New Indian Government’s Initiatives and India-USA: Growing
Partnership – 5 th US-India Business Summit, Atlanta, Georgia
Good morning,
Mr. Gary Black, Commissioner, Georgia Department of Agriculture
Dr. Yves Berthelot, Vice Provost of International Initiatives, Georgia Tech
Mr. Ani Agnihotri, Chair, UIBS 2014
Dr. John R. Mcintyre, Co-Chair, Georgia Tech Global Business Forum
Distinguished guests and friends,
It is indeed an honour for me to again address the 5 th Annual US India
Business Summit and 20 th Annual Georgia Tech Business Forum. This is the largest Conference in South East USA to promote growing partnership between India and United States.
Friends,
As you are aware, this year, the world’s largest democracy carried out the biggest ever democratic and logistical exercise - the Indian elections where
66% of the electorate, i.e. 553 million out of 834 million voted for a new
Govt. The new Govt. of India led by Hon’ble Prime Minister Mr. Narendra
Modi has taken office in May this year backed by strong public support and a stable mandate for positive change.
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Finance Minister Arun Jaitley presenting the GOI 2014 budget in July 2014 set the goal of attaining 7%-8% growth over the next 3-4 years. The budget contains a variety of proposals to improve business climate, encourage foreign investment and bring a transparent and nondiscriminatory regulatory regime for investors.
The development of a robust manufacturing sector is the priority of the
Govt. It has the potential to not only take the economic growth to a higher trajectory, but also to provide employment. The Govt. is committed to remove all bottlenecks and develop India as a manufacturing hub. A number of measures have been taken in that direction.
During the last three months, the economic activity has picked up as reflected in the quarterly growth figures of GDP which grew at 5.7 % in the first quarter of April-June 2014. Industrial growth in general and growth in the manufacturing sector in particular has shown significant improvement with growth rates becoming positive as compared to negative growth rates in these sectors in the corresponding period of last year.
This perceptible improvement in the economic performance in last three months is a reflection of the improved business environment and market sentiment, an outcome of the series of initiatives taken by the Govt. to bring about positive changes to revitalise the industrial sector in general
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and manufacturing sector in particular. A number of positive announcements have already been made in the Union Budget 2014-15 in that direction.
Providing an enabling and conducive environment for doing business in
India is an important factor contributing to industrial growth. The emphasis of the Govt. has been on simplification of the procedures, rationalization of the existing rules and increased use of information technology to make governance more efficient, effective, simple and userfriendly.
Foreign Direct Investment (FDI) being an important resource, the Govt. has taken a number of steps to attract more FDI inflows into the country.
The FDI policy in Defence sector has been liberalised and FDI cap has been raised from 26% to 49%; 100% FDI under automatic route has been permitted in construction, operation and maintenance in specified
Rail Infrastructure projects. FDI inflows have increased by 75 % during
June and July, 2014 over the corresponding period in previous year.
To provide impetus to India becoming a manufacturing nation, industrial corridors and smart cities are being developed at a fast pace.
Shares of Indian stocks have risen to a record high as S&P BSE Sensex index has gained 27% so far in 2014, making it one of the top performers in Asia. Indian shares have been rising on optimism that the country’s new
Govt. would speed up policy changes which would help the economy
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recover this year. Most recent data show economic activity is beginning to rebound. In fact, after 100 days of Prime Minister Modi’s Govt., rating firm
Maplecraft has ranked India No. 1 in terms of economic opportunities.
Moody’s have commented that modest reforms could easily boost Indian
GDP growth to 7%.
Therefore, the new Govt. led by Prime Minister Narendra Modi is focused on growth with good governance and transparency with an eye on manufacturing, infrastructure and trade.
Fast Track Indian Diplomacy: Intensive State of Global Engagement
Japan
Japan has promised an investment of US$ 35 billion after conclusion of
Prime Minister Modi’s visit to Japan earlier this month for infrastructure and other projects.
China
Chinese President Xi Jinping is on an official visit to India today. China, reportedly, would be investing in infrastructure, railway and industrial parks in India.
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Friends,
Indo-US growing Strategic Relations
President Obama had characterized India-US relationship as a defining partnership of the 21st Century. The strategic partnership between India and United States is now broad-based and multi-sectoral. Bilateral partnership enjoys bipartisan support in both our countries.
India’s Ambassador to USA, H.E. Dr. S. Jaishankar in a speech at Carnegie
Endowment for International Peace on January 29, 2014 had said –
“…………..three key drivers of our ties today. First is our geo-strategic and political convergence, something which could only manifest itself after the
Cold War. The second is our intersecting economic interests. These are the consequence of higher Indian economic growth rates as well as the broader rise of Asia. The third is a mix of our shared values and societal contacts.
These reflect the expanding Indian-American community and the growing middle class in India…….”
As far as political relations are concerned, we have higher comfort levels than they have ever been before. This can be seen from the visit of US
Secretary of State John Kerry and Secretary of Commerce Penny Pritzker for the 5 th India-US Strategic Dialogue in July this year - followed by the visit of
US Defence Secretary Hagel. The message they delivered that USA was prepared to be full partner in India’s growth.
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In fact, US Secretary of State Mr. John Kerry welcomed the raised foreign investment ceilings in several sectors of the Indian economy, including defense, railways, e-commerce and insurance. He agreed with our External
Affairs Minister of India Sushma Swaraj to identify specific areas for investment in India's manufacturing and infrastructure sectors through establishing a new initiative and empower the India-U.S. CEO Forum to build a better business environment. They hoped that the Ministerial trade policy forum of both Govt.s would meet in the fall of 2014 focussing on key trade and investment issues.
Minister Swaraj welcomed the United States as a partner country, for the first time, at India's annual Technology Summit in November 2014. The two leaders looked forward to the convening of the next bilateral Joint Science
& Technology Committee meeting and Secretary Kerry welcomed India’s commitment to the Global Health Security Agenda (GHSA) including in the areas of anti-microbial resistance and immunization. They also welcomed work under the Partnership to Advance Clean Energy (PACE) in its Research and Deployment components. They reaffirmed their commitment to the full implementation of the India-U.S. civil nuclear agreement.
Minister Swaraj and the Secretary Kerry welcomed civil space cooperation between India and the United States in Earth Observation, Space
Exploration and Satellite Navigation. The two sides identified education and skills development as an important area of future cooperation. They also recognized that a truly strategic India-U.S. partnership was a significant
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contributor to regional peace, stability and prosperity in Asia, and globally.
They also reiterated their condemnation of terrorism in all its forms and reaffirmed their commitment to eliminating terrorist safe havens and infrastructure.
US Commerce Secretary Pritzker expressed that US was keen to invest in
India’s infrastructure and manufacturing to build on growing trade ties.
Friends,
Trade
The trade and economic partnership remain a central pillar of our expanding bilateral ties. The two way trade in goods and services has risen to nearly $ 100 billion while the two way foreign direct investment has crossed $ 50 billion. The US businesses are becoming strong partners in
India’s economic growth story; and Indian businesses are creating value, wealth and jobs in the United States. Ford is spending US$ 1 billion to turn its new auto plant in Gujarat into a regional manufacturing hub. The effort by both countries is to reach the ambitious goal of US$ 500 billion in twoway trade by 2020. Also discussions on bilateral investment treaty will be continued.
Defence
The visit of US Defence Secretary Hagel in August 2014 led to discussions on military exercises, defence trade, coproduction and codevelopment and
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research and new technology for defence. This is important because US has become India’s largest defence supplier in the past 3 years.
India has placed orders worth nearly $ 9 billion. The Indian Air Force remains second only to the US Air Force in its fleet of C17 Globemaster heavy lift aircraft. The Indian Navy introduced P 8 Poseidon maritime surveillance aircraft at the same time as did the US Navy. Govt. of India has also cleared an additional order of C130J Super Hercules aircraft being made by Lockheed Martin in Marietta. Indian aircraft orders support 40,000 jobs in US defence industry. The United States is the country with which our Armed Forces conduct the maximum number of exercises. Our policy dialogues and military exchanges have also grown in their frequency and comfort level.
Energy
India in order to fuel its economy, is addressing its energy security needs, which is one of the robust areas of cooperation between the two countries.
As Ambassador Dr. S. Jaishankar had stated on February 28, 2014, “……..
American LNG, which could soon account for 40% of India's current imports and 15% of its total gas consumption, could actually become a gamechanger……”
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Pharma
India is the second largest supplier of over the counter and prescription drugs to the US, which relies on foreign drugs to meet 40% of its total requirements. In 2013, our exports of drugs & pharmaceuticals to the US amounted to US$ 4.47 billion. Several US pharma companies like Abbot,
Hospira, Mylan and Gilead have made big investments in India through acquisitions and greenfield projects to manufacture drugs for domestic market and export.
Information Technology
Indian IT companies operating in the US have contributed significantly in providing high-end support to 480 of the Fortune 500 companies plus thousands of other clients. Similarly US IT companies are also doing significant business in India.
Education
Over 100,000 students from India are benefitting from the US higher education and US benefits from $ 3 billion contribution from the students make in to the US economy.
Our Higher Education Dialogue is also promoting strategic institutional partnerships, deepening collaboration in research and development, fostering partnerships in community college education, junior faculty development and empowered classrooms through online education.
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Health
India has collaborated with Centre for Disease Control and Prevention
(CDC) based in Atlanta on 14 projects. They have also assisted in establishing the Global Disease Detection Center in India. In fact, the
Health Minister of India Dr. Harsh Vardhan paid a visit to CDC in June this year and had wide ranging discussions on major health issues and ways for further collaboration in major areas in health sector.
Indian-American community
Above all people-to-people relationship is the strong element of our partnership. The three million strong Indian American community that has come of age and includes a large number of professionals, educationists, and entrepreneurs, who have been increasing their economic and political strength e.g. Two Indian Americans are occupying high level posts of
Governor, a Congressman and several other representatives of the States legislatures and Administration as well as in the business, like CEOs of
Pepsi and Microsoft who name a few. Over 60,000 doctors in USA are of
Indian origin. More than 40% of hotel rooms are owned by the Indian
Americans.
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Industry associations such as Asian-American Physicians of Indian Origin
(AAPI), Asian-American Hotel Owners Association (AAHOA), based in
Atlanta, and The IndUS Entrepreneurrs (TiE) supporting this business forum confirm the fact that the Indian-American community, is also acting as a catalyst to forge closer and stronger economic ties with India. They are the real brand ambassadors of India.
In response to growing potential for commercial and consular activities, the
Indian Consulate in Atlanta for South East USA was opened in October
2011. Trade from Georgia has gone up by 17.5% in the year 2013 (from
US $ 450 in 2012 to US $ 523 million in 2013). Some major Indian investments are also in Georgia, e.g., Novelis was acquired by Hindalco of
Aditya Birla Group for $ 6 billion in 2006. Some major US companies have announced huge interest and expansion projects in India. Coke has announced US $ 5 billion investments in India in the next five years.
Similarly UPS and International Paper Mills have announced expansion projects. Beauliu International Group would be investing US $ 200 million on their Flooring and Cushion vinyl project in India.
The point I am trying to make is that India-US cooperation is multi-faceted and touches almost every aspect of human endeavour – from developmental issues such as education, health, agriculture and energy, to defence and security for our common peace, stability and security.
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Friends,
It is in this context that the maiden visit of Prime Minister Narendra Modi to
United States later this month at the invitation of President Obama assumes significance. The two leaders will discuss a range of issues of mutual interest in order to expand and deepen the US-India strategic partnership.
They will discuss ways to accelerate economic growth, bolster security cooperation, and collaborate in activities that bring long-term benefits to both countries and the world.
Prime Minister Modi will also address a Community Reception on September
28 at Madison Square Garden in New York to be attended by 20,000 Indian
Americans.
In fact, the visit of Prime Minister Modi to US would generate new dynamism in the India-US partnership as India views relations with USA as a great priority in the 21 st century. I am confident that the landmark visit of dynamic Prime Minister Modi would rejuvenate our strategic partnership to new heights.
Thank you very much,
Sept. 17, 2014
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