Background Briefing in Ahmedabad, India

Special Briefing
Senior State Department Official
Ahmedabad, India
January 11, 2015

MODERATOR: Okay. So for the purpose of the transcript, this is on background for attribution to a Senior State Department Official. And what we thought we'd do, just since [Senior State Department Official] is here, which is an opportunity, is talk a little bit about the economic partnership and relationship with India, and you all had many questions about that yesterday and it's sort of an interesting opportunity moving forward. So it's not announcing news, but still great to chat about it. Anyway, so I'll turn it over to you.

SENIOR STATE DEPARTMENT OFFICIAL: Well, I think it's clear to everybody that the prime minister is a visionary leader, and it's so exciting when you think about the prospects that we have here for business, which is already dynamic. And he is now taking barriers away that can allow that to really flourish, both here in India for Indian businesses, but those decisions that he's making and his government is making to make the business climate better for Indian businesses are also going to help U.S. businesses. And they're going to help India take its place in the global supply chain, which we all understand is something that one doesn't make everything in one place anymore. And so you have to be part of that whole chain, and I think that's clearly recognized by the "Make in India" campaign.

And so there's been these concrete steps that have been taken. There are things that have been announced that they're going to be taken. Some of the concrete steps that have been taken, including liberalizing the ability for investment in insurance, in defense, and in medical equipment; announcing land reform, announcing and moving forward on the goods and services tax; as well as eliminating red tape, which we hear from our companies is actually occurring, and obviously there's more to do there.

In addition to that, there has been laid out a whole plan on energy for the future and what's going to happen there, as well as resolving the lingering issues over the WTO trade facilitation agreement, which is really about moving goods across the border in an efficient way, which is also about the global supply chain, because you've got to have inputs and you've got to be able to move your stuff out in order to be part of the global supply chain.

So there's a whole lot that has happened inside India. Bilaterally between the U.S. and India, essentially we started talking again. We've really reinvigorated our discussions on various concrete and substantive areas. So there's the trade policy working group, there is a group on telecom and internet that's meeting this week now in Washington, there's going to be a dialogue on intellectual property, there are numerous discussions going on on energy. And some of these things are meeting who haven't met for many years. And I think the results of those are going to build over time.

So we want to be here to demonstrate our optimism, but also we're meeting with business leaders – both Indian and U.S. business leaders, as well as women entrepreneurs, who are a very important part of any economy – and we want to get input as to what more needs to happen and how we can be a helpful catalyst and partner for that.

And I'll stop there and I'll just take questions.

MODERATOR: Yeah.

QUESTION: Can I ask just one question?

SENIOR STATE DEPARTMENT OFFICIAL: Sure.

QUESTION: As best I can tell, externally there hasn't been a lot of progress on the liability issue, which is so crucial to the American (inaudible) industry. There hasn't been progress in terms of any announced significant defense procurement from India to – for U.S. manufacturers. There's hasn't been any visible progress on patent issues that are so – such a huge issue for U.S. pharmaceutical companies. Do you expect any progress on any of those things any time soon, like in time for the President's visit in a couple of weeks? Are those really big long-term issues you don't expect to get resolved in a couple of weeks?

SENIOR STATE DEPARTMENT OFFICIAL: Well, you named probably some of the hardest issues – well, defense procurement is sort of a big, huge issue just because it's big and huge. But the other two that you named are probably some of the knottiest, thorniest issues that we've had. So I think given that the prime minister's only been in office for six months, it's not to me surprising that we haven't completely resolved these things.

There has been a great deal of rolling up your sleeves discussion going on on the civil liability issue, on the nuclear side on civil/nuclear, and I think there's a commitment on both sides to try to find a way through that. I don't know whether that will be resolved in time for the President's visit, but I would say I think there is progress being made there.

On the patent issue, I think that has to be put in the context of the larger intellectual property issues. There has been a great deal of progress and discussion on the copyright side and a commitment by India to introduce new legislation on copyright, particularly with respect to the film industry and piracy there. So while it is the case that the patent issue is not yet resolved, again I think there is a robust discussion taking place and will continue to take place, and that is an issue that isn't only one that confronts the U.S. and India but it confronts us in a number of other countries as well. I mean, it's a bigger question.

QUESTION: Do you hope to see anything where there might be progress in time for President Obama's visit?

SENIOR STATE DEPARTMENT OFFICIAL: Anything, you say?

QUESTION: Yeah.

SENIOR STATE DEPARTMENT OFFICIAL: Well --

QUESTION: On the economic, commercial trade center.

SENIOR STATE DEPARTMENT OFFICIAL: I think we are working on several things on the energy side, which are clearly economic. We are working on the civil/nuclear liability issue. I can't say for certain we will be doing these things; that's why you have these meetings. But there is a great deal of things that are underway, and I think the goal is to have very concrete and tangible things that we can show forward movement on when President Obama and Prime Minister Modi meet, including on climate change.

QUESTION: Including what? I'm sorry.

SENIOR STATE DEPARTMENT OFFICIAL: On climate change.

QUESTION: What are the energy things?

SENIOR STATE DEPARTMENT OFFICIAL: There are many partnerships that are already going on with India on looking at how we can help partner on sustainable energy, how we can partner on getting energy to underserved areas, and so we're looking at what more we can do there that will be very concrete. We are also looking at what we can do on the solar side. What's impeding us now are the domestic content requirements, so we're looking to see whether we can move forward a path on that as well, that allows us to really try to move that forward and to be – in order for India to meet its own goals and what its set out, it's going to need to be part of the global supply chain on solar, and so we'd like to be part of that.

QUESTION: And that's one of the ones you're working particularly hard on. I know the President's driven domestic contact groups forward.

SENIOR STATE DEPARTMENT OFFICIAL: Right.

QUESTION: And can you explain that --

QUESTION: (Inaudible.)

SENIOR STATE DEPARTMENT OFFICIAL: What is the problem?

QUESTION: Explain that a little more in the content – yeah, financial.

QUESTION: India has to --

SENIOR STATE DEPARTMENT OFFICIAL: Correct. There are requirements that India has. It has them in – especially in this area of solar where it says that you have to make the pieces – all the pieces in India. And this goes back to a notion that many countries have had in the past that in order to develop your industry you have to make every little piece of it domestically in your country. And I think the difficulty with this is, as I've said, in a global supply chain world, it – there are pieces of excellence or of outstanding innovation that are going to be in different parts of the world, and part of what you have to do is figure out where's your niche, but also be able to bring those pieces together rather than saying, "Oh, I'm going to just keep reinventing the wheel here on everything across the board." And that's what we're trying to work with India on, because we have, obviously, some things that we've developed in the high technology area of solar panels that we'd like to be able to bring to bear.

QUESTION: Do you know how high the domestic content percentages are on solar panels?

SENIOR STATE DEPARTMENT OFFICIAL: I do not know the percentage – I'm sorry – off the top of my head. We can get that to you though.

QUESTION: It'd be nice to know.

SENIOR STATE DEPARTMENT OFFICIAL: Yeah.

QUESTION: Another question?

MODERATOR: Pam.

QUESTION: Is it concerning – one of the things, of course, I'm doing here is highlighting the Ford plant, basically that's due to open. And as part of showing U.S.-India cooperation, is there concern that there may be a perception on the U.S. side that this is pulling jobs out of the United States?

SENIOR STATE DEPARTMENT OFFICIAL: Development in other countries – and I'm certainly a firm believer that a rising tide lifts all boats. And so having things that are going to help India develop is also going to help us in terms of being able to sell more things that we already are making here – or making in the U.S. And I don't – I mean, auto manufacturing is something that has been localized all over the world. I don't think there's any concern that seeing that continue here in a good way is going to mean that there's going to be less employment in the U.S.

QUESTION: And how does a new car plant fit into the goals of tackling climate change?

SENIOR STATE DEPARTMENT OFFICIAL: Well, I mean, cars are a reality. I am not that familiar with exactly what things – what are all the pieces of what's being manufactured at the plant that we are – that is going to be open. But we're not going to get rid of cars. I think that the challenge is to make more fuel efficient cars, to use a better technology to do that, to look at things like hybrids and electric cars, et cetera. And Ford has certainly been a leader in all of those things.

QUESTION: Can you discuss the international sort of competition for investment here in India?

SENIOR STATE DEPARTMENT OFFICIAL: (Laughter.)

QUESTION: Because one thing that was striking was listening to these speakers all try to outdo each other and what great friends they are in their marriage with India.

SENIOR STATE DEPARTMENT OFFICIAL: Yeah.

QUESTION: What was going on in this environment for the United States? I mean, there's Europeans, Asians --

SENIOR STATE DEPARTMENT OFFICIAL: It's a huge market. I mean, there's a billion people here. And I think U.S. companies have been here, some for a long time. There's many more who would like to come. The business environment here, it's no secret, it's been a very difficult one and it's really I think acted as a barrier to keep companies out because of that. And that's to the detriment of India; it's also to the detriment of U.S. companies. And I think there's a great excitement now because these – the direction that the prime minister has laid out and the changes that he's made so far and what he's project ted that he's going to do create a completely different environment, and I think people are very anxious to be able to come in and take those opportunities.

I will say that I think that we want to see though the things that are projected actually come to fruition. And I think there are companies who are sort of watching to make sure that what's projected actually happens. And there's no reason to believe it won't but at the same time these are very entrenched things that take a while to change. So --

QUESTION: So an example of something that's projected that's important to watch for is what?

SENIOR STATE DEPARTMENT OFFICIAL: So the land – there's land reform that's projected. There has been proposed the goods and services tax, but it hasn't yet passed. There has been, as I said, eliminating red tape. A lot of that's happened, but there's still a lot of red tape in India. I think anybody would agree to that. So I think there are things that we want to watch and make sure that they go forward.

The other piece is how is this whole vision on energy going to be implemented for the future.

MODERATOR: So we need to wrap it up because we need to get in the motorcade. But we wanted to take this opportunity in a busy schedule. So thank you, [Senior State Department Official].

SENIOR STATE DEPARTMENT OFFICIAL: Sure.

QUESTION: Thank you.

SENIOR STATE DEPARTMENT OFFICIAL: My pleasure.