Tag Archives: India

India-US Relations Blog

India has a vital role to play in Afghanistan’s stability

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Indian American Congressman Ami Bera commented about India’s critical role in fostering peace and stability in Afghanistan. Bera urged Indian and U.S. investors to build on the fast-expanding canvas of opportunities in the two economies. USINPAC recently organized a conference on Capitol Hill on Afghanistan which brought US, Indian and Afghan leaders on a common platform. BJP President Rajnath Singh, Congressmen Engel, Crowley and Royce along with other prominent speakers discussed the issue in details.  For more details, click http://tinyurl.com/ojdsl2t

 

India-US Relations Blog

US LNG Exports to India

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Over the past year, the surplus production of LNG in the US has given impetus to the prospect of LNG exports to strategic allies. On the other hand, the constantly growing demand for LNG in India has prompted the Indian ambassador to the US, Ms Nirupama Rao, to vocally endorse LNG trade between the two countries.

While crude oil accounts for 32% of India’s energy generation, India imports 74% of the crude oil and is largely dependent on the politically unstable Middle-East for the environmentally unfavorable fuel. Of the non-fossil fuel industries, the nuclear industry is marred by public protests and limited international collaboration due to the Indian Nuclear Liability Bill and India’s reluctance to sign the Nuclear Proliferation Treaty (NPT). While wind energy and solar energy generation is increasing steadily, these renewable sources cannot power base loads and are still not economically competitive for widespread penetration into the energy market.

Natural gas is soon emerging as a highly preferred fuel due to its environmentally benign nature, high efficiency, cost effectiveness, and suitability to serve base and peak loads. Despite very limited indigenous gas reserves, The Indian ministry of Petroleum and Natural gas has termed natural gas as the ‘Fuel of the 21st century’. This sentiment has also been echoed by the other emerging economies in Asia.

Recognizing this trend, The Chairman of the U.S. subcommittee on Terrorism, Non-Proliferation and Trade (TNT), Mr. Ted Poe, held a congressional hearing on the issue of U.S. LNG exports on April 25, 2013 in Washington DC. Congressman Poe acknowledged the significant potential for U.S. LNG exports and laid specific emphasis on exports to India, a key strategic ally. He urged the DOE to approve licenses of companies wanting to export LNG to non-FTA countries including India. Congressman Poe’s views were unanimously endorsed by all the speakers who favorably testified about the viability of U.S. LNG exports to allies such as India. They stated that more the LNG exports greater would be the economic benefits to the US.

A noted bipartisan organization on the Capitol Hill, The United States India Political Action Committee (USINPAC), was an active participant at this hearing and the organization’s President, Mr. Sanjay Puri, hailed Congressman Poe’s support for US LNG exports to India. The Chief Coordinator – Hill Outreach of USINPAC, Mr. Rahul Srinivasan, welcomed the initiative and said “The deal will pave the way for an economically and politically beneficial relationship between the two largest democracies in the world that share many common values”.

Mr. Srinivasan’s views were largely shared by the other attendees at the hearing who discussed the economic and political ramifications of the deal. The price for natural gas in the U.S. is approximately $3.2/MMBTU. The corresponding price in India ranges from $4.2/MMBtu to $17/ MMBTU and is subject to volatility. From a supply standpoint, the prices in the U.S. are extremely low because of surplus production exceeding demand. Opening up the export market to India will serve two major benefits:

a. Exporting natural gas to India will bring long-term and sustained economic profits. The trade deal will also increase drilling activity of natural gas within the U.S. to satiate the local U.S. market and will thus increase the number of jobs.

b. India would no longer need to consider importing gas from Iran and other politically unstable countries in the Middle-East. The trade deal will further cement Indo-US economic and political ties and significantly strengthen the US’s geopolitical standing in Asia and the Middle-East. Though the cost of shipping natural gas from USA rather than from the Gulf is much higher, this high cost will be offset by the long-term benefits of sustainable trade and steady country to country relations

Expectedly, U.S. LNG exports have drawn skepticism from certain quarters. Some lawmakers and industry leaders are concerned that export of LNG will lead to an increase in the price of domestic LNG and prompt further drilling and fracking unfavorable to the environment. Allaying these concerns, energy experts from various think tanks have affirmed that LNG exports will very marginally raise the domestic price and thus minimally impact local industries dependent on cheap energy. Also, natural gas is far more environmentally benign than coal as a base-load fuel. Increase in its production to offset exports will create more jobs without significantly degrading the environment. These experts have concurred that the pros of U.S. LNG exports significantly outweigh the cons.

In recent developments, U.S. companies have signed two long term deals with India for export of LNG. GAIL, India has signed a 20 year agreement with Dominion Resources, Inc to use half of the capacity (4.6 million metric tons) Dominion plans to add to a LNG terminal in Maryland. Indian state-run Petronet LNG Ltd. has signed a preliminary agreement with U.S.-based United LNG, LP to purchase around 4 million metric tons a year of liquefied natural gas for 20 years. These deals are dependent on approval from the U.S. DOE since India and USA do not share a free trade agreement (FTA).

Political expediency on the Capitol Hill will help spur many such energy deals to fuel the engine of economic and political cooperation between India and the US.

Defence And Strategic Affairs Blog

Investing In Security: Developing US-India Defense Relations

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Once unthinkable to a level of being a taboo subject during the cold war, US-India military relations have grown exponentially since the signing of a new Defense framework agreement in 2005.  Annual bilateral training exercises (known as Yudh Abhyas involving India’s 99th Mountain Brigade and the American 82nd Airborne Division’s 1st Brigade) have been warmly received and annual US sales of military equipment to India now top $8 billion.  Given ongoing and serious security challenges in the region, fostering even more efficient and effective US-India defense ties is a critical bilateral priority with significant potential yet to be tapped.

American Deputy Defense Secretary Ashton Carter made a visit to New Delhi a year ago and stressed the urgency of exploring bilateral missile defense cooperation.  Ongoing debate over FDI liberalization of India’s defense sector has dominated dialogue since, but consultations on joint co-development of military systems could be the breakthrough that helps generate considerably more trade and boost U.S. export revenue.

On purely strategic grounds, India must show greater resolve in developing its ballistic missile defense capabilities.  Its neighbors China and Pakistan possess formidable ballistic and cruise missile forces.  Internal political and ideological concerns within the government over becoming more interlinked with the United States on defense matters over traditional suppliers like Russia, and how it affects India’s strategic authority, will have to be addressed in a more serious and urgent manner.

Given that Pakistan has refused to commit to a no-first-use policy and grave international concerns over the safety and security of sensitive Pakistani military equipment, the United States should make every effort to help India develop missile defense technology and overcome compulsions to do so purely indigenously.  The American experience in South Asia over the past ten years have exposed a rather pressing need for The United States to find and develop more stable and reliable strategic partners and stronger, more co-operative guarantors of regional stability.  If longstanding biases can be overcome, it will considerably improve the security situation in Asia and further one of the critical bilateral relationships in the geopolitical sphere.

 

India-US Relations Blog

Sanjay Puri’s testimony before the House Committee on Foreign Affairs

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CONGRESSIONAL TESTIMONY
THE REBALANCE TO ASIA: WHY SOUTH ASIA MATTERS
Testimony by Mr. Sanjay Puri
President and CEO
Alliance for U.S. India Business (AUSIB)
House Committee on Foreign Affairs
Subcommittee on Asia and the Pacific
March 13, 2013
Alliance for U.S.-India Business (AUSIB)
Testimony of Sanjay Puri
Founder and Chief Executive Officer
Alliance for U.S.-India Business (AUSIB)
Before the House Committee on Foreign Affairs
Subcommittee on Asia and the Pacific
“The Rebalance to Asia: Why South Asia Matters (Part II)
Wednesday, March 13, 2013

Mr. Chairman, Ranking Member, and members of the Subcommittee:

Thank you very much for the opportunity to testify before you today.

From energy security to defense cooperation to bolstering our economic ties and increasing opportunities for high-skilled workers to come to the U.S. or go to India, there are serious obstacles facing the U.S. as we re-rebalance to Asia. However, I believe our mutual interests and shared values can get us where we need to be if the U.S. is committed to deepening the U.S.- India partnership which is one of the most defining of the 21st century.

For purposes of this hearing, I will leave it to others to delve into counterterrorism and intelligence cooperation, military-to-military exchanges and defense trade. My objective is to focus on four broad issues which deserve our consideration.

The four are:
1) Enhanced education collaboration which can change the dynamics of this relationship
2) STEM teacher exchange which can be a game changer for the U.S.
3) The need to allow exports of natural gas to an energy starved India
4) Why we should look beyond New Delhi to different states in India

Enhance Education Collaboration: A Hindu proverb states that you can change a nation through education. I am a firm believer in this proverb and I think it holds a key for changing U.S.-India relations. For all the short-term fixes we might talk about today, I believe education is the long-term solution which is required for the U.S.-India partnership to thrive.
The Alliance for US-India Business (AUSIB) – a not-for-profit trade organization – has been at the forefront of enhancing dialogue between both countries to create opportunities for building higher quality education because we believe that building global partnerships between U.S. and Indian universities will strengthen the bonds between our two nations. Some of the top CEO’s and policy leaders in India today are educated from U.S. Universities. They take with them the knowledge, values and experiences of the United States. They take back the generosity of the American people. This automatically creates economic and cultural bridges between the two countries. It is not a coincidence that Indian companies, led by U.S. educated CEO’s, are much more active in the U.S.-India economic relationship.

Students from India form the second largest group coming to the U.S. for higher education. But demand for higher education in India is also increasing. The Indian Higher Education sector is rising to meet global benchmarks although further efforts are needed to enhance the accessibility, funding and the quality of higher education in the country. India needs at least 500 Universities and 33,000 more colleges in the next 8 years. This alone is a $50 Billion market. India also has a great need for vocational and technical institutes which is another $2 Billion market opportunity.

Where will this additional capacity come from? If it comes from Indian universities partnering with universities and colleges in the States you represent, I believe we will be on our way to making the kind of difference that needs to be made. Through AUSIB EduNext, a higher education initiative which mobilizes organizations and drives tangible results to empower and make educational institutes more capable and future ready for purposes of preserving and promoting the values that India and the U.S. share, we have created a platform for Indian Colleges/Universities to interact and establish long term relationships with visiting U.S. universities. We focus our efforts in the fields of medicine, pharmacy, engineering, business, hotel management, energy, technology and agriculture.

Our results have led to student and faculty exchanges, joint R&D and we have created an online platform that academics on both sides can use to exchange best practices. We have hosted two of the largest U.S.-India education conclaves in 2011 and 2013 which were attended by over 100 education and policy leaders from the U.S. and over 1,000 from India. All three Provosts of Public Institutions in Iowa were represented at the highest level at this year’s conclave besides other Universities.

Governors, Members of Congress from India and the U.S., University Presidents, Provosts, Chancellors, Deans, Department Heads and senior faculty have participated in AUSIB- led delegations and we encourage universities in your district to collaborate with us or the Indian Higher Education sector so that together we can promote the highest standards of education, value systems and governance. All of our conclaves have had a strong corporate participation from the U.S. and India and I believe it is important for Universities to understand what kind of educational capability that companies need and also for companies to form a Public-Private partnership model with the Universities.

Create a STEM teacher exchange program: The second point I would make is regarding STEM education. The United States has a tremendous shortage of STEM teachers at the K-12 level. It is especially very acute in rural, inner city and remote areas. How can we expect our kids to have strong science, math skills when they do not have good teachers? India has a tremendous pool of science and math experts that also speak English. We should consider a specialized short term program that qualifies trains and brings these teachers over to the U.S. for a short duration so that we can create our own pool of STEM experts for the future. AUSIB is currently working with several states to establish a pilot program.

Allow exports of gas to an energy starved India: Currently India competes with China and Japan for buying LNG from Qatar and Australia. Generally it ends up on the short end of the stick as the growing appetite by China has made China much more aggressive. The U.S. only exports Gas to FTA countries and since India is not it needs approval. If the U.S. can find a way to have an economically viable and environmentally clear mechanism to export gas to India it would do three things: increase economic opportunity in the U.S. through exports, reduce India’s energy dependence on the Middle East and thirdly build a more strategic relationship with India given the country’s tremendous need for energy independence.

Look beyond New Delhi outward to various dynamic states in India: As India has entered a period of coalition politics, the states are much more assertive and powerful. The U.S. should build strong economic and cultural ties with these states since they will get away from the policy paralysis that sometimes affects New Delhi. AUSIB just took a delegation to the state of Punjab where the Chief Minister wants to start a Farmer to Farmer exchange with the U.S. since his state is an agriculture state and he wants to learn best practices from U.S. farmers.

There are several dynamic states in India like Maharashtra, Gujarat, Andhra Pradesh, Tamil Naidu that we should engage with. I would like to make a point about the U.S. relationship with the State of Gujarat and especially its democratically elected Chief Minister Narendra Modi. His state is one of the most economically dynamic and has attracted a lot of investments from U.S. companies like Ford and GM. I have participated with other delegates from around the world at one of the premier economic summits in India hosted by the State of Gujarat called Vibrant Gujarat. However, the U.S. Government has boycotted him. While all of us stand for human rights and deplore any violation, the fact remains that after ten years of investigation, India’s Supreme Court has found no evidence against CM Modi regarding the 2002 Gujarat riots and he has been elected democratically thrice, representing more than 60 million constituents. Therefore, in my opinion, it is time for the U.S. to begin the process of engagement with CM Modi.

I thank you for your time and for holding this important hearing, and I look forward to answering your questions.

To download the PDF version of this testimony, click SanjayPuri_testimony.

Check out the video of the testimony here.

US Elections 2012

Obama or Romney: Who’s the man for India?

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Guest blog by Madhu Nair

Many would say it hardly matters considering the Presidential debates never saw India figure even once. In just about four days the war will come to an end and the world will be introduced to the new President. Will it be Obama or Romney is a question better left for time and the voters to answer.

For both the candidates it’s never been an easy walk so far. Romney has had his share of issues. His handling of personal taxes, his association with Bain Capital, the unfortunately leaked video, his lack of clarity on foreign affairs and the frequent bloopers had Team Obama label him as a plutocrat who could be anybody but the President. Obama too has fallen short of being given a definite second term. He has already drawn flak for his inability to reduce unemployment. A lingering economy, a fragile market, his mishandling of the Libya and Syria crisis and the failed promises made on hope and change seems to have the odds against him.

So what’s the mood in India? Though the election result does not appear to give sleepless nights to the biggies in Delhi, there is a certain degree of excitement keeping in mind the amount of importance a President of the United States has in the world. Manasi Kakatkar, a Master in International Security and Economic Policy from the University of Maryland says, “Obama has apparently slighted the Indians both by not mentioning them enough and then mentioning them only in reference to reducing outsourcing of work. But from a long term perspective, a second Obama Presidency will be beneficial to India both economically and geo-strategically. Obama holds more promise when it comes to dealing strictly with Pakistan and terrorism emanating from there. Economically as well, he is on the right track to securing a strong economic future for the US, which consequently means better trade and economic gains for India in the long run.”

Shakti Shetty of Mid-Day too seems to echo the same sentiment though he maintains that the election results would not bother India much. “Going by the popular opinion, Obama turned out to be quite tepid compared to the bonhomie his Republican predecessor helped create. And there was always noise on the outsourcing front which obviously hurt the Indian ITES sector. On the brighter side, Obama reached out to the public during his celebrated visit, including the Parliament. But the critics always maintained that Obama provided more lip service than needed. He didn’t get too much time to express his admiration for India. At least not in practical terms. Romney may seem like a safer bet but he doesn’t have any precedent and that might work in his favor. Maybe it won’t. After all, he could have the beginner’s luck if he wins the ultimate poll.”

The view further becomes a bit of a personal juggernaut when it comes to the popular Common Man of India. Shybu Khan, a keen observer of US-India relations likes to keep things close to his heart. He says, “I would be unfruitful to think that the American presidential elections won’t affect us, and I am certainly not doing that, but the first challenge I encountered was deciding on a favorite, both for practical as well as selfish reasons.” He further elaborates, “Mitt Romney seems like a good man with good ideas and offers an alternative to what Barack Obama has expressed thus far – and that is a good thing. But in a world that we live in today, continuity and experience edges out flamboyance and experimentation. Storm Sandy – if handled adeptly — could act as a positive wave that convinces the voters and allows Obama his full term to truly perform and hopefully say, “Yes, he did.”

So the general view still tries to balance itself between the promising Democrat and the ambitious Republican. With the recent polls showing a tough contest between the two the game is evenly poised. The candidates have fought with fervor and have openly ballyhooed each other with their campaigns terming each one as regressive and siding with the bad and the evil. History says that U.S. elections has mattered when it came to worldly affairs and there is no way it would choose to go otherwise – at least in the near future. What we really need is a leader who in principle is enterprising, human and respects the future of every man and woman. For now, India can only keep their fingers crossed and trust the Americans to choose the best.

Disclaimer: All views expressed in this article are those of the author and do not necessarily represent the views of USINPAC.