Robert O. Blake, Jr.
Assistant Secretary, Bureau of South and Central Asian Affairs

New Delhi, India

June 21, 2011

ASSISTANT SECRETARY BLAKE: I’m really happy to be back here in Delhi. I’ve been here, as all of you know, to help prepare for the Strategic Dialogue that’s going to take place in July when Secretary Clinton will be here.

As all of you know, President Obama’s trip last November was really kind of a watershed moment for both of our countries and really showed that our partnership is going to have benefits not only for our two countries, but for much of the rest of the world. We saw some of the cooperation that we’re now engaged in trilaterally on things like Afghanistan, Africa, and so now we’re looking to try to build on that progress when Secretary Clinton comes in July for our second Strategic Dialogue.

We had very good talks over the last two days with my MEA [Ministry of External Affairs] counterparts on a wide range of issues including preparing those talks.

Let me just give you a sense of where we are and some of the progress we’ve made bilaterally and some of the things we’re looking to do.

First on the trade side, I think you know trade has doubled between our two countries twice over the past ten years and continues to grow and continues to be a real driver in our partnership. Even in 2010 two-way trade is now up by 30 percent this year from the year before, and India is already now our 12^th largest trading partner up from 25^th largest in 2000. So again, quite an important progression.

QUESTION: [Inaudible]?

ASSISTANT SECRETARY BLAKE: Actually both. But we still think there is room for even more rapid expansion, particularly if India relaxes some of the existing restrictions on things like retail and insurance and so forth. We look forward to any decisions that might be made on that.

One of the things I think we’re looking to do during the course of the Strategic Dialogue will be to try to reenergize our discussions on a Bilateral Investment Treaty. That’s particularly important now as our own investments in India are increasing, but also because India’s investments in the United States are increasing quite rapidly and it’s becoming quite an important source of investment. India itself also has some important interests in having safeguards and an independent arbitration process to protect their investments there.

On the defense side, obviously you all know we regretted the decision on MMRCA, that U.S. companies were not part of the down-select, but we also see there are tremendous opportunities going forward. There are going to be some $35 billion worth of contracts over the next several years, and American companies are very actively involved in those contracts.

The finalization of the C-17 deal marked quite an important step forward and itself doubles the scope of our defense trade, just in that one transaction. So it does show, again, tremendous opportunities.

We’ve also seen a lot of other progress in our relations since the President’s visit. We have delisted DRDO and ISRO from the Commerce Department’s entities list in February. We’ve removed India from most license requirements for items that are controlled unilaterally for crime control or regional stability issues. We’re working hard with India on membership in the four arms control regimes. We’ve had some important regional consultations. First on Asia, and then even today I had our first Central Asia dialogue with my Indian counterpart, the Joint Secretary for that region. So again, I think there is an encouraging expansion of our strategic consultations on more global issues.

As all of you know, Janet Napolitano, our Secretary for Homeland Security, was here recently and had excellent discussions with Home Minister Chidambaram and the launch of our homeland security dialogue. There was quite a lot of important progress both in information sharing and capacity building, and we’re very excited about that.

We’re going to be holding the U.S.-India Higher Education Summit later this year, in the fall. I don’t have the date, but I hope to have one by the time of the Strategic Dialogue.

The Department of Energy has announced $25 million in funding for the U.S.-India Joint Clean Energy Research and Development Center, and eventually we hope to mobilize $100 million of public and private sector funds to promote clean energy.

Finally, we’ve also awarded $2.5 million for innovative projects in science and technology. Again, quite a lot of important progress is taking place. A lot of our efforts, as you can see, are pointed towards opening up opportunities for our companies and for our scientists and others to deepen these people-to-people ties that are so important.

Let me just talk a little bit for a minute about India’s regional and global leadership. Prime Minister Singh’s recent visit to Kabul underscored India’s strong initiative to try to support international efforts to build a more secure and stable Afghanistan. The United States welcomed the Prime Minister’s announcement to increase the envelope of Indian assistance by $500 million to a total of $2 billion, making India one of Afghanistan’s most important partners. And Prime Minister Singh likewise has shown very important leadership and courage in advancing the current thaw in Indo-Pakistani relations. We welcome the progress that’s been made between India and Pakistan and we particularly welcome the meetings that are going to take place later this week between the Foreign Secretaries.

We think that India’s economic rise presents a huge opportunity for Pakistan and a bilateral breakthrough on the trade front particularly could provide a catalyst for wider regional and economic integration in the South and Central Asian region. I’d be glad to talk about that more if there’s interest in that.

Overall we feel that our partnership with India can make this world more secure, more democratic, and more commercial partnerships are going to help to produce new and innovative products that will help the 21^st Century needs of all consumers and help to create millions of new jobs in both of our countries.

I also just want to stress that this is a long-term project. Neither of us can afford to take this relationship for granted. We need to work together to ensure that the spirit of what the President and the Prime Minister have started can really be sustained through concrete steps. I think that’s what the Strategic Dialogue is all about.

With those few opening remarks I’m glad to take your questions.

QUESTION: The drawdown in Afghanistan.

ASSISTANT SECRETARY BLAKE: I think the President’s going to make an announcement very shortly about that. I can’t say what the number’s going to be, but let me just say that the United States remains very much committed to the transition plan that was laid out by NATO at the last NATO Summit in Lisbon and we expect to continue to have a large number of troops through the end of that period. Even after the transition we expect to have a residual military force there to continue some of the important counter-terrorist efforts that will have to be undertaken.

QUESTION: [Inaudible]?

ASSISTANT SECRETARY BLAKE: I just saw a press report about that, but I can’t confirm that. I saw something about it.

QUESTION: So the drawdown could carry on from say July to --

ASSISTANT SECRETARY BLAKE: It’s going to be a phased drawdown and it will be phased according to the ability of ISAF and others to help build up the Afghan National Security Forces so they themselves can take responsibility for their own transition. So it will be a phased and conditions-based withdrawal.

QUESTION: Should India have any concerns about what’s going to happen to Afghanistan after this in terms of the future of Karzai, the future of the Taliban [inaudible]?

ASSISTANT SECRETARY BLAKE: I don’t think India should have concerns. We intend to remain in very close touch with the Indians on this. We have no interest in leaving Afghanistan before it is ready to take on these very important counter-terrorist responsibilities. We also have a long-term interest in assuring Afghanistan’s economic success. A very important focus of ours over the next several years, is going to be to not just sustain our assistance program, but to begin to really make an effort on the infrastructure side to build up Afghanistan’s infrastructure, to lay the basis for sustained development. In that regard India’s assistance program is a very very important part of that, and just one more reason we have to remain in close touch with India.

QUESTION: Can you share with us your assessment of the ground impact of the surge? If you feel comfortable with it, [inaudible].

ASSISTANT SECRETARY BLAKE: General Petraeus has talked about how he feels we’ve been making progress, particularly in Kandahar and Helmand. But this process is fragile. We have to really sustain that. And it’s important to sustain that because it’s important to show the Taliban that they cannot outlast NATO and that they have an incentive to engage and to really participate actively in this reconciliation process and in their reintegration process.

QUESTION: The liability [inaudible] that will [inaudible] future concerns?

ASSISTANT SECRETARY BLAKE: I don’t know what you mean by closed chapter. I think from all that I’ve heard, India remains committed to the commitments that it made during the President’s visit, particularly to the ratification of the CSC [Convention on Supplementary Compensation for Nuclear Damage] within a year of last November, so by the end of this year. I think they also remain committed to ensuring that their legislation is compliant with the CSC.

QUESTION: [Inaudible]?

ASSISTANT SECRETARY BLAKE: Well again, I don’t want to negotiate that here publicly, but this is something we continue to discuss.

QUESTION: [Inaudible] Pakistan’s concern, the number of drone attacks appears to have gone up. At least we are looking at more targets [inaudible]. Also the fact that we just, there have just been reports that the Orions that were destroyed are going to be replaced. [Inaudible] F-16s. I think they come from [inaudible]. Now in a situation like this, how sort of valid is [inaudible]?

ASSISTANT SECRETARY BLAKE: Well, first of all I can’t comment on drone attacks. We don’t comment about that either on or off the record.

On the question of the Orions, I don’t have information about whether they’re going to be replaced, but I don’t think the Orions should pose any concerns for India. Pakistan is a country that has actually been in counter-piracy efforts off the coast of Somalia, and with whom we work quite closely in the Indian Ocean. So it has a legitimate interest in having such aircraft. We have sold similar aircraft to India.

Likewise on the F-16s. The focus of our entire military assistance program in Pakistan shifted away from things like F-16s to counter-terrorism and counter-insurgency equipment and training, and that’s really where we’re focused on going forward. Again, India has a very large conventional advantage over Pakistan, so the small numbers of F-16s we have transferred should not pose any threat to India.

QUESTION: There are reports about Pakistan building up its [inaudible] increasing arsenal of nuclear weapons in the world and so on, [inaudible] will be overtaking France or Britain in the near future. What is the U.S. concern, or does the U.S. have any concerns about this? And [inaudible] Pakistan about this?

ASSISTANT SECRETARY BLAKE: I can’t comment on the specific report, but let me just say as a general rule that President Obama, as you know, has been a global leader on the question of nuclear disarmament and has championed the goal of a world free of nuclear weapons, first articulated in the speech that he made in Prague. And I think Prime Minister Singh also has endorsed that, and as a general principle, but also made clear this has got to be done by India’s neighbors as well.

That’s a goal that we hope all countries are going to subscribe to and that there can be a gradual drawdown of nuclear weapons, so we certainly hope that Pakistan will do the same.

QUESTION: [Inaudible], how concerned is the United States about the safety of the nuclear arsenal?

ASSISTANT SECRETARY BLAKE: I don’t think there are any renewed concerns about the safety of the nuclear arsenal. Those assets remain under much tighter security than the security that was prevalent at the Karachi Naval Base. I’ll just leave it at that.

QUESTION: But [inaudible] possibility of [inaudible] string of events, the [inaudible] assassination, et cetera. Isn’t that one of the key things [inaudible]? And the [inaudible] program, the problem is with the [inaudible]. Today [inaudible]. [Inaudible]. We are talking of the kind of multi-[inaudible] threat, even from Iran. People talk about these guys having [inaudible] one of the possible reasons that [inaudible]. The problem of [inaudible] establishment of armed forces, possibly the armed forces, possibly, [inaudible].

ASSISTANT SECRETARY BLAKE: Again, as you say, these are all issues that Pakistan needs to take seriously. I don’t think that the United States has any new assessments that suggest that would require us to alter our assessment that again, the nuclear arsenal is not at risk.

QUESTION: [Inaudible] of what is going on?

ASSISTANT SECRETARY BLAKE: I can’t comment on that.

QUESTION: How serious is Kayani’s position? There are reports that he is facing some problems from [inaudible].

ASSISTANT SECRETARY BLAKE: I have seen no indication that his leadership is at risk. We continue to engage very closely both with the civilian leadership and with General Kayani. We’ve made a real concerted effort to now chart a renewed way forward after the Usama bin Ladin raid and to reenergize cooperation on the counter-terrorist front. I think there’s been some positive steps that have been taken. Our ability to recover the helicopter wreckage, for example, and so forth. But again, these are efforts that are going to have to be sustained not only against groups that are targeting Pakistan like the TTP, but also groups that are targeting the United States and India like the Haqqani Network and the Lashkar-e-Tayyiba.

QUESTION: Do you think [inaudible] everybody engages the Pakistan [inaudible]. [Inaudible]. Do you think the time has come to [inaudible]?

ASSISTANT SECRETARY BLAKE: India and Pakistan are now engaged in a very careful effort to improve their relations. There have been a number of contacts already between the Commerce Secretaries, so it will be up to those countries to figure out when they want to have the services begin their own contacts. We’ve been very encouraged at the renewed range of contacts that have taken place and some of the progress that has taken place. I would point to the important progress between the Commerce Secretary and the important targets that they have established for themselves to reduce some of the restrictions on trade and capitalize on some of the quite important opportunities that exist to expand trade between your two countries.

QUESTION: One issue, will the Pakistan-Afghanistan trade [inaudible], and the [inaudible].

ASSISTANT SECRETARY BLAKE: Yes.

QUESTION: How important do you think [inaudible] the two countries have agreed to a situation where we will have a [South Asia] free trade area by [inaudible]? We’ve not been moving very fast on that area, primarily because of Pakistani resistance to the idea of opening up. That opening up even extends to Afghanistan in the sense that Afghanistan [inaudible]. Even so, Pakistan has refused to [inaudible] across Pakistan to Afghanistan even though Pakistan [inaudible].

Do you think the United States can play a role there in pushing things in any direction?

ASSISTANT SECRETARY BLAKE: As you know, President Karzai recently visited Islamabad for meetings with President Zardari. They agreed that they should implement the Afghanistan-Pakistan Transit Trade Agreement and that they should also begin to extend it to Central Asia so that’s a welcome step forward. But I think the real prize, as you noted, will be to extend that same agreement to India. When I met with all of my counterparts and leaders in Central Asia, all of them are very focused on the huge opportunities that they see for expanded trade and investment with India, and they really see India as the future of many of their trade and investment relations. So they are very interested in seeing this happen.

I think our hope is that the two Secretaries of Commerce will make sufficient progress not only to unblock a lot of the trade opportunities bilaterally, but to increase confidence sufficiently that Pakistan can think more ambitiously about allowing this transit trade. Pakistan itself would benefit a great deal from this. It wouldn’t just be a matter of allowing transit.

QUESTION: Transit is one part of it but even Pakistan is committed to it. And to any rational person, [inaudible] Pakistan and Afghanistan [inaudible] area would be [inaudible]. At the end of the day both the economies need to get [inaudible], and that can only happen if they open up [inaudible].

ASSISTANT SECRETARY BLAKE: I think there’s already been some progress. I would point, for example, to the Turkmenistan-[Afghanistan]-Pakistan-India pipeline. There were many skeptics for years who said oh, this is never going to happen. In fact not only has there now been an intergovernmental agreement, but all four countries are now, I’d say, quite close to making progress on agreement on a price, pricing mechanism. Then after that there’s going to have to be negotiations on some sort of consortium to actually build this pipeline. But the point is, there’s been quite important, concrete progress on that, a really important project that would help to integrate the region in an important way.

There are other projects like that. There’s the CASA-1000 project that would allow Kyrgyzstan and Tajikistan to export surplus summer power down to Pakistan and potentially even India. So that’s a project that’s now being considered and a feasibility study is being done by the World Bank.

Already countries like Tajikistan are already doing a lot of their own bilateral efforts to expand electricity trade between their countries. Uzbekistan has done the same thing. Turkmenistan has done the same thing.

There’s tremendous interest already and again, if you can begin to create these long-term linkages, they would not only have a very salutary impact on the economic picture in all these countries, but they also create constituencies for peace in all of these countries. That is an equally important goal and something that we should --

QUESTION: My point is to what extent right now, [inaudible] and the other was [inaudible] Pakistan. [Inaudible] to the idea that [inaudible] South Asia with economic integration is the [inaudible], I would say the only long-term solution to this whole thing. But to what extent will the United States administration push this?

ASSISTANT SECRETARY BLAKE: I can tell you, that is very much our long-term vision. And we are very much committed to that and doing what we can to help. Obviously this is not in our hands, but we certainly want to encourage that. I think if you look more broadly, South and Central Asia individually are among the least integrated regions in the world. So there are opportunities not only to integrate South Asia itself, but also South Asia with Central Asia and of course Afghanistan. So there’s undeniable benefits, as you say, to doing this. We will be encouraging quite a lot of progress and we’re willing to put what resources we can into helping out. But of course this is going to have to be done by a lot of the multilateral development banks and private investors as well who will provide the majority of the capital for things like the Turkmenistan-Afghanistan-Pakistan-India pipeline.

QUESTION: Five or six of your citizens died 26/11.

ASSISTANT SECRETARY BLAKE: Yes.

QUESTION: How happy are you with the pace of progress in terms of action against those who were responsible?

ASSISTANT SECRETARY BLAKE: I think like India, we’d like to see the trials progress as quickly as possible in Pakistan. And this is something that we continue to encourage Pakistan to complete as quickly as possible. But this is only one piece of a much larger puzzle which is to, again, gain Pakistan’s broader cooperation or continued cooperation, in the fight against terrorism. We’re very conscious of the fact that Pakistan has also been the principal victim of terrorism from attacks by groups like the TTP, so they’ve suffered a great deal themselves. But this of course is a very high priority for us going forward, to continue to make progress not only against groups like that, but as I said, the groups that are based in the tribal areas that are attacking American forces and other international forces in Afghanistan, but also groups like LET that increasingly are targeting the United States, but are also targeting India.

QUESTION: [Inaudible] increasing evidence of the involvement of [inaudible] establishment. How do you use that?

ASSISTANT SECRETARY BLAKE: I can’t really say that at this point. All I would say is that, if you’re referring to the Rana trial, he was convicted of conspiracy with LET and is going to receive a quite lengthy sentence for that as an offense. [Inaudible]. So those are quite serious charges.

David Headley has already been charged and India has access to him. But there remain other suspects who will come to trial. There’s more --

QUESTION: [Inaudible] process in trying to get [inaudible]? The [inaudible] indicted in U.S. courts.

ASSISTANT SECRETARY BLAKE: Yeah, I think there is a process to try to find them. They’re all wanted people.

QUESTION: [Inaudible].

ASSISTANT SECRETARY BLAKE: What are you talking about? The head of ISI?

[Multiple voices].

QUESTION: I meant that [inaudible].

ASSISTANT SECRETARY BLAKE: You’re trying to get me to create headlines here. Obviously we want to see those people brought to justice. There is quite a lot of evidence that they were involved in these attacks.

QUESTION: You [inaudible] spoke of India as a future trading opportunity. [Inaudible] China next door, a fairly large number of easier [inaudible] access to the market than us. [Inaudible] India be considered that important?

ASSISTANT SECRETARY BLAKE: As you say, China is an important market for them and China’s been very active in developing infrastructure and trade ties with Central Asia, and that’s a good thing from our perspective, but they see, again, quite important opportunities to do more with India. They know that India is an economy that’s on the rise, and your economy’s going to continue to grow and it’s going to be by some estimates the third largest economy in the world by 2030. So they want to capitalize on that, quite naturally. And they want to diversify their trade opportunities. Again, I think that’s a very smart and good thing for them to be doing.

More broadly we think that greater trade and economic interactions between Central and South Asia would have both these economic impacts but also these strategic impacts that I talked about earlier. That’s why we’re particularly interested in trying to encourage that.

QUESTION: Do you see any resistance on the part of [inaudible] relationship? You started off with the business of the relationship between [inaudible]. And when you [inaudible] Pakistan, you had a whole [inaudible]. You had Prime Minister [inaudible], the Foreign Minister [inaudible]. In the case of India there have been some reports that the Indians are interested in having the [inaudible]. Is there some mismatch between [inaudible] when we talk about inter-U.S. [inaudible] the U.S. means one thing and we mean something else. And --

ASSISTANT SECRETARY BLAKE: I don’t think there’s a mismatch. We have extremely high level ties across the board with India. As I said, Janet Napolitano’s just been here. We’ve had a number of very very high level interactions. The Finance Minister is going to Washington next week for our financial and economic dialogue. So there’s a tremendous range of high level contacts. Again, I think when the Secretary comes here she’ll have a broad range of people from across the Washington interagency to participate in this dialogue. The real focus of this dialogue, as I say, every one of the -- I’m reluctant to try to compare these with let’s say the Chinese or the Pakistani one because every one of them is different. In our case, the Indo-U.S. case, the purpose of the dialogue is really to look for a way forward. Where do we go next? Again, I think the State Department and the External Affairs Minister are well positioned and would be the best ministries to do that and to take a strategic look at where we should try to cooperate next, so I think that’s very appropriate.

QUESTION: [Inaudible]?

ASSISTANT SECRETARY BLAKE: No, we haven’t. What’s your specific --

QUESTION: No, I’m saying that the government [inaudible] the U.S. [inaudible]. If you’ve actually [inaudible]. What’s your response?

ASSISTANT SECRETARY BLAKE: I don’t think it violates the commitment. First of all, the Obama administration fully supports the so-called clean NSG exception for India. We continue to support the civil nuclear deal, and hope that again, we can fulfill the commitments that were made when President Obama came here last November. We don’t think that efforts that are now underway in the NSG are going to undermine the exception that was granted to India by the NSG members in 2008. Those efforts in effect predate our own agreement. So we don’t see that this is going to undermine that.

QUESTION: How can you say that when [inaudible] technology which the [inaudible] will be [inaudible]?

ASSISTANT SECRETARY BLAKE: Again, I don’t think the NSG has reached any decisions on this so we’ll have to --

QUESTION: You said they’re backing, the U.S. is backing the sop-called [inaudible] of the -- The U.S. [inaudible] at various levels, we all think there’s a problem with the ban. How do you say that we don’t want you [inaudible]? In which case the NSG [inaudible].

ASSISTANT SECRETARY BLAKE: I’ll stick to what I already said, but I just want to say the United States remains committed to what we’ve already committed to under our own civil nuclear cooperation and -- I’ll just leave it at what I already said.

QUESTION: [Inaudible] membership [inaudible]?

ASSISTANT SECRETARY BLAKE: Again, I had good discussions today. There have been a number of contacts between the members of our, our non-proliferation experts. We’re moving forward pretty well on that front. I don’t have anything specifically to report publicly on that. But I think we’ll --

QUESTION: No timelines?

ASSISTANT SECRETARY BLAKE: No, no timelines at this stage.

I’m sorry I’ve got to run catch a plane, but --

QUESTION: -- off the record? [Laughter].

ASSISTANT SECRETARY BLAKE: We were pretty frank on the record.

It’s nice to see all of you and thanks so much for coming. I’ll certainly be back here next month with the Secretary. But thanks again.

# # # #