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U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

Engaging India through Innovation and Entrepreneurship

Ziad Haider, Special Representative for Commercial and Business Affairs, U.S. Department of State
Washington, DC
March 8, 2016

10:30 A.M. EST


MODERATOR: Great. I guess we will go ahead and get started. I want to welcome everyone to the Washington Foreign Press Center today. Today’s briefing is on engaging India through innovation and entrepreneurship, and our speaker for today’s session is Special Representative for Commercial and Business Affairs Ziad Haider. He will start with some opening comments and then we will open it up for questions.

With that, I will hand it over to you Mr. Haider.

MR HAIDER: Okay, thank you. Well, thank you so much, Doris, for that introduction and to Lalit and Varughese for joining us today. So my name is Ziad Haider. I’m the Department of State’s new Special Representative for Commercial and Business Affairs. I transitioned in about a couple of weeks ago, and very excited at the first official trip I’m going to be taking is going to be to India.

One of the things that Secretary Kerry has repeatedly said is foreign policy is economic policy. And the purpose of that statement is to signal that our economic relations are central, and cementing our economic ties is central to deepening our foreign relations with key partners like India.

And so very much in that spirit, what he announced in Singapore last fall and August was that his senior economic team would be leading these series of innovation road shows across Asia. And the idea of these road shows or the concept of the road shows is to have a senior member of the State Department economic team leading a mix of multi – U.S. multinationals, investors, and early startup-stage companies on a road show essentially across different parts of Asia.

And there are really three objectives to this road show. The first is to highlight the sort of American brand of innovation and I would say our approach to innovation and entrepreneurship. And I’d just say that this isn’t about us going out and lecturing others how to be innovative. That would be ludicrous because many countries are innovative in their own rights. For anyone who has come through India at any point, we all know about the Jugaad system that is the essence of Indian society. So it’s more about showing our approach and how we’ve come at this issue, for example, with the presence that we have in Silicon Valley.

So one is that highlighting effect. The other is really to actually engage with young entrepreneurs in – across the stops that we’ll be making in Asia. And over there, the idea is to continue to kind of foster that people-to-people, business-to-business relationships that really are the sinews of a strong relationship overall.

And then the third is through these conversations – and less us making this point to our government counterparts, but more the delegations with us – to convey to government interlocutors the regulatory environment that’s needed to actually enable innovation and entrepreneurship. And again, from a sort of a sharing point of view versus a hubristic, lecturing point of view.

So that really is the objective. It’s the sort of highlight effect, it’s engaging, and it’s sort of encouraging governments to have that enabling regulatory environment. So that’s the frame of it.

Now, where are we going as far as this road show? The first phase is already underway, and Ambassador David Thorne, who is a senior advisor to Secretary Kerry on economic issues, is currently in Southeast Asia – in Indonesia, Vietnam, and the Philippines – with a similar mix of U.S. companies doing exactly the three things that I mentioned. And so what we will be doing is in phase two of this, or sort of you can even think of it as wrapped up with phase one, is heading to India later this week. And our Assistant Secretary for Economic and Business Affairs Charlie Rivkin will be leading this, and I’ll be joining him along with his senior advisor Urmila Venugopalan who’s here as well.

And again, the question is then why India. And for me, it’s sort of a no-brainer. The fact is that we have a very deep strategic relationship with India that has just made leaps and bound strides over the course of this Administration. On the strategic front, I mean, just a simple physical expression of President Obama being the first U.S. President at Republic Day, I think that symbolism says a lot in itself.

On the economic front, which has also moved, I think, under this Administration, I would just point at two simple facts. One is Secretary Kerry being at Vibrant Gujarat. This is the Secretary of State attending one of the premier investment summits – investment – and not in Delhi, but in Gujarat. So that clearly is an emphasis on the economic dimension of our relationship.

And the second obviously is the elevation of the Strategic Dialogue to a Strategic and Commercial Dialogue. So this is a partnership that is deepening fast, and it is one that we placed a great emphasis on our economic engagement inextricably linked with our broader strategic engagement. And within that I think a natural area for us to be tapping is that of innovation and entrepreneurship, or as Secretary Kerry put it, the greatest potential of our partnership is really the innovative and entrepreneurial spirit of both of our countries.

So that’s why we’re taking this road show to India specifically. And let me then just zoom in on what is a specific theme within innovation because it’s a very broad word. We’re going to focus this trip on clean tech in particular with an emphasis within that on infrastructure. And the reason for that is really threefold.

First of all, as we all know, coming off Paris COP21, climate and the issue of clean energy that, again, is just an intimate part of a smart approach to the climate challenge we face – is a key focus of Secretary Kerry, of this Administration. And so we want to continue to pursue that. We have an agreement on emissions, but at the same time now every country needs to do its part in the clean energy space, and so that’s a key focus for us.

Secondly is, if you think about it again from the commercial side, the profitability of this industry – what we, U.S. companies, what our Indian company partners can do together – the potential is immense. I mean, just consider that last year you had about $300 billion in investment in the clean energy space, right? That’s a pretty staggering number, and even more so when you think of that happening in the face of lower oil prices, when you would expect people to dart back to the carbon products. So there’s a value proposition here for businesses, and we need to be mindful of that.

And third, I would say why we’re focused on this is because India is focused on this, Prime Minister Modi is focused on this, and I think that’s the spirit of a real partnership, where you don’t just go and talk about what’s on your mind but you try to find a way to dovetail deal with what’s on your partner’s mind. And we all know the goals that Prime Minister Modi has laid out. We’re talking about 175 gigawatts by 2022. We’re talking about a deficit of about $100 billion in terms of financing to hit that goal. And we’re talking about the fact that the Indian Government has said that about 80 percent of the infrastructure, energy infrastructure, is yet to be put in place. So this is a real opportunity for us as part of our partnership to help India as part of its urbanization trend to develop a lower carbon urban infrastructure, and we want to be a part of that effort, intimately so.

So that’s sort of the frame of the trip, and I would just hit one other theme before I just take you through the trip itself, which is that the very fact that we are going to be going to the states and not just Delhi is a very deliberate thing. This emphasis on subnational diplomacy is about showing that our relationship is not a capital-to-capital, Delhi-to-Washington relationship, but it really goes down deep. And as we all know, the chief ministers of some of these states, the leadership there, they are key economic change agents in their own right, and we want to have those conversations and hear from them directly. And I think that’s good for the relationship as a whole to do.

So with that, let me just walk you through the trip itself, because I know we shared with you a press release, but we want to arm you with as much detail as you can possibly take and stomach. So we’re going to be starting off in Delhi, where we’re going to have a series of meetings with ministers at several ministries – commerce, urban development, renewable energy. Then we’re going to be going to a Brookings India roundtable on clean energy financing. The USIBC is going to be hosting a roundtable with officials from the ministry of renewable energy. We’ll also be doing a FICCI roundtable on IP and then we’re going to be doing a tour of Imergy Power Systems, which is a California-based company focused on advanced energy storage technology.

From there we head to Ahmedabad, where we again will meet with state government officials. We’ll be doing an event with CII. We will be going to IIM Ahmedabad Center for Innovation, Incubation, Entrepreneurship, and then from there on to Hyderabad, where again meetings with state government officials, a visit to the incubator (inaudible) hub, and then a women and innovation roundtable event at the Indian School of Business. And we’ll share with you a distilled version of this so that you don’t have to take notes, but I just wanted to give you a sense and for those who are tuning in from beyond of some of the stops we’re going to hit.

In terms of the companies, you got a little flavor of the companies that will be joining us from the press release. But again, just to run through the list: 8-Minute Energy, a solar energy company based in LA; GE, we all know; AES, a global power company with electricity generation and distribution business; First Solar, solar-focused customized energy solutions, applied materials; and Praxair, an industrial gases company. And again, we’ll share this with you for your benefit.

So it’s going to be a very full trip. It’s going to be, again, Delhi, Gurgaon, Hyderabad, Ahmedabad; a mix of government of federal, state, entrepreneurs, business. And that’s the richness that we really are trying to find in this relationship.

And I’d just end by saying that this is not to be viewed as sort of a one-off, but it very much fits within the broader arc of what we’re trying to do with India this year. So for example, in the wake of this road show, what do we have coming up? We will have the U.S.-India Innovation Forum that was announced at the end of the last year’s S&CD. That very much dovetails with this theme. We will have the Global Entrepreneurship Summit in Silicon Valley June 22nd to 24th, where we will have about 700 entrepreneurs globally present. President Obama will be speaking. This is the seventh one of these that we’ve done, and we’re thrilled to see very, very strong interest from Indian entrepreneurs. We have, I think, around 78 applications from India alone. So that will be another opportunity to dovetail with this theme, and then obviously we lead into the S&CD with its emphasis on both the strategic and commercial.

So I would just end by saying that foreign policy is economic policy is what the Secretary has laid out for us in terms of how those of us who focus on econ issues at State think about this, but I would just put a spin on it to say that economic engagement with India is strategic engagement. They’re intimately linked. And what we are doing here is not just having sort of a hydra of conversations. It is part and parcel of cementing bonds up and down the chain within India and our two countries. So I come back to what Secretary Kerry said. The greatest potential of this partnership is the innovative and entrepreneurial spirits of our citizens, and that’s what we’re trying to back.

So let me stop there and we will share with you the list of meetings that we can at this point plus the companies so you’ll have that. And I’m happy to take questions now.

QUESTION: You mentioned this 300 billion in investment in clean energy this year. And it’s a global figure or --

MR HAIDER: It’s a global figure and it’s 2015.

QUESTION: And this 100 billion deficit, you’re talking about in India alone, right?


QUESTION: For the – meeting the target?


QUESTION: So when U.S.-India cooperation in this field is (inaudible), you’re talking about both technology and capital and (inaudible)?

MR HAIDER: That’s right, exactly.

QUESTION: For both.

MR HAIDER: Technology and capital. And I mean, and also just sort of not just that these would be things that our companies would come and give, but that there is actually scope for both – in both countries entrepreneurs to work together to develop some of these solutions.

QUESTION: And the key thing I think was the third point about regulatory environment that you might want the Government of India to focus on.


QUESTION: Can you give us some snapshot on what --

MR HAIDER: Sure. Well look, I mean, what enables entrepreneurship to thrive, there are many, many factors. I mean, I think I’d focus in one two. One obviously is IP, intellectual property – you need to know that what you’ve worked hard to develop will actually stick in some fashion and be protected. And over there we continue to work and talk also with the Indian Government. We’re looking forward to the release of their draft – the release of their national IP policy, and I think that’s going to be a good basis of discussion. But in this trip also in other areas of IP where we see eye to eye – for example, the anti-camcording legislation issue, which you’re familiar – we’ll be pushing on that, and happily it’s an open door. There’s an amendment to the relevant legislation pending before parliament.

So to your point, an enabling environment goes to IP. It also goes to the issue of investment climate writ large, and over there we’re working toward the high standards with India which will be important providing that regulatory certainty, investment certainty for U.S. companies that want to do business in India in this manner. So those would be two areas I would flag particularly.

QUESTION: And what kind of interaction you plan to have during the socials with the local Indian companies who are innovations – (inaudible)?

MR HAIDER: Yeah. Well, in a number of ways. I mean, there are companies that are going to be, obviously, wrapped into the events that they do with – through USIBC, but then also, obviously, through FICCI and CII. So there’s those types of companies, but then we’re also going to be visiting a number of these incubators, a number of these clean energy research labs. So again, it’s sort of the big companies that sit in these chambers, but then some of these smaller entrepreneurs or tech labs where we can have slightly more granular conversation.

And that’s a big part of this trip, is we’re not just doing a chamber conversation. We want to kind of drill down and see what is happening sort of at the grassroots level in India in this space, and that also feeds into the GES approach that we have.

QUESTION: What’s the long-distance view of the environment that India has right now in terms of entrepreneurs or innovators?

MR HAIDER: Yeah. Well, I mean, it goes back to the question that Varughese was asking, that there isn’t – there is no question here that India is an extremely innovative entrepreneurship country. I mean, it’s almost sort of tautological to even say that. There are certain things that could allow, I think, even greater potential to flourish, and that goes back to these questions of investment for the regulatory – the investment certainty. So if foreign countries want to, for example, do R&D in India, it’ll be important for them to have the kind of assurances that a high standard allows. If they’re going to be doing those types of partnerships – or forget foreign companies. If an Indian company is going to really push hard on R&D, they need IP protection, which goes to the national IP law that we’re looking to see.

So those are some of the things that we’re keeping an eye on that are, I think, going to be important enablers of India to actually at the government level allow this to flourish. Now, having said that, a lot of it flourishes in spite of the government in both of our countries. But that’s some of the things at the government level.

QUESTION: So what’s the wish list for the U.S. investors for them to invest heavily in India’s sector of innovations, entrepreneurs, in addition to the IP sector? Tax benefits --

MR HAIDER: Yeah. I think of the BIT as a catch-all. I mean, if – bilateral investment treaties are meant to provide – it’s divorced from any one sector. It’s across the board. Foreign investors to come in, there are certain things they’re looking for, is a degree of market access. There is the issue of dispute resolution, which you’re probably familiar with. So those are the types of issues that are going to be very important to have addressed as part of these big conversations we’re having for investors to have broader certainty when they’re entering India.

QUESTION: And do you have any figures of how much investment the U.S. companies have made in these two sectors in India?

MR HAIDER: I don’t have them for sector-specific, but we can get you those numbers. But overall, FDI – U.S. FDI in India is about 28 billion, and I would add about 7 billion coming the other way from India to the U.S., which is also an important number to be aware of. So that’s writ large but not sector-specific. We can follow up with that.

QUESTION: And how much – what’s the potential of this – how much U.S. companies can invest?

MR HAIDER: What is the potential for U.S. investment in India? I --

QUESTION: In these innovations and --

MR HAIDER: It’s hard to put a number to that. I mean, it’s – we set targets. For example, on the trade front, we’ve set a target of quintupling, so from 100 billion to 500 billion. But a target for investment – it’s hard to put a number to that. But obviously, there is significant potential, otherwise we wouldn’t be taking the time and energy to do this.

QUESTION: So the IP thing – India’s position has been that, okay, Indian IP (inaudible) is compliant with the (inaudible) thing. And if you look at the last – the U.S. Chamber of Commerce ranking, it is only – really not improving, actually. If anything, it is – we’ve been downgraded by a bit. So do you actually see any – or is it a complete deadlock, or is there anything that you can talk to India, and this call for improvement is there, or how do you want to --

MR HAIDER: Well, look, I would make three points. I mean, one is that on IP itself, let’s see what the national IP law that – I mean, is – the policy that’s released, let’s see what that has in it, and I – as I said, that would be the basis for discussion. So that’s point one.

Second is in terms of sort of the priority list issue that you’re raising. There’s an ongoing review, and let’s see what the outcome of that is as well. I’m not able to sort of go into the specifics of that.

But thirdly, I would say is – IP is a very big – I mean, it’s like innovation. There are many aspects to IP and there are areas where we may not see to – eye to eye, but there are areas where we clearly do. And I can tell you that when Assistant Secretary Rivkin was out in India talking about this anti-camcording thing, it really resonated. Our Indian interlocutors said, “We are all in on this. We see eye to eye with you and we want to get this through our parliament.”

So I don’t want to make the IP story to be purely one where we’re completely at loggerheads. We’ve been talking back and forth. We have some areas where we’re sorting through, but there are definitely areas where – of great promise, and we’re going to be pushing on that as well. I mean, the anti-camcording thing really kind of runs through both of our entertainment industries – Hollywood, Bollywood – that’s a great sort of synergy in itself between the U.S. and India. But I would keep my eye on some of these aspects of IP as well instead of just thinking of this as purely in tension all the time.

QUESTION: How do you see the Modi comments’ effort to address U.S. concerns on IP? Do you see it as sincere or they’re – do you think they’re sticking to their stance? There’s a conflict – big conflict between India and U.S. on IP.

MR HAIDER: No, I mean, it’s just what I was – exactly what I was saying. I think we cannot – there is not a conflict here. There are areas of differences, but most importantly, there is a policy, a national policy that’s being developed. We really will reserve judgment until we see what that policy is. But what – all I’m pointing to is that having someone who currently in government, previously in the private sector – the narrative on this IP issue tends to be very – that we’re at odds, but I’m just pointing to the fact that there are certain underappreciated areas where we actually are finding ways to cooperate. And hopefully you’ll see more on that traction over the course of the year.


QUESTION: Meanwhile India has gone to the WTO on the question of charging visa fees.

MR HAIDER: Uh-huh. Yep.

QUESTION: So how do you respond to that?

MR HAIDER: Well, so look, on that, the Indian Government, I can confirm, have reached out to us for consultations. That’s sort of the way the procedure happens. A complaint is filed, and then after that, the country that’s filed the complaint proceeds to request consultations. That’s the stage that we’re at. But in terms of a WTO dispute, I’d have to defer to USTR. So you should follow up with them in terms of where we stand on that issue.

QUESTION: So consultation has already started?

MR HAIDER: Well, they’ve reached out for consultations. I don’t have the specifics of whether or not we’ve actually had a sit-down, face-to-face, but they’ve reached out to us for it.

QUESTION: What is your response to India’s concerns about these visa fees have been raised, and India thinks that these are protectionist measures?

MR HAIDER: Well, I just – I mean, again, I’d say two things. And one is that this is – this was clearly not meant to be targeted – targeting India. I mean, the fact is that one doesn’t invest this much energy at the leadership level and all through our ranks of government to try to then discriminate against India specifically. But again, more importantly, I’d just say that India has taken a step. They’ve filed a formal complaint. And now it’s in that procedural mode. And again, USTR can give you a better sense of where the process goes.

But I would just make a larger point, which is that the fact that India has filed a complaint against us or we do against them now or down the road – that, again, is not a measure of a faltering relationship. We’re in court all the time with Canada about different issues, and other countries. So dispute settlement through a rules-based approach is par for the course, and that’s the way it should be. So we will deal with that in that proceeding, but I wouldn’t sort of read into it as being a completely disruptive factor. And we’ve tried to address Indian concern through our diplomatic channels. They’ve taken this measure, so we’ll deal with it in that channel.

QUESTION: Many people say that H-1B visa has become or has the potential to become one of the big indents of India-U.S. business and trade relationships between business companies and companies. Does the government agree with that view? Is it one of the big hurdles?

MR HAIDER: No, and again, there’s nothing further to be added to that beyond the fact that India has filed a complaint. And once these things go into that legal proceeding, there is not much more comment that we can contextually can add to that. So I would follow up with USTR on that point specifically on where it goes. But again, I’d just say this is not meant to be discriminatory towards India. Those fees were generally raised, and so let’s see where the proceeding goes.

QUESTION: Haider, I’m not going into the WTO complaints, but given the feedback that you get and you also get from your industry, the number of visas that are there, and these are meant for bringing specialized professionals from overseas, and now since there’s – unemployment rate is going down, there’s more demand for these people, do you think the 65,000 figures is enough to meet the demands in the U.S. industry?

MR HAIDER: Yeah. It’s a good question, but I don’t have a good answer for you right now.


MR HAIDER: Again, I just really would defer to them in terms of proceeding. If we weren’t in that phase, then I’d comment more broadly. But since we are, I have to limit myself with that.


QUESTION: So other than the regulatory environment, you said that generally, investment climate is also a point of concern or discussion. So the investment climate --

MR HAIDER: Well, let me just say, I mean, yes, there is more potential that – there’s more that our companies could be doing if they were certain – if we had a high-standard BIT in place. I’m not making a critique of the Indian investment climate and saying that we have problems, there’s no opportunity. The very fact that over the last 10 years we went from 200 U.S. companies to 500 in India, employing millions of Indian workers, is a sign that our countries see great potential in this relationship in the economic sphere. And so I don’t want to lose that --

QUESTION: 200 to 500 in when?

MR HAIDER: In the last 10 years, from 2005 to now. And these are – this is a point that our ambassador has been making in India as well, Ambassador Verma. So when we’re talking about this, I want to put that in that larger context that our companies see great opportunity over there, see investing in India as being an invested in success. But within that framework we can do even more if we have a high-standard BIT.

QUESTION: But when you talk to American companies or American investors about investing in India or starting in India, do you get that feedback that there are things to be done better in India for them to find India more effective?

MR HAIDER: Yeah, and that’s some of the issues we’ve already discussed. I mean, again, the – some of the protections that a BIT offers, some of these issues in IP, some of these issues in the tax space, and obviously some of the reforms that are continuing to be deliberated in India, like GST, these are all important signals of an economy that is continuing to open up to foreign investment. The continued – and I would emphasize continued liberalization of FDI caps, terrific in defense and insurance, up to 49 percent. But we hope that would continue. So yes, I mean, I think we know that there are – there are things – there are reforms that have been productive, and we hope that that trend line continues.

MODERATOR: We’ll take one more question.

QUESTION: Do you have – just a background kind of thing. Do you have some factsheets on India-U.S. business relations – I mean, how much investment U.S. companies have done in India, maybe state-wise figures or last couple of years’ figures and which sectors that has gone into?

MR HAIDER: Yeah. We can look into that. I mean, aggregate numbers I shared with you, right?


MR HAIDER: Twenty-eight billion FDI coming over – going over there, 7 billion coming here; aggregate trade, 100 billion. Broken down state, we’ll – I’ll need to take a look at that. But we can – we’ll get back to you.

QUESTION: And where is the trade deficit? To India, the U.S. side, or which?

MR HAIDER: Good question. I don’t know that off the top of my head.


MR HAIDER: But we can give you those numbers.

QUESTION: That will be --

MR HAIDER: Yeah. Sure.

MODERATOR: Did you want the last question?

QUESTION: Yeah. This – well, the two questions are bundled into one, both political, actually. (Laughter.) One is that when Narendra Modi came as prime minister of India, there were a lot of hopes around the world about the U.S. (inaudible). So say one, two years later, do you see that hopes converted into a tangible outcome (inaudible)? Here, when you promote U.S. trade and commerce, in U.S. politics now, the idea of protectionism is quite popular, with most of the – all presidential candidates, including Hillary Clinton, is for protectionist policies. So how does that affect your own engagement with the rest of the world? Can you --

MR HAIDER: Yeah. Well, I’m not – obviously I’m not – let’s start with the first one. I’m not going to comment on our domestic political season. But I would just say this, that this Administration is obviously very much focused on increasing our exports globally and attracting incoming investment. I’ll give you two examples.

In terms of our exports, TPP – I mean, this is a high-standard, as we say, 21st century agreement with 11 other countries on both sides of the Asia-Pacific. Why we made this such a priority is because we see the economic opportunity in it for our companies to be exporting and to deepen that relationship with some of these other partner countries, right. So right now we’re focused on getting it through. But if there wasn’t that commitment to increasing our exports, we wouldn’t have invested that energy in it. So I see that as a great opportunity for us to continue to increase our trade in the region. And similarly, we have our TTIP negotiations going on with Europe. That’s going outward. That’s the trade piece.

Investment, again, you’ll see with SelectUSA, the summit that we’ll be hosting over the summer, in June, I believe – that’s the emphasis, once again, on attracting foreign investment to the U.S., because fundamentally we still believe that this country has, as we were discussing, the regulatory environment that attracts foreign investment, that allows for R&D, allows for innovation, that has legal certainty for dispute settlement. So we have a great story to tell as a country. And we’ve come out of this economy – this economic recession in, I think, good shape. And so in that sense, I don’t see – whatever that you may be seeing in the political debates, the fundamentals are still strong.

In terms of India and the reforms that – sort of a characterization, look, I mean, it’s – there’s no sort of good or bad answer to that. The fact is that there have been certain important strides made in terms of, as I mentioned, FDI cap liberalization. We see Prime Minister Modi is continuing to push through things like GST. Both sides are continuing to assess the prospects of a high-standard BIT. So we’re working at this. But, I mean, the very fact that, as I said, our company numbers are going up, we’re engaging at the government level, all these different channels and dialogues we’ve set up is all a bet that fundamentally the U.S. is invested in India’s success. And so that’s the trend that we hope to continue pursuing and that we’ll be working through these conversations that we have.

Okay. So we will get you the U.S. – the fact sheet on – the best we have those numbers on investment in the country, and then anything that we also have on U.S. investment, specifically in the tech space. Though, as you can imagine, that’s probably a (inaudible) issues thing.


MR HAIDER: All right.

MODERATOR: Thank you for joining us.

QUESTION: Thank you.

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