded the Department of Defense's Distinguished Service Medal. He earned a bachelor's degree in physics and Medieval history. Now that a very --(inaudiable)-- combination. (inaudible) -- of course and went on to get his doctorate at Oxford where he was a Rhodes scholar and he graduated summa cum laude.

Prior to his most recent government service, Dr. Carter was chair of the very well known -- (inaudible) -- global affairs faculty at the Harvard University's John F. Kennedy School of Government. During the Clinton administration, Dr. Carter was Assistant Secretary of Defense for International Security Policy.

He is a member of President Obama's Government Accountability and Transparency Board. He is a member of the Council on Foreign Relations and indeed many, many other prestigious -- memberships.

Welcome. It's a pleasure to have you with us here.

Before I invite him to the podium to share his views, let me also take a few minutes to share a few perspectives that I hope will advance the cause of India-U.S. relationship, and that is basic to this industry.

To state the obvious, our relationship has evolved to avery advanced level, particularly post-9/11, where, with no surprise, we found we had common values. We shared a common beliefs, conditioned on the value of democracy, respect for human rights, rule of law, and so on. Our goals are similar -- international peace and security. The tasks we face are similar: international terrorism, piracy, destabilizing global and regional forces.

In this global context it is no surprise that as for the 13th Finance Commission, India's defense capital expenditure budget is growing at at least 10 percent. And while we talk about the economic impact of this journey, during the next five years this industry must also lead to the creation of almost directly or indirectly a million jobs. So there is a great deal of expectation both from this industry, both the perspective of preparing for national security and advancing the state of development of industry.

The bilateral defense trade between U.S. and India, under the state department framework has strengthened our bilateral relationship. CII has remained in the forefront of highlighting industry's issues, concerns-- (inaudible) -- and in the many business-to-business and business-to-government dialogues.

We've put in a lot of effort in this regard, and hopefully has played some small role in the fact that today many American companies are increasing their footprint in India.

The India-U.S. defense trade has also increased manifold over the last one decade. Today, we've crossed the $10 billion mark, and it looks like to reach the $25 billion threshold, we must take many more years.

In India, our defense sector has also changed gears. We request our American counterparts to use this point of inflection, and to set up their operations in India with emphasis on manufacturing, R&D, and value creation.

If we can have co-development and co-manufacturing with other nations, including Russia, why not have a similar, and an even more promising relationship with the U.S.? Together, we should promote India as a global defense manufacturing hub. We have seen it in other sectors, including my own -- in manufacturing. I truly believe that this is a potential to draw from.

The idea must be to create win-win situations for both India and American companies. We therefore sincerely ask that the U.S. accord special status to India as far as defense status is concerned. Every year on average, India procures over $1 billion in equipment from the U.S.

Understandably, we would like defense systems, equipment, weapons, and their subsystems to flow in both directions. This can be achieved by opening the private sector, where companies are both eager and better prepared today to assist U.S. integrators in the development of supply systems not only in India, but also in several parts of the world globally.

Transfer technology is another concern. We need to ease the restrictions around transfer technology, recognizing that India indeed has an impeccable record of non-proliferation in weapons. The bilateral relationship, which has been built on trust, will ultimately be fortified as issues like DoD get resolved.

For this, we would urge the creation of dedicated forums as we do indeed have with some of the other (inaudible) partners; facilitate the fast-track of this area.

As far as foreign direct investment is concerned, we in CII have been able to convince Indian industry, that FDI cap should really move from the present level of 26 percent to 49 percent on a case-by-case basis. We do not believe FDIC will remain an issue for long, but we need some flexibility and support from the U.S. side as well.

If we are getting access to critical technologies that demonstrate capability to create multiplier effects on the economy and the -- (inaudible) -- generation potential in India, we can together -- and this comes from both sides -- move forward with speed.

As far as the United States is concerned, we indeed urge the U.S. government to encourage U.S. companies to participate in competitive bidding and to indeed make the final product economically and from performance even more competitive.

The buy and make and the making here programs have been a part of a carefully crafted policy so that the infrastructure capabilities of this nation are improved. India defense industry is keen to play a leading role in many strategic projects, and in this arena as well we look forward to support from U.S. defense industry -- (inaudible).

For defense offsets, we in India understand that we view defense offsets as an enabler rather than a restricter on trade. We can have, from CII, U.S. -- (inaudible) -- to identify appropriate offset partners in India. We would urge that most of these offsets be directed towards the manufacturing sector and indeed to make sure that, as we all recognize, sustainable defense cooperation can only be based on the foundation of capability creation and capacity creation.

As far as long-term investments are concerned, the ongoing Indian military modernization program, the state of which challenges -- (inaudible) -- is one of the largest military modernization exercises undertaken in recent times. India's defense industry is poised for long-term investment, growth and capability -- (inaudible).

It is timely for the U.S. defense companies to establish themselves in India with a long-term perspective. (inaudible) -- relationships is not sustainable in the long term.

Indian industry is not shying away from these issues --(inaudible)-- finding shortcomings and gaps and we're truly addressing them. The U.S. defense industry and U.S. defense trade is indispensable as far as India is concerned. However, we should not miss out on the point that the rest of the world is also observing these developments in India and the -- (inaudible).

In some cases it has been observed by some parts of -- (inaudible) -- industry that doing defense trade with European countries is sometimes easier than that with the U.S.

Yet, the conviction that the shared values between U.S. and India must lead to a special, sustainable and mutually beneficial relationship remains unshakable. And it is with this optimism that I would now like to invite Dr. Carter to address this august gathering.

Dr. Carter?

DEPUTY SECRETARY ASHTON B. CARTER: Thank you, Dr. Sumantran, for that wonderful introduction.

Mr. Banerjee, thank you for hosting us today, for your welcoming remarks.

And ladies and gentlemen, distinguished guests, thanks for being here today.

And congratulations to CII on your success. You play a critical role in India's foreign trade and global engagement. You help the world to get to know India, and work with India, and vice versa.

You know, I became familiar with CII through my association with the Aspen Strategy Group about 14 years ago, working with the great Tarun Das and Kiran Pasricha, all of whom have done such exceptional things for the U.S.-Indian relationship, dating back to those early days. I then was an early and strong supporter of the U.S.-Indian relationship also. So for me this is a long, long awaited opportunity, which makes it doubly wonderful to be here today with all of you. I'm familiar with India's charms and culture, a place very close to my heart.

I had a great morning today, a very productive meeting with Ministry of Defense Antony and the senior leadership. This afternoon I'll meet with the Foreign Secretary and the National Security Adviser. Excellent discussions all the way around.

And we know that the U.S.-India relationship is global in scope, like the reach and influence of each of our countries. And our security interests converge. Maritime security across the Indian Ocean region; in Afghanistan, where India's done so much for economic development and the Afghan security forces; and on broader regional issues where we share long-term interests, if not always common approaches, like Syria and Iran.

I like to think of India and the United States as kindred souls, sharing common values, as well as common interests and strong bonds in trade and technology, as well as security.

President Obama has called the U.S.-India bilateral relationship one of the defining partnerships of the 21st century. And our defense cooperation, the topic of my remarks, is an essential part of our partnership.

I can tell you much more about the importance of our relationship, but today I want to speak with you about the practical steps we can take to improve our defense cooperation. We want to develop a joint vision for U.S.-India defense cooperation. That's why I'm here at the request of Secretary of Defense Panetta.

We want to get to a place where we discover new opportunities continuously, making new and innovative investments that benefit both countries for generations. The only limit to our cooperation should be our independent strategic decisions, as any two states can differ, not bureaucratic obstacles or inefficient procedures.

The relationship has come a long way in the past decade. Our goal is to make it even stronger. We need to define where we want to go and then make it possible to get there.

We on the U.S. side have no preconceived model for this relationship or for India's role in this region of the world. We respect that you will follow your strategic interests. Our relationship will therefore be a unique one based on trust, sharing, and reliability. It will be shaped by our own respective strategic decisions and, I hope, by deep strategic dialogue such as that which Secretary Panetta engaged in when he was here in June and which I am happy to continue here today.

Map Credit:  U.S. State Department
Before moving into the specifics of our cooperation, I'd like to start with some strategic concepts, the backdrop for our cooperation. The last 10 years have had a profound impact on world affairs, affecting the United States, but also countries across the Asia-Pacific and around the world. The last 10 years -- excuse me -- we now find ourselves at a strategic inflection point, we in the United States, with two forces impinging upon us.

After a decade of conflict, one war has ended, in Iraq. The other, in Afghanistan, has not ended. We'll transition soon to Afghan lead, thanks to the superb effort of the men and women of the U.S. and coalition forces. We've done exceptionally well. But while we've been fighting insurgencies and terror there, the world has not stood still. Our friends and enemies have not stood still. And technology has not stood still.

The successes we've had in Afghanistan and in counterterrorism mean that we can now focus our attention on other opportunities and challenges. The time has come for us in the United States to look up, look out, to what the world needs next and to the security challenges that will define our future after Iraq and Afghanistan.

We would need to make this transition no matter what, but a second force rises as well. That is we need to keep the United States' fiscal house in order as outlined in the Budget Control Act passed last year by Congress. While the U.S. base defense budget will not go down under this plan, neither will it continue to rise as we had earlier planned. But the wind-down of Iraq and Afghanistan gives us capacity to turn the strategic corner without an ever-rising budget.

These two forces, of strategic history and fiscal responsibility, led us to design the new defense strategy for the 21st century in a remarkable process this past winter steered by President Obama and Secretary Panetta.

We're building a force for the future, what Chairman Dempsey calls the joint force of 2020. And as Secretary Panetta has said, it's going to be agile, lean, ready, technologically advanced, and able to conduct full spectrum operations and defeat any adversary, anywhere, any time.

A central tenet of our new strategy is our rebalance to the Asia-Pacific region, one of the major strategic changes we are making as we come out of the era of Iraq and Afghanistan.

The rebalance is reflected in force structure decisions we make (that is, what we keep and what we cut), in our posture and presence (that is, where we put things), in new investments we're making in technology, weapon systems, in innovative operational plans and tactics, and in alliances and partnerships in the region.

Importantly, here in India, our rebalance extends to Southeast Asia and South Asia.

The logic of the rebalance is simple. The Asia-Pacific has enjoyed an environment of general peace and stability for more than 60 years, allowing Japan to rise and prosper, then Korea to rise and prosper, next Southeast Asia to rise and prosper, and now China, and in a very different way India, to rise and prosper.

The wellsprings of that security have not been found in the region itself. There's no NATO here. In the absence of an overarching security structure, the United States military presence has played a pivotal role in ensuring regional stability.

We intend to continue to play that role. It's good for us and good for everyone in the region.

Our rebalance is not about China, or the United States, or India, or any other single country or group of countries. It's about a peaceful Asia-Pacific where sovereign states can enjoy the benefit of security and continue to prosper.

In the future, therefore, our Asia-Pacific posture will increase relative to other theaters. We intend to have 60 percent of our naval assets in the Pacific by 2020, a very different thing.

We're developing new concepts of rotational presence, as opposed to traditional bases. We have Marines in Australia, Littoral Combat Ships in Singapore and forward stationing in Guam.

We're investing in new platforms and technology relevant to the region, like the new bomber, new submarine-launched conventional weapon, cyber capabilities, and a host of upgrades in radars, electronic detection, space and electronic warfare.

These and other future focused investments are another central tenet of our new strategy.

To those who doubt we have the resources to accomplish all of this, I would to the contrary point out two factors that make it eminently possible.

First, with Iraq behind us and Afghanistan -- Afghanistan slated to wind down, capacity will be released that can be allocated to the Asia-Pacific region.

Second, within our budget, we can and are prioritizing investments relative to the Asia-Pacific theater, rather than, for example, counterinsurgency, where we've put so much effort over the past decade.

So the rebalancing is entirely practical.

Finally, central in our new strategy is, in our decades-long historical commitment to the region we seek to build partnerships that leverage the unique strengths of our allies and partners to confront critical challenges and meet emerging opportunities.

So, we're taking a strategic and comprehensive approach to security cooperation, as well as to our posture.

As I'll say in a moment, we're streamlining our internal processes and security cooperation programs to share and cooperate with our partners better.

Our partnership with India is a key part of our rebalance to the Asia-Pacific and, we believe, to the broader security and prosperity of the 21st century.

You are an economic power with an increasing military capability. Your leadership and civil discourse and democracy is critical to the political stability of South Asia and beacon to the world.

Our military-to-military engagement has increased steadily over the years to include a robust set of dialogues, exercises, defense trade, and research cooperation. Our shared challenge in the next year is to find concrete areas to step up our defense cooperation so that only our imagination and strategic logic--and not administrative barriers--set the pace.

That's why I came with a team of officials who are responsible to me and Secretary Panetta for executing this vision. We need to reinvigorate and commit to maintain a robust set of linkages and working principles and practices -- many of which are in place -- that will work every day to enable our cooperation and develop mutually beneficial policies in the future.

We want to knock down any remaining bureaucratic barriers in our defense relationship and strip away the impediments. And we want to set big goals to achieve.

Today I want to outline some of the steps the U.S. is taking in this direction and, if I may, some areas where we hope India will improve, too.

To begin with, as a country committed to enduring peace and security of the Asia-Pacific region, India deserves the best military equipment available. And we're prepared to help. Practically, we want to be India's highest-quality and most trusted long-term supplier of technology, not a simple seller of goods, in such fields as maritime domain awareness, counterterrorism, and many others.

We're committed to India's military modernization. We know that India has security challenges that are very real. India is a top priority in our export considerations. We trust India and know that India's not a re-exporter or exploiter of our technologies. We have an export control system to prevent high-end technology from getting to states that shouldn't have it, but our system can be confusing, rigid, and controls too many items for the wrong reasons. We know we need to improve it.

We are improving our government's overall export control system under President Obama's 2010 Export Control Reform Initiative. And at the same time, Secretary Panetta and I are committed to reforming the Department of Defense's internal processes. These reforms should make it easier for you to work with us and should benefit you, as well as our other partners. India's been very frank in expressing its concern with U.S. export controls and technology security policies, and we're taking real steps to address India's concern.

For example, we moved DRDO and ISRO off the Commerce Department Entity List. We can therefore conduct research and co-develop technologies together -- batteries and micro-UAVs -- good initial steps, with much more to come. An overwhelming and increasing majority of munitions license requests have been approved more quickly under direct commercial sales, and this will continue. But in addition to increasing sheer bureaucratic speed, we're trying to be more strategic about export decisions. We're making decisions more anticipatory, looking at what partners are likely to want in the future and beginning our thinking and processes earlier.

In a terrific new initiative, we're building exportability into our systems from the start so it doesn't consume time and money to do it later. Next, we're putting priority cooperation sales on a special fast track. All these steps will be felt here in New Delhi.

The combination of these and other efforts will help us respond more rapidly to India's requests for U.S. equipment and systems, particularly for more advanced technologies. At the same time, we want to maintain confidence that our technology will be protected. India's concerned about protecting technology, too. We know that. We have a U.S.-India Senior Technology Security Group to address the genuine security issues that exist in our world, but it needs to be more active.

I just spoke to export control reform. And, secondly, I want to report to you what we in the U.S. are taking steps to do to improve our foreign military sales, or FMS, system, also. This is in both of our countries' interests. India was our second-largest FMS customer in 2011, with $4.5 billion in total FMS transactions, and we delivered six C-130Js on time.

We think our defense technology is the best quality on the market. Some partners choose price over value. Buying American, whether through direct commercial sale or foreign military sales, will get India exceptionally high-quality technology, a high degree of transparency, and no corruption, which is mandated by our legal system.

Sometimes it appears that India favors direct commercial sales. And this is fine, but might overlook some advantages of FMS. The government-to-government agreement through foreign military sales offers competitive pricing, only slightly more than DCS. These costs go to DoD, which affords protections you cannot get from industry alone, and addresses sustainment needs over the long term.

As I said many times when I was acquisition executive of DoD, lifecycle costs are frequently hidden and ignored in acquisition decisions. So to sum up on FMS, we are making our foreign military sales system as easy to work with as possible. But for each sale, India should choose which group is in its interests, commercial or governmental. We will continue to improve both.

Next, and importantly, we're prepared to adapt our system to the unique needs of India and its Defence Procurement Procedure, or DPP. We aim to clarify our acquisition system, which isn't always easy to interpret.

I used to be Undersecretary of Defense for Acquisition, Technology, and Logistics, as has been mentioned. There was a chart on my wall outlining the 250 -- or whatever -- steps it takes to move a program from development to delivery. It read like hieroglyphics. I brought it along today to show you. [Laughter] This is what I had on my wall. [Laughter] This described the steps that you needed to go through to acquire something. And I dare say there's a similar chart over in the Indian Ministry of Defense.

I had trouble remembering all of this, so my staff was kind enough to make me this handy little wallet-sized card -- [Laughter] -- I can refer to when I needed to. Well we're going to try to make this system -- which is hard enough for us to understand and we can't expect anybody from anywhere else to understand it -- more export-friendly.

We have a new fund that allows us to procure long-lead, high demand items so it'll have them on hand in anticipation of partner requests. We now have a cadre of acquisition experts to send to other countries to define their requests through cooperation and streamline our response. That should help India significantly.

Finally, and most importantly, we want to move beyond defense and trade -- this is the important part -- towards cooperative research and development and co-production with India. I'm a scientist; I know this is the central part.

I'm going to Hyderabad tomorrow, where Tata Advanced Systems, Limited, and Lockheed will begin producing parts for the C-130J. From now on, every C-130J around the world will contain parts made in Hyderabad. That's an example of the kind of co-production that is the future.

It highlights what can be achieved when we unleash the potential of our private industries. It shows what's possible when there's a common strategic view, when the bureaucratic barriers are down, and, importantly, when our strategic interests and genuine economic and business interests are aligned. You have to have all three of them to have a successful project.

This is just the beginning. Our horizons can and should expand further. That's what our leadership has directed us to give them.

And the only question for us is where does India want to expand and grow? That's a decision only India can make, then we can help.

Indian bureaucracies, like ours, are changing to adapt to the future. Our bureaucracies, however -- both bureaucracies were built during the Cold War. More recently, Indian introduced the Defense Procurement Procedure which is designed to protect against corruption by reducing prices and complexity. Now, however, a higher-end technology India seeks to develop a higher-end defense industry. That's a different environment.

Likewise in the Cold War, the U.S. bureaucracy is designed to protect a wide swath of technology. With the commercialization of the global marketplace, we now recognize that defense technology controls should be more focused. We want to cooperate with you on high-value technology. To get where we both want to be, India can make some changes, too, to increase U.S. investment. If India raises its foreign direct investment ceiling to international standards, that would increase commercial incentives to invest here.

Second, offsets can be tremendously helpful in growing industry capability if you have the right companies and the right absorptive capacity. If offsets are calibrated correctly, it works. But if offset requirements are too onerous or too narrow, they deter companies' interest and you lose that alignment of economic interest and strategic intent. For companies to participate, our arrangements must make good economic sense as well as good strategic sense.

Third, projects that integrate technology development, production and acquisition will require administrative structures that can do exactly that kind of integration.

So these are just three points where change could be a real help in Indian-American cooperation. Look, the point is that on both sides, we need to change, reform, and push ourselves to get to a place where U.S.-India defense relations are only limited by our thinking not by our capacity to cooperate. That's what Secretary Panetta and National Security Adviser Menon charged when they met in June.

I'm looking forward to visiting India's technology corridor tomorrow. There, we'll all be reminded what is happening in the overall world of technology and industry. There, cooperation is the norm. Leaders of industry globally, such as those in this room, know that. Sometimes, we in the security community lag behind them in our ability to cooperate and advance technology. But the wisest of our industry leaders, including CII, also understand that without security, none of the other good things in life are possible -- family, prosperity, progress -- let alone business

So in gatherings like this and in practical ways like those I have come to India to advance, they help show us the way. For that, Secretary Panetta and I are grateful.

Thank you. (Applause.)

DR. SUMANTRAN: Thank you very much, Doctor Carter.

Doctor Carter has agree to take a few questions. He has a limited amount of time, but he's willing to take a few questions from the audience. So if you have a question, please sir.

Yes ?

Q: Secretary Panetta, when he came here in June, had mentioned that he was appointing you a point person to unlock the potential defense trade between two countries. Now I noticed defense trade -- (inaudible) -- defensive cooperation Does this -- does this involve some kind of evolution in thinking or a re-think of the relationship? Could you just talk us through where is -- is coming from and if I could add on a quick second question to that. There's -- there's been no sign of an Indian counterpart -- (inaudible) -- is that an actual concern to you? Have you asked the Indian (off mic)

DEP. SEC. CARTER: OK, both good questions.

With respect to the trade versus cooperation, I think that shows that evolution in our understanding of what the point is here. And I tried to make this point in my remarks.

Trade suggests buyer-seller relationship and transactions. And I think one of the things that I have learned just in being here so far, and that Secretary Panetta and I learned as we thought about this issue and talked to our Indian colleagues about this issue, was that what India wants and what we want in the long term is more than just buying and selling. We want to do things together. We want to develop products together and produce technology together.

But there is a little bit of a difference between trade and cooperation. And as between the two, we're really looking for cooperation.

With respect to how my Indian colleagues choose to work with me and with the U.S. government, that's really for the Indian side to decide. I'm focused on the results, not the mechanism. And I think we'll get the results whatever is decided on the -- on -- on the Indian side. So I'm -- I'm -- I'm fine whatever -- with whatever is decided.

Q: I work for Times Now. It's a TV channel. I'm taking you back to Dubai, the incident in which an Indian sailor was killed. The Dubai government says that no warnings were issued. The fisherman who survived said no warnings were issued. What is your investigation finally saying? And if warnings were issued, what were the warnings? Could you just share them with us?

DEP. SEC. CARTER: Sure. Sure. I mean, we don't know -- the -- the investigation's not complete. As you probably know, there are two parallel investigations. They'll be thorough. We'll be transparent about the results, but I just don't know what the results are yet. So we don't know exactly what happened.

And obviously, we very much regret the loss of life and injury. Obviously, it's a dangerous part of the world. We had real security concerns. But we're very regretful for any -- any loss of life. And that's extremely tragic.

But the honest truth is, we don't know what happened. We won't know until the investigation is complete. So I don't even want to say what it is that -- our -- what I understand or we understand at the moment happened until the investigation's done, we just don't know what happened. And then we'll be completely transparent about it, and -- and there'll be full responsibility. And -- and certainly for the families and so forth, the -- the greatest condolences.

Q: Yes I'm -- (inaudible) -- walking us through the relationship between our two great countries. And the focus that you have my question is very simple. Up until now, we've been talking about -- (inaudible) -- platforms -- (inaudible) -- but if this relationship has really transformed to the next level, then it is more about the building up national capability, by which I mean manufacturing capacity, design and engineering services, and so forth. And in the very near term there are a vast number of sectors -- (inaudible) -- thank you.

DEP. SEC. CARTER: Also a very good question. And building capacity is why the word "cooperation," rather than "trade," is the appropriate one for where we're trying to get. You mentioned robotics and automation. That is one of the areas where we recognize -- and, in fact, we're recognizing earlier today -- is one where we both have aspirations and innovative potential. So I think it is a very good candidate for exactly that kind of cooperation.

Q: Thank you Dr. Carter. My question to you is what high end technologies India should be expecting near future? And is there any potential of the F-35 as well, in the country and also, while the U.S. seems to be coming very closer to Indian interests the concerns from India always has been that the United States is unable to offer the first line technologies. How do you answer to these concerns?

DEP. SEC. CARTER: Well, to the last part --

Q: Thank you.

DEP. SEC. CARTER: -- that may have been true in the past, but that's what we're trying not to have be true in the in the future. India is, from our point of view, one of the most trusted destinations in the world. We think we can share with India to the greatest possible extent. And just making sure that that relationship of trust is reflected in how we actually administer our defense cooperation is, in one sentence, the principal purpose of my visit here today, the assignment that I've been given by Secretary Panetta and -- and Mr. Menon.

You say what kinds of technology? All kinds of technology. You asked about the Joint Strike Fighter. I've been asked this before. The Indian government has not asked us for information about the Joint Strike Fighter, but I'll say the same thing I said a year ago or something. Of course, if they ever do, we'll talk to them -- talk to them about anything. That's not -- just to be clear, the Indian government has not asked us about the Joint Strike Fighter.

DR.SUMANTRAN: I think we have time for one last question. Yes, sir. Please.

Q: Thank you -- (inaudible) -- take the defense cooperation strategy to the next plane or next higher level, I think we need a showpiece project at the strategic level. I have one in mind for example ballistic missile defense, a joint project. Would the U.S. be willing to make such an offer to India? Thank you.

DEP. SEC. CARTER: Two comments on that. If you couldn't hear that, the question was about ballistic missile defense. That's an important potential area for our cooperation in the future. I do think that ballistic missile defense has a very strategic importance. And therefore, the two governments should discuss that strategically before they discuss it technically. And I think that they intend to. Those strategic decisions on a topic like that precede a technical discussion.

I'll make another sort of parenthetical comment. I'm wary of showcases -- to use your phrase -- only because I want to be doing things that make real strategic and economic sense. It's fine if they make symbolic sense, as well, but, first and foremost, I'd like it to make strategic -- it's not to say they won't occur sometime in the future, but showcases is not -- I prefer things that make hard economic and strategic sense.

DR. SUMANTRAN: I'm sorry. There's a very tight demand on the deputy secretary's time, so if you'll allow me, I would just like to close with a word of thanks. Ladies and gentlemen, of course, in all our years since independence our economy has witnessed many challenges -- and indeed our democracy. -- (inaudible) -- development -- (inaudible). -- (inaudible) -- India's concerns and its needs to build up its military capabilities and security -- (inaudible) -- is understandable .

I would like to thank Dr. Carter for his very valuable comments and his indeed candid comments on several topics: the whole topic of rebalance, the importance he accords this region. I lost count the number of times he talked about removing bureaucratic hurdles and obstacles.

We'd like to thank him indeed for not only taking the time, but indeed for his very practical and useful approach here.

I would take this opportunity to request the U.S. industry to come forward, make best use of these opportunities of -- (inaudible) -- covering the entire gamut of high-tech component, as indeed we have discussed.

And may I say, CII is always there to help you out. As an organization, we are committed to creating indigenous defense industrial base. However, without the support of friendly foreign countries, this would be a very difficult task. Regarding our relationship with the U.S. government and industry, and on behalf of the Indian industry and CII, we commit full support to you.

So once again, let me express my sincere gratitude to Dr. Ashton Carter. We thank you -- sir for sharing your candid views. We are hopeful that with your guidance, defense industries from both sides will benefit and together we can explore a lot of new avenues for cooperation -- (inaudible). Thank you very much, Sir.

And I would also thank excellency, Ambassador Nancy Powell and all of the visiting

Thank you very much.

(Applause.)

DEPUTY DEFENSE SECRETARY CARTER URGES CLOSER U.S-INDIA COOPERATION

FROM: U.S. DEPARTMENT OF DEFENSE
Carter Urges Closer U.S.-India Defense Cooperation
By Karen Parrish
American Forces Press Service

NEW DELHI, July 23, 2012 - Deputy Defense Secretary Ashton B. Carter today offered what he called "practical steps" to improve U.S-India defense cooperation.

During remarks at an event hosted here by the Confederation of Indian Industry, Carter noted President Barack Obama has called the two nations' relationship "one of the defining partnerships of the 21st century," adding that defense cooperation is central to that tie.

India, along with Brazil, Russia and China, is one of the "Big Four," or BRIC, nations that economists have identified as being at a similar level of recently advanced economic development. Carter said partnership with India is a key part of the U.S. strategic emphasis on the Asia-Pacific region and its focus on broader security and prosperity.

"You are an economic power with an increasing military capability," the deputy secretary said. "Your leadership in civil discourse and democracy is critical to the political stability of South Asia, and a beacon to the world."

The United States and India have built their military-to-military engagement steadily through dialogues, exercises, defense trade and research cooperation, Carter noted. He added that U.S. defense leaders want to expand that linkage even further.

"We want to develop a joint vision for U.S.-India defense cooperation," he said. "That's why I'm here, at the request of Secretary of Defense [Leon E.] Panetta."

U.S. defense leaders' goal is to strengthen the relationship, Carter said, "to get to a place where we discover new opportunities continuously, making new and innovative investments that benefit both countries for generations to come."

"We want to knock down any remaining bureaucratic barriers in our defense relationship, and strip away the impediments," he added. "And we want to set big goals to achieve."

The deputy secretary noted the United States has begun to prune back bureaucratic restrictions hindering defense trade and joint development between the two countries. The United States' export control system is designed to prevent high-end technology from getting to states that shouldn't have it, Carter noted.

"But our system can be confusing, rigid, and controls too many items for the wrong reasons," he added. "We know we need to improve it," and the president's 2010 Export Control Reform initiative is guiding those improvements, he said.

The Defense Department's internal procedures also can erect barriers, the deputy secretary acknowledged. He added that he and Panetta are committed to reforming those processes. For example, he said, the United States has moved India's Defense Research and Development Organization and the Indian Space Research Organization off the Commerce Department's entity list. The list sets restrictions on foreign end-user nations involved in proliferation activities.

"We trust India and know that India is not a re-exporter or exploiter of our technologies," Carter said.

U.S. leaders consider India a top priority in the nation's export considerations, and want the United States to be India's "highest-quality and most trusted long-term supplier of technology – not a simple seller of goods -- in such fields as maritime domain awareness, counterterrorism, and many others," the deputy secretary said. In addition, he said, the United States is committed to India's military modernization.

Even as they work to increase bureaucratic speed, Carter said, U.S. defense leaders also are taking a more strategic approach to export decisions.

"We're making decisions more anticipatory, looking at what partners are likely to want in the future, and beginning our thinking and processes earlier," he said. "In a terrific new initiative, we're building exportability into our systems from the start, so it doesn't consume time and money to do it later."

U.S. leaders also are fast-tracking priority sales, Carter said.

"All these steps will be felt here in New Delhi. ... These and other efforts will help us respond more rapidly to India's requests for U.S. equipment and systems – particularly for more advanced technologies," the deputy secretary told Indian defense industry representatives.

Defense Department leaders also are working to improve the Foreign Military Sales program, or FMS, he said.

"India was our second-largest FMS customer in 2011, with 4 and a half billion [dollars] in total FMS transactions," he noted. "And we delivered six C-130J's on time." The C-130J, produced by Lockheed Martin, is the "Super Hercules" four-engine military transport aircraft.

"We think our defense technology is the best quality on the market. ... Buying American, whether through direct commercial sales or Foreign Military Sales, will get India exceptionally high-quality technology, a high degree of transparency, and no corruption," Carter said.

Defense leaders also are working to make their acquisition process clearer and more export-friendly, he added.

"I used to be undersecretary of defense for acquisition, technology and logistics," he said. "There was a chart on my wall, outlining the 250 ... steps it takes to move a program from development to delivery. It read like hieroglyphics."

The department is working to make that system more export-friendly, and also has a new fund that allows the Pentagon to procure long-lead, high-demand items in anticipation of partner nations' requests, he said. Officials also have developed a cadre of acquisition experts to help other countries define their requests and to streamline DOD's response, he noted.

"That should help India significantly," Carter added.

The deputy secretary said most importantly, DOD leaders want to move beyond defense trade, toward cooperative research, development and co-production with India.
"I'm a scientist," said Carter, who holds a doctorate in theoretical physics from Oxford University, where he was a Rhodes Scholar. "I know this is the critical part."

Carter noted he will travel south tomorrow from New Delhi to Hyderabad, India's technology corridor. There, he said, he will visit the facilities where India's Tata Advanced Systems Limited and Lockheed soon will begin producing parts for the C-130J.

"From now on, every [C-130J] around the world will contain parts made in Hyderabad," he added. "That's an example of the kind of co-production that is the future. It highlights what can be achieved when we unleash the potential of our private industries. It shows what's possible when there's a common strategic view, when the bureaucratic barriers are down, and importantly, when our strategic interests and genuine economic and business interests are aligned."

Carter said such joint efforts can and should expand further. "The only question for us is: Where does India want to expand and grow?" he added.

India also is adapting its bureaucratic processes for the global marketplace, the deputy secretary said.

"We want to cooperate with you on high-value technologies," Carter said. "To get where we both want to be, India can make some changes too, to increase U.S. investment."

If India raises its foreign direct investment ceiling to international standards, he said, commercial incentives to invest would be greater. India currently limits foreign investment in its defense sector to 25 percent. A Washington-based nonprofit research group, the Center for Strategic and International Studies, recommended in a report last week that India increase its defense FDI cap to above 50 percent.

"An arrangement where U.S. companies invest in [the] Indian defense industry could provide a win-win for both the United States and India by improving India's defense industry while providing U.S. companies a potential source of lower-cost manufacturing for defense products," the report's authors wrote.

Carter said the Indian government also could adjust offset agreements to increase U.S investment opportunities. Offset agreements typically involve a foreign supplier agreeing to buy products from a government acting as buyer, to offset the buyer's investment.

"Offsets can be tremendously helpful to growing industry capabilities – if you have the right companies, and the right absorptive capacity," Carter said. "If offsets are calibrated correctly, they work. But if offset requirements are too onerous or too narrow, they deter a company's interest, and you lose that alignment of economic interest and strategic intent. For companies to participate, our arrangements must make good economic sense as well as good strategic sense."

Third, he said, projects integrating technology development, production and acquisition require administrative structures that can accomplish that integration, he said.

Foreign direct investment limits, offset agreement restrictions and integrative administration structures are "just three points where change could be a real help in Indian-American cooperation," the deputy secretary said.

"The point is that on both sides we need to change, reform, and push ourselves to get to a place where U.S.-India defense relations are only limited by our thinking, not by our capacity to cooperate," Carter said.

Cooperation is the norm in technology and industry, he said.

"The leaders of industry globally, such as those in this room, know that," the deputy secretary added. "Sometimes, we in the security community lag behind them in our ability to cooperate and advance technology."

Carter's visit to India is part of a 10-day Asia-Pacific tour that has included stops in Hawaii, Guam, Japan and Thailand. The deputy secretary will conclude the tour with a trip to South Korea later this week.



INDIA

PROFILEGeography
Area: 3.29 million sq. km. (1.27 million sq. mi.); about one-third the size of the U.S.
Cities: Capital--New Delhi (pop. 12.8 million, 2001 census). Other major cities--Mumbai, formerly Bombay (16.4 million); Kolkata, formerly Calcutta (13.2 million); Chennai, formerly Madras (6.4 million); Bangalore (5.7 million); Hyderabad (5.5 million); Ahmedabad (5 million); Pune (4 million).
Terrain: Varies from Himalayas to flat river valleys and deserts in the west.
Climate: Alpine to temperate to subtropical monsoon.

People
Nationality: Noun and adjective--Indian(s).
Population (2012 est.): 1.21 billion; urban 29%.
Annual population growth rate (2012 est.): 1.312%.
Density: 324/sq. km.
Ethnic groups: Indo-Aryan 72%, Dravidian 25%, others 3%. While the national census does not recognize racial or ethnic groups, it is estimated that there are more than 2,000 ethnic groups in India.
Religions (2001 census): Hindu 80.5%; Muslim 13.4%; Christian 2.3%; Sikh 1.9%; other groups including Buddhist, Jain, Parsi within 1.8%; unspecified 0.1%.
Languages: Hindi, English, and 16 other official languages.
Education: Years compulsory--K-10. Literacy--61%.
Health: Infant mortality rate--46.07/1,000. Life expectancy--67.14 years (2012 est.).
Work force (est.): 467 million. Agriculture--52%; industry and commerce--14%; services and government--34%.

Government
Type: Federal republic.
Independence: August 15, 1947.
Constitution: January 26, 1950.
Branches: Executive--president (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--bicameral parliament (Rajya Sabha or Council of States, and Lok Sabha or House of the People). Judicial--Supreme Court.
Political parties: Indian National Congress (INC), Bharatiya Janata Party (BJP), Communist Party of India-Marxist, and numerous regional and small national parties.
Political subdivisions: 28 states,* 7 union territories (including National Capital Territory of Delhi).
Suffrage: Universal over 18.

Economy
GDP (FY 2011 est.): $1.843 trillion.
Real growth rate (2011 est.): 7.8%.
Per capita GDP (PPP, FY 2011 est.): $3,700.
Natural resources: Coal, iron ore, manganese, mica, bauxite, chromite, thorium, limestone, barite, titanium ore, diamonds, crude oil.
Agriculture: 18.1% of GDP. Products--wheat, rice, coarse grains, oilseeds, sugar, cotton, jute, tea.
Industry: 26.3% of GDP. Products--textiles, jute, processed food, steel, machinery, transport equipment, cement, aluminum, fertilizers, mining, petroleum, chemicals, and computer software.
Services and transportation: 55.6% of GDP.
Trade: Exports (FY 2011 est.)--$298.2 billion; engineering goods, petroleum products, precious stones, cotton apparel and fabrics, gems and jewelry, handicrafts, tea. Services exports ($101.2 billion in 2008-2009) represent more than one-third of India's total exports. Software exports (FY 2009)--$35.76 billion. Imports (FY 2011 est.)--$451 billion; petroleum, machinery and transport equipment, electronic goods, edible oils, fertilizers, chemicals, gold, textiles, iron and steel. Major trade partners--U.S., China, U.A.E., EU, Russia, Japan.

PEOPLE
Although India occupies only 2.4% of the world's land area, it supports over 15% of the world's population. Only China has a larger population. India's median age is 25, one of the youngest among large economies. About 70% live in more than 550,000 villages, and the remainder in more than 200 towns and cities. Over the thousands of years of its history, India has been invaded from the Iranian plateau, Central Asia, Arabia, Afghanistan, and the West; Indian people and culture have absorbed and modified these influences to produce a remarkable racial and cultural synthesis.

Religion, caste, and language are major determinants of social and political organization in India today. However, with more job opportunities in the private sector and better chances of upward social mobility, India has begun a quiet social transformation in this area. The government has recognized 18 official languages; Hindi, the national language, is the most widely spoken, although English is a national lingua franca. Although about 80% of its people are Hindu, India also is the home of more than 138 million Muslims--one of the world's largest Muslim populations. The population also includes Christians, Sikhs, Jains, Buddhists, and Parsis.

The Hindu caste system reflects Indian occupational and socially defined hierarchies. Ancient Sanskrit sources divide society into four major categories, priests (Brahmin), warriors (Kshatriya), traders/artisans (Vaishya) and farmers/laborers (Shudra). Although these categories are understood throughout India, they describe reality only in the most general terms. They omit, for example, the tribal people and those outside the caste system formerly known as "untouchables", or dalits. In reality, Indian society is divided into thousands of jatis--local, endogamous groups based on occupation--and organized hierarchically according to complex ideas of purity and pollution. Discrimination based on caste is officially illegal, but remains prevalent, especially in rural areas. Nevertheless, the government has made strong efforts to minimize the importance of caste through active affirmative action and social policies. Moreover, caste is often diluted if not subsumed in the economically prosperous and heterogeneous cities, where an increasing percentage of India's population lives. In the countryside, expanding education, land reform and economic opportunity through access to information, communication, transport, and credit are helping to lessen the harshest elements of the caste system.




HISTORY
The people of India have had a continuous civilization since 2500 B.C.E., when the inhabitants of the Indus River valley developed an urban culture based on commerce and sustained by agricultural trade. The Harappan Civilization, as it came to be known, declined around 1500 B.C.E., most likely due to ecological changes.

During the second millennium B.C.E., pastoral, Aryan-speaking tribes migrated from the northwest into the subcontinent, settled in the middle Ganges River valley, and adapted to antecedent cultures. Alexander the Great expanded across Central Asia during the 4th century B.C.E., exposing India to Grecian influences. The Maurya Empire came to dominate the Indian subcontinent during the 3rd century B.C.E., reaching its greatest height under Emperor Ashoka.

The political map of ancient and medieval India was made up of myriad kingdoms with fluctuating boundaries. At the height of the Roman Empire under Emperor Hadrian during the 2nd century C.E., the Kushan Empire, originating in ancient Bactria, conquered north India and the trans-Indus region ushering in a period of trade and prosperity. In the 4th and 5th centuries C.E., northern India was unified under the Gupta Dynasty. During this period, known as India's Golden Age, Hindu culture and political administration reached new heights.

Islam spread across the subcontinent over a period of 700 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established the Delhi Sultanate. In the early 16th century, Babur, a Turkish-Mongol adventurer and distant relative of Timurlane and Genghis Khan, established the Mughal Dynasty, which lasted for 200 years. South India followed an independent path, but by the 17th century large areas of South India came under the direct rule or influence of the expanding Mughal Empire. While most of Indian society in its thousands of villages remained untouched by the political struggles going on around them, Indian courtly culture evolved into a unique blend of Hindu and Muslim traditions.

The first British outpost in South Asia was established by the English East India Company in 1619 at Surat on the northwestern coast. Later in the century, the Company opened permanent trading stations at Madras (now Chennai), Bombay (now Mumbai), and Calcutta (now Kolkata), each under the protection of native rulers.

The British expanded their influence from these footholds until, by the 1850s, they controlled most of present-day India, Pakistan, Sri Lanka, and Bangladesh. In 1857, an unsuccessful rebellion in north India led by Indian soldiers seeking the restoration of the Mughal Emperor led the British Parliament to transfer political power from the East India Company to the Crown. Great Britain began administering most of India directly and maintained both political and economic control, while controlling the rest through treaties with local rulers. Imperial India became the "crown jewel" of the rapidly expanding British Empire.

In the late 1800s, the first steps were taken toward self-government in British India with the appointment of Indian councilors to advise the British Viceroy and the establishment of Provincial Councils with Indian members; the British subsequently widened participation in Legislative Councils. Beginning in 1920, Indian leader Mohandas K. Gandhi transformed the Indian National Congress political party into a mass movement to campaign against British colonial rule. The party used both parliamentary and nonviolent resistance and non-cooperation to agitate for independence. During this period, however, millions of Indians served with honor and distinction in the British Indian Army, including service in both World Wars and countless other overseas actions in service of the Empire.

With Indians increasingly united in their quest for independence, a war-weary Britain led by Labor Prime Minister Clement Attlee began in earnest to plan for the end of its suzerainty in India. On August 15, 1947, India became a dominion within the Commonwealth, with Jawaharlal Nehru as Prime Minister. Strategic colonial considerations, as well as political tensions between Hindus and Muslims, led the British to partition British India into two separate states: India, with a Hindu majority; and Pakistan, which consisted of two "wings," East and West Pakistan--now Bangladesh and Pakistan--with Muslim majorities. India became a republic, but chose to continue as a member of the British Commonwealth, after promulgating its constitution on January 26, 1950.

After independence, the Indian National Congress, the party of Gandhi and Nehru, ruled India under the leadership first of Nehru and then his daughter (Indira Gandhi) and grandson (Rajiv Gandhi), with the exception of brief periods in the 1970s and 1980s and during a short period in 1996. From 1998-2004, a coalition led by the Bharatiya Janata Party governed.

Prime Minister Nehru governed the nation until his death in May 1964. Nehru was succeeded by Lal Bahadur Shastri, who also died in office in January 1966. In 1 month, power passed to Nehru's daughter, Indira Gandhi, Prime Minister from 1966 to 1977. In June 1975, beset with deepening political and economic problems, Mrs. Gandhi declared a state of emergency and suspended many civil liberties. Seeking a mandate at the polls for her policies, she called for elections in March 1977, only to be defeated by Morarji Desai, who headed the Janata Party, an amalgam of five opposition parties.

In 1979, Desai's government crumbled. Charan Singh formed an interim government, which was followed by Mrs. Gandhi's return to power in January 1980. On October 31, 1984, Mrs. Gandhi was assassinated by her Sikh bodyguards, which led to the killings of thousands of Sikhs in New Delhi. Her son, Rajiv, was chosen by the Congress (I)--for "Indira"--Party to take her place. His Congress government was plagued with allegations of corruption resulting in an early call for national elections in November 1989.

Although Rajiv Gandhi's Congress Party won more seats than any other single party in the 1989 elections, he was unable to form a government with a clear majority. The Janata Dal, a union of opposition parties, then joined with the Hindu-nationalist Bharatiya Janata Party (BJP) on the right and the Communists on the left to form the government. This loose coalition collapsed in November 1990, and the Janata Dal, supported by the Congress (I), came to power for a short period, with Chandra Shekhar as Prime Minister. That alliance also collapsed, resulting in national elections in June 1991.

While campaigning in Tamil Nadu on behalf of his Congress (I) party, Rajiv Gandhi was assassinated on May 21, 1991 by Tamil extremists from Sri Lanka unhappy with India's military intervention in that country’s civil war. In the elections, Congress (I) won 213 parliamentary seats and returned to power at the head of a coalition, under the leadership of P.V. Narasimha Rao. This Congress-led government, which served a full 5-year term, initiated a gradual process of economic liberalization under then-Finance Minister Manmohan Singh. These reforms opened the Indian economy to global trade and investment. India's domestic politics also took new shape, as the nationalist appeal of the Congress Party gave way to traditional caste, creed, regional, and ethnic alignments, leading to the founding of a plethora of small, regionally based political parties.

The final months of the Rao-led government in the spring of 1996 were marred by several major corruption scandals, which contributed to the worst electoral performance by the Congress Party in its history. The Hindu-nationalist BJP emerged from the May 1996 national elections as the single-largest party in the Lok Sabha but without a parliamentary majority. Under Prime Minister Atal Bihari Vajpayee, the subsequent BJP coalition lasted only 13 days. With all political parties wishing to avoid another round of elections, a 14-party coalition led by the Janata Dal formed a government known as the United Front, under the former Chief Minister of Karnataka, H.D. Deve Gowda. His government collapsed after less than a year, when the Congress Party withdrew its support in March 1997. Inder Kumar Gujral replaced Deve Gowda as the consensus choice for Prime Minister at the head of a 16-party United Front coalition.

In November 1997, the Congress Party again withdrew support from the United Front. In new elections in February 1998, the BJP won the largest number of seats in parliament--182--but fell far short of a majority. On March 20, 1998, the President approved a BJP-led coalition government with Vajpayee again serving as Prime Minister. On May 11 and 13, 1998, this government conducted a series of underground nuclear tests, spurring U.S. President Bill Clinton to impose economic sanctions on India pursuant to the 1994 Nuclear Proliferation Prevention Act.

In April 1999, the BJP-led coalition government fell apart, leading to fresh elections in September-October. The National Democratic Alliance--a new coalition led by the BJP--won a majority to form the government with Vajpayee as Prime Minister in October 1999. The NDA government was the first coalition in many years to serve a full 5-year term, providing much-needed political stability.

The Kargil conflict in May-July 1999 and an attack by terrorists on the Indian parliament in December 2001 led to increased tensions with Pakistan.

Hindu nationalists supportive of the BJP agitated to build a temple on a disputed site in Ayodhya, destroying a 17th-century mosque there in December 1992, and sparking widespread religious riots in which thousands, mostly Muslims, were killed. In February 2002, 57 Hindu volunteers returning from Ayodhya were burnt alive when their train caught fire. Alleging that the fire was caused by Muslim attackers, anti-Muslim rioters throughout the state of Gujarat killed over 2,000 people and left 100,000 homeless. The Gujarat state government and the police were criticized for failing to stop the violence and in some cases for participating in or encouraging it.

The ruling BJP-led coalition was defeated in a five-stage election held in April and May of 2004. The Congress Party, under the leadership Sonia Gandhi, the widow of Rajiv Gandhi, formed a coalition government, known as the United Progressive Alliance (UPA). It took power on May 22 with Manmohan Singh as Prime Minister. The UPA's victory was attributed to dissatisfaction among poorer rural voters that the prosperity of the cities had not filtered down to them, and rejection of the BJP's Hindu nationalist agenda.

The Congress-led UPA government continued many of the BJP's foreign policies, particularly improving relations with the U.S. Prime Minister Singh and President George W. Bush concluded a landmark U.S.-India strategic partnership framework agreement on July 18, 2005. In March 2006, President Bush visited India to further the many initiatives underlying the agreement. The strategic partnership is anchored by a historic civil nuclear cooperation initiative and includes cooperation in the fields of space, high-technology commerce, health issues, democracy promotion, agriculture, and trade and investment.

In July 2008, the UPA won a confidence motion with 275 votes in its favor and 256 against. In late November 2008, terrorists killed at least 164 people in a series of coordinated attacks around Mumbai. Prime Minister Singh promised a thorough investigation and Home Minister Chidambaram pledged significant reforms to improve India’s counterterrorism agencies.

The Congress-led UPA coalition gained a more stable majority following May 2009 elections, riding mainly on the support of rural voters. Singh became the first prime minister since Nehru to return to power after completing a full 5-year term.

GOVERNMENT
According to its constitution, India is a "sovereign, socialist, secular, democratic republic." Like the United States, India has a federal form of government. However, the central government in India has greater power in relation to its states, and has adopted a British-style parliamentary system.

The government exercises its broad administrative powers in the name of the president, whose duties are largely ceremonial. A special electoral college elects the president and vice president indirectly for 5-year terms. Their terms are staggered, and the vice president does not automatically become president following the death or removal from office of the president.

Real national executive power is centered in the cabinet (senior members of the Council of Ministers), led by the prime minister. The president appoints the prime minister, who is designated by legislators of the political party or coalition commanding a parliamentary majority in the Lok Sabha (lower house). The president then appoints subordinate ministers on the advice of the prime minister.

India's bicameral parliament consists of the Rajya Sabha (Council of States) and the Lok Sabha (House of the People). The Council of Ministers is responsible to the Lok Sabha.

The legislatures of the states and union territories elect 233 members to the Rajya Sabha, and the president appoints another 12. The members of the Rajya Sabha serve 6-year terms, with one-third up for election every 2 years. The Lok Sabha consists of 545 members, who serve 5-year terms; 543 are directly elected, and two are appointed.

India's independent judicial system began under the British, and its concepts and procedures resemble those of Anglo-Saxon countries. The Supreme Court consists of a chief justice and 25 other justices, all appointed by the president on the advice of the prime minister.

India has 28 states* and 7 union territories. At the state level, some legislatures are bicameral, patterned after the two houses of the national parliament. The states' chief ministers are responsible to the legislatures in the same way the prime minister is responsible to parliament.

Each state also has a presidentially appointed governor, who may assume certain broad powers when directed by the central government. The central government exerts greater control over the union territories than over the states, although some territories have gained more power to administer their own affairs. Local governments in India have less autonomy than their counterparts in the United States. Some states are trying to revitalize the traditional village councils, or panchayats, to promote popular democratic participation at the village level, where much of the population still lives. Over half a million panchayats exist throughout India.

Principal Government Officials
President--Pratibha D. Patil
Vice President--Mohammed Hamid Ansari
Prime Minister--Manmohan Singh
Minister for Home Affairs--P. Chidambaram
Minister of External Affairs--S.M. Krishna
Ambassador to the U.S.--Nirupama Rao
Ambassador to the UN--Hardeep Singh Puri

POLITICAL CONDITIONS
Having emerged as the nation's single-largest party in the May 2009 Lok Sabha election, Congress leads a coalition UPA government under Prime Minister Singh. Party President Sonia Gandhi was re-elected by the Party National Executive in May 2005. Also a member of parliament, she heads the Congress Lok Sabha delegation. Congress positions itself as being a secular, left of center party, with a long history of political dominance. Although its performance in national elections had steadily declined during the previous 12 years, its surprise victory in 2004 was a result of recruiting strong allies into the UPA, the anti-incumbency factor among voters, and its courtship of India's many poor, rural, and Muslim voters. Congress's political fortunes suffered badly in the 1990s, as many traditional supporters were lost to emerging regional and caste-based parties, such as the Bahujan Samaj Party and the Samajwadi Party, but rebounded following its May 2004 ascension to power. In November 2005, the Congress regained the Chief Ministership of Jammu and Kashmir state, under a power-sharing agreement.

The Bharatiya Janata Party (BJP), led by Shri Nitinn Gadkari, took the second-largest number of seats in the Lok Sabha in 2009. Sushma Swaraj is leader of the opposition. The Hindu-nationalist BJP draws its political strength mainly from the "Hindi Belt" in the northern and western regions of India. Former Foreign Minister Jaswant Singh was expelled from the party in August 2009 after authoring a book which portrayed the founder of Pakistan, Muhammad Ali-Jinnah, in a positive light, although he was allowed to rejoin in June 2010.

Popularly viewed as the party of the northern upper caste and trading communities, the BJP made strong inroads into lower castes in past national and state assembly elections. The party must balance the competing interests of Hindu nationalists, (who advocate construction of a temple on a disputed site in Ayodhya, and other primarily religious issues including the propagation of anti-conversion laws and violence against religious minorities), and center-right modernizers who see the BJP as a party of economic and political reform.

Four Communist and Marxist parties are united in a bloc called the "Left Front," which had 59 parliamentary seats following the 2009 elections. The Left Front provided external support to the UPA government until the July 2008 confidence vote. It advocates a secular and Communist ideology and opposes many aspects of economic liberalization and globalization, resulting in dissonance with Prime Minister Singh's liberal economic approach. The Maoist-inspired Naxalite insurgency continues to be a major internal security threat, affecting large parts of eastern India. With the Communists in retreat in West Bengal, the Trinamool Congress Party was expected to perform well in the 2011 state elections.

ECONOMY
For 2011, India's estimated GDP was $1.843 trillion with 7.8% growth. Services, industry, and agriculture account for 56%, 26%, and 18% of GDP, respectively. India's population is estimated at 1.2 billion and is growing at 1.3% a year. The country is capitalizing on its large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers, but more than half of the population depends on agriculture for its livelihood. 700 million Indians live on $2 per day or less, but there is a large and growing middle class of more than 50 million Indians with disposable income ranging from 200,000 to 1,000,000 rupees per year ($4,166-$20,833). Estimates are that the middle class will grow tenfold by 2025.

India continues to move forward, albeit haltingly, with market-oriented economic reforms that began in 1991. Reforms include increasingly liberal foreign investment and exchange regimes, industrial decontrol, reductions in tariffs and other trade barriers, opening and modernization of the financial sector, significant adjustments in government monetary and fiscal policies, and more safeguards for intellectual property rights.

The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. India achieved 9.6% GDP growth in 2006, 9.0% in 2007, and 6.6% in 2008, significantly expanding manufactures through late 2008. The country weathered the 2008-2009 global financial crisis well. Estimated GDP growth was 6.5% for 2009. Foreign portfolio and direct investment inflows have risen significantly in recent years. They contributed to the $283.5 billion in foreign exchange reserves by December 2009. Government receipts from the 34-day 3G spectrum auction in 2010 were $14.6 billion.

Economic growth is constrained by inadequate infrastructure, a cumbersome bureaucracy, corruption, labor market rigidities, regulatory and foreign investment controls, the "reservation" of key products for small-scale industries, and high fiscal deficits. The outlook for further trade liberalization is mixed, and a key World Trade Organization (WTO) Doha Ministerial in July 2008 was unsuccessful due to differences between the U.S. and India (as well as China) over market access. India eliminated quotas on 1,420 consumer imports in 2002 and incrementally lowered non-agricultural customs duties in later budgets. However, the tax structure is complex, with compounding effects of various taxes.

U.S.-India bilateral merchandise trade in 2008 topped nearly $50 billion. Principal U.S. exports are diagnostic or lab reagents, aircraft and parts, advanced machinery, cotton, fertilizers, ferrous waste/scrap metal, and computer hardware. Major U.S. imports from India include textiles and ready-made garments, Internet-enabled services, agricultural and related products, gems and jewelry, leather products, and chemicals.

The rapidly growing software sector is boosting service exports and modernizing India's economy. Software exports surpassed $35 billion in FY 2009, while business process outsourcing (BPO) revenues hit $14.8 billion in 2009. Personal computer penetration is 14 per 1,000 persons. The number of cell phone users was expected to rise to nearly 300 million by 2010.

The United States is India's largest investment partner, with a 13% share. India's total inflow of U.S. direct investment was estimated at more than $16 billion through 2008. Proposals for direct foreign investment are considered by the Foreign Investment Promotion Board and generally receive government approval. Automatic approvals are available for investments involving up to 100% foreign equity, depending on the kind of industry. Foreign investment is particularly sought after in power generation, telecommunications, ports, roads, petroleum exploration/processing, and mining.

India's external debt was nearly $230 billion by the end of 2008, up from $126 billion in 2005-2006. Foreign assistance was approximately $3 billion in 2006-2007, with the United States providing about $126 million in development assistance. The World Bank planned to double aid to India to almost $3 billion a year, focusing on infrastructure, education, health, and rural livelihoods.

DEFENSEThe supreme command of the Indian armed forces is vested in the president of India. Policies concerning India's defense, and the armed forces as a whole, are formulated and confirmed by the cabinet.

The Indian Army numbers over 1.4 million strong and fields 34 divisions. Its primary task is to safeguard the territorial integrity of the country against external threats. The Army has been heavily committed in the recent past to counterterrorism operations in Jammu and Kashmir, as well as the in the Northeast. Its modernization program focuses on obtaining equipment to be used in combating terror. The Army often provides aid to civil authorities and assists the government in organizing relief operations.

The Indian Navy is by far the most capable navy in the region. The Navy's primary missions are the defense of India and of India's vital sea lines of communication. India relies on the sea for 90% of its oil and natural gas and over 90% of its foreign trade. The Navy operates one aircraft carrier with two on order, 15 submarines, and 15 major surface combatants. It is capable of projecting power within the Indian Ocean basin and occasionally operates in the South China Sea, the Mediterranean Sea, and the Arabian Gulf. Fleet introduction of the Brahmos cruise missile, the possible lease of nuclear submarines from Russia, and the introduction of a new aircraft carrier in 2012 will add significantly to the Indian Navy's flexibility and striking power.

Although small, the Indian Coast Guard has been expanding rapidly in recent years. Indian Navy officers typically fill top Coast Guard positions to ensure coordination between the two services. India's Coast Guard is responsible for control of India's huge exclusive economic zone.

Fielding nearly 900 combat aircraft, the Indian Air Force is the world’s fourth largest. It is becoming a 21st-century force through modernization, new tactics, and the acquisition of modern aircraft, such as the SU-30MKI, a new advanced jet trainer (BAE Hawk), and the indigenously produced advanced light helicopter (Dhruv). In April 2008 six firms submitted proposals to the Indian Government to manufacture 126 multi-role combat aircraft for the Indian Air Force.

FOREIGN RELATIONS
India's size, population, and strategic location give it a prominent voice in international affairs, and its growing economic strength, military prowess, and scientific and technical capacity give it added weight. The end of the Cold War dramatically affected Indian foreign policy. India remains a leader of the developing world and the Non-Aligned Movement (NAM). India is now strengthening its political and commercial ties with the United States, Japan, the European Union, Iran, China, and the Association of Southeast Asian Nations. India is an active member of the South Asian Association for Regional Cooperation (SAARC).

Always an active member of the United Nations, India seeks a permanent seat on the UN Security Council. The country holds a non-permanent seat on the Security Council 2011-2012. India has a long tradition of participating in UN peacekeeping operations.

Bilateral and Regional Relations:
Pakistan.
India and Pakistan have been locked in a tense rivalry since the partition of the subcontinent based on the "two-nations theory" upon achieving independence from Great Britain in 1947. The principal source of contention has been Kashmir, whose Hindu Maharaja at that time chose to join India, although a majority of his subjects were Muslim. India maintains that his decision and subsequent elections in Kashmir have made it an integral part of India. This dispute triggered wars between the two countries in 1947 and 1965 and provoked the Kargil conflict in 1999.

Pakistan and India fought a war in December 1971 following a political crisis in what was then East Pakistan and the flight of millions of Bengali refugees to India. The brief conflict left the situation largely unchanged in the west, where the two armies reached an impasse, but a decisive Indian victory in the east resulted in the creation of Bangladesh.

Since the 1971 war, Pakistan and India have made slow progress toward normalization of relations. In July 1972, Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto met in the Indian hill station of Simla. They signed an agreement by which India would return all personnel and captured territory in the west and the two countries would "settle their differences by peaceful means through bilateral negotiations." Diplomatic and trade relations were re-established in 1976.

The 1979 Soviet invasion of Afghanistan caused new strains between India and Pakistan. Pakistan supported the Afghan resistance, while India implicitly supported the Soviet occupation. In the following 8 years, India voiced increasing concern over Pakistani arms purchases, U.S. military aid to Pakistan, and Pakistan's nuclear weapons program. In an effort to curtail tensions, the two countries formed a joint commission. In December 1988, Prime Ministers Rajiv Gandhi and Benazir Bhutto concluded a pact not to attack each other's nuclear facilities and initiated agreements on cultural exchanges and civil aviation.

In 1997, high-level Indo-Pakistani talks resumed after a 3-year pause. The Prime Ministers of India and Pakistan met twice, and the foreign secretaries conducted three rounds of talks. In June 1997 at Lahore, the foreign secretaries identified eight "outstanding issues" around which continuing talks would be focused. The dispute over the status of Jammu and Kashmir, an issue since partition, remains the major stumbling block in their dialogue. India maintains that the entire former princely state is an integral part of the Indian union, while Pakistan insists upon the implementation of UN resolutions calling for self-determination for the people of the state.

In September 1997, the talks broke down over the structure of how to deal with the issues of Kashmir and peace and security. Pakistan advocated that separate working groups treat each issue. India responded that the two issues be taken up along with six others on a simultaneous basis. In May 1998 India, and then Pakistan, conducted nuclear tests. Attempts to restart dialogue between the two nations were given a major boost by the February 1999 meeting of both Prime Ministers in Lahore and their signing of three agreements. These efforts were stalled by the intrusion of Pakistani-backed forces into Indian-held territory near Kargil in May 1999 (that nearly turned into full scale war), and by the military coup in Pakistan that overturned the Nawaz Sharif government in October the same year. In July 2001, Prime Minister Vajpayee and General Pervez Musharraf, leader of Pakistan after the coup, met in Agra, but talks ended after 2 days without result.

After the terrorist attack on the Indian parliament in December 2001, India-Pakistan relations cooled further as India accused Pakistan of involvement. Tensions increased, fueled by killings in Jammu and Kashmir, peaking in a troop buildup by both sides in early 2002.

Prime Minister Vajpayee's April 18, 2003 speech in Srinagar (Kashmir) revived bilateral efforts to normalize relations. In November 2003, Prime Minister Vajpayee and President Musharraf agreed to a ceasefire, which still holds, along the Line-of-Control in Jammu and Kashmir. After a series of confidence building measures, Prime Minister Vajpayee and President Musharraf met on the sidelines of the January 2004 SAARC summit in Islamabad and agreed to commence a Composite Dialogue addressing outstanding issues between India and Pakistan, including Kashmir.

In February 2004, India and Pakistan agreed to restart the "2+6" Composite Dialogue formula, providing for talks on Peace and Security and Jammu and Kashmir, followed by technical and Secretary-level discussions on six other bilateral disputes: Siachen Glacier, Wuller Barrage/Tulbul Navigation Project, Sir Creek estuary, Terrorism and Drug Trafficking, Economic and Commercial cooperation, and the Promotion of Friendly Exchanges in various fields. The restart of the Composite Dialogue process was especially significant given the almost 6 years that had transpired since the two sides agreed to this formula in 1997-1998. The UPA government continued the Composite Dialogue with Pakistan. Following the October 2005 earthquake in Kashmir, the two governments coordinated relief efforts and opened access points along the Line-of-Control to allow relief supplies to flow from India to Pakistan and to allow Kashmiris from both sides to visit one another.

The Foreign Secretary talks resumed in November 2006, after a 3-month delay following July 11, 2006 terrorist bombings in Mumbai. The meeting generated modest progress, with the two sides agreeing to establish a joint mechanism on counterterrorism. Since 2006, India and Pakistan have continued to take part in the Composite Dialogue process in an effort to maintain the peace process and strengthen bilateral relations. Following Pakistani elections in February 2008 the Indian Minister of External Affairs and the Indian Foreign Secretary met with their new counterparts to advance the Composite Dialogue talks, reaffirming a commitment to maintain the ceasefire along the Line-of-Control as well as increasing people-to-people connections through improving cross-border bus services. The July 2008 bombing of the Indian Embassy in Kabul and the Mumbai terrorist attacks in November 2008 increased tensions between India and Pakistan. Although Prime Minister Singh and Pakistan Prime Minister Yousuf Gilani agreed to resume talks following the 2010 SAARC summit, India continued to insist that Pakistan must do its part to dismantle terror networks operating from its territory and prosecute those who had a hand in planning the Mumbai attacks.

SAARC. Certain aspects of India's relations within the subcontinent are conducted through the South Asian Association for Regional Cooperation (SAARC). Its members are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, with the People's Republic of China, Iran, Japan, European Union, Republic of Korea, and the U.S. as observers. Established in 1985, SAARC encourages cooperation in agriculture, rural development, science and technology, culture, health, population control, narcotics, and terrorism.

SAARC has intentionally stressed these "core issues" and avoided those which could prove divisive, although political dialogue is often conducted on the margins of SAARC meetings. In 1993, India and its SAARC partners signed an agreement gradually to lower tariffs within the region. Forward movement in SAARC had slowed because of tension between India and Pakistan, and the SAARC summit scheduled for 1999 was not held until January 2002. In addition, to boost the process of normalizing India's relationship with Pakistan, the January 2004 SAARC summit in Islamabad produced an agreement to establish a South Asia Free Trade Area (SAFTA). All the member governments have ratified SAFTA, which was slated to come into force on January 1, 2006, with a series of graduated tariff cuts through 2015. As of December 2006, however, the FTA partners were still negotiating sensitive product lists, rules of origin, and technical assistance. India hosted the 2007 SAARC summit, which called for greater regional cooperation on trade, environmental, social, and counterterrorism issues. At the 2008 SAARC summit in Sri Lanka, the SAFTA member countries signed a protocol for Afghanistan’s accession and several countries (Including India, Pakistan, and Sri Lanka) agreed to drop some items from their sensitive product lists.

China. Despite suspicions remaining from a 1962 border conflict between India and China and continuing territorial/boundary disputes, Sino-Indian relations have improved gradually since 1988. Both countries have sought to reduce tensions along the frontier, expand trade and cultural ties, and normalize relations. Their bilateral trade reached $24 billion in 2006. China is India's second-largest trading partner behind the U.S.

A series of high-level visits between the two nations has improved relations. In December 1996, Chinese President Jiang Zemin visited India on a tour of South Asia. While in New Delhi, he and the Indian Prime Minister signed a series of confidence-building measures along the disputed border, including troop reductions and weapons limitations.

Chinese Premier Wen Jiabao invited Prime Minister Vajpayee to visit China in June 2003. They recognized the common goals of both countries and made the commitment to build a "long-term constructive and cooperative partnership" to peacefully promote their mutual political and economic goals without encroaching upon their good relations with other countries. In Beijing, Prime Minister Vajpayee proposed the designation of special representatives to discuss the border dispute at the political level, a process that is still under way.

In November 2006, President Hu Jintao made an official state visit to India, further cementing Sino-Indian relations. India and China are building on growing economic ties to improve other aspects of their relationship such as counterterrorism, energy, and trade. In another symbol of improved ties, the two countries opened the Nathu La Pass to bilateral trade in July 2006 for the first time in 40 years. Although it was the first direct land trade route in years, trade was expected to be local and small since the pass is open only 4 months a year.

Prime Minister Singh and Chinese President Hu met in January 2008 in Beijing in an effort to reinforce their confidence to further develop ties, vowing to promote their relations to a higher level. The meetings cemented a shared vision for the 21st century, with agreement to raise the annual volume of bilateral trade to $60 billion by 2010. Despite flare-ups over border issues, China-India relations remain stable at the strategic level. In 2010 there were a large number of high-level visits from Indian Government officials, including National Security Advisor Shivshankar Menon, External Affairs Minister S.M. Krishna, and President Pratibha Patil.

Former Soviet Union. The collapse of the Soviet Union in 1991 and the emergence of the Commonwealth of Independent States (CIS) had major repercussions for Indian foreign policy. India's substantial trade with the region plummeted after the Soviet collapse and has yet to recover. Longstanding military supply relationships were similarly disrupted due to questions over financing. Russia nonetheless remains India's largest supplier of military systems and spare parts.

Russia and India have not renewed the 1971 Indo-Soviet Peace and Friendship Treaty and follow what both describe as a more pragmatic, less ideological relationship. The visit of Russian President Boris Yeltsin to India in January 1993 helped cement this new relationship. The pace of high-level visits has since increased, as has discussion of major defense purchases. UPA leader Sonia Gandhi and Prime Minister Singh visited Russia in July 2005. President Vladimir Putin traveled to India in January 2007 to attend an Indo-Russia summit and was the guest of honor at India's Republic Day celebrations. President Dmitriy Medvedev visited India in December 2008 and signed a civil nuclear agreement.

U.S.-INDIA RELATIONS
Recognizing India as a key to strategic U.S. interests, the United States has sought to strengthen its relationship with India. The two countries are the world's largest democracies, both committed to political freedom protected by representative government. India is also moving gradually toward greater economic freedom. The U.S. and India have a common interest in the free flow of commerce and resources, including through the vital sea lanes of the Indian Ocean. They also share an interest in fighting terrorism and in creating a strategically stable Asia.

There were some differences, however, including over India's nuclear weapons programs and the pace of India's economic reforms. In the past, these concerns may have dominated U.S. thinking about India, but today the U.S. views India as a growing world power with which it shares common strategic interests. A strong partnership between the two countries will continue to address differences and shape a dynamic and collaborative future.

In late September 2001, President Bush lifted sanctions imposed under the terms of the 1994 Nuclear Proliferation Prevention Act following India's nuclear tests in May 1998. The nonproliferation dialogue initiated after the 1998 nuclear tests has bridged many of the gaps in understanding between the countries. In a meeting between President Bush and Prime Minister Vajpayee in November 2001, the two leaders expressed a strong interest in transforming the U.S.-India bilateral relationship. High-level meetings and concrete cooperation between the two countries increased during 2002 and 2003. In January 2004, the U.S. and India launched the Next Steps in Strategic Partnership (NSSP), which was both a milestone in the transformation of the bilateral relationship and a blueprint for its further progress.

In July 2005, President Bush hosted Prime Minister Singh in Washington, DC. The two leaders announced the successful completion of the NSSP, as well as other agreements to further enhance cooperation in the areas of civil nuclear, civil space, and high-technology commerce. Other initiatives announced at this meeting included: a U.S.-India economic dialogue, the fight against HIV/AIDS, disaster relief, technology cooperation, a democracy initiative, an agriculture knowledge initiative, a trade policy forum, an energy dialogue, and a CEO forum. President Bush made a reciprocal visit to India in March 2006, during which the progress of these initiatives was reviewed, and new initiatives were launched.

In December 2006, Congress passed the historic Henry J. Hyde United States-India Peaceful Atomic Cooperation Act, allowing direct civilian nuclear commerce with India for the first time in 30 years. U.S. policy had opposed nuclear cooperation with India because the country had developed nuclear weapons in contravention of international conventions and never signed the Nuclear Non-Proliferation Treaty. The legislation cleared the way for India to buy U.S. nuclear reactors and fuel for civilian use.

In July 2007, the United States and India reached a historic milestone in their strategic partnership by completing negotiations on the bilateral agreement for peaceful nuclear cooperation, also known as the "123 agreement." This agreement, signed by Secretary of State Condoleezza Rice and External Affairs Minister Pranab Mukherjee on October 10, 2008, governs civil nuclear trade between the two countries and opens the door for American and Indian firms to participate in each other's civil nuclear energy sector.

In July 2009, Secretary of State Hillary Clinton traveled to India to launch the "Strategic Dialogue," which called for collaboration in a number of areas, including energy, climate change, trade, education, and counterterrorism. Prime Minister Singh visited Washington, DC in November 2009 for the first state visit of the Barack Obama administration. The inaugural session of the U.S.-India Strategic Dialogue was held in June 2010 in Washington, DC. The event was successful and showed progress in the U.S. India relationship. President Obama visited India in November 2010.

In July 2011, Secretary Clinton led a U.S. delegation to India for the second round of the U.S.-India Strategic Dialogue, which took place in New Delhi on July 19, 2011, followed by a visit to Chennai.

Principal U.S. Embassy Officials
Ambassador--Nancy J. Powell (arrival April 2012)
Deputy Chief of Mission--Donald Lu
Counselor for Management--Michael C. Mullins
Counselor for Commercial Affairs--Judy Reinke
Counselor for Political Affairs--Herro K. Mustafa
Counselor for Agricultural Affairs--Allan P. Mustard
USAID Country Director--William Hammink (Acting)




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