Remarks for the Asia Society
Assistant Secretary, Bureau of Economic and Business Affairs
Thank you. It’s a pleasure to address the Asia Society. As you may know, I spoke to the Asia Society in Los Angeles last week – about the importance of fostering international partnerships between Chinese and American film companies.
My travels on this trip have taken me to China where I attended APEC … to Bangladesh, where I met with leaders in government, the NGO community and the private sector about labor rights … and here in India, where I’ll be addressing a number of business and economic issues …
In most of my conversations – whether we are talking about joint movie ventures between Hollywood and Beijing, or how worker safety can actually increase investment in Dahka’s Ready Made Garment industry – I have invariably returned to the same three things: innovation, entrepreneurship, and investment.
Those are the three things I want to talk about today. And I’m especially glad to talk about them in India – where we have the chance to build a vibrant investment climate for both our private sectors, drive economic growth, and forge our strongest bilateral ties in a generation.
Investment into India not only creates jobs, but generates innovation by bringing expertise and technology to address challenges.
It also benefits both our economies. When U.S. companies invest in India, they gain a better understanding and appreciation of the Indian market and how to do business in India.
They can also tap into the talents of the next generation of Indian engineers and entrepreneurs – being trained in universities across India.
This allows investors to develop and create the next generation of innovative products that can benefit the Indian people and be exported around the globe.
U.S. investment overseas also benefits the U.S. economy by allowing companies to bring profits back to the U.S. and export goods and services to India.
I’m encouraged by the signals that Prime Minister Modi has been sending. In a speech last August, he directed foreign investors to – quote – “Come make in India,” urging them to invest in everything from agriculture to automobiles, and from satellites to submarines.
On his visit to the United States – followed by excited crowds – he met with key investors to reiterate that invitation. And he vowed to reduce bureaucratic inertia and counter the so-called “license raj” – one of India’s biggest impediments to investment.
Companies are already noticing a shift in the tone and demeanor of the Indian civil service. And the numbers are bearing this out.
Foreign institutional investment into India is up 134 per cent over last year’s full-year total, according to the Center for Strategic and International Studies.
And last year foreign direct investment from January through August was $14 billion. This year – over the same period – it is already almost $20 billion, with almost $2.4 billion in U.S. investment since April – this according to the Government of India.
This is movement in the right direction.
But while the U.S. is one of the largest investors in India, and India is an increasingly large investor in the United States, we recognize that this aspect of the relationship has yet to reach its potential.
That’s why it’s so important that we resume and advance our talks on a bilateral investment treaty – or BIT. It would help build investment by supporting openness, transparency, and predictability, and respect for property rights.
Whether it is investing in manufacturing, building infrastructure, developing smart cities, fostering innovation and entrepreneurship, or promoting financial inclusion, the U.S. government and the U.S. private sector stand ready to partner in India’s growth.
And we continue to work with the Government to turn that potential into reality.
When Prime Minister Modi came to U.S., for example, we created a working group to remove barriers to investment in manufacturing in both countries, and to safeguard innovation through the protection of intellectual property rights.
Without intellectual property rights protections, innovation is almost impossible. If an entrepreneur doesn’t know if he or she can profit from their inventions, they won’t invent anything. Or they will move to a country with strong IPR protection and invent there.
These protections are as important to Indians as they are to Americans, and we need to insure that strong IPR protocols are in place in both countries.
I will be meeting this week with representatives from the U.S. and Indian entertainment industry to discuss ways that we can partner to protect creativity and innovation and create increased opportunities for both the U.S. and Indian sectors.
When investors believe that they can make a good rate of return, and entrepreneurs know they can profit from their inventions, the flow of investments will increase. And that will bring capital, technology and expertise. It will create jobs, and generate innovation.
It will support climates for entrepreneurs to build businesses, and help grow economies.
Investment can also bring improvements in environmental quality, workers’ rights and other social goods…
And more of the innovations that don’t only bring prosperity but can change lives, whether we are talking about medical cures or improved technology that makes life more comfortable, or efficient or simply more pleasant.
So far, I’ve spoken about investment in India – and our efforts to create opportunities for American investors and entrepreneurs abroad. But investment doesn’t just flow in one direction.
We want to see more Indian companies investing in the United States – and following in the footsteps of companies such as Essar, Tata, and Dr. Reddy’s Laboratory.
We also recognize the power of building investment through the private sector but local governments in both countries.
So we are working with Indian states, municipalities, and both our private sectors to create smart cities which will help develop further investment.
When Prime Minister Modi delivered that speech I referred to, the symbolism was powerful:
On India’s Independence Day, the first Prime Minister to be born after India’s liberation was talking about his vision to take the country forward.
As he spoke, from India’s iconic Red Fort, his country was sending its first space mission to Mars – the red planet.
That mission was the first to reach Mars on its maiden voyage and the most cost-effective. And it perfectly showcased some of the qualities that any investor or entrepreneur would prize:
An appetite for innovation and economic resourcefulness; and the wherewithal to guarantee success for ambitious undertakings.
The sky’s the limit for what we can achieve – individually or together. By building business-friendly climates in both countries, we can maximize our chances to come up with the next big idea that drives economic growth – or simply makes life better.
We need to hear more stories of innovation from India that benefits not only Indian companies but the public as well.
For example, the Government of India funded Datawind, a Canadian company to develop a tablet that will bring internet access to millions of people in India and around the world.
With U.S. software from Google’s Android operating system, it has the CPU speed and twice as much RAM as the first IPAD but it only costs less than $40.
And Flipkart – an Indian e-commerce company with U.S. financing – already has $1 billion in revenue and employs thousands of employees. It has rapidly expanded from books to a wide range of products including healthcare products for the Indian people.
We hope to see these and other innovations continue to grow, expand and become commercially accessible, so we can say that the U.S. and India are open for business – and for doing business together.