Luncheon Meeting With H. E. Mr Robert D Blackwill, US Ambassador to India on "Doing Business With India"
October 29, 2002, New Delhi

Address by Mr. Yogendra K. Modi, Vice President, FICCI

Mr. Robert D. Blackwill, US Ambassador to India

Distinguished Invitees and

Ladies and Gentlemen

Today on behalf of FICCI and the Industry Community of India, it gives me a great pleasure to welcome H.E. Mr. Robert D. Blackwill, the U.S. Ambassador to India for this exclusive Roundtable meeting on "Doing Business with India". This, I believe, is the first time, that His Excellency would be speaking on business synergy between our two great nations since the heinous dastardly acts of 9/11. In other words, this meeting may chart for us a renewed vision for deepening our trade and investment flows and broadening the bonds of the business of knowledge - an area that we share so dearly.

President Bush and Prime Minister Vajpayee undertook a commitment to complete the process of transforming the US-India relations, an initiative that was undertaken by President Clinton during his visit to India in March 2000.

We have witnessed the initiation of numerous fundamental ties which will take our relationship to a different level altogether. This includes the Financial and Economic Forum, the Indo-US Commercial Dialogue and the Indo-US Working Group on Trade. The two countries have also set up Joint Consultation Groups on Clean Energy & Environment and an Indo-US Science and Technology Forum. A major impetus to this very important relationship has also come through the establishment of a closer working relationship in areas of counter-terrorism, defense, security and intelligence related activities which are crucial to the national interest of both.

These have become very important channels for exchange of information and discussions helping both the countries to address substantive issues. All of this have opened the door to enable a broad based relationship between the world's largest democracies, pluralistic and English speaking economies.

In the latest announcement of the National Security Strategy of the United States of America, by none other than President Bush, we see the contours of a strong and enhanced sense of trust and brotherhood, in a world ridden by terror affecting both our nations deeply. And I quote, "the United States has undertaken a transformation in its bilateral relationship with India based on a conviction that US interests require a strong relationship with India. We are the two largest democracies, committed to political freedom protected by representative government. India is moving toward greater economic freedom as well. We have a common interest in the free flow of commerce, including through the vital sea-lanes of the Indian Ocean. Finally, we share an interest in fighting terrorism and in creating a strategically stable Asia.

Differences remain, including over the development of India's nuclear and missile programmes, and the pace of India's economic reforms. But while in the past these concerns may have dominated our thinking about India, today we start with a view of India as a growing world power with which we have common strategic interests. Through a strong partnership with India, we can best address any differences and shape a dynamic future."Unquote.

Obviously, we have embarked on a new vista where President Bush sees India as a strategic partner and the US sees us as a potential great power.

I may add that the long term partnership must lie on our common heritage of human capital driven by knowledge-based industries and high-technology areas. FICCI's fundamental work in this domain, Indo-US Knowledge Trade Initiative Guide Book, and the Govt. of India's confidence in FICCI, demonstrated by allocating this entire sector to us in the economic dialogue is a sign of the times to come. IT, Biotech, e-entertainment, e-commerce, e-health and many other thrust areas defined in this fundamental work will become the cornerstone of our long term interface driven by the human mind and not by muscle alone. Clean energy, environment, health and education are the underlying binders which will make us stick in the future.

Although, USA over the years has been our largest trading partner, the volume of trade between the two countries has left a lot to be desired.

In spite of economic sanctions and global recession, followed by the terrorist attacks of 9/11 and the resulting travel advisories, trade between the two countries have not been affected too much. In fact, our exports to the US have risen by more than 17.5 per cent during the calendar year. US exports to India have, however, remained unchanged.

Another benchmark of US-India relationship has been the fact that US has been our largest investment partner. US direct investments account for about 40 per cent of the total foreign direct investments into the Indian economy which is valued at approximately US $2 billion. In addition to this, US is also the leading portfolio investor in India which accounts for approximately 47 per cent of the net investments made.

It is worth mentioning that the 11th September terrorist attack last year had a limited impact on the FDI flows. This has been observed from surveys conducted by UNCTAD and AT Kearney which show that though the attacks did affect short term business confidence, they did not change the long term investment plans of companies. This was also time for India and this fact is proved by continued presence of top American companies like GE, AT&T, BoA, Citibank, Gillettes, KPMG, AT Kearney to name a few.

As business in the knowledge driven sector gain momentum, the IPR issue becomes crucial. We are firmly committed to a strong IPR regime which we believe is the key to the success of India's technology led industries and will also support a healthier investment atmosphere.

Yes, we have differences as all thinking nations must. We have a different perspective on the Singapore issues in WTO. We have concerns on the raising of import duty on steel and the new Farm Bill which enlarges subsidies to farmers in the US. We are keen to access further the textile market in the US and the multifibre agreement still remains a hindrance. We are sometimes irked by your anti-dumping measures. Having said so, the positive vibrations between us are much deeper, much wider and much warmer than anything we have with almost any nation.

The full potential of our trade and investment relationship is far from realized. The immediate need is a sustained and effective economic and commercial dialogue between the two countries to fully exploit the economic potential, to tackle the problems, sort out differences, encourage effective trade policies and create a regulatory atmosphere for an enhanced and effective economic cooperation between the two countries.

Given the enhanced political, strategic and geopolitical partnership between India and the US the background is set to ensure a vibrant economic relation.