Special Address by Mr. Kanwal Sibal, Foreign Secretary, Government of India

Under Secretary Juster, Mr. Modi, Dr. Mitra, U.S. CdA Robert Blake & Distinguishes personalities on the podium

Thank you for inviting me to speak today. I shall be brief in my remarks, so that we have adequate time to hear Under Secretary Juster speak about high technology trade and controls in the context of India-U.S. relations. He is in a position to provide a good U.S. perspective on the subject and on the broader theme of how the United States seeks to balance commerce and national security.

We in India are acutely aware of U.S. controls on trade and, I am sure, part of Under Secretary Juster's objectives today would be to explain to this audience how the United States has moved away from the controls of the sanctions era to freer trade with India.

I am sure, too, that he would be happier today than on his visit last November, because, after a long time, growth in U.S. exports to India is outpacing increase in Indian exports to the United States. We all sincerely hope that our trade moves onto a sustained, high growth trajectory in both directions, so that we can speak less about flat chapatis and more about our shared expanding cake.

Under Secretary Juster and I have just come away from a very productive session of the official segment of the second India-U.S. High Technology Cooperation meeting and we will continue our dialogue in the afternoon. Over the past year or so, he has been a strong partner in our common endeavour to expand India-U.S. high technology commerce, including strategic trade.

The High Technology Cooperation Group, which is meeting for the second time in less than six months, has two broad objectives -facilitating high technology commerce in the broadest sense and creating conditions for expanding trade in strategic goods and technologies. They both have strong political and commercial significance.

For too long, technology transfer issues were a metaphor of political and strategic differences between India and the United States. They created constraints for cooperation not only in military uses of technologies, but also on their civilian applications. Let me pre-empt Under Secretary Juster and say that we recognise that a broad category of controlled goods and technologies are now available easily to most importers in India. But, there are critical areas, not necessarily in value terms, in which we believe our relationship has remained a prisoner of the past.

Over the past two years, our two governments have pursued the vision and aspiration of our political leadership to qualitatively transform India-U.S. relations and build a long-term strategic partnership. This is a vision that is based on shared values, common long-term interests and growing opportunities for mutually beneficial cooperation. One example of our effort is the strong growth in defence ties, that encompasses military exchanges, defence supplies and defence technology cooperation.

And, in recent months, a key purpose of our bilateral dialogue is to explore ways in which we can overcome some of the restrictions and barriers to a fuller and a more fruitful relationship on what has come to be described as "quartet issues", in a way that reflects and embodies the political vision of India-U.S. relations articulated by Prime Minister Vajpayee and President Bush. The task is not easy, especially because our bilateral relationship exists in a broader international context, and there are historical legacies to contend with. But, our two governments have engaged in this task in a constructive, forward-looking and a realistic manner. We are now well into the process of resolving these issues consistent with our respective laws, national security and international obligations, but entirely in the spirit of the new relationship between our two countries.

As we advance our engagement in these areas, we will strengthen our cooperation, in a spirit of equal partnership, to prevent proliferation of sensitive technologies. Situated as India is, in the arc of strategic proliferation, our understanding of the consequences of proliferation and our commitment to preventing it is second to none. Industry-government partnership has to be an important part of that endeavour .

Although I turn to it second, we attach no less importance to high technology commerce. India-U.S. partnerships have pioneered the patterns of international linkages in information technology and, now increasingly, in other knowledge-based industries and services. As these industries have grown and expanded, as technology has opened up new possibilities of connectivity, they have developed their own models of international supply chains. Cross-border ties and allocation of responsibilities and tasks will be an integral part of research, development and value addition in these industries. This is not a zero-sum game of losers and winners. At a broader macro level, there are gains for all partners in the chain and for the national economies, as well. We believe that both Indian and American industries have gained immensely from their growing web of linkages on information technology and IT -enabled services. So, initiatives that seek to curb or disrupt those linkages will be, in the long run, counter-productive to both countries.

At the HTCG, we are working with the private sector, to advance India-U.S. high technology commerce through a series of tangible and concrete measures that can be addressed in a bilateral framework. It could be incubating a new opportunity; it could be addressing a regulatory issue that impedes commerce; or, it could simply be developing a better understanding of each other's regulations and procedures. While we are addressing thematic issues such as intellectual property, data privacy and customs procedures, we are leveraging our resources to network and connect institutions and enterprises in our two countries in new areas such as nano-technology.

The potential for large and rapidly growing India-U.S. ties in knowledge-driven industry and services sectors are too well known to bear repetition. The task is to make it happen. We must explore the possibility of putting in place special bilateral arrangements for trade and investment in this sector. As our recent comprehensive economic cooperation and free trade initiatives in our neighbourhood and Southeast Asia show, India is ready for bold initiatives in international economic relations. I hope that our industry associations will work with their counterparts in the United States to examine possibilities in the context of our two countries.

Thank you.