‘India to be a net security provider’
In an exclusive interview with Group Editorial Director Raj Chengappa, US Ambassador to India Richard Verma elaborates on the evolving India-US equation during Obama’s regime
President Barack Obama defined the India-US relationship as a transformative and defining partnership of the 21st century. As his two-term presidency draws to a close, Group Editorial Director Raj Chengappa, in an exclusive interview with US Ambassador to India Richard Rahul Verma, 47, assesses just how far relations with India progressed under Obama’s tenure and what more needs to be done. Excerpts: Do you think, as Prime Minister Narendra Modi said, that India and the US have finally overcome the hesitations of history? Yes. We both had what he calls the hesitations of history. I refer to it as a gravitational pull, and we are trying to break out of its orbit. Because there were forces holding us back. And many of those were in the past. And I think it’s hard to cure those overnight. It takes time, and a building of trust. Under President George W. Bush, the big-bang Indo-US nuclear deal went through. What are the key contributions of President Obama towards improving relations with India? Where the change has come, it has been evolutionary. To put it simply, to supporting India’s rise as a leading power in the world. And it comes in many different facets. So in international institutions it was making sure they are reflective of India’s role in the world, not the post-World War II period where those institutions were built. The President saw a world where India will soon be the world’s most populous country. It will have the third biggest economy. It is the world’s largest democracy. Six years ago, he supported India’s accession to the nonproliferation regimes, so he’s been a big proponent of the re-architecture of our global political institutions, including the UN and the G20.
Secondly, he is making sure India is strong militarily and has the tools and capabilities it needs to be a net security provider in the region. The US leadership is unabashed about their strong support for India to have the best navy, the best air force, the best army, the best special forces capability. We’ve seen that in how hard they’ve pushed on cyber security cooperation, on counter-terrorism cooperation. So again, moving away from the transactional sale here and there to more of a full partner. We saw that in the summit over the summer with India’s evolution to a major defence partner. We’ve seen that with the Defense Technology and Trade Initiative (DTTI), something we don’t have with any other country. And on the economic front? I think the President has tried to line up very strongly behind Prime Minister Modi’s vision for development, and support ultimately the aspirations of not only the Indian people but of the American people to have closer, stronger economic ties. So I know it’s easy for us to rattle off a laundry list of things we’ve done. You know, we have some 70 different initiatives going on. We’ve broken every record in what we keep. But I think it’s important for people to take a step back and say why has this relationship actually excelled over the last couple of years in particular. A lot of hard work. Bipartisan administrations, bipartisan support in the Congress, over successive regimes here in India and in Washington. But I think we finally have moved from two parallel tracks to two tracks that are converging in important ways. On trade and investment, there is promise of building it from $107 billion to $500 billion. Is there a momentum to that? I think there is optimism. If you go back and look at our trade numbers, our two-way trade numbers, just 10 years ago, they were about $35 billion. So, in a 10-year period, we have more than tripled the number. If you look at our defence trade number, seven years ago, it was close to zero. Now we are north of $15 billion. Look at our agriculture trade number: 10 years ago, about $1.5 billion; last year, closer to $6 billion. I look at the number of Indian companies in the United States—the highest ever. Upwards of 200, employing several hundred thousand Americans. The same is true on the Indian side: 500-plus US companies here employing well over a million Indians. I only give you these data points to suggest
PRESIDENT OBAMA HAS MADE IT CLEAR THAT THE PAKISTANI LEADERSHIP SHOULD GO AFTER ALL TERRORIST GROUPS
we were able to achieve this at a time when we were still kind of fighting a lot of these trade and bureaucratic fights. Now, we will not get to $500 billion overnight and we will not get there without some work. There also has to be a shared understanding of why that would be good for both countries. And I think we are making progress. As the reforms continue to happen here, I think we will see increased trade and investment. What areas need working on? The GST reform from a central perspective was important. Some of the FTI liberalisations we’ve seen are important. It’s not just sectors opening, though, it’s all those ease-of-doing business factors. Then the areas we have had a big discussion about over the years have been IT, strengthening the intellectual property environment, issues of tax fairness and certainty— legal certainty and contract sanctity. That’s part of the reason we were and are interested in a Bilateral Investment Treaty, so that investors know and companies know how their disputes can be resolved. There are always issues of regulatory burden. And obviously land and labour... perennial issues. The US and India are competing against regional trade blocs, against our trade with other countries, and we’re competing to attract India’s investments because it can go to other destinations as well. So I believe this is a huge and exciting area for both of us. How will the proposed Bilateral Investment Treaty make a difference? Taking a step back, just ask why both sides should want it. It’s ultimately about a structural reform or agreement that will boost investor confidence. So when you ask me how do you reach $500 billion, you do it through knocking on the doors of companies in both countries and saying you should go there, you should go there. But you can also try to make the climate more attractive so that you can mitigate risk, provide certainty and a path forward so that when a company or an investor looks at their investment choices, let’s say just across Asia, and they’re choosing between places where the US has a Bilateral Investment Treaty and where they don’t, not to go to a place they will have some risk because they don’t know, for example in dispute resolution, how those disputes get resolved. The US now describes India as a major defence partner. This earlier was an area where there was no trust. Have we got over the problems of the past? I think the future of our defence cooperation is unlimited. It’s really extraordinary how far we’ve come. I think you know already on the military exercises, India has more exercises with
THE US HAS IN THE LAST SIX YEARS SUPPORTED INDIA’S ACCESSION TO NON-PROLIFERATION REGIMES
the United States than with any other country. On the industry part, we have our DTTI, but we also have our joint ventures. I think people forget that parts of the President’s helicopter are built here in India. Parts of the Apache, the most advanced military combat helicopter in the world, will be made in India. The core principle of being a major defence partner is that we will treat India as if it were one of our closest allies for the purpose of defence cooperation and technology transfer. Now it’s up to both sides to build out exactly what that means in practice. What does that mean in terms of licensing? In terms of codevelopment and co-production? But let me just give you one major example as to why this is so exciting.
We are talking about building frontline fighter aircraft here in India. Not some parts of it, but building the [whole] aircraft here in India. And not only for use by the Indian Air Force, but potentially for export as well. Now that is somewhat groundbreaking. I think that qualifies as major defence partner type of initiative that we haven’t extended our offer to any other nation. It is ensuring that India has the military capabilities to be that net security provider and be able to carry out the kinds of missions required as a defender and protector of the global commons today. There are concerns that if we buy arms from the US, America could use it as leverage against us if they do not agree with us on a conflict situation? Or use it to snoop on us? When we talk about overcoming the hesitations of history, some of these things have been floating around for a long time, and I think there was some suspicion about what these agreements actually do. If one were to actually read the logistics or communications or the geospatial agreement, I think they’d find them to be quite mundane agreements that will ultimately lead to a better and higher level of cooperation and transfer of technology. Now some people said, well, we can’t sign the logistics agreement because that will result in American bases or Americans using our facilities in a time of conflict.
INDIA IS NOT BEING TARGETED ON VISAS. THE VISA FEE HAS GONE UP BUT THERE’S NO FALL IN NUMBER OF VISAS
There’s not a single word in that agreement that would authorise that. And that was made clear in the course of the negotiation. And that’s why I think it’s important to overcome some of these rumours and get down to the actual text. The other area defining the partnership is India’s relations with US visàvis Pakistan. Earlier, it was always hyphenated. Has that changed? I think the US-India relationship stands on its own. And the trajectory that the US-India relationship is on is so strong and so promising in so many areas that we didn’t even talk about yet, from education and travel and consular and science and technology and innovation. Our relationship with Pakistan is an important one also, but one where the objective is to seek a stable and peaceful and democratic Pakistan. And at times in our history, that’s put us in tension with New Delhi. We understand that.
But I think the objective is commonly shared. We want the people of Pakistan to be able to live peacefully, free from attacks of terrorism. To be able to pursue their life’s dreams and ambitions. And we also have concerns we share with the Indian government about cross-border terrorism, safe havens, extremism, and we’ve made that very clear to the Pakistanis. What pressure has the US brought on Pakistan to delegitimise these terror groups, disrupt their activity and curb crossborder terrorism? Look, I think at the highest levels we’ve had this conversation with the Pakistanis. The President has made it very clear that safe havens have to be eliminated. That it’s important
for Pakistanis to go after all terrorist groups that not only threaten within Pakistan but its neighbours as well. There’s been designations of terrorism groups. There’s been a cut-off of funding when steps have not been taken—$300 million was recently withheld because of failure to take action against the Haqqanis. There has been a significant toughening of India’s approach towards Pakistan and Prime Minister Modi spoke of human rights violations in Balochistan. How does the US view these recent developments? Our policy on this front has not changed. It is one that encourages dialogue and cessation of violence, but ultimately an issue for the two parties to resolve, through dialogue. And that’s ultimately a question for the leadership of both countries. For the time, the scope, the manner, the content of those conversations, when they would occur, what’s on the table, where they would occur. How does the US view India’s role in terms of global issues? In the South China Sea, for instance? One of the landmark documents we signed with India in January 2015 was the Joint Strategic Vision for the Asia Pacific. It’s a short document, but it reasserted and upheld some very basic principles. One is upholding the rule of law. Secondly, the peaceful resolution of disputes and living up to international norms. And nowhere is that more important than the South China Sea where it’s important the rule of law be upheld in that region. So I think India’s adherence to the kind of post-World War II order, to international norms and rules, whether in cyber security supporting the multistakeholder model of internet governance and international norms on cyber behaviour, or on upholding the basic rules under the Law of the Sea. And we’ve seen India be just such a leader in this area. In its boundary dispute with Bangladesh. So it can be and has been a critical country in this century that stands up for and advances the rules of behaviour that have been in place in the post-World War II order. During the NSG negotiations, China overtly expressed its opposition to India’s membership. In the past, we had President Bush reportedly call his counterpart and ask him to agree to a waiver for India. There is a feeling the US fell short somehow in persuading China this time. Look, I think you have to go back and remember that President Obama called for India’s accession to the export control regimes including the NSG six years ago, and has been supportive of India’s position since then. And there has been no shortage of effort from the highest levels in Washington and beyond in continuing to support India’s case. Did President Obama make a call to Xi Jinping on this? I don’t want to get into who he did or did not call. I’d just say it was strongly supported at the highest levels. And again, I think we’re on a good track going forward and we’re working closely with our counterparts here at the MEA and across the Indian government to hopefully see a good result.
AS A MAJOR DEFENCE PARTNER, INDIA WILL EVEN MAKE PARTS OF THE US PRESIDENT’S HELICOPTER
There is growing concern that US is tightening visa norms and is targeting Indian business and jobseekers? I don’t think it’s a targeting of India at all. I think what we saw was an increase in the H1B visa fee, but there’s been no decrease in the number of H1B visas issued. I think what we’re talking about is probably a larger question which is not just a US question, which is what to do when domestic industries are under stress, when labour is available in foreign locations at cheaper rates, and that’s the struggle, the economic struggle, I think. We’re not the only ones having it. Certainly Europe has had it, other parts of Asia are trying to deal with it. This is the challenge of globalisation. How do you make it work for everyone? And that’s an ongoing conversation, but it certainly is not about decreasing the role India or Indian workers play with US companies or with the US economy. India cooperated with the US to see the Paris Climate Change Treaty through. How is the US assisting India in meeting the ambitious energy targets it has set? The renewable energy target of 175 gigawatts is the single biggest renewable commitment of any country that’s ever been made in history. We have strongly lined up behind that target. Even before that target was reached, we mobilised about $2.5 billion in capital through our Partnership to Advance Clean Energy. At the recent summit in June, we laid out three new programmes we think will mobilise another $1.4 billion. So that’s just on the funding side. EXIM and OPIC are here in big ways, will continue to be here, especially through the Westinghouse project. I’ve heard this argument before that somehow we’re withholding providing our best technology. It really has more to do with the intellectual property environment. In fact, our companies know what a huge commitment this is, to reach that target. We know it will take a revolution in technology, in financing, and ultimately in economic development when that many people have renewable sources of energy and have it in a clean way. Finally, a personal question. How has it been as the first American of Indian origin to be ambassador to India? Look, it’s a great honour, and I think every time I go back and see my mom’s house or my dad’s village, go back to Punjab, I’m reminded of how life throws you the dice and you don’t know how it will end up. The best thing is to be able to try to make a difference and to try to give some things back to this critically important relationship. If I can help move the dial in some small way, then maybe that will have a real impact for people.