'Indo-US economic cooperation very positive; military cooperation very high'

THE INDO-US relations-both political and economic-is strengthening by the day. The economic cooperation is very positive with trade being at the highest level and military cooperation is very high with joint exercises and other activities going on, says Mr. Sanjay Puri, Executive Director of US India Political Action Committee (USINPAC), a leading political action committee for Indian Americans. USINPAC's mission, among others, is to strengthen US-India bilateral relations in defense, trade, and business. In an wide-ranging interview- from Indo-Pak relations to foreign investment in India- Mr. Puri told Amitabha Sen that "there is an awareness from both the people in the US and India recognizing that the two countries share so much in common i.e. shared values: democracy, capitalism, rule of law and free markets."

AS.  How you rate the Indo-US bilateral relations -both political and economic-being nurtured and developed by the Bush Administration compared with his predecessors?

SP: The relationship is as good as it has ever been from a Economic and political perspective. Economic Cooperation is very positive with trade being at the highest level, military cooperation is very high with joint exercises and other activities going on and politically there is a lot going on with constant group of visitors coming in from US i.e. political leaders who are visiting India.

AS:  India's External Affairs policy has all along been considered by international experts as balanced one. Do you find anything special that differentiates the Vajpyee government from others in the past?

SP: I think the world has changed and also there is an awareness from both the people in the US and India recognizing that the two countries share so much in common i.e. shared values: democracy, capitalism, rule of law, free markets so that there is a general convergence in the two countries of peoples desire to collaborate and work together and gain from each other economically and culturally.

AS: To what extent, you feel, the Pakistan factor influences US bilateral policy for India? Any pulls or strings from the White House that act as quid pro quo for expanding trade and economic relations with India?

SP: So far the US policy has always been to equate Pakistan with India but I think that is now beginning to change with India and Pakistan getting de coupled and India's strategic relationship with US continuing to grow on the economic and defence front. The relationship is bound to grow leaps and bounds since there is so much to be gained by US sharing in India's economic growth and India sharing in US expertise and markets in technology and defence and also India asserting itself regionally.

AS:  Few weeks back, at a seminar in New Delhi former Pak Prime Minister, Ms Benazir Bhutto in the perspective of strained Indo-Pak relations said that proper 'conflict management' can ensure better trade and economic relations to grow pending major political issues. Do you think the US follows the same principle in its foreign policy towards India and in some cases occasionally shows softer policy towards Pakistan while considering financial aids despite knowing the fact the terrorism is flourishing in some parts of that country (recent attacks on Pak President at short intervals vindicated India's allegation, not to talk about attacks on J&K)?

SP:  Pakistan has been a strategic ally of the United States in the war on terror. Due to its location and other factors it is very important for the US to have a strong and democratic Pakistan in this region and that is also the case for India to have a strong and democratic Pakistan. The financial aid to Pakistan is partly a reward for its support on the war on terror and also to placate the Pakistani people that they got something out of the issue of changing their Policy towards Taliban 360 degrees.

AS:  What is USINPAC's stand on Indian industry's getting a fair share in Iraq reconstruction activities? Did you ever take it up with the Bush Administration? If so, What's the Administration's response?

SP:  USINIPAC works on issues that are important to the Indian American Community and USINPAC has worked hard to see how the Indian American community can get a pie of the reconstruction of Iraq and you will see our has tried to see how the Indian American community participate in the reconstruction of Iraq. We had a major reception for the Chairman of the Small Business Committee and other members of Congress who had just come back from Iraq and how the Indian American community could participate in the reconstruction. We are following it up with other individual meetings.

AS:  Could you identify the areas that offer greater scope for Indian companies to expand and invest more in the US?

SP:  USINPAC is a Political Action Committee that works on issues that are important to Indian American and obviously two way trade is an issue that we care about so we would say that Health Care area i.e. hospitals, entertainment, Human Resources and Financial Services firms.

AS:  After a decade of speed and momentum, India's economic reforms have somewhat slowed down due to variety of reasons including political outcries among the ruling allies and opposition on privatizing public sector units. To what extent this has affected the sentiments of the US companies or companies controlled by Indian Americans who would like to enter Indian market and which are the areas that offers vast scope for US investments?

SP:  As part of the USINPAC trade and policy area we strongly believe that privatisation is good for the economy, the US is the best example and you can see it in India by the experience you have in travelling by Jet Airways vs Indian Airlines.

Obviously the more the Indian Public Sector units privatise, the more they are going to see investments from Foreign Director investments and other collaborations and also transfer of technology and better economic relationships with US and other countries, but obviously a country as large as Indian needs time to make these major changes.

AS:  Does USINPAC consider privatization of even profit-making Indian PSUs a right policy? Do your organisation think that the public sector concept should be abolished totally? If not, which are the areas, you think, should be under state control?

SP: Those are decisions to be made by the Indian Government and USINPAC does not have any policy positions on this.

AS:  Infrastructure, Financial sector, Healthcare, Civil Aviation are some of the most potential sectors that are gradually opening up for private sector and foreign investments in India. What is the prospect of US investment in these sectors?

SP:  We think they are excellent since the US is a leader in many of these sectors.

AS:  Information Technology is gradually becoming India's signature tune as it seeks to consolidate its position as an IT super power in the world. Will you throw some light on the possible expansion of Indo-US IT collaboration?

SP: This relationship will continue to expand especially as the economy expands and also since India is now not only considered a destination for cheap labor but for quality IT solutions.

AS:  What is USINPAC's stand on Outsourcing to India? To what extent USINPAC can help Indian firms including small and medium IT companies, in this respect?

SP:  As mentioned to you before we focus on issues that are important to Indian Americans and this is an economic issue that needs to be dealt with by the large companies that are currently outsourcing work globally and Indian happens to be one of the destinations they are using to stay competitive in this global marketplace.

AS:  Last but not least. Despite country's political stability, a very strong foundation of Democracy, investor-friendly policy and approach of the Indian government, the flow of foreign direct investment from different countries including the US into India is significantly lower than China. For example, the size and growth of the US investments in China are no match for what have been invested in India? What is the primary reason for such huge gap between the countries and what is the USINPAC prescription for both the US and Indian governments to boost it up sizably in coming years?

SP:  Trade needs to be both ways and since the Indian economy is growing they need to do more to open up to opportunities for US firms (small/medium) in many areas that they have expertise: environmental solutions, technology, health care etc. Also, US should consider participating in the Defence sector in India which is one of the largest in the World.

January 13, 2004

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