Event Date: 04/26/2007
[Off-Camara Interviewer]: Chris from New Hampshire asks:
Why has it taken so long for the United States to embrace India as a key strategic partner, and what in particular are we doing to strengthen and institutionalize our ties to the world's largest, fastest-developing, English-speaking democracy?
Ambassador Mulford: Well, thank you for that question, Chris. I think it's important to look at the history of the relationship to understand this question because India became an independent nation in 1947 and embarked on a course of a heavily managed socialist-style economy. It was a leader of the Nonaligned Movement. It was an economy rather insulated by virtue of high tariffs and restrictions on foreign direct investment.
And it wasn't until 1991 that India itself began to transform into a country that wanted to become more clearly part of the world, and it also began to change its economy. In other words, it made reforms, it brought down tariffs, it brought down barriers to foreign direct investment, carried out other reforms.
And it became much more a country that had major things in common with the United States, and therefore the relationship, which was always good but was a bit of an up and down relationship, really began to build and develop during the course of the 1990s as India itself decided that it wanted to have a relationship of strategic importance with the world's major superpower and it wanted to change its economy to enhance growth, in part to lift more people out of poverty. And it's really that substantial change that has generated this huge development that you now see today between the two countries.
[Off-Camara Interviewer]: Dieter from Germany has a good follow-up.
He asks, In what respect do you think the United States will profit from the development in India the most? What areas will America develop and profit the most? Ambassador Mulford: Well, I think that, again, you have to look at this relationship, Dieter, as an important strategic relationship of two great democracies located half way around the world from each other in terms of time, space, who are in a way dedicated to many of the same fundamental values and principles of democracy, rule of law, free press, diversity, a secular government, individual liberty and a free economy with a large private sector.
And it is this basis, really, that has laid the groundwork for the kind of huge growth in the relationship that takes place today. So the answer, What does the U.S. get out of it, I think it's better to say, What do we both get out of it? And it is a huge range of benefits ranging from health, science and technology, space, military relations, economics, politics, education, agriculture. And in all these areas, both countries are very, very active with each other and we are seeing the building of what I would call a comprehensive relationship.
[Off-Camara Interviewer]: Another question. This one is from Martin from Germany.
It follows up. It says, Many in India have been on good terms with the United States and have always been keen on their children studying in the U.S. How much has the booming Indian economy influenced the attitudes of the middle class and other parts of Indian society towards the USA in general?
Ambassador Mulford: Well, I think the growth of the middle class, which is estimated today to be about 300 million people and at a 9 percent growth rate, we estimate that there are sort of 30 to 40 million new entrants into the middle class each year, so this is a huge impetus in India's development. And mainly, these people are interested in a better life for their families. Many of them are very, very interested in good education for their children and many of them send children to the United States. We have 75,000 or so Indian students in America today, the largest number of foreign students from any other country.
And the private sector is also being enhanced by the activities of middle class peoples -- consumers, investors, businessmen and so on. And so this group is really driving India's development at a sort of 8 to 9 percent growth rate, and the United States has a lot in common with these people so this is really part of an important basis of the relationship.
[Off-Camara Interviewer]: Shahid from India asks about the civil nuclear agreement and he asks,
Was it really necessary to hinge the future of India-U.S. relations on this nuclear deal?
Ambassador Mulford: Well, Shahid, I think that it isn't really accurate to say that the future is hinged on this relationship. This initiative was taken by the President as a reflection of our confidence in India, our desire to help them achieve their objective of becoming a world power by addressing some of the major constraints that are imposed on India's development, one of which is energy. The civil nuclear agreement would end 30-some years of isolation. It would normalize civil nuclear relations between the two countries and it would cause to be born in India a major civil nuclear industry base, all of which are of great importance to us.
The fact that it's important to India is very, very clear. It's regarded here as the most important diplomatic initiative of the last 50 years and it's India very much wishes to end its isolation and to merge into the world's civil nuclear industry. So it's a key element in the relationship, but it is not a question of the relationship being hinged on that. I've already answered a question earlier in which I explained the breadth and diversity of this relationship. So yes, civil nuclear is important, but it isn't the be-all and the end-all of the relationship.
[Off-Camara Interviewer]: A follow-up on that from Lieselotte asks,
What effect will President Bush's efforts to secure a civilian nuclear agreement with India have on U.S. relations with other countries in the region, including Pakistan?
Ambassador Mulford: Well, that question is a question that can be asked on a lot of other areas of interest, not just civil nuclear. And the important point to make in the answer to that is that the United States has moved in the past few years to a position that says we have a major bilateral relationship with India, it is a freestanding relationship with its own vision of the future and that vision is a global vision.
We have relationships with other countries, Pakistan for one, but other countries. Those relationships are also freestanding bilateral relationships. They're important, but they're different and they have a different vision of the future than the vision than we have with India. So there is a differentiation in U.S. foreign policy between countries and it is appropriate to have such a differentiation.
In the case of civil nuclear, the case is very clear: India needs this form of energy, first of all; India is a democracy and India has a very, very high-quality record in the nonproliferation area, all of which helps contribute to this initiative the United States has undertaken. That is not the case for, for example, Pakistan, which is not a democracy and has not followed a good nonproliferation record. So it's a completely different situation and needs to be seen that way.
[Off-Camara Interviewer]:: A question from Illinois from David. David from Illinois asks,
In recent years, the United States has seen a large increase in outsourcing of business services by our major corporations. I see this as a result, in part, by globalization. From an economic standpoint, does the United States see this as a good thing?
Ambassador Mulford: Well, David, first of all, we not only share the same name, but Illinois happens to be my home state, so you're a lucky man to be in Illinois.
The outsourcing issue is one that is not really terribly well understood. For example, we've done research into exactly how many jobs have been outsourced to India, and frankly the number is really not very large when you compare it to the total number of jobs created every month, say, in the United States.
The second thing is that outsourcing is a natural part of today's global economy and the way it functions. It isn't just a U.S.-India phenomenon; it's a cross-border phenomenon all over the world that's taking place with the diversification of production and work that's going on in the world.
Thirdly, for every dollar that is outsourced, research shows that the United States gains something like a $1.3 5 benefit. So from the standpoint of the overall economic picture, this is of a benefit to the United States even though we are concerned about the individuals who may lose jobs or whose suffering may be associated with jobs that are moved and communities are affected by this.
But basically, it's a part of the natural growth of the kind of global economy that we are seeing today. And you can look at it also as a phenomenon that assists U.S. companies in their ability to remain profitable, grow, take on new employees in the United States as they improve their earnings, pay dividends to their shareholders and generally improve their overall condition because they are engaged in something that is reducing expenses and making them more profitable, which is the idea of a company and its duty to its shareholders.
[Off-Camara Interviewer]: Another economic question. This one is from India.
Why does the U.S. put pressure on India to open up its insurance sector, for example, to 100 percent FDI, foreign direct investment?
Ambassador Mulford: Well, let's drop the word pressure and talk about the issue. India itself decided some years ago that it wanted to promote an insurance industry, a perfectly normal part of a growing and sophisticated economy. And there's huge demand for insurance coverage in India.
At that time, they passed legislation that permitted a 26 percent level of investment by a foreign insurance company and they said at the time that they intended to raise that to 49 percent in the future. And people have been pressing for India to meet that announced goal sooner rather than later. Politically, it's a controversial issue among some quarters in India, but the key point here is that if it were raised there would be more capital investment in insurance, the industry would grow more rapidly and expand, give more coverage; it would have bigger reserves.
And by the way, insurance companies and pension funds, as you probably know in the United States, are big investors in long-term obligations. So an insurance company or a pension fund would be a natural investor in large-scale, long-term capital infrastructure projects, which India is desperate to develop and it does not have a long-term capital market today. So insurance development would help promote that macroeconomic transformation in India's capital markets, which in turn would help India finance infrastructure.
So I think it's an extremely positive business issue, but there are people, especially in the left side of government, who are opposed to foreign capital whether it's in a bank or an insurance company expanding into the Indian economy, and then those people become adversaries of this proposal.
[Off-Camara Interviewer]: We have another question from Germany, from Elfriede in Germany. A broader question.
How much does India's status as a vital and stable democracy influence its relations with the United States?
Ambassador Mulford: Elfriede, I think it's a vital issue. As I said a little earlier, we have a very, very important relationship because we share so many similar values. We are democracies and our democracies have many characteristics in common. We are both engaged in personal freedom, diversity, rule of law, free press, active politics, individual freedoms, religious freedom -- in other words, secular government, and a court system that is admired but works, admittedly slowly sometimes in India, but is a credible court system.
So these are very, very important attributes and they share -- we share these and they bring us together. We also have a people-to-people basis for the relationship which also underpins this, and I think it is that richness in terms of the shared values that make the U.S.-India relationship such a strong and growing relationship today.
[Off-Camara Interviewer]: We have a question on U.S.-India military relations. And again, from Shahid from India, who puts it this way:
Why is the U.S. putting pressure on India to buy F-16 fighter planes? Isn't the U.S. using its military cooperation agreement and strategic partnership to demand that India buy U.S. fighter planes for interoperability and facilitation of joint exercises?
Ambassador Mulford: Well, what's important here is that the U.S.-Indian military relationship is like everything else; it's growing very rapidly. Between all the services we have numerous joint exercises, we exchange personnel with visits back and forth, and there's an increasing interest in India in the acquisition of U.S. defense products, for which there's a relatively weak track record. It is India which is interested in the F-16s and F-18s as it looks at the rehabilitation and replacement of its fighter aircraft force.
The United States produces absolute top technology. If the Indians decide they want to seriously consider these airplanes, they will find that if they do a life cycle costing of this aircraft, nobody competes with it in terms of efficiency, quality of technology, et cetera.
So we feel we're going to be very competitive and we're being invited by the Indians to participate in this tender offer. And what's clear is that the Indians want to diversify their sources of military acquisition and, not surprisingly I'm sure to you, they place a very high premium on high-tech, and America's high-tech is the best. So they're seriously looking at this aircraft as a way to go for the future.
[Off-Camara Interviewer]: On another question in another area, Dan from North Dakota writes,
What role do you believe the United States should play in the Kashmir dispute?
Well, Dan, the role that we should play is the role that we are playing, which is to encourage both sides to make progress in their peace initiative, but at the same time to avoid on the part of the United States placing ourselves in the middle of that process as the referee or the manager, because that I think would be regarded by both sides as too aggressive, too assertive. So there we are, both pushing both sides to make whatever progress they can make but retaining that sense of distance from the middle of the exercise. And what we hope is that over time they will continue to resolve issues and gradually work their way to the point where they can resolve the big issues that are involved. And they're making pretty good progress, I think.
[Off-Camara Interviewer]: From Virginia, Anjan in Virginia writes,
What is the latest on the new consulate in Hyderabad? When will it be operational?
The latest on that, the President, as you may know, in March of '06 announced that we would open a consulate in Hyderabad, which is a very, very important Indian city. And we plan now -- we've got the arrangements in place to begin work on renovating the building that we've provided by the state government there in Hyderabad, and I would guess that sometime towards the end of 2008 that consulate would be open for business.
Here's a question from a sports fan in India, Nitin:
Is any work being done to bring major American sports like baseball and the NBA to India?
Well, baseball is a really good prospect in India, which plays a lot of cricket, but what we find, because my wife and I both support and sponsor a little league team here at the embassy which includes participation by American kids as well as Indian kids and others, and the Indian kids, as you watch a season unfold, begin sort of swinging a bit like a cricket bat, but before long they really pick the game up and they've very skilled at the game because they have good hand-to-eye sort of motions and ball sense.
I think what we'll see, because the Major League Baseball organization is interested in India, they are trying to promote development of baseball, there are parts of India where baseball is played. And I was surprised to find in this little league that there are more senior leagues in India which actually play in different cities and have their own tournaments. It's at Chandigarh this year. So yes, it's a developing sport and I've watched some of those seniors play and they're just extremely good.
The other sport that is receiving attention from America today is the NBA, which has been here exploring, examining, researching, hoping to sponsor development. And I think it's important to remember in a country of 1.1 billion people you're bound to find outstanding athletes. It's just a question of how you find them and develop them. I always like to say there's at least 10 or 15 young people in India who can probably break 10 seconds in the 100 meters; you just have to find them. And these organizations are out to develop these things and try to find these kinds of athletes.
[Off-Camara Interviewer]: Eileen from New York.
She writes that she'll be traveling to India in October for four weeks and would like to know what are some helpful tips that will make her stay safe and enjoyable.
Well, the best recommendation I can make to her is to contact the State website, which is travel.state.gov, and in there you will find a comprehensive guide to travel in India and how to get around, what the safe ways of travel are, et cetera. That's what I would recommend.
[Off-Camara Interviewer]: Well, on a couple of personal questions, one, Shaf from India asks,
What are some of the favorite places that you've visited in India?
Ambassador Mulford: Well, India is a fascinating, diverse and beautiful, colorful, dynamic country, so everywhere you go in India turns out to be interesting. My wife and I have been in virtually every region of India and we've been well received and we are fascinated by what we've seen.
But if I had to pick a few places that have outstanding attraction, I would say that of course Rajasthan is one, Kerala is beautiful, very charming, very laid back area. I found Varanasi fascinating, Hyderabad. Mumbai is one of the great cities in the world to develop -- to visit. And of course, the northern area where the foothills of the Himalayas are located is also beautiful and exciting.
On a related question, for the time you've been -- how do you like the food in India?
Well, the food in India is delicious, and surprisingly it varies quite considerably from one region to another. So southern Indian food, northern Indian food; different areas have different menus and recipes. It is, by and large, extremely tasty. Sometimes it takes a little time to get used to the spiciness of the food, but I've always liked that kind of food and therefore it's exciting and pleasurable to dine out in India.
[Off-Camara Interviewer]: Thank you, sir.
Thank you very much.