As Prepared

Thank you, Fred, for that kind introduction and for putting together this event today. Seeing this fantastic lineup, including Ambassador Hills, Ambassador Singh, and Nelson Cunningham – as well as all the India experts and journalists in the crowd – I regret that I won’t be able to stick around after my remarks and join the discussion.

As you can imagine, with the Strategic and Commercial Dialogue and the UN General Assembly coming up, this is an intensely busy week for my team. When I spoke at the Indian Consulate up in New York last month, I said that August felt like the calm before the storm… this week feels like we’re approaching Category 4.

Fred, I wanted to begin by commending you on your excellent report, which has a vision that commands attention – in policy circles, in boardrooms, and across the United States and India. It is to our great benefit that you’re using your expertise and influence to shine such a bright spotlight on India’s tremendous economic potential.

In an increasingly globalized world, we appreciate how geo-economics is shaping the world around us. As Secretary Kerry put it at his confirmation hearing – “foreign policy is economic policy.”

We know that our diplomatic influence, our ability to advance our values, and even our national security, is underpinned by our economic strength. And the welfare of our country depends on our ability to trade goods and services and drive innovation across the globe.

India’s leaders know this too. With India fast becoming one of the largest and most diversified markets in the world, President Obama and Prime Minister Modi have committed to increasing bilateral trade fivefold – from 100 billion to 500 billion dollars.

To fulfill the aspirations of our leaders, the United States and India have added a separate commercial track to our annual U.S.-India Strategic Dialogue, providing an opportunity for our senior-most economic officials to explore how we can improve connectivity, enhance investment, make doing business easier, and ultimately reach that 500 billion dollar mark.

Now, there are many reasons why the United States is the world’s largest and most dynamic economy, including a strong regulatory system that rewards entrepreneurship, protects innovation, and propels the best ideas to market.

That system has helped our companies to create and build some of the very best products the world has to offer. As a result, our companies and our economy are deeply integrated into global supply chains, making them more productive and competitive.

And as the report shows, India can do the same. The United States knows well that few can match the innovative and entrepreneurial spirit of the Indian people – some 15 percent of start-ups in Silicon Valley have been founded by Indians & and Indian Americans – a community that makes up just 1 percent of the U.S. population.

India will soon have the world’s largest and youngest population – just imagine what tomorrow’s citizens of India will be able to accomplish, given the right education, training, and opportunity.

But to take full advantage of that demographic dividend, India needs to create about one million jobs every month for the next 20 years – and provide skills training for a 400 million-strong workforce.

The Indian government’s vision for its ambitious “Make in India” initiative is to create millions of new jobs in the manufacturing sector, which will require India’s economy to be better integrated into global supply chains, markets, and trade.

We understand and support the Prime Minister’s bold vision for boosting India’s economic potential, because a stronger India means a stronger partner in solving some of the world’s most pressing challenges: combatting climate change, protecting the global commons, and ensuring inclusive and sustainable development and growth.

As the report points out, much of India’s economic growth will come from trade. For India to achieve its goal of sustainable growth and development, it must assure global markets and international investors that it is open for business. Efforts to simplify its tax code and increase the ease of doing business will pay huge dividends for India’s citizens and its global economic stature.

I think most of us have watched intently as the Indian government has pursued market reforms, sought to enhance competitiveness, and increase trade-led growth.

Some progress has been made. Though, as anyone familiar with our own legislative process knows, sometimes getting big things done is more difficult in vibrant democracies.

In the meantime, as the report mentions “signals” that the Modi government can send to show its commitment to reform, such as strengthening intellectual property rights.

That’s an issue we raise often with the Indians, because we know that a strong IPR regime is absolutely critical to a competitive economy – it’s what underpins our own economic success and, while our system isn’t perfect, it does attract some of the best companies from all over the world.

India will soon transition from being a net user of technology to a net producer. To innovate, attract investment, and compete, the Indian firms creating those new technologies will need strong IPR protections.

This report also points out how external frameworks can help catalyze internal reforms. The World Trade Organization is one example. APEC is another, and India could greatly benefit from becoming an APEC economy – matching the pattern of open-market development that has worked so well for many of the countries to its east.

But there are several other steps India should take, but today I’d like to focus on one very important opportunity: a U.S.-India Bilateral Investment Treaty, or BIT.

If India could complete a BIT with the United States it would become India’s highest-standard investment agreement. It would demonstrate to international investors – especially those from the United States – that India is open for business. And, it will attract much-needed capital for a variety of sectors, including infrastructure, energy, health, education, and many more.

Because a high-standard BIT with the United States would lock-in reforms for the long-term, it would give investors the confidence they need to make the long-term investments that India needs.

What’s more, by signing a BIT with the United States, India would show that it is willing and able to join other high-standard investment agreements, making it even more competitive and integrated into the global economy.

India has already completed bilateral deals, like the investment chapter of their economic partnership agreement with Japan, that provide strong investor protections. If India were to commit to those same standards with the United States, our two countries could greatly accelerate the negotiation of a BIT. It would require a lot of hard work, but it would unlock huge dividends.

The bottom line is that we want more Indian firms to invest in the United States, and U.S. companies want to build on their almost $28 billion dollars of investments in India. We want to see the expansion of sectors like the digital economy, renewable energy, and especially manufacturing, which could help integrate India more deeply into global supply chains and markets.

There’s great reason to be optimistic about India’s potential. And the United States government is committed to helping India achieve that potential, which is why we want to be its best partner, strategic and commercial, as it develops into a leading power.

That’s what we’re working toward with next week’s S&CD and a slew of other major events – the Energy Dialogue, the CEO Forum, PM Modi’s trip to California, and more.

Again, I want to commend the Peterson Institute on this incisive report, which rightly recognizes that stronger cooperation between the United States and India isn’t just good for Americans and Indians, but for the whole world. That’s why we’ve worked so hard over the last several years to transform this bilateral relationship into a global partnership, a partnership that can help address the most pressing challenges of our time.