[Senate Hearing 114-764]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-764

                 U.S.-INDIA RELATIONS: BALANCING PROGRESS AND 
                         MANAGING EXPECTATIONS

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE


                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                              __________
                              

                            MAY 24, 2016

                               __________



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                COMMITTEE ON FOREIGN RELATIONS         

                BOB CORKER, Tennessee, Chairman        
JAMES E. RISCH, Idaho                BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida                 BARBARA BOXER, California
RON JOHNSON, Wisconsin               ROBERT MENENDEZ, New Jersey
JEFF FLAKE, Arizona                  JEANNE SHAHEEN, New Hampshire
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
DAVID PERDUE, Georgia                TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia              CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky                  TIM KAINE, Virginia
JOHN BARRASSO, Wyoming               EDWARD J. MARKEY, Massachusetts


                  Todd Womack, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        


                              (ii)        
                              
                         C O N T E N T S

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                                                                   Page

Corker, Hon. Bob, U.S. Senator From Tennessee....................     1

Cardin, Hon. Benjamin L., U.S. Senator From Maryland.............     2

Biswall, Hon. Nisha Desai, Assistant Secretary, Bureau of South 
  and Central Asian Affairs, U.S. Department of State, 
  Washington, DC.................................................     4

Dhume, Sadanand, Resident Fellow, American Enterprise Institute, 
  Washington, DC.................................................    29

Ayres, Alyssa, Senior Fellow for India, Pakistan, and South Asia, 
  Council on Foreign Relations, Washington, DC...................    30

              Additional Material Submitted for the Record

Witnesses' Prepared Statements:

    Nisha Desai Biswall..........................................    41

    Sadanand Dhume...............................................    46

    Alyssa Ayers.................................................    51


Additional Questions Submitted by Members of the Committee:

    Responses to Additional Questions for the Record Submitted to 
      Assistant Secretary of State Nisha Biswal by Senator David 
      Perdue.....................................................    57

    Responses to Additional Questions for the Record Submitted to 
      Assistant Secretary of State Nisha Biswal by Senator 
      Christopher Coons..........................................    64

    Responses to Additional Questions for the Record Submitted to 
      Assistant Secretary of State Nisha Biswal by Senator Edward 
      J Markey...................................................    66



                             (iii)        

  

 
   U.S.-INDIA RELATIONS: BALANCING PROGRESS AND MANAGING EXPECTATIONS

                              ----------                              


                         TUESDAY, MAY 24, 2016

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:03 a.m. in 
Room SD-419, Dirksen Senate Office Building, Hon. Bob Corker, 
chairman of the committee, presiding.
    Present: Senators Corker [presiding], Rubio, Johnson, 
Gardner, Perdue, Cardin, Menendez, Shaheen, Coons, Murphy, 
Kaine, and Markey.

             OPENING STATEMENT OF HON. BOB CORKER, 
                  U.S. SENATOR FROM TENNESSEE

    The Chairman. The Foreign Relations Committee will come to 
order. We welcome everybody.
    The nature and scope of the U.S.-India relationship has 
changed significantly over the past couple of decades. Indeed, 
political, economic, and strategic cooperation between the 
United States and India is at an all-time high.
    There is considerable potential to further strengthen many 
aspects of our relationship. For example, I am encouraged by 
efforts to expand U.S.-India defense and security cooperation 
specifically in the maritime sphere. As the world's two largest 
democracies, it is essential that Washington and Delhi stand 
together to uphold democratic values, principles, and norms in 
the Indo-Pacific, particularly as China seeks to gain greater 
influence in the region.
    India's positive engagement and support for peace and 
stability in Afghanistan is also another reason for optimism.
    Unquestionably India has much to contribute to the 
international efforts to tackle complex global challenges.
    And there is little doubt that the overall trajectory of 
the U.S.-India relations is positive, and we talked a little 
bit about that before the meeting. And again, we thank you for 
being here to testify.
    But there remain a number of challenges as well, including 
our economic and trade relationship. Onerous and unreasonable 
localization requirements, high tariffs, limits on foreign 
investment, and unparalleled bureaucratic red tape hinder 
further access to the Indian market by American businesses.
    There are also serious concerns about the treatment of 
intellectual property in India. Prime Minister Modi has made 
repeated statements about undertaking economic reforms and 
making India more hospitable for foreign investors. And there 
have been some small movements in certain sectors such as 
defense.
    However, the rhetoric has far outpaced the reforms. 
Moreover, it appears that trade and investment remain 
principally transactional for the Indians rather than serving 
as indispensable tools to establishing a genuinely free market 
economy.
    I am concerned that the robust rhetoric has created a 
widening expectations gap between Washington and Delhi.
    Of course, we must aspire as a government to achieve 
certain goals in any relationship, especially with India. But 
in the case of U.S.-India relations, the hopeful rhetoric has 
far exceeded actual, tangible achievements.
    I can think of no more poignant example than the U.S.-India 
civil nuclear cooperation agreement. Nearly 8 years have passed 
since the nuclear cooperation agreement was signed, and only in 
recent weeks have we been assured that contracts for U.S. 
companies are imminent. Of course, we need to see what those 
contracts actually look like as well.
    For these reasons, U.S.-India relations would be better 
served by a more sober and pragmatic approach that could go a 
long way towards laying the groundwork for genuine progress in 
areas that would be mutually beneficial to both the United 
States and India.
    I look forward to hearing the witness, and I want to thank 
you for being here.
    I look forward to our distinguished ranking member and his 
opening comments. And thank you for being here.

             STATEMENT OF HON. BENJAMIN L. CARDIN, 
                   U.S. SENATOR FROM MARYLAND

    Senator Cardin. Well, thank you, Mr. Chairman, and I 
welcome both panels of our witnesses today.
    And thank you for calling this hearing. It could not be 
more timely with Prime Minister Modi's visit scheduled early 
next month. It is important that this committee have this 
hearing to look at the deepening ties between India and the 
United States. It has been a relationship that has only grown 
stronger in recent years. We look at the 2-year anniversary of 
the Modi administration, which has, I think, deepened the ties 
between the United States and India. And as you pointed out, 
the United States and India are the two largest democracies in 
the world. So there is an expectation that that relationship 
would get stronger and it has.
    Today I hope we will have a chance to explore our defense 
relationship. Clearly we have a lot in common. The South China 
Sea and China's activities on maritime security dictate that 
the United States and India work a closer defense cooperative 
arrangement to make sure that we maintain the commerce of the 
seas and the openness of the shipping lanes.
    We also need to deal with counterterrorism. We still recall 
the tragic terrorist episode in Mumbai in 2008. Three of my 
constituents from Maryland were killed during that attack, and 
that is still fresh in the minds of the people of India. So I 
think strengthening our ties on counterterrorism, working 
towards further cooperation in South Asia is an important part 
of the growing relationship between our two countries.
    You mentioned the nuclear agreements on civil nuclear 
cooperation. India, of course, which has nuclear power and also 
nuclear weapons, is a country that we need to make sure that we 
have a close tie on the nuclear front, on nuclear safety, and 
nuclear proliferation. So I would be interested in hearing from 
our witness the status of the agreements between our countries 
that could improve logistical on the defense front.
    On other areas, in climate we have been major progress 
made. We applaud the relationship between President Obama and 
Prime Minister Modi in the successful completion of COP21, 
India's presence at the United Nations on the signing, and 
would welcome your assessment as to how the ratification 
process will be proceeding in India.
    On the economic front, we clearly have challenges. There 
are many areas that I have heard from American companies of 
concerns as to the hurdles that they have in doing business in 
India. So we will be interested in hearing about market access.
    On the human rights front, Mr. Chairman, as you know, I 
will always raise human rights issues. There is no country that 
cannot improve their human rights records, including the United 
States and India. India, according to the State Department's 
human rights list of concerns related to women's rights, 
minority communities, religious freedom, press freedom, and the 
freedom of civil societies. Similar concerns have been raised 
by many of our civil society groups including Human Rights 
Watch. The expectations are higher from a country with capable 
democracy where institutions are well positioned and have the 
responsibility and ability to correct shortcomings and over-
extensions of authority.
    India's vibrant civil society and press are extraordinary 
assets that deserve expansion not limitation as they also play 
better roles in safeguarding fundamental freedoms. Prime 
Minister Modi is right when he says that diversity is our pride 
and it is our strength. As friends, we should stand ready to 
support India's efforts towards this vision.
    In closing, we must set realistic expectations but steadily 
remove obstacles to our deeper cooperation and partnership. 
This will come over time as trust is built and our respective 
systems get used to working with each other. As we look forward 
to the future, support in Congress for a strong and growing 
partnership with India will help to frame the policy debate.
    I look forward again, Mr. Chairman, to hearing from our 
witnesses.
    The Chairman. Well, thank you. And I would not expect to 
have an opening statement from you without human rights being 
mentioned. So thank you for that.
    I would say that while this committee has been unanimously 
supportive of an end modern slavery movement that the United 
States would lead, India also has the largest number of slaves. 
I am not talking about people working for a dollar a day. I am 
talking about people who are enslaved in any country in the 
world. So I very much appreciate you bringing that up.
    And with that, our first witness is the Honorable Nisha 
Biswal, Assistant Secretary of State for South and Central 
Asian Affairs. We thank you for being here. I know you have 
done this before. If you could summarize your comments, without 
objection, we will enter your written statement into the 
record. And again, we thank you so much for being here and 
sharing your wisdom with us.

  STATEMENT OF HON. NISHA DESAI BISWAL, ASSISTANT SECRETARY, 
 BUREAU OF SOUTH AND CENTRAL ASIAN AFFAIRS, U.S. DEPARTMENT OF 
                    STATE, WASHINGTON, D.C.

    Ms. Biswal. Thank you very much, Mr. Chairman, Ranking 
Member Cardin for inviting me to testify today. And I will 
summarize my comments and ask that my statement be entered for 
the record. Thank you.
    As you noted, this hearing, Mr. Chairman, provides us with 
a timely opportunity to take stock of the U.S.-India 
relationship.
    Over the past 8 years, we have seen tremendous progress 
across every major dimension of our relationship. Indeed, the 
relations between our two great democracies have never been 
stronger, even as both sides recognize that there is much more 
that needs to be done.
    The strategic partnership between the United States and 
India is anchored in the premise that our two democratic, 
pluralistic, and secular societies share not only many of the 
same attributes but also many of the same aspirations.
    India is Asia's fastest growing major economy and soon to 
be the most populous nation on earth. How it grows its economy, 
evolves its strategic doctrine, asserts its interests and 
values, and projects its growing economic, military, and 
political power will have important consequences not only for 
the 1.25 billion Indian citizens but also for the rest of the 
planet. That is why the U.S.-India partnership is so 
significant and why I believe that this relationship will shape 
the future of geopolitics and economics in the 21st century.
    The bilateral architecture of the U.S.-India partnership 
reflects the investment that both countries have made in 
building ties between our people, our industries, our 
governments, and our defense establishments.
    Secretary Kerry stated last year that we may do more with 
India on a government-to-government basis than with virtually 
any other nation. Yet, for India to be a strong and capable 
strategic partner, it must have the economic strength to back 
up its growing global leadership.
    At the same time, we must note that expanding trade between 
our nations will create more jobs here and offer U.S. firms 
greater access to one of the most important foreign markets of 
this century. Bilateral trade in goods and services has nearly 
doubled since 2009. U.S. exports to India have increased by 
nearly 50 percent over the same period, supporting more than 
180,000 U.S. jobs.
    Despite these gains, as you noted, much still needs to be 
done to get two-way trade closer to its potential. Among the 
steps that we have urged India to take to attract more 
companies would be to negotiate a high standard, high quality 
bilateral investment treaty with the U.S. India's economy 
cannot achieve its full potential without strengthening the 
protection of intellectual property rights and creating a more 
transparent and predictable regulatory and tax regime.
    In the defense and security sectors, ties are critically 
important to securing U.S. interests in Asia and across the 
Indo-Pacific region. This is well respected in the words of 
former and current Defense Secretaries Leon Panetta and Ash 
Carter who have referred to India both as the linchpin of the 
U.S. rebalance to Asia and the U.S.-India defense partnership 
as an anchor of global security. And India now conducts more 
military exercises with the United States than any other 
country. In recent years, we have become one of India's largest 
defense suppliers, enabling greater interoperability between 
our armed forces. To that end, we have launched the Defense 
Technology and Trade Initiative, or DTTI, which includes 
working groups on jet engine technology, aircraft carrier 
development, and others.
    In addition to the security partnership, how India's energy 
market develops will have a profound impact beyond its borders. 
Our cooperation in this arena is critical to ensuring global 
growth is achieved in a sustainable way. Building an 
international consensus to combat climate change has been a top 
priority for President Obama and Secretary Kerry, and India's 
leadership, as you noted, Senator Cardin, was essential to the 
successful conclusion of the COP21 negotiations in Paris.
    Clean and renewable energy is where our cooperation can 
have the greatest effect. Our partnership to advance clean 
energy now includes cooperation on smart grids, energy storage, 
as well as solar, biofuels, and building efficiencies. And 
since 2009, we have helped mobilize more than $2.5 billion to 
develop clean energy solutions in India. We are confident that 
as India looks to increase its civilian nuclear capabilities, 
that U.S.-built nuclear reactors will play a contributing role 
to that effort.
    But our partnership is also focused on strengthening the 
ties between our peoples and addressing the challenges that 
keep them from achieving their full potential. Last year in his 
speech in New Delhi, President Obama said, ``our nations are 
strongest when we uphold the equality of all of our people.'' 
And to that end, to build on those strengths, we have a range 
of dialogues focused on human rights, including religious 
freedom, trafficking in persons, as you both noted, child 
labor, and gender-based violence.
    Taken together, the progress we have made across the 
breadth of this relationship over previous administrations and 
certainly over the past 8 years has ushered in a new era of 
relations between the United States and India, strengthening 
the foundations of a partnership which we believe will help 
ensure the peace of the Indo-Pacific region and shared 
prosperity across that expanse.
    Thank you, Senator. And, Mr. Chairman, I look forward to 
your questions.


    [Ms. Biswal's prepared statement is located at the end of 
this transcript on page 41.]


    The Chairman. Thank you. Thank you very much for being here 
and your service to our country.
    I am going to reserve my time for interjections down the 
road.
    Senator Cardin.
    Senator Cardin. Let me just ask you directly. With the 
Prime Minister's visit here to the United States, do you expect 
that there will be formal agreements that will be signed in 
regards to security cooperation during the visit?
    Ms. Biswal. We have already strengthened our security 
cooperation on a number of key fronts, and certainly Secretary 
Carter's visit earlier this year was key in advancing many of 
those things.
    We are looking at what additional areas we can engage in to 
deepen that cooperation. We just launched a maritime security 
dialogue. We have, as I noted, undertaken a great deal of 
activity in terms of co-production and co-development of 
various next generation technologies.
    And we are looking to see if there are additional things 
that we can conclude during the Prime Minister's visit. We are 
hopeful that progress will be made on some of the foundational 
agreements, including the logistics agreement, that might be 
concluded prior to the visit. And we are looking to see if 
there are other things that we can take on board.
    Senator Cardin. Clearly anti-terrorism is going to be a 
huge issue, fighting forms of extremism. Yesterday I believe an 
agreement was announced between Iran and India in regards to 
the Port of Chabahar. Are we concerned knowing that Iran is 
continuing to sponsor terrorism in that region? Obviously, 
there is nothing that appears to be in violation of any of our 
agreements. But how do we see India as a partner in fighting 
extremism and financing of terrorism?
    Ms. Biswal. Well, it is a very important question in light 
of the Indian Prime Minister's recent visit and announcements. 
And I am going to answer it in two points.
    One is with respect to the announcement on the Chabahar 
Port, we have been very clear with the Indians on what we 
believe are the continuing restrictions on activities with 
respect to Iran. And they have been very responsive and 
receptive to our briefings to explain where we believe the 
lines are. And we have to examine the details of the Chabahar 
announcement to see where it falls in that place.
    But with respect to India's relationship with Iran, which I 
do believe is primarily focused on economic and energy issues, 
we do recognize that from the Indian perspective that Iran 
represents for India a gateway into Afghanistan and Central 
Asia. For India to be able to contribute to the economic 
development of Afghanistan, it needs access that it does not 
readily have across its land boundaries, and that India is 
seeking to deepen its energy relationships with the Central 
Asian countries and are looking for routes that would facility 
that.
    That said, we have been very clear with the Indians on what 
our security concerns have been and we will continue to engage 
them on those issues.
    Senator Cardin. Well, I just hope that we are getting 
candid discussions. Again, economic issues we understand. But 
if it is also being used as a way to increase their capacity to 
support terrorism--that is Iran--we need to know that we have a 
reliable partner in India in fighting terrorism. And I assume 
those candid discussions are taking place?
    Ms. Biswal. They are absolutely, Senator.
    Senator Cardin. And you will keep our committee informed of 
those discussions?
    Ms. Biswal. Indeed.
    Senator Cardin. So let me change focus to the human rights. 
The chairman mentioned the trafficking issues. I mentioned the 
human rights issues. India is on the State Department's tier 2 
as a source, destination, and transit country for men, women, 
and children. We know that they have an inconsistent record on 
the manner in which they treat women and girls. So tell us the 
progress being made in regards to dealing with modern day 
slavery in our relationship with India.
    Ms. Biswal. Thank you, Senator.
    Our representative on global trafficking issues, Susan 
Coppedge, was actually just in India a few weeks ago. And I 
will say that this is the first time that we have been able to 
engage with the Indians and travel to India at that level on 
these issues. In the past, irrespective of whether it was this 
administration or previous administrations in India, they have 
not been willing to allow our folks to travel on these issues. 
I think it marks a progress in the relationship and in India's 
own commitment to work towards ending or combating trafficking. 
I believe Ambassador Coppedge had very useful and constructive 
discussions particularly on how we can strengthen the 
cooperation of our law enforcement bodies, as well as working 
on civil society's role to address trafficking in persons. It 
is an issue that I think is a challenge across the South and 
Central Asian region and one that I know that the Secretary 
prioritizes.
    Senator Cardin. Let me just point out the 2015 TIP Report 
made specific recommendations. The 2016 outlook indicates that 
they have not successfully implemented many of the 
recommendations, including they have not increased prosecution 
and convictions for trafficking in persons crimes, especially 
bonded labor. And India has failed to fully fund and staff its 
anti-human trafficking police units. The fast courts continue 
to lack adequate resources and funding to train prosecutors, 
judges, and core personnel. This is a democratic ally, friend. 
Are we being candid with them in regards to what is expected in 
regards to trafficking?
    Ms. Biswal. Absolutely we are being candid. Ultimately it 
is an issue of Indian capacity to address the very large, 
complex network.
    Senator Cardin. The recommendations in our trafficking 
reports take that into consideration.
    I can also bring up their anti-conversion laws that are 
problematic in regards to how they are dealing with religious 
freedom.
    I guess my question to you, other than releasing the 
Department's human rights report, how does State engage with 
India on the issues that are raised as human rights concerns?
    Ms. Biswal. So we have a number of different opportunities 
across our relationship. One, we have specific dialogues that 
focus on human rights, trafficking religious freedom issues, 
including our global issues forum at the under secretary level 
where we go through in great detail where we have areas of 
concern. But we also, in all of our interactions, raise issues, 
particularly if we have specific instances or cases of concern 
to seek Indian responses and actions. We also, in the way that 
we do our diplomacy, make clear the values that we stand for 
and ensuring that we are engaging all communities and 
ethnicities and religions in India, that we are engaging with 
civil society as a core component of the relationship. And we 
look to partner not only at the national level, but also at the 
state level where many of these challenges manifest to see what 
kinds of solutions.
    For example, in the specific instance of combating gender-
based violence, we know that this is about how local law 
enforcement implements and acts on an existing legal stricture, 
and so we are trying to deepen our cooperation with Indian law 
enforcement agencies on community policing and creating greater 
awareness and best practices in terms of how to combat gender-
based violence.
    So across all of these areas, we do try to engage 
constructively, both at the national and at the state level.
    Senator Cardin. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I gave up my time on the front end, so I am just going to 
ask my first question.
    Just to follow on with our ranking member's great 
questions, India has 12 million to 14 million slaves. There are 
27 million slaves in the world. How does a country like this 
have 12 million to 14 million slaves in the year 2016? How does 
that happen?
    Ms. Biswal. Well, Senator, it is a huge challenge in this 
massive country to deal with the issues of uniform capacity and 
capability to address the rights of every individual citizen. 
We do think that there is a lot more that can and should be 
done to address issues of trafficking and----
    The Chairman [continuing]. But how could you have that many 
slaves? I mean, seriously. Do they have just zero prosecution 
abilities, zero law enforcement? I mean, how could this happen? 
On that scale, it is pretty incredible.
    Ms. Biswal. Mr. Chairman, I would say that there is 
increasing awareness and commitment at the national level to 
try to deal with these. And we have seen them break up 
trafficking rings in places like Shinai. But there is a long 
way to go, and there is an economic reality that is going to 
incentivize, unfortunately, this kind of criminal network from 
existing. And it will be increasingly, I believe, incumbent 
upon India to advance the rule of law across all aspects of its 
society to ensure that these kinds of conditions do not exist 
and this kind of trafficking does not exist. We are committed 
to supporting those efforts and to being a partner in that 
endeavor.
    The Chairman. Senator Perdue.
    Senator Perdue. Thank you, Mr. Chairman.
    And thank you, Madam Secretary.
    I just have two questions, one related to global security 
and the other economic.
    Prime Minister Modi just concluded a 2-day visit in Tehran. 
I think he met with President Rouhani. My information says they 
signed 12 agreements talking anything from trade to security. 
You have related some comments to a relationship with Iran and 
its growing import to India. I would like you to talk about 
that in perspective with Pakistan and the relationship that 
India has with Pakistan, two nuclear powers, an aspiring 
nuclear power in Iran. How do you assess the developments of 
this growing India-Iran relationship, and how does it affect 
U.S. interests in the region?
    Ms. Biswal. Thank you, Senator.
    We have, over the course of years, invested a great deal of 
effort in engaging India on our desire to prevent Iran from 
acquiring nuclear weapons and the sanctions regime that has 
been in place for that reason. The Indians have been very 
consistent partners, even when it has adversely impacted their 
economic interests, in ensuring that they were working with us 
and in compliance of that sanctions regime.
    Senator Perdue. I am sorry. But some of these 12 agreements 
that they just signed have to do with increased trade between 
the two countries. Correct?
    Ms. Biswal. So we are at the point now under the Joint 
Comprehensive Plan of Action where some activities that were 
previously prohibited are, in fact, permissible. We do not have 
yet the details of the agreements that have been signed, and we 
will look to engage with our Indian counterparts to better 
understand the specific details and how they comport with what 
continuing requirements are in place and what restrictions are 
in place.
    Senator Perdue. With India having the world's third 
largest--and I know this is a debatable measure--third largest 
military and the relationship with Iran having been somewhat 
tenuous over the last few decades--it seems to be better today. 
But with the diversity, religious diversity, demographic 
diversity, the Pashtun issue across both countries, give us an 
update on the India-Pakistan security issues today.
    Ms. Biswal. Well, clearly we have long encouraged India and 
Pakistan to engage in dialogues and to address some of the many 
issues that continue to be outstanding in that relationship. We 
have a very important relationship with each country, and we 
seek to advance our interests with each country. We do not see 
this as zero sum, but we do recognize that for India and 
Pakistan, that there are a number of outstanding issues between 
both that would be benefited by dialogue.
    On the other hand, we do understand that countering and 
combating terrorism is an important objective not just for 
India, for Pakistan, for Afghanistan, but for the United States 
across that area. And so these are areas that we try to support 
conversations across all of our bilateral relationships, as 
well as pushing countries in the region to address it 
themselves.
    We do believe that increasingly there is recognition that 
no kind of terrorist organization will be acceptable, that you 
cannot differentiate between good terrorists and bad 
terrorists. That has been a stalwart tenet of our engagement in 
the region, and we do believe that we are starting to get that 
recognition back in at least the commitments that countries in 
the region are making to us. We do need to see more in terms of 
actions in that space, and we will continue to push on those 
issues.
    Senator Perdue. Thank you.
    Moving over to the economic question, India is a growing 
economy, one of the fastest growing. It is the third largest 
now, in line with having the third largest military. And yet, 
the bilateral trade is really anemic between the U.S. and 
India. We still have a net negative trade balance with them, 
and yet they are a large source of foreign direct investment in 
the U.S., one of the fastest growing I might add.
    The question is will they--and I am a little bit dubious of 
these rankings. But the World Bank ranks India 130th out of 189 
countries that they rank in terms of ease to do business. I can 
relate to that in some ways. I have done business there much of 
my career, having lived in Asia a couple times.
    And by the way, I am not sure that the U.S. ranking of 7 on 
that World Bank ranking is merited either. I know how tough it 
is to do business in the U.S. today.
    So having said that, what is the administration doing to 
increase trade between the two countries and influence economic 
development of that region related to several things, the 
refugee issue being one, where we have to get those economies 
growing again when these people get to go home and not just in 
Syria but all across the Middle East, Afghanistan, Iraq, et 
cetera, including Africa? So can you talk specifically about--
this is one of the three top economies in the world, and yet 
trading with the top economy in the world is really anemic. And 
yet, we have the economic development needs of the third world. 
And I do not see India playing in that today. And the question 
I have is how can these two juggernauts economically get 
together and trade better together but also work together for 
the economic development of the third world.
    Ms. Biswal. Well, that is an excellent question. It has 
been an effort that has been one of both the most important but 
also most complex between our two countries.
    The Indian economy, which has for so long been very inward 
and insular, is increasingly looking to see how it can 
integrate and connect. And as they do that, I think that the 
Indian Government is recognizing its need to open up and 
liberalize. It is not happening at a pace that any of us would 
want. I think that the Prime Minister created very high 
expectations in his campaign about what an India that is open 
for business would look like. In terms of the reforms that he 
has been able to get passed through parliament and implemented, 
the pace has been slower than what many not only in the United 
States but, frankly, in India would have liked to see.
    That said, we do believe that there has been greater ease 
in doing business and in attracting investment. We have seen 
that in terms of the increase in U.S. investment flows into 
India. We have also seen that in terms of the interest of 
American companies. They increasingly are looking at India as 
one of their top destinations for where they want to put their 
investments, where they want to sell their products and their 
services. And so it will be incumbent upon both of us to try to 
create the economic architecture that allows that to happen and 
for India to create the environment both with respect to larger 
legislative changes that they need to make in terms of the tax 
regime and others, but also in terms of the regulatory policies 
and how they are implemented across the board.
    Senator Perdue. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    Madam Secretary, I read the testimonies of the private 
panel of witnesses that is going to appear following your 
testimony, and without stealing their thunder, I was struck by 
similarities in their policy recommendations. In my view, the 
point that resonated the loudest was the U.S. interest in a 
strong economic relationship with India and, conversely, 
India's interests in a similar relationship with the United 
States. And like those witnesses, I believe that developing 
that bilateral economic relationship should be elevated to one 
of our highest bilateral priorities for the U.S. agenda.
    Now, we are engaged mutually in a comprehensive set of 
diplomatic dialogue and working groups covering a wide range of 
issues in the areas of economic security, climate change, and 
education. So this is a relationship that does not suffer from 
the lack of dialogue. But it, unfortunately, does suffer from a 
lack of results, especially since the civilian nuclear deal was 
signed in 2006.
    So it would be my hope that with a strong push from Prime 
Minister Modi--and I am pleased he is returning to the United 
States--that the time is right for these dialogues to translate 
into action. And there is no better example of the benefits to 
both the United States and India of a strong bilateral 
relationship than my home State of New Jersey. You were 
gracious enough to come in 2014 and be part of a panel 
discussion there. Indian Americans start more companies than 
any other immigrant group in America. New Jersey leads every 
State in Indian American startups. Nine companies on the 
Fortune 500 list have Indian American CEOs. They account for 
about 1 percent of the U.S. population but have a 
disproportionately influential position in American medicine, 
academia, corporations, and especially the high tech sector.
    Now, I have talked to many U.S. companies, and they 
definitely want to--they seek to invest in India. But they need 
transparent governance, a fair regulatory environment, strong 
legal mechanisms to protect those investments. So there is 
great optimism but there is also a realization that there is 
not the type of progress necessary in those fields to try to 
capitalize on that possibility.
    If the Indian Government can deliver on its plans for 
greater openness with capital flows and stronger intellectual 
property rights, I am confident that our companies are ready to 
invest.
    And so the question for me, with that as a background, 
particularly my concern in these different areas of the 
necessity for India to undertake reforms to recognize 
intellectual property rights, real reforms on this issue, which 
significantly impacts the ability of many U.S. companies to do 
business in India's important markets, particularly the 
pharmaceutical industry which faces continuing challenges in 
IPR protections--so realizing that some progress has been made, 
why has the relationship not realized its full economic 
potential? What is the administration's top priority in this 
regard with the Indian Government?
    Ms. Biswal. Thank you, Senator.
    I do believe that it is an extraordinarily complex not only 
economy but government with very robust state and provincial 
leadership that are not always on the same page or on the same 
mindset. And so while we have seen progress, the progress has 
been uneven. There are states that many of our companies would 
rank at the very top in terms of the ease of doing business, 
and then there are states that are prohibitively difficult to 
engage in. And so there is a great deal of unevenness across 
the board in terms of where we have success and where we have 
extraordinary and prohibitive challenges.
    Senator Menendez. So you are suggesting there is a 
structural challenge in the way the Indian Government works 
between the provinces and the central government?
    Ms. Biswal. I do believe that there are structural 
challenges, as well as I believe some of the progress that we 
would like to see is a national enabling environment and legal 
framework where we believe that the government has not been 
able to pass the kind of reforms through parliament that would 
dramatically change the outlook in this sphere.
    Have we seen progress? I think we have. And I think as I 
talk to our executives across the board, they would say that 
over the past 2 years, that they have seen a dramatic change in 
the nature of the conversations and more of a problem-solving 
approach to trying to address these issues, but not yet, as you 
have noted, the concrete outcomes that would give us the 
measure of assurance that we are seeking that our business, our 
economic relationships can grow at the pace that both countries 
would like to see.
    Senator Menendez. Well, so in the areas of intellectual 
property rights, what is the State Department doing and the 
administration doing to further not just a conversation but 
actions that ultimately create an Indian legal framework that 
will recognize and guarantee intellectual property rights? 
Because in so many ways, whether it is the pharmaceutical 
industry, whether it is the high tech industry and others, the 
concern of pirating and/or just outright--I will call it--
forfeiting intellectual property rights is a real concern. And 
that is going to be a challenge for India as well in terms of 
opportunities that exist.
    Ms. Biswal. You are exactly right. And that is the approach 
that we have taken, which is that as India seeks to increase 
its--you know, making India its innovation economy that it 
seeks to create, it will need to have a stronger intellectual 
property regime.
    Now, in our trade policy forum, which is led by USTR, we 
make this a centerpiece of our conversations, of our 
engagement. We also have an intellectual property working 
group, an IPR working group, between the U.S. and India, 
including engaging with the private sector on their specific 
interests and concerns.
    And finally, there, I believe, is a growing constituency 
within India to see a strengthening IPR regime. And the Indian 
Government just recently announced a new IPR policy that 
amongst the positive aspects I would say are that they seek to 
create a greater awareness and understanding in the Indian 
population about the need for strong intellectual property, to 
change the nature of that conversation so that they can make a 
systemic change, a need to increase the capacity, particularly 
the length of time it takes to issue a patent in India because 
of the enormous backload is inhibitive and prohibitive for 
innovation. And many Indian innovators are looking to offshore 
their patents because they cannot get a timely consideration. 
So these are positive steps.
    But we know that there are many other areas that we want to 
see greater progress on intellectual property not only in the 
pharmaceutical industry but increasingly across the innovation 
economy that both our countries want to see enabled.
    Senator Menendez. Well, I would just say it would be ironic 
that Indian entrepreneurs and inventors would offshore their 
patents and then would not have their patent recognized 
successfully in their native country.
    So I look forward to continuing that engagement.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Gardner.
    Senator Gardner. Thank you, Mr. Chairman.
    And thank you, Secretary Biswal, for this hearing today and 
your time and testimony today.
    I first had the opportunity to visit India almost 10 years 
ago now. What an incredible experience it was. Our nation's 
oldest democracy, the United States, to the world's--the 
world's oldest democracy in the United States to the world's 
largest democracy in India. What an incredible opportunity to 
see a vibrant economy, the incredible energy of the people of 
India. And throughout our meetings, no matter where we were, 
there was always this energy about how we could work better 
with the United States, how we could partner more in terms of 
business and relationships to further the already strong ties 
that we have. And so I continue to be excited about the future 
of U.S.-India relations and certainly look forward to working 
every way I can to further those relations.
    But I wanted to thank you personally, though, for something 
that you and your colleagues have helped me out at the SCA 
Bureau, working with my office to assist a Christian 
organization called Compassion International, which is based in 
Colorado Springs, Colorado. A situation that Compassion 
International has found itself in India is deeply concerning to 
me, and I hope that we can find a resolution to it soon. So 
thank you for you and your Bureau's engagement.
    I received a letter from Compassion International talking 
about what is happening in India to the organization, an 
organization that cares for some sponsors--has sponsored since 
1968 nearly 145,000 children. This organization has been active 
since 1968, millions of dollars going to help children, sponsor 
them, bring them up and out of poverty to greater 
opportunities. But in India, Compassion has now been sued by 
the income tax commission four times. Their assets have been 
seized. They have had employees and church pastors interrogated 
after hours by the intelligence bureau. 12 separate visa 
applications have been denied.
    The situation does raise concern about religious freedom in 
India. According to the U.S. Commission on International 
Religious Freedom (USCIRF), in 2015--and I quote from the 
report--religious tolerance deteriorated and religious freedom 
violations increased in India. Minority communities, especially 
Christians, Muslins, and Sikhs, experienced numerous incidents 
of intimidation, harassment, and violence.
    Furthermore, there seems to be a real crackdown on 
religious NGOs by the Indian Government in the last year. 
According to USCIRF, in April of 2015, the Ministry of Home 
Affairs revoked the licenses of nearly 9,000 charitable 
organizations. The ministry stated that the revocations were 
for noncompliance with legal reporting requirements, but 
numerous religious and non-religious NGOs claimed that they 
were in retaliation for highlighting the government's poor 
record on human trafficking, labor conditions, religious 
freedom, and other human rights, environmental, and food 
issues. Among the affected organizations were Christian NGOs 
that receive money from foreign co-religionists to build or 
fund schools, orphanages, and churches and human rights 
activists and their funders. And I believe this year even the 
employees of the bureau who were going to help right the USCIRF 
were denied their visa by India.
    So is this an accurate position in your view or statement 
of view of what is happening to NGOs being retaliated against 
by the Government of India or local governments?
    Ms. Biswal. I do believe that one of the concerns that we 
have raised with our counterparts in India consistently has 
been about the regulatory and/or legal framework that seeks to 
constrain the activities of civil society organizations, 
whether they be Indian or international organizations, American 
organizations, and to try to work through exactly what the 
concerns are on the Indian side but to ensure that one of the 
pillars of our relationship, which is a people-to-people 
relationship founded in the role of civil society organizations 
in both countries, that that is allowed and enable to flourish. 
And so this is a continuing area of concern.
    Now, with respect to USCIRF, I will note that we have 
engaged consistently to try to enable members of that committee 
to travel to India. I am not aware in the tenure of not only my 
term in this position but in government, that India has ever 
provided visas to that committee in successive administrations 
dating back since the foundation of that committee. We have 
tried to impress upon our counterparts that this organization 
with a congressional mandate is undertaking very important work 
and that a dialogue, a constructive dialogue, between the 
Government of India and the U.S. Commission for International 
Religious Freedom would benefit all sides. And we will continue 
to press upon them.
    Senator Gardner. And thank you. So what you are saying 
basically is that it is not just Compassion International, 
there are other Christian organizations or otherwise that are 
now in the same situation that Compassion International finds 
itself in.
    Ms. Biswal. I think that there are probably an uneven 
experience of civil society organizations. We are looking into 
specifically the issues that you have raised with Compassion 
International to see if there is some way that we can work 
through those concerns and try to facilitate their activities 
in India. And I look forward to working with you and with them 
to try to get to the bottom of that.
    Senator Gardner. And thank you. In terms of the Government 
of India's response to our actions in Delhi from our embassy, 
what exactly have they done to this point perhaps to alleviate 
the concerns that you have expressed?
    Ms. Biswal. Well, we have engaged on behalf of both 
specific concerns when U.S. civil society organizations raise 
them with us, as well as the broad-based issues of, on the one 
hand, understanding that in our country, as well as any other, 
that there is a legal frame under which civil society operates 
and to ensure that that frame is one well understood and, two, 
that it is transparently and evenly applied. One of the 
conversations that we have had with our counterparts is that an 
uneven application of the law can itself represent a bias that 
can constrain the activity of civil society and constrain the 
speech of private entities. So we do try to work through those 
issues.
    I will say it is inherently going to be dependent on the 
very robust constituencies within India that push on these 
issues in the public debate, in the media, and in the 
interactions between civil society and members of government 
and members of parliament that you are going to see the 
greatest possibility for progress. But we are doing our part in 
our conversations both publicly and privately to encourage 
progress in this area.
    Senator Gardner. And again, I want to thank you for your 
office's actions. It would be a shame to see this organization 
stop its great work because of this activity taking place right 
now and this policy in India. So thank you for that. And 
perhaps we could have further discussions later--I am out of 
time now--about the partnership that we have right now on the 
South China Sea with India and their views of freedom of 
navigation operations. But perhaps at a later time. Thank you 
very much.
    Ms. Biswal. Thank you, Senator.
    The Chairman. Thank you.
    Senator Kaine.
    Senator Kaine. Thank you, Mr. Chair.
    And thank you, Secretary Biswal. It is good to be back 
together with you.
    I want to follow up on the line of questioning for Senator 
Gardner because I want to make sure I understood some of your 
answers and underline this issue.
    The Indian Government denied visas for American researchers 
in March who were going as part of the U.S. Commission on 
International Religious Freedom. These were researchers who 
work to prepare the annual report that is done about religious 
freedom around the world. That is a most unusual action. Is it 
not?
    Ms. Biswal. We certainly would have encouraged them to 
allow these researchers to travel because we believe it would 
foster greater understanding and support and dialogue between 
USCIRF and Indian authorities and would enable them to have a 
more comprehensive report and understanding.
    Senator Kaine. I was not exactly clear about your 
testimony. I just was distracted for a second. In the past, 
have similar researchers been denied visas in India or have 
they been allowed in?
    Ms. Biswal. It is my recollection that we have never been 
able to gain entry or gain visas for them to travel to India in 
successive Indian administrations, that that has been a 
longstanding policy of the Indian Government that we have not 
been able to change.
    Senator Kaine. And what has been the general policy with 
respect to other nations' willingness to grant visas to 
researchers from the U.S. commission?
    Ms. Biswal. I suspect that it is a mixed and uneven record, 
but I cannot tell you definitively what it is across the board.
    Senator Kaine. The 2015 report of the commission was pretty 
hard on India, and in fact, on India's--I think in their 
conclusion--sort of declining religious tolerance, or maybe to 
say it in the reverse, increased instances of sectarian tension 
and disturbances, as I recall.
    Ms. Biswal. I believe that is correct.
    Senator Kaine. From my constituents--I have a very, very 
vibrant Indian American community in Virginia, as you know, 
including a pretty active Sikh community. And the Sikh 
community in particular has expressed a lot of concerns about 
Indian governmental response, for example, to desecration of 
Sikh religious texts and sites that have been conducted in 
certain parts of the country and what they view as an 
inadequate government response to that. Has your office been 
following those concerns as well?
    Ms. Biswal. We have been and we have also engaged with the 
Sikh community here in the United States.
    Senator Kaine. I met with the Indian Ambassador to the 
United States in recent months to talk about this and shared my 
very significant concern about it. I think the message was 
delivered. I think the explanation was during election seasons, 
there can sometimes be things happen, and then after the 
election season, tensions abate a little bit. But I was not 
completely satisfied with that answer. Again, I consider myself 
a strong supporter of this bilateral relationship.
    I also understand over these issues of religious tolerance, 
there have been in India recently a number of artists and 
others who have been refusing cultural prizes to try to make 
kind of a public statement of concern about the state of 
religious tolerance and liberty in India. Am I correct in that?
    Ms. Biswal. There has been a fairly vigorous and vociferous 
debate within India with respect to issues of religious 
freedoms and religious tolerance.
    Senator Kaine. Well, this is an issue that I think is a 
really important one for us to stay up on. We are going to have 
the opportunity, which I really look forward to, to have the 
Prime Minister in Washington soon. But India's status as that 
secular democracy, as you described it, is a really important 
one, but you can only have that status if people do not feel 
like they are going to be preferred or punished for how they 
choose to worship.
    Ms. Biswal. I guess if I may comment, Senator. My own 
perspective on this issue is that there is no more robust voice 
than the voice of the Indian people that is taking up these 
issues within increasing vigor and public debate. It is on the 
headlines of Indian newspapers that you are seeing a very 
active engagement on this issue. I think these are issues and 
these are values that we hold very dear that we bring into the 
conversation, but we try to do it in as constructive a way 
possible to not take away from the fact that these are issues 
that Indians must grapple with and get right for their own 
country, for their own democracy, for their own society and 
that we in the United States have experiences to share, lessons 
to share, best practices to share, but we seek to do that in a 
way that respects and honors the fact that this democracy has a 
very vibrant and very vocal civil society and media and 
political party system that is also trying to get this right.
    Senator Kaine. And that certainly has been my experience as 
I have visited. That is a heartening aspect of India today is 
that vibrant civil society that is not shy at all about raising 
these issues.
    Just to conclude, moving to defense cooperation, an aspect 
of the testimony of all the witnesses, I am very heartened by 
the ongoing work that is being done in that area. Senator King 
and I visited India in October 2014 and went to the Mazagon 
docks in Mumbai to see the Indian shipbuilding industry and 
encouraged the defense ministry to send a delegation here, and 
I think that has happened maybe last summer. And then there is 
ongoing work in these various defense spaces. Secretary Carter 
has been really good about it.
    And I even noticed--this is interesting being on the Armed 
Services Committee--every DOD witness we now have always talks 
about the Indo-Asia-Pacific. When I started on the committee, 
they always talked about the Asia-Pacific. Now they always talk 
about the Indo-Asia-Pacific. And I think it is good that as we 
think about that part of the world, we are changing our 
vocabulary to reflect the fact that the relationship with India 
is of growing strategic importance. I believe that it is. And I 
just want to encourage that we continue in that way.
    And with that, Mr. Chair, I yield back.
    The Chairman. Thank you.
    I did not use my time on the front end, and I wanted to ask 
a couple of questions. This is my second one.
    I get the feeling just in listening to your testimony and 
some of the concerns that people on both sides have had that we 
are not as brutally honest about our relationship with India as 
we should be, and it benefits neither them nor us. It just 
seems that they are huge country and we see promise there. We 
do not see much action. But we are just not that honest in our 
discussions--brutally honest--about some of the issues that 
have been raised here, whether it is human rights, whether it 
is slavery, whether it is really a lack of the intellectual 
property issues that have been brought up.
    The civil nuclear deal. I mean, I am sorry. It never 
materialized into anything that mattered yet. A long time ago 
one of the first votes I made coming into the Senate--I have 
been here 9 years and 4 or 5 months.
    So do we just sort of walk around these issues with India 
and hit them on the edges but have fear about fully addressing 
the issues head on with them?
    Ms. Biswal. I would actually take exception with that 
characterization, Mr. Chairman, because I do believe that we 
have a very robust and very honest and very transparent 
discourse. We are a very transparent democracy, and the 
concerns that we have are communicated very clearly and at very 
senior levels to the Indian Government. India is also an 
extraordinarily transparent democracy in that the issues that 
we raise are not only issues that we are raising, but they are 
grappling with these issues in the context of their own 
democracy and debate. What I believe the administration seeks 
to do in these engagements is to find the places where our 
engagement on these issues can have the kind of results and 
actions in a constructive way that we would like to see.
    That is not to say that we do not engage in a candid and 
brutally honest conversation. I think our human rights report, 
our religious freedom report, our trafficking in persons report 
lays bare in very clear and detailed terms the concerns that we 
have and the assessments that we make. And those are conveyed 
and communicated very clearly to the Government of India and to 
the Indian people at large.
    That said, we do have a desire to advance this relationship 
in a way that I think is going to be increasingly important to 
both our countries, to both our peoples, and to both our 
economies.
    The Chairman. Thank you.
    Senator Rubio.
    Senator Rubio. Thank you.
    Thank you for being here today.
    Oftentimes I hear the role of India's future discussed as a 
sort of counterbalance to China. I think it should be much more 
than that. Obviously, there is an element of that, but I think 
India in and of itself is a nation with incredible potential 
and there is incredible potential in our bilateral 
relationship. So my questions about military exchanges are not 
towards the desire to use viewing India as some sort of 
surrogate counterbalance to China and the region but rather one 
that recognizes what I think is their potential and ultimately 
their rightful role in South Asia and across the world.
    So how do you see the future of U.S.-India military-to-
military relations progressing in the near future? I know there 
has been concern in the past within India that the United 
States has either proven to be unreliable and/or a meddling 
nation that they view--sell arms and they want to go around and 
tell them what to do internally. So how has that progressed and 
how do you view the future of our military-to-military 
engagements?
    Ms. Biswal. Thank you, Senator.
    I do believe that this is an area of extraordinary progress 
and ambition in both countries. We have seen the growth in our 
defense ties that has dramatically scaled up over the past 
decade. Our defense trade, which has gone from something in the 
neighborhood of $250 million to $300 million per year, is now 
over $14 billion.
    Our exercises have grown tremendously and in complexity. We 
are just concluding our air-to-air combat exercises, Red Flag, 
but also we are doing exercises not only bilaterally but 
including increasingly trilaterally. Malabar is now done with 
U.S., India, and Japan. India is a participant in RIMPAC.
    We are also, I believe, on the cusp of an era where we 
could well see the U.S. and India doing joint or coordinated 
operations across the Indo-Pacific. And we believe that India 
has an important role to play as a net security provider and a 
guarantor of an open and rules-based maritime order across the 
Indo-Pacific.
    Senator Rubio. You discussed for a moment the trilateral 
cooperation, and you mentioned specifically Japan. It is my 
understanding that that relationship is ripe for growing. How 
is that moving forward? How are those two countries interacting 
now both economically and militarily?
    Ms. Biswal. We have certainly seen a dramatic increase and 
scale-up on India-Japan ties. On the economic side, Japan has 
announced a major $100 billion investment in the Mumbai-Delhi 
corridor but I think is increasingly looking to prioritize 
India as an investment destination for Japanese investment.
    But we are also seeing increased cooperation between India 
and Japan on the defense side. I noted the discussions, the 
inclusion of Japan in the Malabar exercises not only when it is 
happening in the Indian Ocean region but in every locale.
    And I do believe that we will also look to enhance our 
cooperation on other areas such as humanitarian assistance and 
disaster relief and other platforms where the United States, 
India, and Japan can really advance a joint effort and a shared 
effort.
    Senator Rubio. It is also clear that groups like ISIS and 
other radical Islamic groups see India as a prime potential 
target for fomenting the rise of surrogate groups and 
affiliates within India. How would you assess the U.S.-Indian 
counterterrorism and intelligence sharing relationship, and is 
it one that is growing along the lines of our strategic 
partnership and our military partnership?
    Ms. Biswal. It certainly is. We have a very robust 
cooperation with India on counterterrorism that includes 
intelligence and information sharing, includes the sharing of 
tools and technologies and best practices so that we can 
enhance the capabilities to combat terrorism and violent 
extremism. We have a homeland security dialogue and a joint 
counterterrorism working group that is increasingly looking at 
both regional and global terrorist networks.
    India has been a strong partner in combating terrorism 
financing that increasingly we have concerns about the reach of 
terrorist financing networks across South and Central Asia, and 
India has been a strong partner in that.
    And we believe that the potential for greater cooperation 
is there as we deepen our ties on intelligence and on security. 
We are also deepening our ties in the internal security matters 
as well.
    Senator Rubio. And my last question. You know, in Indian 
history, there are multiple examples of very prominent and 
successful women that have been leaders in their government, 
and yet we also see these reports about the treatment of women 
at the societal level, particularly in some local jurisdictions 
where crimes committed against women, ranging from assault to 
all-out harassment, is often ignored by local officials. Is it 
your sense that at the national level that its leaders 
understand that they are facing a significant global perception 
challenge and a reality challenge on the ground in the 
treatment and status of women in their society?
    Ms. Biswal. You know, when we had the rape I believe 4 
years ago now of Nirbaya on a bus in New Delhi and the brutal 
murder, it created not only the shock and outrage in the United 
States and around the world, but actually the biggest and most 
vocal reaction was in India itself. And as a result of that, 
there has been, I believe, a tremendous awareness of the 
challenges that women's security in India and that law 
enforcement face in advancing that, a great deal of sensitivity 
now in the Indian media and civil society to not push that 
under the rug but to actually put it out into the open, but 
also some progress.
    The Verma Commission, which was headed by a former chief 
justice of the Indian Supreme Court, came out with a number of 
critical recommendations, many of which are now in place, 
enacted, and implemented. And New Delhi has created a new 
women's rights bill to specifically address issues of women's 
security and in curbing gender-based violence.
    So this is a very important issue within India, but it is 
going to take a great deal of focus and effort not just at the 
national level, but to drill it all the way down to the local 
level to change dramatically and evenly across the board the 
prospects of women and girls in India to live in a secure 
environment that protects their rights.
    Senator Rubio. Thank you, Madam Secretary.
    The Chairman. Thank you.
    Senator Coons.
    Senator Coons. Thank you, Chairman Corker, Ranking Member 
Cardin. Thank you for convening this important hearing on the 
future of relations between the United States and the world's 
most populous democracy.
    Delaware is home to a large, industrious, engaged, and very 
entrepreneurial Indian American community that is constantly 
working with me to seek ways to strengthen bilateral ties. And 
last year's renewal of the U.S.-India defense framework 
agreement is, I hope, the sign of a new and positive era in 
U.S.-India relations that we can build on to work together to 
address security threats in Asia and to build stronger and more 
mutually beneficial economic relationships.
    I will simply say a number of issues raised by other 
members on this committee around intellectual property, the 
importance of a BIT, the central role that India played in 
COP21, the importance of renewable energy are all topics. I 
agree with many of the issues raised.
    I also just want to commend the Chairman for his relentless 
focus on the suffering of those who are enslaved around the 
world and the ranking member for his repeatedly raising 
trafficking issues. I think these remain an important area of 
work for us in our relationship with India to make sure that we 
address our shared values, whether religious tolerance and 
inclusion or addressing the fundamental human rights violations 
against women and those who are enslaved in India.
    Let me ask two perhaps more parochial questions. I 
represent a State that has a county that grows more poultry 
than any other county in America, and in June of 2015, India 
lost a case in the WTO that said that India's ban on U.S. 
poultry was inconsistent with global norms. India has requested 
18 months to take down these restrictions and to open up a 
market that could be $300 million of potential for the U.S. 
poultry export community which is rooted in more than 30 of our 
50 states.
    Can you give me any update? And I will just share my 
concern that other countries that have also lost similar cases 
in the WTO like China have ultimately taken years. The USTR 
just announced another WTO suit against China because they 
neglected to ever follow through on meeting their WTO 
commitments.
    How do you see the path forward for U.S. and India when it 
comes to agricultural exports and, in particular, poultry?
    Ms. Biswal. Senator, I will have to get back to you on the 
specifics of the poultry case. But in terms of the agricultural 
exports at large, I do believe that we have an agricultural 
dialogue which seeks to advance market access. It has been 
challenging. And we do believe that as India looks to reform 
its economy, that one of the major areas to focus on is the 
agricultural sector where I believe we can have a robust 
partnership that can, one, help India prevent the post-harvest 
losses that really account for almost 40 percent of India's 
agricultural produce that does not ever make it to the market. 
But for us to be able to do that, we do need to ensure that our 
companies and our producers have the kind of access that would 
enable us to really deepen that partnership. So this is 
something that I know that Secretary Vilsack is very committed 
to.
    Senator Coons. Thank you.
    One of the things I have worked hard in the African context 
with our poultry companies to try and emphasize and highlight 
is that this should be a two-way trade where there is 
investment in technology transfer in developing a modern and 
world-class poultry industry for the people of India, as well 
as an export opportunity for the United States.
    DuPont, a company headquartered in my home State of 
Delaware, has a strong public-private partnership with the 
Uttar Pradesh Department of Agriculture. They have created rice 
farming schools at the local level in order to provide farmers 
with modern scientific and practical expertise to improve 
yields and productivity and profitability, which would be 
another step towards creating a sustainable agricultural 
future. It has been very successful. There have been more than 
a quarter million farmers in 11,000 villages that have 
participated, and they hope to keep expanding this program.
    How can the State Department work with companies like 
DuPont in the United States that has been a great partner in 
Africa and the Indian Government, central government and state 
governments, to expand development programs that actually can 
improve world communities and develop sustained positive 
economic ties?
    Ms. Biswal. I think there is a tremendous opportunity. You 
know, in 2010 when President Obama made his first trip as 
President to India, one of the things that was launched and 
announced was a partnership for a second green revolution, 
which really focuses on how the United States and India, 
working together, can not only benefit Indian farmers but also 
can partner to advance technologies and best practices in 
Africa and other places.
    And in that, there is an important opportunity for the 
private sector, which brings a lot of the tools and technology 
and best practices--both U.S. private sector and Indian private 
sector--to be able to work on that. We are already seeing that 
in some of the things that we are doing in terms of 
agricultural extension programs and the technologies that can 
create more efficiency in the extension programs, but also in 
areas of water in agriculture and irrigation and many other 
areas. So I would look forward to seeing how there are 
opportunities for DuPont to collaborate in that.
    Senator Coons. I appreciate your long service at USAID, as 
well as State.
    And it is my hope that the Global Food Security Act will be 
soon enacted by both houses of Congress and the President. It 
is the sort of partnership--the Feed the Future program is the 
sort of robust public-private partnership that I think has been 
a hallmark of this administration.
    Let me ask a last question, if I might. I will just renew 
the comments that several Senators have made. Senator Cardin 
first raised them about the Prime Minister's visit to Iran and 
the potential challenges of a strengthened India-Iran alliance. 
What obstacles stand in the way of increasing U.S.-India 
security ties? And what are we doing to overcome those 
obstacles? And to what extent do you view an opening to Iran by 
India as an obstacle to our having a closer and sustained 
security relationship with India?
    Ms. Biswal. Thank you, Senator.
    With respect to, first, the challenges in our own security 
ties, I would say that for both countries we are increasingly 
looking to see how we can create more efficiency in the defense 
relationship. That means on the Indian side efficiencies in 
their procurement processes and efficiencies in their 
regulatory environments and hopefully increasingly an Indian 
progress on such basic bedrock issues as the foundational 
agreements. And we hope to have a logistics agreement like I 
said in place before the Prime Minister's visit, but also other 
foundational agreements.
    And on the U.S. side, as we increase our own confidence in 
India as a reliable partner of cutting-edge advanced 
technology, we are looking to see how we can work through the 
licensing process with greater efficiency so that we can move 
collaboration and opportunities for partnership on more 
advanced platforms and technologies. What we want to get at, at 
the end of the day, is greater interoperability that can then 
allow our militaries to do more in real time together as and 
when the need arises.
    With respect to Iran, I will say that as of yet, we have 
not seen Indian engagement with Iran on a military security or 
CT front that would cause us concern. We watch very closely. We 
have very candid conversations about what our concerns and red 
lines are. We also track very closely what their economic 
engagement is and make sure that they understand what we 
believe are the legal parameters and requirements that we 
believe any engagement needs to follow. So far, we have had a 
very responsive reaction from the Indians on that.
    Senator Coons. Well, thank you, Madam Assistant Secretary. 
I view Iran as a very dangerous country, and so I am quite 
cautious and concerned, as others seek to open, and I do think 
the U.S.-India relationship is one that has immense potential 
and we need to continue to work together to find ways to 
realize that potential.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Murphy.
    Senator Murphy. Thank you very much, Mr. Chairman.
    Thank you for taking the time with us today.
    I think this is an incredibly important hearing. I thank 
the chairman for calling it. The deepening ties to India has 
really spanned three different administrations from the Clinton 
administration to the Bush administration to the Obama 
administration.
    It is a wonderful counter-narrative to this mythology that 
exists about American global weakness. The Indians have had a 
very purposeful, long-term commitment to nonalignment, but they 
have made a decision over the course of the last several 
decades to create an alliance with the United States because 
they are making a long-term bet on the importance of American 
economic, political, and military power in the globe for a long 
time moving forward. So I think it is important to put their 
decision in the context of what other nations think about the 
future of America's role in the world.
    I wanted to ask a couple of questions to follow up on a 
line of questions from Senator Rubio on our intelligence 
sharing. So Secretary Kerry and the Indian Foreign Minister 
signed this joint declaration on combating terrorism in 
September of 2015. But we know that there are some obstacles 
that still exist to effective intelligence sharing. One is a 
pretty traditional reluctance on behalf of the Indians that 
exists in many other countries to engage in sharing with the 
United States because of fears as to what happens to that 
information. Second is the fact that as I understand it, most 
of the most important intelligence operations in India are done 
at the state level, that there is really not a national 
capability that exists like it does here in the United States.
    Can you just talk about what some of the obstacles are that 
we need to overcome in order to have a closer intelligence 
sharing relationship with the Indians?
    Ms. Biswal. Sure, Senator. I will go as far as I can go in 
this setting. I would be happy to also come up and brief in a 
private setting and bring colleagues from the IC to have that 
lengthier conversation.
    I would say that India absolutely has a national level 
capability and structure on intelligence that we do engage with 
and have a robust dialogue with through the IC channels and 
that there has been a lot of progress in that arena, including 
engagement at the cabinet level with the leadership of our 
intelligence community both with Director Brennan and with 
Director Clapper and their counterparts and an operational 
level of engagement as well.
    That said, there is a role, I think, in terms of combating 
terrorism, of state level entities. And we are looking to see 
where and how we can engage on that. We have had very candid 
conversations when we believed that the security of information 
that has been passed has been compromised in any way and have 
gotten very good responses on that. Again, I do believe that 
this is an area where we are seeing deepening cooperation. I 
would be happy to elaborate in a different setting.
    Senator Murphy. I wanted to ask you about the penetration 
of Islamic extremism in India. They have had a long history of 
success, frankly, in rebuffing attempts by these groups to set 
up footholds within India.
    And then more specifically, I wonder if you would talk 
about what we know about the Gulf investments in India. There 
is a lot of reporting about some major investments being made 
by the Saudis, by the Wahabi clerical movement to set up a 
large network of schools, madrasas, universities throughout 
India. We know about the connection between the penetration of 
that ideology and its connection often to the ability of 
terrorist recruiters to find success. There is an article in 
``The New York Times'' this weekend about what happened in 
post-war Kosovo related to the investment of the Saudis in 
building out the reach and capability of the Wahabi 
conservative movement there. So can you talk about that 
specific issue and then, more broadly, about any developing 
trend lines on the penetration of some of these extremist 
groups to gain some foothold inside India?
    Ms. Biswal. Sure. We are clearly tracking and very 
concerned about the reach of these global networks in India and 
around the world, and that is a very focused part of our 
conversations and engagement on the CT front and on the 
intelligence front. We have had very strong success in engaging 
with India on tracking financial flows that represent areas of 
concern, and the Indians themselves are doing a lot to track 
flows coming in not only from the Gulf but from many parts of 
the world that they think can cause concern.
    The challenge is always identifying what we believe is 
appropriate financial flows coming in from across and around 
the world versus areas of concern and creating the distinctions 
and the systematic framework to constrain one and enable the 
other. And that is a challenging area--I will be quite honest--
in being able to get that right.
    We do believe that through both our Treasury dialogues 
which deal with the financial flows issue and terrorism 
financing concerns and in our CT and Homeland Security 
dialogues which deal with the focus of efforts by global 
networks to tie into and reach into South Asia and India in 
particular, that we have very robust cooperation. India 
actually has demonstrated and the Indian Muslim community has 
demonstrated a great deal of resilience against such overtures, 
and we have seen in India that radical ideology has, by and 
large, not been successful in taking root.
    Senator Murphy. My time is up, but can you answer my second 
question. Are we watching this trend line of Saudi and Gulf 
state investment inside India?
    Ms. Biswal. I will have to take that back to give you a 
more specific answer on the areas that you are mentioning. It 
is certainly something that, like I said, through our various 
components with the U.S. Treasury and with our counter-ISIL 
task force that there is a great deal of focus on what some of 
the destination countries are and what could be at play. So I 
will give you a more specific answer on that after consulting 
with some of my colleagues who track that.
    [Ms. Biswal's response to Senator Murphy's question 
follows:]


    Ms. Biswal. Several of the Gulf countries are important Indian 
partners for trade and investment. According to the Indian Ministry of 
Commerce, Saudi Arabia and the United Arab Emirates are among India's 
top five trading partners. Gulf Cooperation Council countries provide 
half of India's oil imports, and the region is home to more than 7 
million Indians who repatriate over $50 million a year in remittances. 
In the past year, Prime Minister Modi has visited the United Arab 
Emirates, Saudi Arabia, Qatar and Iran. During his June 5 visit to 
Qatar, both sides agreed to share information on terrorism financing 
and money laundering. External Affairs Minister Swaraj led the 
inaugural Arab-India Cooperation Forum in Bahrain in January 2016.
    In response to your question on private support for terrorism in 
India, we maintain a vigorous and productive counterterrorism 
relationship with India, as we do with our partners in the Gulf.
    As a strategic partner, the United States actively engages India on 
these issues. We will hold a bilateral Counterterrorism Working Group 
and a Homeland Security Dialogue in summer 2016 to discuss issues such 
as capacity building, information sharing, and exchanges on urban 
policing. Mumbai is part of the Strong Cities Network - a multilateral 
forum to increase local resiliency to violent extremism. We also hold 
regular consultations on the Middle East with the Indians to discuss a 
range of issues in the region, including security, as well as the U.S.-
India Global Issues Forum that includes discussion of migration and 
countering violent extremism among other issues.
    Radicalism in India is an extremely limited phenomenon; one with 
which the Indian state is well-equipped to deal, and which the Modi 
government has been proactive in working with the Muslim community to 
monitor and address.


    Senator Murphy. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Before turning to Senator Markey, I reserved my time up 
front, and I just have one last question. And I know Senator 
Markey is likely to get into this. But what kind of liability 
issue did we end up with relative to the civil nuke deal that 
we understand may be about to break in a very positive way? I 
know that has been a big problem for our companies in trying to 
do business with them. Where have we ended up with them in this 
regard?
    Ms. Biswal. Thank you, Mr. Chairman. And I wanted to be 
able to be responsive to your concerns on the civil nuclear 
deal and where it stands.
    I do believe that the issues that bedeviled progress on a 
civil nuclear deal being implemented and having a commercial 
deal, viable deal, take place have been issues of liability. 
And under the previous administration, there had not been an 
ability to move forward on liability concerns. The breakthrough 
understanding that President Obama and Prime Minister Modi 
achieved last January on his Republic Day visit was with 
respect to this particular issue of liability.
    India has subsequently ratified the International 
Convention on Supplementary Compensation and has, therefore, 
confirmed and attested that its liability laws will be in 
compliance with the International Convention. India has also 
moved to establish insurance pools that can help, again, 
address issues of liability.
    We believe that the steps that India has taken have 
addressed, by and large, the key concerns that had been in 
place, and it is now for U.S. companies to make the commercial 
determinations----
    The Chairman. Surely they gave input on the front end. So 
have they told you that, yes, they feel comfortable doing 
business in India or not?
    Ms. Biswal. I believe that it is going to be different for 
each company. We do believe that there are companies that are 
moving aggressively forward on pursuing a commercial deal and 
are quite close, and there are companies that perhaps have a 
different risk perception and are moving a little bit more 
cautiously in that space. I think that those are going to be 
individual determinations that companies are going to have to 
make in terms of what the risk profile is that they are 
comfortable with, but we believe that the commitments are in 
place and have largely addressed the concerns that we had 
raised with them very consistently over the past decade.
    The Chairman. Thank you.
    Senator Markey.
    Senator Markey. Thank you, Mr. Chairman, very much.
    Since 2010, the Obama administration has sought to gain 
Indian membership in the Nuclear Suppliers Group. If India 
joined the Nuclear Suppliers Group, it would be the only 
participating government that was not also a party to the 
Nuclear Nonproliferation Treaty.
    Now, despite the lack of consensus in the Nuclear Suppliers 
Group on Indian membership, the Obama administration has 
decided to forcefully press for a vote on the issue in the 
coming months.
    The purpose of the Nuclear Suppliers Group has been to 
encourage states to accept full-scope IAEA safeguards and to 
prevent the spread of sensitive technology that could be used 
to build nuclear weapons. Instead of strengthening those 
objectives, admitting India would undermine them.
    Now, unfortunately, we have repeatedly carved out 
exemptions for India. We did it in 1980 in the sale of uranium 
to them without full-scope safeguards. We did it in 2008 in the 
U.S.-India nuclear deal that did not require full-scope 
safeguards.
    Today we are not only granting India exemptions from global 
nonproliferation rules, but we are actually proposing to 
include India in the body that decides on those rules.
    So, Secretary Biswal, the Nuclear Suppliers Group has 
agreed to a set of factors that must be taken into account when 
considering whether to accept a new member. Among those factors 
is the state must be a party to the Nuclear Nonproliferation 
Treaty or an equivalent nonproliferation agreement and that it 
must accept full-scope safeguards from the IAEA. In other 
words, Indian membership would require us either to set these 
factors aside or to revise them. So which of these two options, 
revising the rules or setting them aside, does the 
administration plan to pursue?
    Ms. Biswal. Thank you, Senator.
    Let me say that the President has reaffirmed that the U.S. 
views that India meets not only the missile technology control 
regime but also that it is ready for NSG membership.
    Senator Markey. Are you going to revise the rules for their 
membership, or are you just going to set them aside? Which is 
the administration going to do?
    Ms. Biswal. I do believe that as you have stipulated what 
the requirements are, that India has harmonized its export 
controls with the Nuclear Suppliers Group. It has adhered to--
--
    Senator Markey. Yes, but they are not in compliance. I 
understand. They are not in compliance with the rules. So which 
are they going to do? That is, what is the administration going 
to do? Is it going to ask for a revision of the rules or just 
set aside the rules for India?
    Ms. Biswal. So I do believe that in our engagement with the 
NSG, we have made the case that we believe that India has 
complied with and is consistent with the requirements of the 
NSG and, therefore, should be considered for membership.
    Now, I do not believe that requires us to set aside----
    Senator Markey. So you are saying that you are not 
exempting India from the NSG membership guidelines and that 
they are in compliance with the guidelines. Is that the 
administration's perspective?
    Ms. Biswal [continuing]. Our position is that India is very 
much consistent with the NSG guidelines.
    Senator Markey. Are they in compliance with the membership 
guidelines?
    Ms. Biswal. So I would be happy to take back and talk to 
our colleagues who negotiate on these issues to get the 
specific technical frame, but I do believe that it is our 
considered opinion that India has met the requirements and 
therefore should be considered----
    Senator Markey. Well, I do not think any clear reading of 
the NPT or the NSG rules can lead to that logical conclusion, I 
will be honest with you. And I guess what I would say to you--
and maybe you can bring this back--that it should also require 
some specific new nonproliferation commitments from India such 
as signature of the Comprehensive Test Ban Treaty, an agreement 
to halt production of fissile material before pursuing full 
membership in the Nuclear Suppliers Group. I think that would 
be a strong message.
    And why is that? Well, it is because since 2008 when we 
also gave them an exemption, the country has continued to 
produce fissile material for its nuclear weapons program 
virtually unchecked. At that time, Pakistan warned us that the 
deal would increase the chances of a nuclear arms race, and 
sure enough, since that time, Pakistan has declared its 
intention to give control over battlefield nuclear weapons to 
frontline military commanders and it has declared its intention 
to use nuclear weapons earlier in a conflict with India.
    In your view, how would granting state-specific exception 
to India affect Pakistan's nuclear choices? Would it complicate 
efforts to get Pakistan to refrain from undertaking 
destabilizing actions such as deploying battlefield nuclear 
weapons?
    Ms. Biswal [continuing]. So I do believe we have a specific 
and separate dialogue with both countries to address both our 
concerns and to----
    Senator Markey. Is there any relationship between what we 
do for India in terms of exempting them from rules and 
regulations and, as a result, a response from Pakistan in 
saying we are going to actually move closer and closer to the 
use or putting their nuclear weapons in a situation where they 
become more likely that they are going to be used?
    Ms. Biswal [continuing]. Well, I do believe that we address 
the interests of both countries on their own merits, and we 
have very distinct and robust discussions with both countries 
as to what their aspirations are.
    Senator Markey. I do appreciate that. I just think that 
what you are doing is you are creating an action/reaction that 
is leading to a never-ending escalation that ultimately brings 
these battlefield nuclear weapons closer and closer to the 
border of both countries. I think it is a dangerous policy. It 
is an unnecessary policy. Making these exemptions only 
infuriates Pakistan and leads them to further increase their 
own nuclear capacities. So I just think it is a very dangerous 
long-term trend, especially in view of how concerned we are 
about those weapons in Pakistan potentially falling into the 
hands of non-state actors. So I would hope you would bring that 
message back. I just think it is very dangerous.
    And if I may, just one other question which is on India's 
renewables program. President Modi is now talking about 175,000 
megawatts of renewables by the year 2022. What is the United 
States' role in helping on a bilateral basis to encourage the 
full development of those 175,000 megawatts of renewables?
    Ms. Biswal. Thank you.
    You know, this is an ambitious target that Prime Minister 
Modi has put forward, in fact, the most ambitious target 
globally.
    We believe the biggest constraint to implementing that is 
going to be having the right framework to attract low-cost 
financing that will allow them to really unleash that. And this 
is an area where we are working with them to see what we can do 
to, one, create opportunities for greater private investment in 
their renewable sector, but two, to share with them what are 
some of the tools and some of the mechanisms that they can put 
in place.
    So we have a Clean Technology Financing Forum that we have 
engaged in with the Indians to try to have that conversation 
about what the enabling environment must be. We are also 
working with them on different tools that can help mitigate 
some of the risk and create greater willingness for private 
financing to go into that space.
    Senator Markey. Thank you. This is an enormous area of 
potential for the U.S. and India. It is an example for the rest 
of the world.
    Ms. Biswal. Absolutely.
    The Chairman. Thank you.
    Senator Cardin.
    Senator Cardin. I just wanted--before the Secretary 
leaves--several members have been raising the issues of change 
in India on human rights, whether it deals with religious 
tolerance or the trafficking issues, women's issues. And you 
repeatedly refer to the robust activities of the population. 
And I fully understand that. But I would just point out that is 
another reason why we are concerned about the attack on civil 
society within India. They have to effectively be able to 
speak.
    And then lastly, it does not relieve us from developing and 
working with leaders in India that recognize that these are not 
Western values but these are universal issues that India needs 
to make progress on. I just want to underscore that point 
because we cannot put everything on the people, particularly if 
the civil societies are under attack.
    Ms. Biswal. Absolutely, Senator. I do not disagree with a 
word that you have said. And I in no way mean to imply that we 
are not engaging on these issues ourselves.
    The Chairman. Madam secretary, thank you for being here 
today and for your service to our country. We are going to 
leave questions open until the close of business Thursday. If 
you would attempt to answer them fairly promptly, we would 
appreciate it. Again, thank you for being here today, and we 
look forward to the visit in a few weeks and hopefully it is 
going to be very productive. But thank you.
    We are going to move to the second panel.
    Ms. Biswal. Thank you, Mr. Chairman.
    The Chairman. Thank you so much.
    The second panel, as they are making their way to the 
table. The first witness is Mr. Sadanand Dhume, Resident Fellow 
at the American Enterprise Institute. We thank him for sharing 
his wisdom with us today. The second witness will be Dr. Alyssa 
Ayres, Senior Fellow for India, Pakistan, and South Asia, 
Council on Foreign Relations.
    Mr. Dhume, if you would, if you would go first. Again, 
thank you for sitting through the testimony you just heard, and 
our second panels always have a little less attendance. For 
that, we apologize. We also know that many times the second 
panels are the most interesting. So, again, thank you both for 
being here, and if you would begin, we would appreciate it.

    STATEMENT OF SADANAND DHUME, RESIDENT FELLOW, AMERICAN 
             ENTERPRISE INSTITUTE, WASHINGTON, D.C.

    Mr. Dhume. Well, thank you very much, Mr. Chairman and Mr. 
Ranking Member, and members of the committee. My name is 
Sadanand Dhume. I am a Resident Fellow at the American 
Enterprise Institute. It is a real honor to be here. This is a 
topic that is particularly interesting to me not just because 
it is my intellectual interest, but because I grew up in India 
and I think it is a testimony not only to the relationship but 
to the opportunities afforded by the United States to 
immigrants from all over that I am here today. So thank you 
again.
    I am going to use my limited time to just make four broad 
points. There are greater details in my written testimony, of 
course. But I think that with the impending visit of Prime 
Minister Modi, which will be his fourth visit to the United 
States in 2 years and his second bilateral visit since he took 
office, just to keep in mind the big picture. And of course, I 
will be happy to take questions on more detailed issues during 
the Q&A.
    The first big point is that the U.S. and India are enjoying 
arguably the best period of their relationship. Trade has 
quintupled to $107 billion in a little over a decade. The 
defense relationship has gone from essentially zero to $14 
billion worth of U.S. defense sales. The military exercises 
between the two countries are not only greater than before, but 
also more complex in terms of what they are achieving and what 
they are setting out to do and in terms of involving other 
partners such as Japan. That is the first point.
    The second is that as we saw during the questions from the 
members, that this is really a relationship that stands out for 
having been driven by a bipartisan consensus. And I think that 
when you look at where the U.S. and India were during much of 
the Cold War, if you look at where the U.S. and India were in 
1998 when India tested its nuclear weapons and look at the 
dramatic progress that we have seen since then, it is fair to 
say that no single party can claim credit for that. This is 
something that both parties have worked towards, and this is 
something that administrations have successively built upon but 
also Congress, including many of you, have been instrumental in 
taking forward.
    The third major point is--now, this is something that 
others have raised as well--that for the relationship to be 
sustained, when we look out ahead, when we look into the 
future, there needs to be a much stronger economic basis. I 
think that the progress has been particularly dramatic in terms 
of coming to a broadly shared understanding of the threats and 
opportunities that face both our democracies as we look at the 
world, particularly with the rise of China as a potential 
hegemon in Asia and also the turmoil in the broader Middle East 
and the Islamic world. But where the relationship continues to 
lag is in terms of trade and economics. Even though the trade 
relationship is at an all-time high in U.S.-India terms, it is 
still one-sixth of the relationship compared to the U.S. and 
China, for instance.
    And finally, I would say that just in terms of one word of 
caution going ahead is that I think that because the 
relationship has generally done quite well, we tend to take it 
for granted. I think that certainly happens over here, but it 
certainly happens in New Delhi also. And both countries should 
recognize the fact that because they are democracies, it helps 
the relationship become stronger but also because they are 
democracies and that politicians in both countries have to be 
responsive to voter concerns and constituency concerns, both 
countries need to be a little bit careful about doing things 
that unnecessarily are seen as a poke in the eye. I think you 
raised some of those, several economic issues and several other 
issues during the Q&A.
    But I also wanted to thank you, Senator Corker, for being 
cognizant of how the F-16 sales issued to Pakistan played in 
India and played out negatively for the U.S.-India 
relationship. And I think going forward, both these sets of 
concerns are important to keep in mind.
    And with that, I will wrap up my testimony. I would be 
happy to take questions. Thank you.


    [Mr. Dhume's prepared statement is located at the end of 
this transcript on page 46.]


    The Chairman. Thank you.
    Ms. Ayres?

  STATEMENT OF ALYSSA AYRES, PH.D., SENIOR FELLOW FOR INDIA, 
    PAKISTAN, AND SOUTH ASIA, COUNCIL ON FOREIGN RELATIONS, 
                        WASHINGTON, D.C.

    Dr. Ayres. Thank you very much, Chairman Corker, Ranking 
Member Cardin, and members of the committee. Thank you for the 
invitation to appear before you on U.S. relations with India.
    I shared in advance with the committee a copy of the recent 
Council on Foreign Relations independent task force report, for 
which I served as project director. It addresses many of the 
issues that you wish to explore, and I respectfully request 
that the report be submitted for the record.
    On progress, the subject of this hearing, every aspect of 
the U.S.-India relationship has changed over the past 15 years. 
The civil nuclear agreement bridged a 30-year divide. Economic 
ties are no longer thin. Defense trade has increased from 
nothing to more than $14 billion in the past decade and, as you 
have heard, joint exercises are now a regular occurrence.
    Progress does not mean, however, that we are free from 
disagreements. Since the hearing focuses on progress and 
managing expectations, I will offer a few recommendations 
focused on government-to-government cooperation.
    Think joint venture not alliance. Many Americans see India, 
the world's largest democracy, a fast growing economy, and a 
nation of great diversity, and see a future along the pattern 
of an alliance. India does not seek alliances, seeing them as 
constraints on its freedom. Our task force recommended an 
alternate framework, the model of a joint venture in the 
business sense rather than a not-quite alliance. This model 
provides conceptual space to increased cooperation without 
assuming support on all matters, as one would expect from an 
alliance.
    Economics. India's economic growth rate has bounced back 
and now is at an estimated 7.6 percent, making it the fastest 
growing major economy in the world. Last year, India became the 
seventh largest economy at market exchange rates, bypassing 
Canada, Italy, and Brazil. One of the task force's findings was 
that if India can maintain its current growth rate, let alone 
attain sustained double digits, it has the potential over the 
next 20 to 30 years to follow China on the path to becoming a 
$10 trillion economy.
    But U.S.-India trade, as you have heard, remains well below 
its potential, a little more than one-tenth of U.S.-China trade 
in goods. India can still do more to make its economy more 
open. Our economic ties face differences, including over worker 
mobility issues and intellectual property rights.
    The task force recommended that we elevate support for 
India's economic growth and its reform process to the highest 
bilateral priority, committing to ambitious targets for 
bilateral economic ties, along with steps to get there. 
Securing Indian membership in economic institutions focused on 
transparency and openness would be a good start, beginning with 
APEC and looking as well at the Organization for Economic 
Cooperation and Development and the International Energy 
Agency.
    Democracy and human rights. India and the United States 
have much in common with democracy, as we have heard, but have 
important what I would call tactical differences in approach. 
Indian foreign policy for decades has upheld the principle of 
non-intervention. India sees issues of democracy and rights as 
matters of domestic sovereignty.
    In the bilateral discussion with India and the United 
States, a similar concern over tactics exists. The United 
States, as we know, approaches its support for advancing 
democracy and human rights around the world through both 
private diplomacy, as well as through public reports. The 
Indian Government sees these reports as an intrusion upon 
domestic sovereignty. I would note here as well that while 
India continues to struggle with rights and discrimination 
issues, including on the basis of religion, gender, and caste, 
its active civil society, press, and judiciary serve as 
constant domestic oversight mechanisms.
    We will likely find opportunity with India to work on 
democracy and rights in third countries through technical 
training on democracy, as our task force recommended. On U.S. 
bilateral concerns about rights issues within India, while our 
annual public reporting obligations will continue, no one 
should be surprised to see the Indian Government take no 
cognizance,--as the Ministry of External Affairs said last 
year. ``Where we can craft an agenda of mutual interest, on the 
other hand, the conversation can go much farther.''
    A note on defense. The geostrategic case for stronger 
defense ties with India is well known. A stronger, more capable 
India represents a bulwark of democracy in a volatile region 
and a model across Asia capable of ensuring that no single 
country dominates the region. India's military capabilities 
increasingly make it a first responder for humanitarian 
assistance and disaster relief, as demonstrated with the Nepal 
earthquake and the Yemen evacuations last year. India is also a 
major donor to Afghanistan, providing humanitarian assistance, 
building infrastructure, training civilians and military 
officers on Indian soil.
    As the task force observed, defense ties have progressed 
well but still have much room to grow. The task force 
recommended building further on security cooperation while 
expanding across the entire spectrum. Homeland security and 
counterterrorism cooperation should receive added emphasis.
    One quick final note, preparing the United States for 
working with India. Familiarity with India should be an 
economic preparedness issue for our own country, but our higher 
education metrics do not reflect this. Nearly twice as many 
U.S. students head to Costa Rica than opt to study abroad in 
India. Total enrollments in all Indian languages combined 
account for less than one-quarter of those of Korean, only 14 
percent of Russian, 9.5 percent of Arabic, and just 5 percent 
of Chinese. The Higher Education Act, which I realize is not 
part of this committee, but the Higher Education Act provides 
greater resources for East Asia, Latin America, Russia and 
Eastern Europe, the Middle East, and Africa than it does for 
South Asia. So we ought to bring these to a more appropriate 
level.
    In my written testimony, I have provided a bulleted list of 
recommendations for U.S. policy that draw upon and amplify the 
above.
    Thank you very much and I look forward to questions.


    [Dr. Ayres's prepared statement is located at the end of 
this transcript on page 51.]


    The Chairman. Thank you. Thank you both very much.
    Senator Cardin.
    Senator Cardin. Well, thank you both.
    I am going to ask your help in trying to understand how the 
United States can strengthen its ties with India as it relates 
to our relationship with Pakistan because, quite frankly, I do 
not quite understand the full impact of that relationship.
    Clearly the United States made a decision several decades 
ago to have a more strategic relationship with Pakistan. It 
became extremely controversial during Bangladesh independence. 
I am well aware of the history here. If we had a hearing on 
Pakistan, I can assure you it would be much more critical on 
questioning than a hearing on India. We have many issues with 
what Pakistan does, but we have a strategic partnership that is 
critically important to our counterterrorism activities. As a 
result, there are economic issues between our two countries, 
including military issues, that advance U.S. interests.
    So how do we handle Pakistan in our relationship with 
India? Because it seems to me it is almost a subject we do not 
talk about. And it is to me somewhat remarkable because in 
Maryland we have a large Pakistani American community and large 
Indian American community. And quite frankly, they are much 
friendlier than the countries' representatives are. So how 
would you recommend the United States handle its relationship 
with Pakistan as it relates to India?
    Dr. Ayres. I will take a stab at that one. You have 
actually asked one of the most challenging questions for 
dealing with U.S. policy towards South Asia.
    And that is a question that I do worry about. I think that 
Pakistan in the past several years has missed a number of 
opportunities to allow itself to better its ties with India and 
to allow itself to open its economy further to some of the 
opportunities that its strategic location affords it.
    By that, I would focus on some of the economic connectivity 
issues. You have probably heard before that South Asia, as the 
World Bank has said, is one of the least economically 
integrated regions of the world. India in, I believe, 1996 
granted Pakistan what the WTO calls most favored nation status. 
Now, Pakistan went through a process around 2012 of looking to 
reciprocate that status to India, which potentially could have 
made a major trade opening for both countries. Their trade, 
which is very limited, goes through third countries like the 
UAE. And there is potential there to have the private sector 
play a leading role in sort of the thin end of the wedge in 
creating more exchange and opening ties between them.
    Now, that reciprocal status never made it through in 
Pakistan, unfortunately. So you still see this very limited 
relationship and limits to which the civil----
    Senator Cardin. I understand that Pakistan has issues.
    Dr. Ayres. Yes.
    Senator Cardin. I want to take it from India's perspective. 
What should we be asking from India in regards to how do we 
handle Pakistan in our relationship with India?
    Dr. Ayres. Well, I think we should be asking Pakistan to do 
more on, A, the trade opening and, B, the counterterrorism 
questions. And this is an issue that I am certain comes up over 
and over again.
    Senator Cardin. What should we be asking India to do?
    Dr. Ayres. We are asking them to do a lot it seems. They 
have serious concerns. The Mumbai attackers' trial still has 
not gone forward. You just saw----
    Senator Cardin. I understand the things that have not 
happened in regards to other countries affecting the 
counterterrorism.
    As I said, if we had Pakistan here, my book would be three 
times bigger as far as questions to ask. There is not a lack of 
major concerns we have in regards to our relationship with 
Pakistan.
    We are going to have an opportunity to have the Prime 
Minister in our country. How do we advance the regional 
security and how do we handle what India can do in regards to 
the Pakistan relationship?
    Dr. Ayres. Right. It is my understanding that we continue 
to encourage both countries to try to keep that dialogue open. 
And you have seen where there have been hiccups in the course 
of the past year, but the Indian Government does come back and 
try to keep that channel open. You saw the Prime Minister's 
stop in Lahore to meet with Prime Minister Nawaz Sharif on 
Christmas Day, on his birthday. Shortly after that, you saw a 
terrorist attack take place across the border in Pathankot. So 
I think that conversation with India about ensuring that they 
do have an open channel and that they are working to try to 
have an ongoing dialogue with the Government of Pakistan lets 
the Government of India know that this is of deep interest to 
the United States and to U.S. Members of Congress.
    I think the challenge here is finding a way to press 
Pakistan so these terrorist attacks do not derail the process 
because that is the other part of the pattern that we 
continually see.
    Mr. Dhume. If I can take a stab. It is an extremely 
difficult question. I would like to take a stab at that and use 
a historical analogy.
    One of the places where I think the U.S. was extremely 
successful is Southeast Asia. So if you look at Southeast Asia 
before the late 1960s, you had many of the countries in the 
region squabbling, at each others' throats, and then the U.S. 
emerged and by helping cobble together ASEAN really underwrote 
a long period of prosperity and peace in the region.
    So the question here, if you look at South Asia, is 
economic integration, as Dr. Ayres suggested. But I think more 
fundamentally to impress upon Pakistan that terrorism cannot be 
used as an equalizer. This has been the single sorest point.
    I think that between the U.S. and India, Pakistan only 
emerges as a problem when certain red lines are crossed. I 
think that most serious policymakers in India recognize that 
the United States is a super power. It has to have relations 
with many countries, including difficult countries like 
Pakistan, and that the U.S. has wrestled in many ways in that 
relationship with Pakistan to sort of keep something going in a 
pragmatic way while recognizing that there are security 
concerns, including Pakistan's sponsorship of terrorism against 
U.S. troops in Afghanistan.
    But when the U.S. is seen as helping Pakistan in ways that 
directly hurt India's security, I mean things like advanced 
weapons sales, which are of doubtful value in targeting 
terrorists but are of immense military value in targeting 
another country, such as the F-16 issue, I think that becomes 
very hard for the Indian leadership to then sell to their 
people and say, look, the United States is our most important 
friend. This is the most important strategic relationship for 
us. The United States is helping the rise of India. So I think 
those are the kinds of things to avoid.
    But by and large, in terms of maintaining a relationship, 
maintaining parallel relationships, that is simply a reality 
that has been in the----
    Senator Cardin. Let me try one more time on a different 
subject. Let us take use of nuclear weapons.
    Senator Markey made a very interesting observation, which 
is absolutely accurate. We have seen a proliferation in recent 
years. Certainly there has been more indication on the 
Pakistani side that it may be okay to use nuclear weapons in a 
regional conflict. That is obviously unacceptable.
    What can we do in our relationship with India to try to 
think back the proliferation and use of nuclear weapons in that 
region?
    Mr. Dhume. So on that issue, I would argue that Pakistani 
doctrine cannot be influenced by the U.S.-India relationship. 
Pakistani doctrine or the fact that they are trying to move 
towards tactical nuclear weapons has to be influenced by the 
U.S.-Pakistan relationship. So the questions to be asked are 
why do Pakistani military commanders or why does the Pakistani 
military leadership feel that putting nuclear weapons in the 
hands of military commanders, which I think is widely 
recognized as very dangerous, is a wise move as opposed to an 
extremely unwise move. And that is something that really goes 
down to how they think of nuclear weapons and how they view 
nuclear weapons as an equalizer. And it is obviously a serious 
concern. But I think the concern is in the wrong place----
    Senator Cardin. So what you are both saying is that 
Pakistan should not at all worry about India.
    Mr. Dhume. No. It should, but it should----
    Senator Cardin. Look, as I said before--and I am going to 
give up because I am really trying to get how we use our 
relationship with India to deal with some of these problems. We 
know we have a challenge with Pakistan. And you said it fairly 
well. The United States needs to have relationships with 
countries sometimes we disagree with in order to advance our 
causes. And I always raise, as the chairman knows, human 
rights. We deal with countries that have horrible human rights 
records, but we have to have relations. I understand that. But 
we have the unique opportunity in the next 2 weeks to advance 
regional security, and clearly Pakistan is going to be in the 
discussions. And I was hoping to get some idea as to how to use 
our relationship with India to advance that cause. Maybe it is 
not possible.
    So I thank you both for your testimony.
    The Chairman. Thank you.
    What is the security posture of India relative to Pakistan? 
We know that Pakistan--at least half of their military budget 
and more is oriented towards India. But what is India's posture 
relative to Pakistan?
    Mr. Dhume. So I think in many ways this sort of gets to the 
heart of what the disagreements hinge on. Now, when India looks 
at its military budgeting, it is budgeting for essentially two 
fronts. It is facing China and it is facing Pakistan. When 
Pakistan looks at the Indian defense budget, it only sees 
itself. So from a U.S. perspective, we would like India to be 
spending more on defense and continue to build out its navy as 
it is doing. From a Pakistani perspective, whatever India puts 
into defense is viewed by Pakistan with alarm.
    I think that as long as there is evidence that India is not 
showing aggression towards Pakistan, is not making territorial 
claims, is not trying to change the borders, I think that the 
U.S. should reassure Pakistan that India is essentially a 
status quo power in that region. It does not seek any territory 
or to redraw the maps in that part of the world. And that is 
important because it is in fact in the U.S.'s interest for 
India to be spending more on defense, which it has been doing.
    So to answer your question, the way it works is that much 
of Indian spending which is in fact, like if you look at the 
naval spending and if you look at the nuclear deterrent, for 
instance, that is keeping in mind the very dramatic rise of 
China particularly over the last 25 years. And India, as you 
know, had a war with China in 1962. So the question is how do 
you explain to Pakistan that India's defense capability in and 
of itself cannot be viewed as a threat to Pakistan.
    Dr. Ayres. I would just add to that. On the nuclear 
question, India has a declared no first use doctrine for its 
nuclear weapons. You do not see a no first use doctrine with 
Pakistan, and you do see the development of these tactical 
nuclear weapons. So to me those are very different postures. 
One is a defensive only, no first use. The other is looking to 
have these very dangerous weapons utilized in a way that could 
be even more dangerous.
    The Chairman. And they are roughly right now at parity as 
it relates to the numbers of nuclear warheads. Is that correct?
    Mr. Dhume. Pakistan has slightly more I believe.
    The Chairman. But very slightly more. A lot of fissile 
material but only slightly more in the way of warheads.
    Is there a perceived, within the countries, race to 
continue to outdo each other? What is the psychology of the two 
countries relative to the nuclear arms right now?
    Mr. Dhume. I would say they are very different. I think the 
way India has historically viewed nuclear weapons is in two 
ways. The first is to kind of be a member of the club of great 
powers, so to speak. It has almost been a status issue. The 
second is to have a minimal capability particularly in case of 
another war with China, but to have the minimal capability to 
defend itself. Beyond that, India has not been particularly 
aggressive in terms of its nuclear buildup. Out of the 
countries that have acknowledged nuclear weapons programs, 
India has the smallest number of warheads. And so it is non-
aggressive. It is essentially defensive.
    I think that in the case of Pakistan, the nuclear weapons 
play a more active role not just in terms of the recent thing 
we have seen in a few years of moving toward tactical nuclear 
weapons but also being used as an umbrella under which 
terrorism can be used against India. And in fact, I think that 
is one of the concerns that we should have more broadly with 
nuclear nonproliferation in the world not just worrying about 
the weapons themselves being used but worrying about when these 
weapons are in the hands of countries that also happen to host 
a plethora of Islamist terrorist groups, how it affects the use 
of terrorism.
    The Chairman. Ms. Ayres, do you have anything to add to 
that?
    Dr. Ayres. I actually agree with that statement.
    The Chairman. I do want to correct one thing, and I am 
probably shooting myself in the foot by saying this. My 
position on the F-16's really had nothing to do with how it 
would be perceived in India. It was solely about what Pakistan 
was doing--not doing--relative to the Haqqani Network and the 
fact there has been total duplicity on their part relative to 
working with us. The fact is they are undermining--they are the 
number one by not really going against the Haqqani Network in a 
proper manner, nor the Taliban. They are, in essence, aiding, 
first of all, the greatest threat to U.S. men and women in 
uniform in Afghanistan but also destabilizing the government. 
So that was the reason that we took the position we did on the 
F-16's.
    Let us move to something a little different. Economically 
India ranks 130 out of 189 in the World Bank's Doing Business 
Report. While I said in earlier comments I do not think we are 
honest as we should be about the relationship, I will also say 
that having attended a world economic forum there years ago and 
seeing the incredible capital formation and entrepreneurial 
capacity and just the business community there is really 
phenomenal--it is. It is very impressive. At the same time, you 
look at the way the country is governed. The bureaucracy is 
just stifling. We obviously complain about it here, as we 
should be, but there it is incredible.
    What is your sense of their own ability--you know, Modi 
came in with great fanfare. Everyone thought this was going to 
be a new day. It has not really worked out that way. What are 
the possibilities from your perspective in changing the 
business climate itself in India, which benefits us over time?
    Dr. Ayres. I will try that one first.
    We have a difference of opinion I think on this. I think 
that you have seen over the course of the last 2 years of the 
Modi government a very intensive emphasis on ease of doing 
business. You saw their number did move up in that World Bank 
ranking. I would anticipate that it would move up even further 
a few notches when the next one comes out in the fall.
    The Modi government has been able to do more than I think 
we generally acknowledge. They were able to get parliament to 
get parliament to pass an amendment to the insurance law that 
lifted the FDI cap on insurance. This was something that the 
previous Indian Government could not accomplish in two terms, 
so in a decade. So that was a big deal.
    In defense, they have lifted the FDI cap from 26 to 49 
percent with the possibility of 100 percent foreign investment 
on a case-by-case basis, another big deal considering the 
interest that both countries have in developing the defense 
technology industry cooperation.
    They have lifted investment caps on a number of lower 
profile kinds of industries, ones that nobody is really paying 
attention to but will have an impact like in real ways. They 
have done this for courier services. You could go through. 
There is a long list.
    The other thing that they have done is place a high 
priority on infrastructure issues, whether that is cleaning up 
India, building toilets, building more roads, modernizing the 
railway system, looking at high speed bullet trains. So you do 
see an emphasis on--building ports I should have mentioned--all 
the building blocks that will lead to much higher economic 
growth once these things are in place.
    Mr. Dhume. I think that is an extremely important question. 
In many ways, it is sort of like India is recovering from 
socialism, and that recovery process has not been as swift as 
we would like to see.
    Now, it is certainly true that the Modi government really 
has placed a lot of emphasis on improving the ease of doing 
business. It is also true that Modi has sort of turned himself 
into a kind of chief pitch man for India. He travels the world, 
including to the United States. He goes and meets with CEOs 
directly. He asks for investment.
    But two quick points. The first is that----
    The Chairman. Since you brought that up, you are actually 
feeding into my second question. You can answer them both at 
once.
    So you have him--you are right--traveling around the world 
trying to attract investment, and yet they have investment 
caps, which is very self-defeating. I mean, so you are going 
around the world and you have all kinds of limitations on 
investment. So why would someone who we know knows better, who 
is traveling the world seeking investment--why are they 
continuing to have policies in their country that limit that 
investment?
    Mr. Dhume. So I think a lot of these are simply legacy 
issues and it is a question of moving and in which direction 
they are moving. So, for instance, defense would be a good 
example. There would have been zero percent. Then they moved to 
26. Now they have moved to 49. I believe they should have moved 
to at least 51. That will be the next step. A lot of it is just 
the nature of how things move. It is like the Titanic. It moves 
really slowly. Just be happy that it is not sinking.
    So Modi has been very good in terms of trying to attract 
investment. Foreign investment in India has increased 
increasingly. It has overtaken China. It is the largest 
destination for inward green field investment.
    But what I have been writing about and have been somewhat 
disappointed by has been the speed and pace of economic reform. 
So on the one hand, there is definitely a more business-
friendly environment, but on the other hand, there still 
remains in my view a certain amount of ambivalence about how 
much of a role the market is going to play in the economy. I 
will give you just one quick example to illustrate this.
    70 percent of India's banking sector is run by state-owned 
banks. So how can you have a functioning market economy when 70 
percent of your banking sector is run by state-owned banks 
which essentially making decisions not for commercial reasons 
but at least partly for political reasons?
    And so when you compare the Modi administration to his 
predecessor, he has certainly been an improvement in terms of 
economic policy. No question. But when you compare the Modi 
administration with the expectations that were raised by that 
big victory in 2014, then I feel there is still a ways to go.
    The Chairman. Did you want to comment on any of the----
    Dr. Ayres. If I could just add to that. I mean, the process 
of carrying out reform in a democracy adds additional elements. 
One of the areas that the government had hoped to reform has 
been labor laws. India has some very restrictive labor laws 
that actually constrain growth of companies. So, for example, 
there is an industrial disputes act that makes it very 
difficult to fire people even for a company that is not making 
a profit if the company is larger than 100 people. So what you 
see then is a lot of small companies that do not grow larger 
because of this industrial disputes act.
    In any case, the current government tried to begin 
reforming labor laws, and 150 million people, members of many 
different unions that came together to organize a national 
strike, went on strike to protest this effort. So it is not 
that the government is not trying to carry out reforms. It is 
that there is a pushback. There are a lot of different voices 
in the Indian democracy. And so now this labor law reform has 
been pushed down to individual states to try to carry out 
reforms in the best way they can at the state level.
    The Chairman. Well, you all have been invaluable to us. We 
appreciate you sharing your knowledge with us. As you heard on 
the last panel--I know a lot of members disappear after the 
first panel. It is sort of a standard around here, but many of 
them will wish to ask you questions on the record. We will have 
questions until the close of business Thursday. And if you 
would, if you could answer them fairly promptly, we would 
appreciate it. We thank you for your interest in helping us in 
this manner. Thank you for the time to prepare, and we look 
forward to seeing you again.
    And with that, the meeting is adjourned. Thank you.
    [Whereupon, at 12:15 p.m., the hearing was adjourned.]


              Additional Material Submitted for the Record

                              ----------                              


                     Witnesses' Prepared Statements

                Prepared Statement of Nisha Desai Biswal

                              introduction
    Thank you, Chairman Corker and Ranking Member Cardin, for inviting 
me to testify today on the progress and expectations of the U.S.-India 
relationship. The White House announced last week that President Obama 
will host Indian Prime Minister Modi on June 7th. The Prime Minister 
has also been invited to address a joint session of the U.S. Congress 
during that visit.
    So this hearing provides us with a timely opportunity to take stock 
of the U.S.-India relationship. Sixteen years ago, when another Indian 
Prime Minister, Atal Vajpayee, had the honor of addressing the U.S. 
Congress at the dawn of this new century, he set out a vision that the 
United States and India--based on our our shared values and common 
interests--would forge a natural partnership that would help to shape 
the century to come.
    Since that time, and over the past eight years, we have seen a 
tremendous amount of progress across every major dimension of our 
relationship, including our strategic, economic, defense and security, 
and energy and environment ties. When President Obama welcomes Prime 
Minister Modi to Washington next month, we will be able to say with 
confidence that relations between our two great democracies have never 
been stronger, even as both sides recognize there is much more to be 
done.
                          strategic relations
    The strategic partnership between the United States and India is 
anchored on the premise that our two democratic, pluralistic, and 
secular societies share not only many of the same attributes but also 
many of the same aspirations. It is that premise which has led 
President Obama to characterize the relationship as a defining 
partnership of the 21st century.
    India is the world's largest democracy, Asia's fastest-growing 
major economy, and soon-to-be the most populous nation on Earth. How 
India grows its economy, evolves its strategic doctrine, asserts its 
interests and values, and projects its growing economic, military, and 
political power will have important consequences not just for 1.25 
billion Indian citizens, but increasingly for the rest of the planet. 
That is why the U.S.-India partnership is of such extraordinary 
importance for the United States and one that will, I believe, shape 
the future of geo-politics and geo-economics in the 21st century.
    Mr. Chairman, as we reflect on the ambitious trajectory of this 
important relationship, one must give credit to the previous 
administrations in the United States and India, and to the U.S. 
Congress, for setting us on this path. The historic U.S.-India Civil 
Nuclear Agreement of 2008, signed by President Bush and Prime Minister 
Singh, and passed with bipartisan support in Congress, not only made 
possible civil nuclear cooperation between the United States and India, 
but laid a foundation on which we have built a strategic partnership 
that has made both countries safer and more prosperpous.
    The U.S.-India Strategic Dialogue, launched by Secretary Clinton in 
2009, has expanded dramatically in the past seven years and now 
includes high-level bilateral dialogues and working groups spanning 
policy planning, global leadership, finance and economics, commerce, 
transportation, aviation, space, climate change, maritime security, 
energy security, infrastructure, cyber policy, defense policy, 
political-military relations, homeland security, the oceans, East Asia, 
Africa, the Middle East, and the United Nations. There was no hyperbole 
in Secretary Kerry's statement last year that ``we may do more with 
India--on a government-to-government basis, than with any other 
nation.''
    The impressive bilateral architecture of the U.S.-India partnership 
reflects the investment both countries have made in building ties 
between our people, our industries, our governments, and our security 
establishments. It has created a platform for an unprecedented level of 
cooperation meant to grow our respective economies and make our 
citizens more secure.
    India represents a key part of the Administration's Asia policy. To 
be sure, India's Act East strategy and the U.S. Rebalance to Asia are 
complementary and mutually reinforcing, promising to bring greater 
security and prosperity to the Indo-Pacific region. And at a time of 
new challenges from both state- and non-state actors to the modern 
international rules-based order, India has increasingly taken a strong 
stand in defending a system that has sustained global security and 
prosperity for over seven decades.
    Nowhere is this expressed more clearly than in our Joint Strategic 
Vision for the Asia Pacific and Indian Ocean Region, issued by 
President Obama and Prime Minister Modi last year, which enshrined our 
mutual commitment to safeguarding maritime security and ensuring 
freedom of navigation and overflight throughout the region, including 
in the South China Sea.
    And India has provided the world with an excellent model of how a 
large power can peacefully resolve territorial and maritime disputes 
with its smaller neighbors. By accepting the results of international 
arbitration on disputed maritime claims in the Bay of Bengal, India--
along with Bangladesh and Burma--created a template for others to 
follow.
    Taken together, it is clear that a strong and long-term strategic 
partnership with India is the best way we can ensure open and secure 
access to the global commons across the Indo-Pacific and beyond.
                           economic relations
    Yet, for India to be a strong and capable strategic partner, it 
must have the economic strength to back up its growing global 
leadership. Our fast-growing economic partnership is based on the 
understanding that deepening the trade and commercial ties between our 
two countries will advance opportunity and prosperity for both of our 
peoples.
    Growing commercial ties will empower India's young and inventive 
workforce, contributing to regional prosperity, globally-significant 
innovation, and sustainable development of India's cities--over 60 of 
which boast more than 1 million citizens. And growing trade between our 
nations will create more jobs in the United States and offer U.S. firms 
access to one of the most important foreign markets of this century.
    And the economic data supports this premise. Bilateral trade in 
goods and services has expanded from $60 billion in 2009 to over $107 
billion in 2015. U.S. exports to India increased by nearly 50% over the 
same period, supporting more than 180,000 U.S. jobs. While many trade 
barriers still remain, agricultural exports, in particular, have grown 
substantially and almost quadrupled in value over the past decade, 
reaching an all-time high last year.
    Indian foreign direct investment (FDI) in the United States nearly 
tripled between 2009 and 2014--making it the fourth-fastest growing 
source of FDI into the United States--and U.S. FDI in India increased 
by nearly 30 percent over the same period. Last year, U.S. investors' 
stakes in Indian equities surpassed those in Chinese equities for the 
first time, rising to $12 billion.
    Today, well over 500 U.S. companies are active in India, a country 
whose middle class could grow to half a billion people in the next 15 
years. American companies have focused their investments on the 
opportunities that a growing India represents for the future of their 
businesses.
    Companies like Corning, which built a new factory there in 2013--
and Ford, whose 460-acre plant was created with a $1 billion 
investment--will be positioned to access not only the vast Indian 
market, but will use these platforms to grow their exports across Asia 
and the Indo-Pacific region.
    As India seeks to build the infrastructure to power its economy, it 
is looking directly to the United States to attract the technology and 
private capital it needs. A McKinsey report from 2010 concluded that 
approximately 70 to 80 percent of the infrastructure of the India of 
2030 has yet to be built. This represents a tremendous opportunity for 
American companies with infrastructure expertise.
    For example, General Electric was awarded a deal worth $2.6 billion 
to provide India's railways with 1,000 locomotives. That is the largest 
deal in GE's 100-year history in India, and marks a doubling of the 
company's investment there in just the last five years.
    And we are working actively to find new commercial opportunities: 
the Department of Commerce, for example, is supporting work by the 
Harvard Business School and the Ahmedabad Institute of Management to 
better enable U.S. companies to identify markets in India for exports 
of products and services, by developing a cluster map compatible with 
our current, U.S.-based cluster map. By making more efficient and data-
driven investment and business decisions, our companies and regions 
will be more competitive in developing export strategies that maximize 
benefit.
    We are also working to bring more Indian investment to the United 
States. More than 200 Indian companies now have operations here, up 
from just 85 about a decade ago. According to a study released last 
year by the Confederation of Indian Industries, just 100 of those 
companies have together invested more than $15 billion in the United 
States, supporting over 90,000 jobs, and 84 percent of those companies 
plan to invest more here in the next five years.
    And through a partnership with diaspora entrepreneurs in Silicon 
Valley, the Department of Commerce's SelectUSA initiative will help 
Indian entrepreneurs get the data and support they need to expand their 
operations in the United States, bringing more innovation, jobs, and 
prosperity here at home.
    Despite these gains, there is still much to be done to get two-way 
trade much closer to its potential. While India's business climate has 
improved--India climbed four places on the World Bank's Ease of Doing 
Business survey last year--our companies still struggle with an over-
burdened and inefficient legal system for adjudicating commercial 
disputes and with a variable--and at times inconsistent--regulatory 
environment and tax code.
    Among steps India can take to attract more companies would be to 
negotiate a high-standard bilateral investment treaty (BIT) with the 
United States, which would send an important signal to U.S. investors 
that India is not only open for business, but also open to liberalizing 
its trade and investment practices. And while India has made some 
progress in improving the ease of doing business, its economy cannot 
achieve its full potential without strengthening the protection of 
intellectual property rights and creating a more transparent and 
predictable regulatory and tax regime. While these issues are some of 
the most challenging in our relationship, they are also some of the 
most important for both countries to get right.
    It is for these reasons--both the remaining challenges and the 
bright opportunities--that we have elevated our commercial relationship 
by expanding our annual U.S-India Strategic Dialogue to include a 
commercial component. We are using the S&CD--as it is now called--to 
expand our commercial engagement in four areas: ease of doing business, 
standards, infrastructure, and innovation and entrepreneurship. One of 
the key private sector vehicles informing the S&CD is the U.S.-India 
CEO Forum. In addition, the Trade Policy Forum, the U.S.-India Economic 
and Financial Partnership, and myriad other working groups address 
these commercial and economic issues, as well as chart an ambitious 
future for our bilateral economic ties.
                     defense and security relations
    Of all the areas that define the future and help frame the stakes 
for a strong U.S.-India partnership, none is more prescient and 
important in my opinion than our defense and security ties. Without 
ensuring the safety and security of our democracies, the other areas of 
cutting-edge cooperation would simply not be possible.
    Our defense and security partnership with India is critically 
important to securing U.S. interests in Asia and across the Indo-
Pacific region. Former Defense Secretary Leon Panetta noted several 
years ago that India is a ``lynchpin'' of the U.S. Rebalance to Asia. 
And it is no surprise that Secretary Carter refers to the U.S.-India 
defense partnership as ``an anchor of global security.''
    India now conducts more military exercises with the United States 
than with any of the other 23 countries that it holds bilateral 
exercises with. These military exercises have grown not just in number, 
but also in complexity. Our bilateral army exercise ``Yudh Abhyas,'' 
for example, has evolved from a squad- and platoon-level exercise to 
the company- and battalion-level. Our annual naval exercise, MALABAR, 
last year mobilized over 8,000 personnel, including a U.S. Carrier 
Strike Group, U.S. and Indian submarines, and P-8 surveillance planes. 
Reflecting our close cooperation, we now also welcome Japan as a 
regular participant in the MALABAR exercise.
    The benefits of our enhanced coordination were on display during 
relief operations after the tragic earthquake that struck Nepal last 
year, when the U.S. and Indian militaries jointly worked together to 
rescue stranded civilians and deliver badly needed food, water, and 
shelter to those affected by the disaster. And last year, our two 
countries signed a renewed 10-year Defense Framework Agreement, which 
will provide new avenues for strengthening cooperation between our 
militaries. We're also now working with India to jointly train 
peacekeepers in African countries.
    And, as you probably read after Secretary Carter's recent visit to 
India, we are moving toward concluding a logistics exchange memorandum 
of understanding, which would allow our armed forces to use each 
other's bases for resupply and repair. We are hopeful that the 
successful conclusion of this agreement will lead to progress on the 
remaining foundational agreements and allow greater interoperability in 
our militaries, so that we can go from joint exercises to coordinated 
operations in the Indian Ocean.
    In recent years, the United States has become one of India's 
largest defense suppliers, totaling nearly $14 billion and up from less 
than $300 million eight years ago. These sales include C-130 and C-17 
transport planes, Poseidon (P-8) maritime reconnaissance aircraft, and 
Apache attack and Chinook heavy-lift helicopters. The deal for those 
helicopters was just finalized last September and will support 
thousands of American jobs. These deals not only increase 
interoperability between our armed forces, they also help buttress the 
growing economic ties through partnership and cooperation between our 
nations.
    To that end, in 2012 we launched the Defense Technology and Trade 
Initiative (DTTI), which includes the joint development and production 
of new defense products. We also have DTTI working groups on jet engine 
technology and aircraft carrier development. The carrier working group 
marks the first time the United States has lent support to another 
country's indigenous carrier development program, and we hope to see a 
day in the not-too-distant future when the U.S. and Indian navies--
including aircraft carriers--operate side-by-side to promote maritime 
security and protect freedom of navigation for all nations.
    The Maritime Security Dialogue provides an important channel to 
discuss such cooperation--it was launched under the auspices of the our 
Joint Strategic Vision and met for the first time this month, co-led by 
the Departments of Defense and State. All of these efforts are built 
toward enabling India to become a net provider of security in the 
Indian Ocean region and beyond.
    We have also expanded our cooperation with India to combat 
terrorism and violent extremism, and continue to work toward finalizing 
a bilateral agreement to exchange intelligence and terrorist watch-list 
information. This cooperation, which includes regular trainings through 
the State Department's Anti-Terrorism Assistance program, as well as 
joint sponsorship of terrorist designations at the United Nations, has 
made both our nations more secure.
                         energy and environment
    In addition to our security partnership, the size, scope, and 
nature of India's energy market will have a profound impact beyond its 
borders. With over 400 million people without reliable access to 
electricity, and the needs of a growing economy increasing by the day, 
the stakes for India's widespread adoption of clean energy technology 
have never been greater.
    What some people may not realize is that how India chooses to fuel 
its growth will have enormous, transformational effects on the health, 
well-being, and sustainable growth of the country, of the Indo-Pacific, 
and the entire globe. India does not have to choose between growth and 
sustainability--Secretary Kerry often says that the development, 
scaling, and adoption of clean energy technology represents a ``multi-
trillion dollar'' business opportunity.
    This is why many leaders in both our countries have posited that 
our cooperation on energy and environment can have dramatic 
consequences for how global growth is supported in the coming decades. 
And our energy ties are reflecting this. For instance, this year saw 
the first shipment to India of U.S. liquefied natural gas (LNG), 
providing more of a low-carbon alternative to oil and coal for powering 
India's economic rise.
    India is also looking to increase its civilian nuclear power 
capacity, and we are confident that U.S.-built nuclear reactors will 
contribute to that effort. We are very encouraged by the progress made 
over the last year. In particular, India ratified the Convention on 
Supplementary Compensation for Nuclear Damage (CSC), which was an 
important step toward creating a global nuclear liability regime.
    Now it is up to individual companies--and our leading U.S. firms 
can count on our support--to help ink contractual agreements that will 
bring civil-nuclear power to India. As President Obama has stated, we 
are hopeful that this year will see deals for U.S. companies to build 
new reactors, providing clean, reliable energy that can support the 
needs of megacities on the scale of Mumbai or Delhi, even on the 
hottest day. I am confident we will see progress on this critical part 
of our partnership soon.
    Clean and renewable energy is where our cooperation can have the 
greatest effect, and where many of our efforts are focused, including 
joint research and development, supporting early stage innovative 
technologies, and exploring new approaches to clean energy financing 
and mobilizing private sector funding.
    Our Partnership to Advance Clean Energy (PACE), which was launched 
in 2009 and expanded in 2015, now includes cooperation on smart grids 
and energy storage in addition to solar, biofuels, and building 
efficiency. Super-efficient air conditioners alone have the potential 
to offset the need for over 100 power plants by the year 2030.
    We are also working together through the Clean Energy Ministerial 
and Mission Innovation--a global clean energy R&D initiative--to 
accelerate the research, development, and adoption of clean energy 
technologies. Since 2009, we've helped mobilize more than $2.5 billion 
to develop clean energy solutions in India. These investments have 
demonstrated the promise and potential of renewable energy in the 
country, and it now has some of the most ambitious renewable energy 
goals in the world--175 gigawatts of capacity by 2022, including 100 
gigawatts of solar.
    India is also playing a more prominent role in combatting global 
climate change. India's leadership was essential to the successful 
conclusion of the COP21 negotiations in Paris. Through the U.S.-India 
Climate Change Working Group, initiated in 2014, we're expanding 
cooperation on issues like adaptation, forestry, and air quality.
    Our joint U.S.-India space collaboration includes a bilateral 
expansion of cooperative satellite-based Earth observation efforts to 
support regional and global goals. This space cooperation between the 
U.S. civil space agencies: the National Oceanic and Atmospheric 
Administration (NOAA), the National Aeronautics and Space 
Administration, the U.S. Geological Survey, and the Indian Space 
Research Organization includes joint work on satellite missions that 
will help the international community better understand the connections 
between climate change and natural disasters as well as provide weather 
observations in near real-time to the global forecasting community.
    In addition, since 2008, NOAA and India's Ministry of Earth Science 
have collaborated on research projects to monitor climate patterns in 
the Indian Ocean and better forecast tropical cyclones and monsoons.
    And at the sub-national level, some Indian states have opened lines 
of communication with California on reducing carbon emissions and 
improving air quality, and we are working to increase engagement 
between other states and cities in the U.S. and India.
                               conclusion
    Underpinning all elements of our relationship are our people-to-
people ties, which have grown stronger than ever throughout this 
Administration. Our efforts to promote tourism have paid off 
handsomely, with the number of Indian visitors to the United States 
going from less than 550,000 in 2009 to over 960,000 in 2014, while 
their spending nearly tripled over the same period, to $9.5 billion.
    The number of Indian students studying in the United States 
increased over 30 percent from 2009 to 2015, reaching over 130,000 and 
bringing an estimated $3.6 billion into the U.S. economy. The 
Fulbright-Nehru exchange program, which builds life-long bridges among 
our young scholars and academics, has tripled in size since 2009. And 
through the Indo-U.S. 21st Century Knowledge Initiative, launched in 
2012, we have built 32 new partnerships between our institutes of 
higher education, ranging from efforts to improve mental health care to 
developing more sustainable aquaculture systems.
    Overall, our long-running U.S. government exchange programs have 
graduated over 15,000 alumni from India, including six current and 
former heads of state, 35 members of parliament, 11 chief ministers, 
and other leaders in business, civil society, academia, and the arts.
    In his speech last year at Siri Fort, New Delhi, President Obama 
said that ``our nations are strongest when we uphold the equality of 
all our people.'' To build that strength, we have a range of dialogues, 
engagements, and private conversations about human rights with India's 
government. Our U.S.-India Global Issues Forum, led earlier this year 
by Under Secretary of State Sarah Sewall, focused on a wide range of 
issues including transparency and governance, countering violent 
extremism, migration and refugees, trafficking, and LGBTI rights. Our 
Ambassador-at-Large to Monitor and Combat Trafficking in Persons, Susan 
Coppedge, just returned from India, where she had a fruitful exchange 
with the government on how it combats trafficking, and also shared U.S. 
efforts on prosecution, protection, and prevention. And we are always 
looking for new ways to partner with India to advance human rights, 
strengthen democratic institutions, and support societies that are more 
inclusive, secular, and tolerant.
    Taken together, the progress we have made over the past eight years 
in our strategic, economic, defense and security, and energy and 
environment ties has truly ushered in a new era of relations between 
the United States and India, strengthening the foundation of a 
partnership that will help ensure that the Indo-Pacific region and the 
world is a more peaceful and prosperous place. Thank you and I look 
forward to your questions.

                               __________


                  Prepared Statement of Sadanand Dhume

    Chairman Corker, Ranking Member Cardin, members of the committee, 
thank you for this opportunity to testify before the committee on 
``U.S.-India Relations: Balancing Progress and Managing Expectations.'' 
I am Sadanand Dhume, a resident fellow at the American Enterprise 
Institute, a non-profit, non-partisan public policy research 
organization based in Washington, DC. My comments today are my own and 
do not necessarily reflect the views of AEI.
    Over the past two decades, both Democratic and Republican 
administrations have pursued closer relations with India. A strong 
bipartisan consensus in Congress has boosted this effort to build ties 
with the world's most populous democracy. At a time of great flux in 
Asia, India occupies a pivotal place in the region, wedged between a 
rapidly rising China and the turmoil of Afghanistan and Pakistan. U.S. 
hopes of fostering peace and prosperity in Asia--and of preventing any 
single power from dominating this region--rest in no small measure on 
deepening the U.S.-India relationship and supporting ongoing Indian 
efforts at economic and military modernization.
    Prime Minister Narendra Modi's visit to Washington next month, when 
he will become the first foreign leader to address a joint session of 
Congress in 2016, underscores the importance both countries attach to 
this relationship. This will be Mr. Modi's second bilateral visit to 
Washington in less than two years, and his fourth to the U.S. since he 
took office two years ago. Mr. Modi and President Obama have met seven 
times in the last two years. This sustained high level engagement, 
culminating in next month's visit, presents an opportunity to cement 
progress made over the past few years and set a platform for the next 
administration to build upon.
    Despite occasional hiccups, U.S.-India ties have witnessed a steady 
upward trajectory since the late 1990s. India conducts more military 
exercises with the U.S. than with any other country. Over the past 10 
years, total U.S. defense sales to India have grown from $300 million 
to approximately $14 billion. India now has 10 heavy lift C-17s, the 
largest fleet outside the U.S.
    Military exercises are also growing in complexity. Last year, Japan 
joined the U.S.-India Malabar naval exercises as a permanent member. 
Since 2012, India has also participated in PACOM's Rim of the Pacific 
Exercise (RIMPAC), the world's largest international maritime warfare 
exercise. Thanks in large part to the efforts of Defense Secretary 
Ashton Carter, the Defense Technology and Trade initiative also shows 
promise as the two countries move toward co-production and co-
development on six projects spanning protective clothing for soldiers 
to aircraft carriers.
    In fighting terrorism, too, the U.S. and India face common 
challenges. But as pluralistic societies they also share experiences of 
managing the threat. Although it houses the second largest Muslim 
population in the world, India shows relatively few signs of homegrown 
radicalization. Barely a few dozen Indian Muslims have signed up to 
fight for the Islamic State, compared with several thousand from 
Western Europe.
    Economic relations have deepened too, albeit from a modest base. 
Between 2002 and 2015, bilateral trade in goods and services quintupled 
from $21 billion to $107 billion. Since 2004, U.S. FDI stock in India 
has more than tripled from $8 billion to $28 billion. According to the 
Confederation of Indian Industry, 100 Indian companies have invested 
$15 billion in 35 U.S. states, creating 91,000 jobs. Indian students 
add $3.6 billion to the U.S. economy each year. At the same time, the 
three-million-strong Indian-American population continues to act as a 
bridge between the two countries.
    Nonetheless, neither country should take this continued progress 
for granted. For one, recent gains notwithstanding, trade ties remain 
far below potential. With an annual output of $2.1 trillion, India is 
the seventh largest economy in the world. In purchasing power parity 
terms it is even larger--a $8 trillion economy, or the world's third 
largest. Yet, in 2015, with trade in goods of $66.7 billion, India was 
only the U.S.'s tenth largest trading partner in goods, ranked below 
smaller economies such as Taiwan and South Korea. Without a deeper 
trade relationship, and an India more deeply integrated into the global 
economy, the relationship risks remaining unsustainably lopsided toward 
shared geopolitical and security concerns.
    The U.S. should also recognize that India's history and domestic 
politics preclude it from becoming a formal U.S. ally such as Japan or 
South Korea. Keeping expectations sober will ensure that ties remain on 
even keel rather than careening between unrealistic ambition and 
ensuing disappointment. At its heart, the U.S. bet on India represents 
the hope that a large democratic, pluralistic country, rooted in common 
law traditions, and home to an English-speaking elite, will succeed in 
Asia. At the same time, however, U.S. interest in India's future 
carries implicit expectations: of economic reforms and a continued 
adherence to democratic values including pluralism, freedom of speech 
and human rights.
    In the absence of a formal alliance, the robustness of India's 
economy, strength of its military and quality of its democracy 
naturally become proxies for the health of the U.S.-India relationship, 
and the amount of policy attention New Delhi can sustainably attract 
from Washington. For this relationship to fulfill its potential, the 
U.S. ought to continue to take the long view, as it has during much of 
the past two decades, by playing a part in helping India fulfill its 
own aspirations. At the same time, India must recognize that the 
sustainability of U.S. commitment to its rise rests in large part on 
the success of the so-called ``India model.'' This will require not 
just continued strategic engagement with the U.S., but also continued 
reforms to make India a more competitive economy.
                      key policy recommendations:

   Asia-Pacific Economic Cooperation: Back India for full membership 
        in APEC as a step toward eventual inclusion in the Trans-
        Pacific Partnership.

   Seize new economic opportunities: The Modi government's landmark 
        economic initiatives in digital technology, renewable energy 
        and urban infrastructure provide opportunities for U.S. firms 
        to boost trade and deepen economic ties with India.

   Enhance technology sharing: Make technology-sharing processes with 
        India easier in order to assist its ongoing military 
        modernization.

   Champion sound economic principles: Instead of focusing solely on 
        specific firms or areas of the economy, the U.S. should broadly 
        support the principles of free enterprise that will allow India 
        to unlock its economic potential.

                              background:
Economic policy: India's tryst with socialism
    India bears the harmful legacy of past mistakes that have not been 
fully acknowledged, and therefore not fully repudiated. India's first 
prime minister, Jawaharlal Nehru, was a Fabian socialist who was 
contemptuous of markets, mistrustful of trade and enamored of state 
planning.
    Nehru's daughter, Indira Gandhi turned the crude license-permit 
system she inherited from her father into a refined instrument of 
economic torture. In her time, the marginal tax rate rose to 97 percent 
and, thanks to the infamous license-permit raj even the most routine 
economic decisions, such as where to build a factory or how much it 
could produce, were made by bureaucrats. These policies, no more 
successful in India than anywhere else, guaranteed decades of 
stagnation and inspired the disparaging economic moniker, ``Hindu rate 
of growth.''
    Between them, Nehru and Gandhi ruled India for all but four of its 
first 37 years of independence. They created a political discourse on 
the economy centered on government intervention that has not been fully 
overcome to this day.
    Between independence in 1947 and the advent of economic reforms in 
1991, India was one of Asia's worst performing economies. In the first 
three decades after independence (1947-77), despite a low base, the 
Indian economy grew at an anemic annual average of 3.5 percent. In 
1964, the average Indian was about three-fourths as rich as the average 
South Korean. By 1984, the average South Korean was four times richer 
than the average Indian.
    Only in 1991, faced with a balance-of-payments crisis, did India 
embark upon economic reforms. Then prime minister P. V. Narasimha Rao 
proceeded to scrap most licensing programs, reduce tariffs, and open 
the door to foreign investment. Almost as if on cue, growth rates, 
exports, and foreign-exchange reserves began to rise, and India joined 
a larger club of fast-growing Asian economies.
    Since then, India's reform program has deepened, albeit in fits and 
starts. A new telecom policy led to India's mobile phone revolution. 
India currently has one billion mobile phone subscribers, the second 
highest number in the world. Competitive private firms have changed the 
face of Indian telecoms and aviation, and have made inroads in banking.
    Between 1991 and 2014, the Indian economy grew on average at 6.6 
percent per year. However, the reform process lost steam after 2004, 
when a left-of-center government took power. Though the economy 
continued to grow--buoyed by healthy global conditions and reforms 
unfurled before 2004--ultimately the lack of fresh reforms caught up 
with India. According to the World Bank, growth fell from a high of 
10.3 percent in 2010 to 5.1 percent in 2012. By the end of 2013, with 
the stock market falling and the rupee hitting historic lows against 
the dollar, India had come to be seen as one of the world's ``fragile 
five'' economies.
    Though India's economy is large in absolute terms, it has failed to 
live up to its potential. Per capita income of $5,700 (in PPP terms) is 
less than half that of China, though both countries had similar levels 
of per capita income barely 35 years ago. With a median age of 27, 
India is one of the youngest large countries in the world. In order to 
provide jobs to the 12 million people who enter the workforce each 
year, New Delhi will have to significantly deepen an economic reform 
program first embarked upon 25 years ago, but that has lost steam over 
much of the past decade.
    Currently, the IMF regards India as ``a bright spot'' in the global 
economy. But today's generation of reformers faces essentially the same 
challenges as its predecessors: to complete India's transformation from 
a state-dominated economy to a market-oriented economy.
Foreign Policy: The legacy of non-alignment
    Through most of the Cold War, U.S.-India ties were frosty. Indeed, 
India largely took a parallel approach to economics and international 
politics. Nehru spearheaded the non-aligned movement (NAM): an alliance 
of third-world countries whose aim--as the 1979 Havana Declaration 
would later summarize--was to protect ``the national independence, 
sovereignty, territorial integrity, and security'' of its members in 
their joint ``struggle against imperialism, colonialism, neo-
colonialism, racism, Zionism, and all forms of foreign aggression, 
occupation, domination, interference, or hegemony, as well as against 
great-power and bloc politics.''
    In theory, the NAM was intended to keep New Delhi independent of 
both Moscow and Washington. In practice, beginning with India's failure 
to condemn the Soviet Union's 1956 invasion of Hungary, both the 
movement's worldview and its rhetoric tilted conspicuously toward the 
Kremlin. This, along with the stark Dullesian division of the world 
into friend or foe, helps explain the frigid state of U.S.-India 
relations for many years, and the contrasting warmth of the U.S. 
embrace of a pliant Pakistan.
    Though the nonaligned movement still exists in theory, in practice 
the end of the Cold War, and the emergence of the U.S. as the sole 
superpower, ended its relevance. Changes in attitudes toward the West 
have accompanied the opening of India's economy. Patient diplomacy and 
family ties forged by immigration have also played a part. Today 
Indians are among the most pro-American people in Asia. A Pew Research 
Center survey of ``global attitudes'' last year found that seven in ten 
Indians hold a favorable view of the United States.
    Like their counterparts in the U.S., most major Indian political 
parties share a broad consensus on the importance of deeper ties with 
Washington. Since the end of the Cold War, both the ruling right-of-
center Bharatiya Janata Party and the opposition Congress Party have 
recognized the central role the U.S. will play in India's 
modernization. Nonetheless, of the two major parties, the BJP has 
traditionally felt less constrained by the legacy of nonalignment. This 
gives it greater room to pursue rapid strategic convergence with the 
U.S.
                       the rise of narendra modi
    After a period of pronounced drift in India between 2011-14, the 
election of Mr. Modi as prime minister in 2014, with the first single 
party electoral majority in 30 years, raised hopes that New Delhi would 
return emphatically to the path of greater global engagement as well as 
structural economic reform. Despite a few mishaps, Mr. Modi's foreign 
policy is widely regarded as astute and imaginative. On his watch, 
India's relations with the U.S., Japan and Israel have thrived, as they 
have with important neighbors such as Sri Lanka and Bangladesh. The 
prime minister has rightly made the U.S. the centerpiece of his foreign 
policy, though, as with past Indian leaders, this has not meant 
forswearing the pursuit of better ties with other important powers.
    However, on the economy, the single biggest determinant of India's 
trajectory, Mr. Modi's record is mixed. On the campaign trail two years 
ago, Mr. Modi painted his vision for the economy through slogans such 
as: ``minimum government, maximum governance,'' ``red carpet, not red 
tape,'' and ``the government has no business being in business.'' His 
record as the dynamic and business-friendly chief minister (the Indian 
equivalent of governor) of the industrialized western state of Gujarat 
(2001-14) also raised hopes among investors and commentators that he 
would swiftly implement the kind of far-reaching reforms that had long 
been discussed, but had nonetheless eluded India over the past decade.
    So far, the Modi government has proceeded cautiously on reforms, 
preferring what it calls ``creative incrementalism'' to so-called ``big 
bang reforms.''
    On the positive side, the government has rolled out the proverbial 
red carpet for investors, with the prime minister himself acting as 
India's chief pitchman. Foreign investment caps have been eased in, 
among other areas, defense, insurance and food processing. According to 
the United Nations Conference on Trade and Development, $59 billion of 
FDI poured into India in 2015, nearly twice as much as the year before. 
In the same period, pledged greenfield FDI--proposed investments in new 
assets rather than existing ones--in India was the highest in the world 
at $63 billion. Several high profile firms including Taiwan's Foxconn 
and South Korea's Posco have pledged billions of dollars of fresh 
investment in India. Large U.S. investors include General Electric, 
General Motors, Uber and Oracle. India is trying to woo Apple to set up 
a manufacturing plant.
    The IMF expects India's GDP to grow at 7.5 percent this year, which 
would make it the world's fastest growing major economy. The government 
also intends to boost infrastructure spending to $32 billion dollars 
this year, a 22.5 percent increase from the previous year, in order to 
upgrade India's roads, ports and railways. Despite stepped-up 
government spending, Finance Minister Arun Jaitley expects to keep 
India's fiscal deficit in check at a reasonable 3.5 percent of GDP next 
year.
    The government also hopes to end harassment by tax officials by 
simplifying rules. This is part of a larger effort to improve India's 
Ease of Doing Business ranking, which despite government efforts to 
improve it, is currently an unimpressive 130 of 189 countries surveyed 
by the World Bank. In May, the government passed a much-awaited 
bankruptcy law designed to make it easier for firms to shut down. This 
will likely further boost India's ease of doing business ranking.
    However, in terms of deep structural reform, Mr. Modi has either 
been stymied by the opposition or has himself preferred caution to 
boldness. Thanks to opposition in the indirectly elected upper house of 
Parliament, a proposed goods and services tax to stitch India into a 
common market was not rolled out this April as planned. The opposition 
has also forced the government to retreat on a proposal to ease land-
acquisition norms for industry.
    Labor law reform--in effect making it easier for firms to lay off 
workers during a downturn--has been shunted to the states, but only a 
handful of them appear interested in pursuing them seriously. A 
proposed privatization program has stalled. Though the government says 
it remains committed to privatization, the prime minister has also 
suggested that he can stem the rot in state-owned companies, and a 
largely state-owned banking system, simply by picking the right 
managers. This has not worked in the past; there is no reason to 
believe that it will change.
    Despite holding a comfortable majority in the lower house of 
Parliament, the Modi government has done nothing to reverse the 
previous government's worst laws, like an unpopular retroactive tax. 
Also in force is a government directive that goads companies to channel 
some of their profits toward social objectives such as reducing child 
mortality and combating AIDS. In reality, politicians use the provision 
to ``encourage'' businessmen to fund their favorite boondoggles.
    Mr. Modi has undoubtedly stabilized the economy and piqued foreign 
investor interest. But the jury is still out on his ability to launch 
India on a path of sustained high growth. The measures he enacts over 
the remaining three years of his term will determine whether his 
contribution to the economy will extend beyond better administration to 
the deeper reforms India needs.
                         what the u.s. can do:

    Asia-Pacific Economic Cooperation: Back India for full membership 
in APEC as a step toward eventual inclusion in the Trans-Pacific 
Partnership.

    Founded in 1989, the 21-nation APEC is East Asia's broadest 
economic grouping and the world's largest trading bloc, accounting for 
three billion consumers and 44 percent of global trade. In 2010, a 
decade long moratorium on new members expired, opening the door for 
India, whose initial application for membership in 1991 was rejected.
    The U.S. has welcomed India's interest in joining APEC, but has not 
backed formal membership. Publicly backing India's candidacy for APEC 
membership would echo a broad U.S. policy that supports India's rise as 
a responsible global power. Washington has already supported Indian 
membership in the G-20, four multilateral nonproliferation regimes, and 
an expanded United Nations Security Council. In addition, India is 
already a full member of the East Asian Summit and the ASEAN Regional 
Forum, and is a dialogue partner with ASEAN.
    The case against backing India's entry into APEC hinges on its 
notoriously obstreperous trade negotiators, who some of their American 
counterparts hold responsible for helping create a stalemate at the 
World Trade Organization. They fear that admitting India into APEC will 
hurt the group's capacity for consensus building and dilute the quality 
of its trade agreements.
    Although these concerns are legitimate, backing India's APEC 
membership is a low-risk gambit for the United States and carries 
potentially large rewards. At worst, India complicates the workings of 
an already unwieldy body that concludes nonbinding agreements among 
members. At best, India uses APEC membership as training wheels to 
prepare it for the more ambitious Trans-Pacific Partnership (TPP), 
embraces the best practices APEC espouses, invigorates the grouping 
with new energy, and integrates itself more fully into the global 
economy.


    Seize new economic opportunities: The Modi government's landmark 
economic initiatives in digital technology, renewable energy and urban 
infrastructure provide opportunities for U.S. firms to boost trade and 
deepen economic ties with India.

    India's ongoing economic expansion, spurred by a government that 
has placed economic development at the heart of its program, opens up 
new opportunities for U.S. firms, and a chance to boost U.S.-India 
trade. The U.S. ought to continue efforts to emerge as a significant 
player--in terms of both business and technology--in Indian efforts to 
modernize urban infrastructure, enhance digital connectivity and boost 
the proportion of energy produced by renewable sources such as solar 
power.
    According to the government, India will need to spend up to $1 
trillion over the next few years to upgrade its ports, roads and 
airports. As part of its ``smart cities'' project, India has already 
marked Ajmer in Rajasthan, Allahabad in Uttar Pradesh and Visakhapatnam 
in Andhra Pradesh as centers for U.S.-India collaboration. The U.S. 
Trade and Development Agency (USTDA) is involved in planning and 
providing technical assistance for these cities. A three-company 
consortium led by AECOM will implement a master plan for Visakhapatnam, 
the largest city in Andhra Pradesh.
    The ``Smart Cities'' initiative reflects India's ongoing 
urbanization. Currently only about 32 percent of Indians live in 
cities, compared to 81 percent of Americans or 54 percent of Chinese. 
Similarly, Digital India and the Indian bid to build renewable energy 
capacity add up to a vision of the country's future: increasingly 
urbanized, networked, and (proportionally) less reliable on fossil 
fuel. An early U.S. involvement with these initiatives ought to go a 
long way toward strengthening the weakest link in bilateral 
relationship--comparatively weak trade ties.
    According to the Telecom Regulatory Authority of India, the country 
currently has only 325 million Internet subscribers, or 25 percent of 
the population. The government expects this to rise to 38 percent of 
the population by the end of 2016. U.S. companies including Google, 
Facebook, Qualcomm and Microsoft will likely play a critical role in 
this ongoing modernization. Similarly, India hopes to install 100 
Gigawatts of solar energy by 2022 at a cost of $90 billion. If allowed 
to compete fairly, U.S. firms such as First Solar and SunPower ought to 
play a significant role in India's solar power expansion.


    Enhance technology sharing: Make technology-sharing processes with 
India easier in order to assist its ongoing military modernization.

    For decades following India's first nuclear tests in 1974, many 
Indian policy makers and strategic thinkers viewed U.S.-India relations 
through a thick web of technology denial spun in response by 
Washington. With the 2008 U.S.-India civil nuclear deal, as well as 
subsequent actions by the U.S. government, much of the technology 
denial regime once put in place to punish India for its nuclear 
explosions has receded. Nonetheless, both private Indian defense 
company executives and government officials say they find it easier to 
obtain high-end defense or dual use technology from Israel, France or 
Russia than from the United States.
    The U.S. has already embarked upon technology sharing with India in 
multiple respects, most significantly through the Defense Technology 
and Trade Initiative. This includes six projects, including at least 
two, on jet engine technology and aircraft carrier technology that hold 
great promise. The Pentagon's creation of the India Rapid Reaction 
Cell, its first country-specific cell, should add further momentum in 
pushing the DTTI forward. If the U.S. and India can get DTTI to work it 
will automatically bring both countries' militaries closer in terms of 
interoperability, help India modernize its military more effectively, 
and ensure that the U.S. cements its place as India's most important 
defense partner.


    Champion sound economic principles: Instead of focusing solely on 
specific firms or areas of the economy, the U.S. should broadly support 
the principles of free enterprise that will allow India to unlock its 
economic potential.

    If economic relations between the U.S. and India are to avoid 
getting bogged down in minutiae, and are instead to serve U.S. 
strategic goals in Asia, the U.S. should encourage India to become a 
more competitive, market-oriented economy for its own sake, even if 
specific reforms offer no clear payoff for U.S. firms. For instance, 
India needs better roads, but given the lack of U.S. competitiveness in 
this area they are unlikely to be built by American firms, though they 
may at times be built with American equipment.
    At the same time, the U.S. should aim to remain India's top trade 
partner. Last year, Secretary of State John Kerry reiterated the goal 
of multiplying U.S.-India trade fivefold, to $500 billion, over ten 
years. But beyond just that number, the U.S. should also aim to stay 
ahead of China in volume of bilateral trade with India. This will 
likely spur more day-to-day attention to the relationship than a 
theoretical longer-term target would.
    While consistently advocating for U.S. businesses, Washington 
should not allow individual companies to hijack the agenda. For 
instance, while India will undoubtedly benefit from opening up its 
retail market to Walmart and others, this is not necessarily the most 
pressing economic issue facing the country.
    India needs to liberalize its labor and land markets, rationalize 
expensive food, fuel, and fertilizer subsidies, and privatize loss-
making state-owned companies. Over time, as India's economy becomes 
bigger and more outward looking, many of these decisions will likely 
benefit U.S. companies. But they're important mostly because they will 
unleash India's own economy, raise the living standards of its people, 
and give it the wherewithal to fulfill the larger role it seeks on the 
world stage. Though the U.S. cannot make policy for India, it can 
certainly provide assistance to would-be Indian reformers who look to 
it for ideas and expertise.


                               __________


                   Prepared Statement of Alyssa Ayres

    Chairman Corker, Ranking Member Cardin, and members of the 
committee, thank you very much for the invitation to appear before you 
on U.S. relations with India. I am honored to serve as a witness in 
this hearing on U.S.-India relations, and commend the committee for 
holding it. India does not always receive the attention it should as a 
rising power and close U.S. partner. I shared in advance with the 
committee a recent Council on Foreign Relations (CFR) Independent Task 
Force report, for which I served as project director, which addresses 
many of the issues you wish to explore in some detail. I respectfully 
request that the report be submitted for the record. My testimony here 
draws extensively from the Task Force report's findings and 
recommendations, and from my work on a book about India's rise on the 
world stage.
    In two weeks, India's prime minister, Narendra Modi, will return to 
the United States for a working visit, and will address a joint meeting 
of the U.S. Congress. With his upcoming visit in mind, I will touch 
briefly on several areas of importance to our bilateral relations. 
First, we have come a long way since the twentieth-century years of 
estrangement. Reflecting on the changed nature of U.S.-India ties 
during a recent symposium, former U.S. Ambassador to India Frank G. 
Wisner noted that back in 1994, prior to his departure for India, the 
only subject of strategic significance discussed was a ``dispute over 
almond trade.'' \1\ The United States and India were divided over 
nonproliferation, economic ties were weak, and India's strongest 
defense relationship was with Russia.
---------------------------------------------------------------------------
    \1\ Frank G. Wisner, ``The New Geopolitics of China, India, and 
Pakistan: Keynote Session'' (YouTube video, from a symposium streamed 
live by the Council on Foreign Relations, May 4, 2016), https://
www.youtube.com/watch?v=cgcBKFVH85Y.
---------------------------------------------------------------------------
    Every aspect of the U.S.-India relationship has changed 
dramatically. The civil-nuclear agreement helped overcome what had been 
the single most divisive issue between both countries for more than 
thirty years. While its full commercial development remains incomplete, 
the civil-nuclear deal has had the effect of bringing India ``inside'' 
the nonproliferation tent it spent three decades outside. India has 
brought its civil-nuclear facilities under International Atomic Energy 
Agency safeguards, harmonized its own export controls with global 
nonproliferation regimes, and seeks entry in the Nuclear Suppliers 
Group, the Missile Technology Control Regime, the Wassenaar 
Arrangement, and the Australia Group down the line. These steps mark a 
complete turnaround.
    Secondly, our economic ties are no longer confined to almond trade: 
last year, two-way trade in goods and services reached $107 billion, a 
more than fivefold increase over the $21 billion level of 2002. The 
U.S.-India Business Council has seen a significant uptick in its 
membership, now around 450 companies. U.S. technology industries have 
strong links with India--last week Apple CEO Tim Cook visited India, 
just as many other U.S. CEOs have done in recent years. Ties among 
entrepreneurs increasingly bridge both countries, including through the 
three million-strong Indian diaspora in the United States.
    Defense ties have improved markedly. Defense trade has increased 
from approximately zero to more than $14 billion in the past decade, 
and the Defense Trade and Technology Initiative has positioned both 
countries for coproduction and codevelopment initiatives, a deeper 
cooperation than a buyer-seller exchange. The tempo of joint exercises 
keeps both countries continually practicing with each other, and 
India's promising indication that a logistics exchange agreement may at 
last be signed will make cooperation more seamless.
    By any measure, when comparing with the past, the snapshot of U.S.-
India relations shows great progress. That does not mean we are free of 
disagreements, or that there isn't room for further progress. Since 
this hearing focuses on progress and managing expectations, I will 
offer a few recommendations focused on government-to-government 
cooperation.
    the model for u.s.-india ties: think joint venture, not alliance
    One of the overarching recommendations our Task Force made 
concerned how we think about what our relationship with India should 
look like. Many Americans see India, the world's largest democracy, a 
fast-growing economy, and a nation of great diversity, and see a future 
in which our shared values will bring both countries ever-closer 
together. That has been taking place, but the shared values of 
democracy do not always mean that Washington and New Delhi will see 
eye-to-eye on every matter.
    Although the present Indian government does not emphasize 
nonalignment or its successor term, ``strategic autonomy'' in the same 
way its predecessors did, New Delhi's model for its own foreign 
relations focuses on the idea that ``the world is a family.'' India 
does not seek alliance relationships, seeing them as potential 
constraints on its freedom of choice. As we in the United States look 
to advance ties with India, our Task Force recommended, given India's 
size, its independence, and what we termed its ``class-of-its-own sense 
of self,'' an alternate framework for how we think about our relations 
with India: the model of a joint venture, in the business sense of the 
word, rather than a not-quite alliance.\2\ This model provides more 
conceptual space to increase cooperation in areas of convergence 
without assuming agreement or support on matters across the board, as 
one would typically expect from an alliance. In the words of the Task 
Force, ``Reframing ties with this flexible model will also create 
conceptual space for the inevitable disagreements without calling into 
question the basis of the partnership . . . the expectation will be 
that divergences inherently exist and, therefore, must be managed.''
---------------------------------------------------------------------------
    \2\ Charles R. Kaye, Joseph S. Nye, Jr., and Alyssa Ayres, 
``Working With a Rising India: A Joint Venture for the New Century,'' 
Independent Task Force Report No. 73 (New York: Council on Foreign 
Relations Press, November 2015), 29. http://www.cfr.org/india/working-
rising-india/p37233?co=C007301.
---------------------------------------------------------------------------
                             economic ties
    As noted above, U.S.-India trade has crossed the $100 billion 
threshold; economic ties have gone from being a weak link to a ballast. 
Last September, Secretary of Commerce Penny Pritzker noted that U.S. 
exports to India now ``support more than 180,000 American jobs, and 
India's exports to our country support roughly 365,000 Indian jobs. 
U.S. firms employ about 840,000 people in India, while Indian-owned 
companies employ nearly 44,000 people in our communities.'' \3\ In the 
past two years, the Indian government has made progress on reforms such 
as lifting foreign direct investment (FDI) caps in defense, insurance, 
a whole host of lower-profile sectors such as courier services, and its 
efforts to cut red tape have helped bump India's ranking up in the 
World Bank's Ease of Doing Business index to 130 from 142. Two weeks 
ago India's parliament passed a major new bankruptcy law. The 
government has mounted initiatives to extend electrification, build 
more roads and rail, and modernize ports. Still, labor law reform has 
proven politically challenging, as has land acquisition reform; both 
have been devolved to the state level. Parliament has not yet passed an 
important constitutional amendment to unify India's states into a 
national single market through a goods and services tax.
---------------------------------------------------------------------------
    \3\ Secretary of Commerce Penny Pritzker, ``U.S. Secretary of 
Commerce Penny Pritzker Addresses U.S.-India Commercial and Economic 
Relationship at Carnegie Endowment for International Peace,'' September 
21, 2015.
---------------------------------------------------------------------------
    India is poised for growth: growth rates have bounced back from a 
dip during the 2011 to 2014 period, and are now at an estimated 7.6 
percent. India is the fastest-growing major economy in the world given 
China's slowdown. India has already become the seventh-largest economy 
in the world at market exchange rates, according to International 
Monetary Fund (IMF) data for 2015, bypassing Group of Seven members 
Canada and Italy, and also Brazil. On a per capita gross domestic 
product (GDP) basis, however, India's $1,688 level ranks it at number 
140 in the world, in the bottom third. Economic growth has lifted some 
133 million people out of extreme poverty during 2001 to 2011, but 21.3 
percent of the population, or around 259 million people, still live 
below the World Bank benchmark for extreme poverty of $1.90 per day.\4\
---------------------------------------------------------------------------
    \4\ Rakesh Kochhar, ``A Global Middle Class Is More Promise Than 
Reality: From 2001 to 2011, Nearly 700 Million Step Out of Poverty, but 
Most Only Barely,'' Pew Research Center, July 2015.
---------------------------------------------------------------------------
    Despite the upswing in economic ties, U.S.-India trade remains well 
below its potential, representing only a little more than one-tenth of 
U.S.-China trade in goods, and more on the scale of Taiwan or the 
Netherlands. In addition, the economic relationship faces some tough 
differences that will not be easy to resolve. On market access matters, 
the United States recently won a dispute in the World Trade 
Organization (WTO) regarding local content requirements in India's 
solar energy sector, but India has appealed that decision. Differences 
over intellectual property rights have been largely resolved in the 
media and entertainment fields, but remain a concern to U.S. companies, 
particularly in the pharmaceutical industry. India has its own high-
level complaints, especially regarding worker mobility. Two months ago 
India filed the first step in a WTO dispute over U.S. law governing 
high-skilled worker visas. This is the first time that an issue of 
immigration has been disputed under global trade rules, and the outcome 
of this filing will set a global precedent.\5\
---------------------------------------------------------------------------
    \5\ See Edward Alden, ``India's Landmark WTO Challenge to US,'' 
Nikkei Asian Review, March 15, 2016.

                               Ten Largest Global Economies, GDP (current prices)
                                            2015 data in USD billions
----------------------------------------------------------------------------------------------------------------
            Rank                                              Country                           2015
----------------------------------------------------------------------------------------------------------------
  1                                              United States                                           17,947
  2                                              China                                                   10,982
  3                                              Japan                                                    4,123
  4                                              Germany                                                  3,357
  5                                              United Kingdom                                           2,849
  6                                              France                                                   2,421
  7                                              India                                                    2,090
  8                                              Italy                                                    1,815
  9                                              Brazil*                                                  1,772
  10                                             Canada                                                  1,552
----------------------------------------------------------------------------------------------------------------
* staff estimate
Source: International Monetary Fund World Economic Outlook Database, April 2016

    One of the Task Force's findings, based on India's economic 
performance, its potential, and its ambitions, was that ``if India can 
maintain its current growth rate, let alone attain sustained double 
digits, it has the potential over the next twenty to thirty years to 
follow China on the path to becoming another $10 trillion economy.'' 
Few countries have such potential, and sustained growth would position 
India to become a larger proportion of the global economy, contributing 
more toward global prosperity.
    India has its own hurdles to clear internally and its domestic 
political challenges to economic reform are something that the United 
States can do little about. But we have a clear stake in India 
achieving its ambitions. As our Task Force observed, ``As the Indian 
economy grows, it has the potential to become increasingly 
indispensable for global prosperity--becoming an engine of growth for 
its region and its trading partners, and rising as a source of global 
investment.'' \6\ Given India's fast-growing importance to the world 
economy in the aggregate, and to the U.S. economy, the Task Force 
recommended that the United States ``elevate support for India's 
economic growth and its reform process to the highest bilateral 
priority, committing to ambitious targets for bilateral economic ties 
along with clear steps to get there.'' \7\
---------------------------------------------------------------------------
    \6\ Kaye, Nye, Jr., and Ayres, ``Working With a Rising India,'' 15.
    \7\ Ibid., 34.
---------------------------------------------------------------------------
    From my perspective, one of the most immediately actionable steps 
would be for the United States to champion actively India's candidacy 
for membership in the Asia-Pacific Economic Cooperation (APEC) forum. 
India has been waiting for nearly twenty years. APEC is not a binding 
negotiating forum, but rather a norm-setting organization with a 
commitment to transparency and continued work to further open trade 
goals. India would benefit from inclusion in ongoing consultation with 
Asia-Pacific peers on how the economic region can further trade.\8\ 
Similarly, we should explore Indian membership in the Organization for 
Economic Cooperation and Development (OECD), which would also open up 
the possibility for Indian membership in the International Energy 
Agency. These are important norm-setting and economic information-
sharing institutions that at this point should include India--
especially since its economy is now far larger than many of its 
European members.
---------------------------------------------------------------------------
    \8\ For a longer discussion of India and APEC, see Alyssa Ayres, 
``Bringing India Inside the Asian Trade Tent,'' Policy Innovation 
Memorandum No. 46 (New York: Council on Foreign Relations Press, June 
2014), http://www.cfr.org/india/bringing-indiainside-asian-trade-tent/
p33173.
---------------------------------------------------------------------------
            working with india on democracy and human rights
    The world's two largest multiethnic, multireligous democracies: 
India and the United States have much in common in this sense. But we 
have important tactical differences in approaches to democracy and 
human rights around the world. I will divide my observations into two 
types, the first focused on cooperation in other parts of the world, 
and the second focused on U.S. bilateral dialogue with India.
    India was a founding supporter of the United Nations (UN) Democracy 
Fund, to which it is the second-largest donor after the United States, 
and has also been a founding supporter of the Community of Democracies. 
India has been a supporter of and involved with the UN Human Rights 
Council since its creation. But Indian foreign policy in general, and 
for decades, has upheld a core principle of nonintervention when it 
comes to concerns in other countries, and that extends to public 
comment. It sees issues of democracy and rights as matters of domestic 
sovereignty. While the Indian government has a great story to tell 
about its own history as a democracy, it does not seek to proselytize. 
Rather, it is happy to provide technical assistance if requested. 
Similarly, as a general principle, India does not typically vote for 
single-country condemnatory resolutions in the UN and its bodies; Human 
Rights Watch noted that India abstained from half of all UN Human 
Rights Council resolutions in 2015, and 40 percent in 2014.\9\ A 
statement from India's permanent mission to the UN in Geneva in 2014 
clarified this preference, explaining India's interest in strengthening 
capacities for upholding human rights, while adding that, 
``highlighting country situations and finger pointing has never proved 
to be productive. . . . India strongly believes that the advancement 
and realisation of human rights can be achieved only through the 
cooperation and full participation of the concerned States.'' \10\ The 
few exceptions to this orientation tend to be situations that have an 
immediate effect on Indian national security, such as with neighboring 
countries in South Asia, or situations of severe deterioration, such as 
in Syria by 2012.
---------------------------------------------------------------------------
    \9\ Human Rights Watch, ``Country Datacard, Human Rights Council 
Voting Record: India,'' VotesCount, 2015, http://votescount.hrw.org/
page/India.
    \10\ Permanent Mission of India to the United Nations, Geneva, 
``Statement on Agenda Item 4 General Debate: Human Rights Situation 
That Requires the Council's Attention, September 16, 2014'' (Government 
of India, Ministry of External Affairs, September 16, 2014), http://
www.pmindiaun.org/pages.php?id=983.
---------------------------------------------------------------------------
    In the bilateral discussion between India and the United States, a 
similar concern over tactics exists. The United States approaches its 
support for advancing democracy and human rights around the world 
through private diplomacy as well as through public reports providing a 
snapshot of problems in countries, including through annual reports to 
Congress on human rights, international religious freedom, trafficking 
in persons, and others. With many countries, these reports serve as a 
gauge to help them focus their efforts. The Indian government, on the 
other hand, does not view these reports as helpful; they are generally 
unwelcome and seen as an intrusion upon domestic sovereignty. In March, 
for example, the Indian embassy released a statement regarding visa 
denials to commissioners of the U.S. Commission on International 
Religious Freedom (USCIRF). The embassy's statement said, in part, ``We 
do not see the locus standi of a foreign entity like USCIRF to pass its 
judgment and comment on the state of Indian citizens' constitutionally 
protected rights.'' It went on to welcome the ``sharing of experience 
and best practice on all issues of mutual interest.'' \11\ I would note 
here as well that while India continues to struggle with rights and 
discrimination issues, including on the basis of religion, gender, and 
caste, its active civil society, press, and judiciary serve as constant 
oversight mechanisms.
---------------------------------------------------------------------------
    \11\ Embassy of India, Washington, DC, ``Press Release -In Response 
to a Media Query on Visa to USCIRF Visit,'' March 4, 2016, https://
www.indianembassy.org/press--detail.php?nid=2338.
---------------------------------------------------------------------------
    These two examples should illustrate where our divergences exist, 
and what some of the limits are to the usual U.S. template for 
cooperation. In third countries, we will likely find increased 
opportunity in technical training on the mechanics of democracy, as our 
Task Force recommended: ``Either in bilateral collaboration with India 
or by supporting India's technical work with democracy-focused 
institutions . . . the United States should approach India as a 
frontline partner on technical training and capacity building for 
democracy around the world.'' India has recently created an Indian 
International Institute for Democracy and Election Management, which 
can train officers from anywhere in the world on the lessons learned by 
the Election Commission of India. On U.S. bilateral concerns about 
rights issues within India, private diplomacy will go much farther than 
public rebuke. While our annual public reporting obligations will 
continue, no one should be surprised to see the Indian government 
``take no cognizance,'' as the Ministry of External Affairs said last 
year in response to USCIRF's report.\12\
---------------------------------------------------------------------------
    \12\ Suhasini Haidar, ``Govt. Rejects U.S. Panel's Report on 
Religious Freedom,'' The Hindu, May 1, 2015.
---------------------------------------------------------------------------
    Where we can craft an agenda of mutual interest in collaboration 
with the Indian government, on the other hand, the conversation can go 
much farther. It is my understanding, for example, that U.S. 
Ambassador-at-Large to Monitor and Combat Trafficking in Persons Susan 
Coppedge recently traveled to India for discussions with the Indian 
government. The U.S.-India Women's Empowerment Dialogue, and the Global 
Issues Forum both provide platforms for consultations. India and the 
United States will continue to have differences on the best way to 
discuss rights problems, but we should continue looking for the spaces 
of agreement to build a larger and more open dialogue. I have also long 
believed that sharing some of the domestic challenges we struggle with 
in the United States, some of which have become higher profile over the 
course of the past two years--such as racial justice and law 
enforcement--could serve as a helpful basis for a broadened dialogue.
              defense and strategic partnership with india
    The transformation in defense and strategic ties with India stands 
as one of the great changes of the past fifteen years. India went from 
seeing Russia as its primary defense partner to diversifying its 
suppliers, and from a limited defense relationship with the United 
States to one in which it exercises more with U.S. forces than with any 
other country. India recently participated in this year's Red Flag held 
in Alaska, took part in the Rim of the Pacific Exercise (RIMPAC) last 
year, and will do so again this year.
    The geostrategic case for stronger defense ties with India is well 
known. Successive U.S. administrations have viewed a stronger, more 
capable India as a bulwark of democracy in a volatile region, and as a 
model across Asia capable of ensuring that no single country dominates 
the region. India's military capabilities also increasingly make it a 
regional first responder for humanitarian assistance and disaster 
relief, as demonstrated with the Nepal earthquake last year, where it 
took an immediate leading role. During last year's humanitarian crisis 
in Yemen, similarly, India took the lead evacuating not only its own 
citizens but also many other nationals, including stranded 
Americans.\13\ India has also served as a major donor to Afghanistan, 
the fifth-largest over the past fifteen years, and has been an 
important source of humanitarian assistance, infrastructure 
development, and training for civilian officials and military officers 
on Indian soil.\14\ We could be doing more with India on civilian 
security in Afghanistan, including on training, rule of law, and other 
areas.
---------------------------------------------------------------------------
    \13\ Ishaan Tharoor, ``India Leads Rescue of Foreign Nationals, 
Including Americans, Trapped in Yemen,'' Washington Post, April 8, 
2015.
    \14\ Alyssa Ayres, ``Why the United States Should Work With India 
to Stabilize Afghanistan,'' Policy Innovation Memorandum No. 53 (New 
York: Council on Foreign Relations Press, April 2015), http://
www.cfr.org/afghanistan/why-united-states-should-workindia-stabilize-
afghanistan/p36414.
---------------------------------------------------------------------------
    India's air capabilities acquired from the United States--its C-
17s, C-130Js, and P-8s--give it the ability to respond quickly in a 
disaster (such as sending relief to cyclone-hit Sri Lanka last week), 
haul supplies over long range, and conduct maritime surveillance in the 
greater Indian Ocean region. It is building aircraft carriers to 
augment its fleet of one, and one of the ``pathfinder'' projects in the 
U.S.-India Defense Trade and Technology Initiative concerns aircraft 
carrier technology. As the Task Force observed, defense ties ``have 
progressed well . . . but still have much room to grow.'' The Task 
Force recommended building further on security cooperation, while 
expanding ``across the entire spectrum. Homeland security and 
counterterorrism cooperation should receive added emphasis.'' \15\
---------------------------------------------------------------------------
    \15\ Kaye, Nye, Jr., and Ayres, ``Working With a Rising India,'' 
41.
---------------------------------------------------------------------------
    Having recognized the great steps taken over the past decade, it is 
also true that U.S. and Indian systems for defense cooperation and 
acquisition are still learning to work with each other's differences. 
It has taken a long time to work through with Indian colleagues 
precisely how to approach foundational matters like end use monitoring, 
resolved in 2009 but not without a political firestorm in India over 
questions of sovereignty. Following Secretary of Defense Ashton 
Carter's visit to India, it appears that an approach to logistics 
support, evolving to a joint ``logistics exchange memorandum'' 
according to the Indian press, could be signed soon. Secretary Carter 
has had the right approach: be patient as the Indian system works 
through its responses to U.S. templates, and be flexible. A longer path 
to achieve agreements that take on a shape of their own should be the 
expectation; long negotiations or extended deliberations should not be 
interpreted as some kind of failure.
          preparing the united states for a more global india
    As a final reflection, I would urge that members consider ways to 
better structure the enabling environment in the United States for 
working with India as a global power. Knowledge and familiarity with 
the world's rising powers should be an economic preparedness issue for 
our own country--but our higher education metrics do not reflect this 
change. In U.S. colleges and universities, India receives far less 
attention than it should. American students do not study abroad in 
India at the levels one might expect; they head to the United Kingdom 
as their top study abroad destination, followed by Italy, Spain, 
France, China, Germany, Ireland, Costa Rica, Australia, Japan, and 
South Africa, with India coming in at number twelve, according to the 
Institute for International Education's Open Doors 2015 report. Nearly 
twice as many U.S. students head to Costa Rica than opt for a semester 
abroad in India. Americans do not study Indian languages--and 
admittedly there are many--at the levels they do for Chinese, or even 
American Sign Language. Total enrollments in all Indian languages 
combined account for less than one-quarter those of Korean, and a mere 
fraction of more commonly taught languages (14 percent of Russian, 9.5 
percent of Arabic, or 5 percent of Chinese).\16\
---------------------------------------------------------------------------
    \16\ Data from the Modern Language Association's enrollments survey 
database, https://apps.mla.org/flsurvey--search. For the most recent 
MLA survey report, see David Goldberg, Dennis Looney, and Natalia 
Lusin, ``Enrollments in Languages Other Than English in United States 
Institutions of Higher Education, Fall 2013,'' MLA Quadrennial Language 
Enrollments Survey (New York: Modern Language Association, February 
2015).
---------------------------------------------------------------------------
    U.S. funding mechanisms through the Higher Education Act routinely 
prioritize numerous other regions, providing greater resources for East 
Asia, Latin America, Russia and Eastern Europe, the Middle East, and 
Africa than for South Asia. The Fulbright mechanism has increased 
exchange between the United States and India for postgraduate and 
faculty fellowships, as the Indian government now shares the costs (and 
indeed, now the name: these are now called Fulbright-Nehru 
fellowships). But as Americans we ought to review more closely the 
incentive mechanisms to encourage students during their formative 
undergraduate years to study abroad in India, study a language, and 
place India on a par with the countries of Europe in terms of U.S. 
familiarity.
                    recommendations for u.s. policy
 1. Look to a ``joint venture'' model as the ideal for U.S.-India 
        partnership. We will see eye-to-eye in many areas, but not 
        always with others. India is not a U.S. ally and does not seek 
        the implied obligations that an alliance represents. Focus on 
        the opportunities and do not let the differences crowd out or 
        undermine the positive progress.

 2. Elevate support for India's economic growth to the highest 
        bilateral priority for the U.S. agenda with India. Steps 
        recommended by the CFR-sponsored Independent Task Force on 
        U.S.-India Relations include:


           leadership of a global diplomatic effort to support India's 
        entry into APEC;

           steps to enhance trade: high-level discussion of bilateral 
        sectoral agreements, such as in services; completion of a 
        bilateral investment treaty; and discussion of a longer-term 
        pathway to a free trade agreement or Indian membership in an 
        expanded Trans-Pacific Partnership as an equivalent;

           creation of initiatives that respond to Indian interest in 
        domestic reform needs, such as technical advice on market-based 
        approaches to infrastructure financing; shared work with 
        international financial institutions to reprioritize 
        infrastructure financing; continued joint work on science and 
        technology; technical cooperation on regulatory reform, bank 
        restructuring, best practices in manufacturing, labor, supply 
        chain, transportation, and vocational skills training;

    In addition to these Task Force recommendations, I would add the 
necessity of working comprehensively to integrate India into global 
economic institutions such as the OECD and the International Energy 
Agency.


 3. Democracy and human rights issues: Use private diplomatic channels, 
        and have no illusions that our public rebukes will be welcomed. 
        We should not stop being who we are, but be realistic about the 
        responses we will receive. Work to build shared platforms of 
        concern: globally, this likely means a technical focus on 
        democracy training. Bilaterally, this will entail developing 
        specific agendas in dialogue with the Indian government.

 4. Defense: Among the most successful areas of partnership, we should 
        build further on progress already made, including on defense 
        and security consultations, defense trade, technology sharing 
        and codevelopment. Homeland security and counterterrorism mark 
        two critical areas where more emphasis could help advance 
        further cooperation.

 5. Prepare our next generation: Review federal funding incentives to 
        encourage study abroad in India and study of Indian languages. 
        Higher Education Act incentives place South Asia in the lower 
        half of funding lines. Beyond the Higher Education Act, models 
        to examine include Passport to India, the Boren national 
        security education incentives, and Title VIII funding, which 
        presently provides extra incentives for Russia and Eastern 
        Europe.


                               __________


                    Additional Questions Submitted 
                      by Members of the Committee


Responses to Additional Questions for the Record Submitted to Assistant 
        Secretary of State Nisha Biswal by Senator David Perdue


    Question 1.  Where does the issue of IPCA fit in the larger 
bilateral relationship? Have we included the issue of IPCA in our 
highest bilateral priorities?

    Answer. The Department of State takes international parental child 
abduction (IPCA) very seriously. Senior Department officials have 
encouraged the Government of India to resolve reported abduction cases 
and to help ensure access rights for left-behind parents of children 
abducted to India on numerous occasions. We have encouraged India to 
accede to the 1980 Hague Convention on the Civil Aspects of 
International Abduction. We will continue to raise this issue at every 
appropriate opportunity.


    Question 2.  Has the administration raised the issue of IPCA with 
Prime Minister Modi, and have we secured a commitment from Prime 
Minister Modi to return abducted American children from India?

    Answer. We repeatedly have asked the Modi administration to help 
resolve reported abduction cases. We have encouraged India to accede to 
the 1980 Hague Convention on the Civil Aspects of International Child 
Abduction. Ambassador Susan Jacobs, Special Advisor for Children's 
Issues, Consular Affairs Assistant Secretary Michele Thoren Bond, U.S. 
Ambassador to India Richard Verma and I have all pressed senior Indian 
officials to resolve reported IPCA cases. Other senior officials have 
raised this issue and will continue to do so at a high level.


    Question 3.  If this issue has not been raised with Prime Minister 
Modi, do we have your assurance that Secretary Kerry and President 
Obama will raise this during Prime Minister Modi's upcoming visit to 
the U.S., and seek his commitment to resolve this issue promptly?

    Answer. We repeatedly have asked the Modi administration to help 
resolve reported abduction cases and encouraged India to accede to the 
1980 Hague Convention on the Civil Aspects of International Child 
Abduction. We will continue to raise this at high levels and at every 
opportunity.


    Question 4.  What is India's response to this serious humanitarian 
issue, and what level of cooperation are we seeking from them?

    Answer. We believe the 1980 Hague Convention on the Civil Aspects 
of International Child Abduction is one of the best tools to prevent 
and resolve international parental child abductions (IPCA). Senior 
Department officials continue to encourage the Government of India to 
accede to the Convention. The Government of India has neither acceded 
to the Convention, nor taken visible, concrete steps to help resolve 
reported cases. U.S. Embassy New Delhi officials are in regular contact 
with Indian officials on IPCA, and we will continue to raise this issue 
at high levels.


    Question 5.  How do you assess the developments in the India-Iran 
relationship?

    Answer. India was a critical U.S. partner during the negotiations 
for the Joint Comprehensive Plan of Action (JCPOA). India remains 
interested in exploring economic opportunities with Iran in the wake of 
JCPOA implementation, with a focus on increasing its energy security 
and expanding its access to markets in Iran, Afghanistan, and Central 
Asia. During Prime Minister Modi's May 22-23 visit to Iran, India and 
Iran announced their intention to deepen bilateral ties, especially 
noting a desire to cooperate in the fields of connectivity and 
infrastructure, energy, and trade and investment. A trilateral 
agreement signed by Indian Prime Minister Modi, Iranian President 
Rouhani, and Afghan President Ghani has the potential to further 
strengthen the economies of India and Afghanistan. India's 
participation in efforts to develop Iran's Chabahar Port and associated 
road and rail projects would give Afghanistan an alternative outlet to 
global export markets and would furnish India with a platform to invest 
in the region.
    Additionally, India perceives that it has deep-rooted historical 
and civilizational ties with Iran which it hopes to reinvigorate 
following the signing of the JCPOA through increased people-to-people 
contact such as student exchanges and initiatives to facilitate 
tourism.


    Question 6.  How might closer India-Iran ties impact U.S. interests 
in the region?

    Answer. India has been a very consistent partner in working with us 
and complying with the sanctions regime, even when doing so has 
adversely impacted its economic interests. The Indians remain committed 
to supporting U. S. efforts to implement the JCPOA.
    Indian investment in Iran likely has an important role to play in 
demonstrating to Iran the economic benefits of sanctions relief, and 
thereby ensuring Tehran's continued compliance with JCPOA and ensuring 
that Iran's nuclear program remains peaceful. Increased Indian 
investment in Iran, especially in transportation and infrastructure, 
could also increase regional economic connectivity both with Central 
Asia and Afghanistan. For Afghanistan in particular, improved 
connectivity would facilitate Indian economic investment in Afghanistan 
and expand Afghan access to regional markets, both of which could 
contribute to a more developed and peaceful Afghanistan.
    For India to be able to contribute to the economic development of 
Afghanistan, it needs access that it does not readily have across its 
land boundaries. India is seeking to deepen its energy relationships 
with the Iran and Central Asian countries to develop routes that would 
facilitate that access. That being said, we have been very clear with 
the Indians on what our security concerns have been in regards to Iran, 
and will continue to engage them on those issues.


    Question 7.  What is India doing, in relation to its Muslim 
population, that's leading to such low recruitment rates? Can other 
countries learn from India on this front?

    Answer. As the world's largest democracy, India has been largely 
successful in integrating Muslims and other minorities. India's 
constitution and laws provide a secular framework where all citizens 
are given political and economic opportunities. Indian Muslims are 
well-known members of society, including Bollywood stars, and have 
risen to top political positions such as president and vice-president. 
Leaders of India's Muslim community have generally been a voice for 
moderation. The Indian police, security services, and justice system 
have demonstrated their ability to counter and prevent terrorism. While 
no one single program has led to India's success, we believe there 
could be general lessons for other countries.


    Question 8.  To what extent, if any, do you see the Islamic State 
realizing successes in its reported efforts to recruit in South Asia, 
and in India specifically?

    Answer. Da'esh supporters have sought to establish a larger, 
permanent presence in India since 2014 with little success, but we 
continue to monitor this issue closely. Some of its supporters are 
affiliated with dormant India-based extremist groups such as Indian 
Mujahideen and its offshoot Ansarul Tauheed, which pledged allegiance 
to Da'esh in 2014.
    Despite a lack of success establishing a large presence in India, 
the region is home to a number of foreign terrorist fighters. Several 
hundred people from across South Asia have traveled to Iraq and Syria 
to join Da'esh's caliphate; among these, a small percentage are of 
Indian origin. The Government of India officially estimates a few dozen 
Indians, mostly middle-class and well-educated, which is consistent 
with the broader foreign fighter trends globally, have traveled to 
Syria since 2014 to join Da'esh and six have been killed in Syria. 
Given Da'esh's ongoing efforts to recruit Indian Muslims online, online 
radicalization and recruitment to violence are serious concerns for 
India.
    India-based Da'esh supporters--those who aspire to conduct attacks 
in India in Da'esh's name--ikely number in the dozens. Since January, 
Indian authorities have arrested at least two dozen Da'esh supporters 
planning attacks during national holidays and at festivals with a large 
presence of Westerners and Hindus. Despite the arrests, we remain 
concerned that the group's supporters could conduct small-scale attacks 
with little to no warning.


    Question 9.  What is the Indian government's policy toward current 
international military operations targeting IS in Iraq and Syria?

    Answer. India is focused on both domestic radicalization and 
international terrorism, and shares our concerns about Da'esh. In the 
September 2015 U.S.-India Joint Declaration on Combatting Terrorism, 
the Indian government: ``Recognize[d] the serious threat posed by 
Da'esh to global security and affirm[ed] efforts to degrade and defeat 
this threat in accordance with the provisions of United Nations 
Security Council Resolutions 2178, 2170, and 2199.''
    The Indian government is particularly concerned about Da'esh's 
potential influence in South and Central Asia, but has not joined the 
counter-Da'esh coalition. India has historically been reluctant to join 
informal coalitions outside of the UN framework. India also has 
concerns about endangering the millions of migrant Indian laborers in 
the Middle East: Da'esh has reportedly been holding 40 Indian workers 
hostage in Iraq for two years, a high profile case in which Minister of 
External Affairs Swaraj has played an active role.
    India has strengthened security and counterterrorism ties with 
several Gulf countries under the Modi administration. It organized the 
first India-Arab League Forum in January 2016; the Forum's statement 
denounced Da'esh and called upon the ``international community to lend 
to the Iraqi government support on its war against terrorism.'' The 
Muslim community in India, has spoken out against Da'esh--70,000 Muslim 
clerics signed a fatwa against Da'esh in the fall of 2015.


    Question 10.  Why has the administration not yet backed India's 
candidacy for APEC membership? At the same time, it appears that our 
talks with India on a bilateral investment treaty (BIT) are paused.

    Answer. India has substantial and growing economic linkages with 
the United States and other Asia Pacific Economic Cooperation (APEC) 
member economies. We welcome India's interest in joining the APEC forum 
and plan to better understand India's interest in membership and how 
APEC fits into India's domestic economic reform agenda.
    There is currently no consensus among APEC members on the 
parameters of membership expansion or on which of the roughly dozen 
candidates, including India and other countries in the Americas and 
South and Southeast Asia, should be considered if the organization 
decides to expand.


    Question 11  What are prospects for the United States and India to 
conclude a ``high-standard.'' BIT?

    Answer. A high-standard Bilateral Investment Treaty between the 
United States and India would foster investment and support economic 
growth and job creation in both the United States and India.
    During President Obama's visit to India in January, the President 
and Prime Minister Modi called for meetings to discuss the prospects 
for a high-standard BIT. We are continuing our technical discussions 
with the Indians to find common ground and seek a way forward. Working 
toward a high-standard agreement will take time.


    Question 12.  How would the proposed Trans-Pacific Partnership 
(TPP) affect U.S.-India trade relations?

    Answer. India is not a member of the Trans-Pacific Partnership 
(TPP). The 12 TPP partners have negotiated TPP as a potential platform 
for broader integration of the Asia-Pacific regional economy. While the 
United States and the other 11 TPP Parties are currently focused on 
getting the agreement approved and entered into force, they also left 
open the possibility of expanding membership in the future to other 
regional economies that can demonstrate their readiness to adopt high-
standard commitments and can win consensus support of all current TPP 
members to join.


    Question 13.  What is the likelihood of India joining TPP or other 
plural-lateral trade negotiations and agreements?

    Answer. The text of the TPP agreement is useful reading for all our 
trading partners because it sets out the elements that the United 
States, as well as our 11 TPP partners, believe should be at the heart 
of 21st-century trade liberalization.
    The Administration is focused on making the case for TPP to our 
domestic stakeholders, getting the agreement through the respective 
processes of the 12 current TPP signatories, and entering the agreement 
into force. Regional economies interested in seeking to join TPP in the 
future can review the text and consider their readiness to adopt TPP's 
ambitious commitments. Decisions on new members are by consensus of all 
the current TPP members. For the United States, the process includes 
reviewing how a potential candidate has addressed bilateral issues in 
our trade relationship.


    Question 14.  What are the implications of doing so (or not)?

    Answer. The U.S.-India economic relationship has seen significant 
gains over the past few years. Bilateral trade in goods and services 
has expanded from $60 billion in 2009 to over $107 billion in 2015. 
However, while the Indian government is working on important reforms to 
attract investment and improve the ease of doing business in the 
country, substantive trade and investment reforms are needed to ensure 
that India can fully take advantage of greater regional economic 
integration.


    Question 15.  How do you see U.S.-India defense trade progressing 
in coming years?

    Answer. The United States supports India's rise as a security 
partner in Asia, as envisioned in the January 2015 Joint Strategic 
Vision for the Asia-Pacific and the Indian Ocean Region; bilateral 
defense cooperation is an increasingly important pillar in this 
strategic partnership. The U.S.-India defense trade is robust and 
continues to grow. Defense trade helps build closer military to 
military ties and strengthen the overall bilateral defense 
relationship. Our engagement seeks to: improve our cooperation through 
exchanges and exercises; support joint ventures between American and 
Indian industry; and build India's conventional capabilities through 
sales of military hardware and technology sharing.
    As its Russian-origin equipment wears out, India has increasingly 
looked to the United States for military hardware, training, and 
partnership. Since January 2008, over $13 billion in defense deals have 
been signed, including most recently in September 2015 when we signed a 
$3 billion deal for Apache and Chinook helicopters. There are several 
more deals in the defense pipeline demonstrating the Government of 
India's continued interest in purchasing U.S. defense articles and 
services and technology sharing and co-production.
    A central focus of our bilateral security relationship is the 
Defense Technology and Trade Initiative (DTTI), an unprecedented effort 
to streamline technology-sharing and deepen defense co-development/co-
production partnerships with India. The United States and India have 
finalized agreements on two projects (mobile hybrid power sources and 
chemical-biological protective suits), and have also agreed in 
principle to work on two more (digital helmet mounted displays and a 
biological tactical detection system). Since 2013, 46 DTTI proposals 
have been exchanged. As a part of this initiative, we also are 
deepening collaboration with India on aircraft carrier technology and 
jet engine development.


    Question 16.  Is the U.S. government offering India arrangements 
that satisfy India's defense needs? What defense articles does India 
want from us that we cannot currently provide?

    Answer. The U.S. government continues to identify ways to work more 
closely with India. This year, for example, the Department of Defense 
(DoD) enacted a major policy change on gas turbine engine technology 
transfer to India that will broaden the level of technology transfer 
that DoD would consider recommending during the case-by-case export 
license review. The United States and India have set up the Defense 
Technology and Trade Initiative (DTTI), as well as several working 
groups to address issues related to the procurement of sensitive 
technology defense items including on aircraft carrier technology 
development, jet engine development, and unmanned aerial systems (UAS). 
These opportunities should lead to authorizations for increased 
capabilities over time, allowing Indian scientists and engineers to 
continue increasing their expertise.
    India continues to request Category 1 Missile Technology Control 
Regime (MTCR) platforms, including High-Altitude Long-Endurance (HALE) 
and armed Unmanned Aerial Systems (UAS). HALE UAS face a strong 
presumption of denial under our MTCR commitments, and armed UAS face 
similar constraints under the UAS Transfer Policy. Instead, we have 
articulated to India a willingness to cooperate, to some extent, on 
general UAS-enabling technologies and a high elevation, medium payload, 
autonomous resupply UAS, assuming those technologies are not for use on 
MTCR Category I systems, WMD delivery systems, or armed UASs. Further, 
through the DTTI and our broader bilateral security cooperation, we are 
working together to identify specific capability requirements and ways 
we can work collaboratively to fill those requirements in ways 
consistent with our export control commitments.


    Question 17.  How would a better-armed India more effectively 
counterbalance China, Russia, and Iran?

    Answer. The United States sells defensive articles and services to 
the Government of India in accordance with the President's Conventional 
Arms Transfer (CAT) policy, which supports transfers that meet 
legitimate security requirements of our allies and partners in support 
of our national security and foreign policy interests. In line with 
this policy and the Arms Export Control Act, the United States 
government reviews all prospective sales of defense articles and 
services for their consistency with U.S. regional stability interests.
    U.S.-India bilateral political-military cooperation, arms sales and 
technology sharing already have proceeded at an unusually fast pace and 
scope since 2008, in accordance with the shared political, cultural and 
economic interests of both of the world's largest democracies.


    Question 18.  What initiatives is Defense Minister Parrikar 
undertaking to smooth India's acquisition process and to speed up the 
modernization of India's arsenal?

    Answer. In March 2016, Defense Minister Parrikar announced India's 
revised Defense Procurement Procedure (DPP 2016), which aims to align 
defense procurements with PM Modi's ``Make in India'' initiative, and 
includes a number of updates to promote greater flexibility and 
streamlining in the contracting and bidding process. In May, Parrikar 
tasked an 11-member committee to modify the Indian military's manpower 
ratio of combat personnel to noncombat personnel to release additional 
funds for weapons and equipment modernization.
    Following other long-standing recommendations, he created a 
committee to study the creation of a defense procurement organization 
focused on streamlining the acquisition process, as well as a 
subcommittee to recommend how private sector companies should be 
shortlisted as strategic partners. Bureaucratically, the Defense 
Acquisition Council has increased the frequency of its meetings, and 
convenes almost monthly under Parrikar's leadership. Defense firms and 
other governments have commented that Minister Parrikar has provided 
greater transparency and access to his office and the Ministry of 
Defense to foreign. Under his leadership, the Ministry of Defense has 
also made better use of the internet for Requests For Information, 
tenders, and Requests For Proposals.
    Question 19.  How can we help India wean itself off of Russian 
military hardware?

    Answer. The United States has greatly enhanced its bilateral 
defense relationship with India in the past several years through the 
Defense Technology and Trade Initiative (DTTI), the January 2015 Joint 
Strategic Vision for the Asia-Pacific and the Indian Ocean Region, and 
the recently renewed 10-year Defense Framework Agreement. With the U.S. 
government's increased focus on promoting defense trade with India, and 
with much of India's Russian-made systems reaching the end of their 
service lives, India has increasingly looked to the United States for 
military hardware, training, and partnership. Since January 2008, over 
$13 billion in defense deals have been signed, including most recently 
in September 2015 when we signed a $3 billion deal for Apache and 
Chinook helicopters. Our increased engagement through working groups, 
dialogues, and formalized initiatives, as well as the superior quality 
of U.S. defense articles, is already building trust and confidence on 
the Indian side at unprecedented speed for a large democratic system.


    Question 20.  Would it help if we made it easier for India by 
streamlining the export control process and making some of our best 
technology available, as we do for other close allies?

    Answer. Technology release decisions involve many factors including 
interoperability requirements; military operational impact; end-user 
and end-use history; level of technology; ability and willingness to 
protect; and bilateral, multilateral, and international agreements. 
While not a treaty ally, we have a strong and growing strategic 
partnership with India. There are unique structures in place to promote 
defense trade cooperation and provide sensitive technologies, including 
via the Defense Technology and Trade Initiative (DTTI) and DoD's 
establishment of the India Rapid Response Cell (IRRC), which seeks to 
expeditiously advance ongoing projects with India. This unique 
cooperation is supported at the senior-most levels of our two 
governments. We have also taken several steps to facilitate the export 
licensing process, such as establishing an export licensing forum with 
India to ensure communication and transparency in our process, 
providing education and outreach on our system, and finding creative 
solutions to specific process hurdles as they arise. As with any 
country, we do not exempt India from export licensing requirements and 
procedures, or authorize ``blanket'' export authorizations. Our 
licensing regime is based on a case-by-case review process by design, 
as each defense export has specific national security and foreign 
policy considerations.


    Question 21.  Could you speak more to how do you assess the 
progress of U.S.-India intelligence and counterterrorism cooperation?

    Answer. The United States and India's cooperation on 
counterterrorism issues is very strong and continues to grow with the 
recent signing of the HSPD-6 arrangement to share terrorism screening 
information. Both countries share intelligence and cooperate to fight 
against international terrorist organizations threatening security in 
India. Prime Minister Modi's government prioritizes its response to 
terrorism as a serious national security threat, although they have not 
yet joined the international counter-Da'esh Coalition.
    The United States and India are deepening counterterrorism 
cooperation in a number of areas through the Homeland Security Dialogue 
and Counterterrorism Joint Working Group. This includes capacity 
building, intelligence sharing, cooperation on cyber issues, and 
exchanges on urban policing. In addition, Mumbai is part of the Strong 
Cities Network--a multilateral forum to increase local resiliency to 
violent extremism.


    Question 22.  To what extent, if any, does the U.S. relationship 
with Pakistan hinder such cooperation?

    Answer. The United States has long-standing counterterrorism 
relationships with both Pakistan and India, and our work with both 
countries is essential to American interests and regional security. We 
discuss bilateral counterterrorism cooperation and capacity building 
with both countries. Our counterterrorism cooperation with India 
continues to grow and will be a key discussion topic during Indian 
Prime Minister Modi's June 6-8 visit to Washington.


    Question 23.  What, in your view, are the most important aspects of 
such cooperation?

    Answer. We have a strong and growing counterterrorism relationship 
with India. This issue will be a key discussion topic during Indian 
Prime Minister Modi's June 6-8 visit to Washington. Our growing 
counterterrorism cooperation encompasses a range of important issues 
which include information sharing, the designation of terrorists at the 
United Nations, and sharing best practices relating to counterterrorism 
tactics used by our police forces.


    Question 24.  What do you plan to do/what can we do to ensure 
India's actions don't have a direct negative impact on jobs here at 
home?

    Answer. The United States government has been actively working to 
ensure that India's intellectual property actions do not negatively 
impact jobs in the United States. Prompted in part by our engagement, 
the Modi Administration has promoted respect for intellectual property 
rights (IPR) in India and has taken significant steps to strengthen 
protection and enforcement. High-level national initiatives, such as 
``Make in India'' and ``Start-up India,'' have linked the realization 
of development goals to IPR creation and protection. The 2015 passage 
of the Commercial Courts, Commercial Division and Commercial Appellate 
Division of High Courts Bill may enable rights holders in India to more 
consistently enforce their rights in the courts. The Modi 
Administration has also announced a significant increase in the number 
of patent and trademark examiners, which should help to reduce the long 
delays new applicants currently face and gradually eliminate the 
backlog of pending applications. At the state level, Telangana has 
formed India's first anti-piracy policy unit, and Andhra Pradesh 
launched an aggressive anti-piracy campaign. The United States also 
welcomed the deliberate and transparent process employed in India's 
evaluation of a compulsory license application in 2015.
    In addition, in May 2016, India released its long-awaited National 
IPR Policy, which sought to codify and clarify the government's overall 
framework for IPR issues. The Policy emphasizes that protecting IPR is 
essential to promoting innovation, and includes helpful language on 
reducing administrative hurdles to registering intellectual property. 
However, it does little to ameliorate long-standing and systemic 
deficiencies in India's IPR regime, and even endorsed problematic 
policies that may enable backsliding in the future. The Department of 
State and other executive branch agencies remain vigilant and 
continuously engage with counterparts in India and in law-enforcement 
to ensure that this backsliding does not happen.


    Question 25.  How do you plan to work with India to address these 
increasing challenges faced by U.S. businesses?

    Answer. We maintain strong channels of engagement with India and, 
in the last few years, have improved communication with industry 
stakeholders, lobbied India to increasingly publicly recognize the 
importance of IPR and link it to India's future development, and take 
positive steps to address or avoid further erosions of the IPR regime.
    The main avenue through which we seek to address IPR issues with 
India is through the U.S.-India Trade Policy Forum. In addition, 
President Obama and Prime Minister Modi announced in 2014 the creation 
of the High Level Working Group on Intellectual Property. Our Embassy 
in New Delhi also maintains close contact with India's Department of 
Industrial Policy and Promotion, which has primary responsibility for 
coordinating IPR policy in India, to ensure that our concerns on IPR 
are heard. Through these mechanisms, the United States is working with 
India to foster an environment favorable to IPR protection and 
enforcement while enabling India to achieve its important domestic 
policy goals of increasing investment and stimulating innovation.


    Question 26.  What was the administration's response to this visa 
denial for the USCIRF commissioners?

    Answer. We strongly supported and actively worked to facilitate the 
United States Commission on International Religious Freedom's (USCIRF) 
planned trip to India, as noted in USCIRF's annual report. We have 
expressed to senior Indian officials our disappointment in the 
government's decision not to issue visas for USCIRF Commissioners and 
staff, and continue to underscore the importance of constructive 
engagement on issues of religious freedom. We have been and will 
continue to remain in close communication with USCIRF Commissioners and 
staff regarding any future travel plans for India.


    Question 27.  How can the U.S. work with India to address religious 
freedom and other important human rights issues?

    Answer. We support the government of India's efforts to promote 
religious freedom and diversity, and we will continue to work with the 
Indian people, civil society organizations, and government to realize 
their vision for a society that is tolerant and inclusive. We have also 
welcomed statements from Prime Minister Modi and other officials who 
have called for tolerance and condemned violence in the name of 
religion.
    We closely follow the situations of religious and other minorities 
in India, and report on these annually in the International Religious 
Freedom and Human Rights Reports. We regularly engage the Indian 
government on these issues, including in the Global Issues Forum led by 
Under Secretary of State Sarah Sewall, last held in January. We 
strongly support India's own vibrant civil society, and encourage 
India's commitment to counter violent extremism, promote religious 
freedom, combat trafficking in persons, and increase transparency. We 
share our own experiences on fostering tolerance in the United States.
    Our mission in India has taken a number of steps to welcome the 
diversity of India's many religions and support religious freedom. This 
year, our embassy and consulates in India worked with the Bureau of 
Educational and Cultural Affairs to create several International 
Visitor Leadership Programs through which representatives of religious 
minorities in India spent three weeks in the United States learning 
about American policy and values. The Community College Initiative 
Program provided U.S. study scholarships for 29 Indian students in the 
2015-2016 academic year, with special recruitment focus given to 
religious minorities. For the past several years, the mission has also 
supported specialized English Access grants to Madrasas and Muslim 
schools in India. These grants provide additional English learning 
resources to underserved youth with a focus on encouraging economic 
empowerment and integration.


    Question 28.  How important is it to India and to India's 
relationship with the United States that full implementation of the 
bilateral civil nuclear agreement is realized?

    Answer. The steps that the two governments have taken in the last 
two years on the civil nuclear agreement have laid a strong foundation 
for a long-term partnership between U.S. and Indian companies for 
building nuclear power plants in India. Once completed, the project 
would be among the largest of its kind, fulfilling the promise of the 
U.S.-India civil nuclear agreement and demonstrating a shared 
commitment to meet India's growing energy needs while reducing reliance 
on fossil fuels.


    Question 29.  What changes, if any, might be made to India's 
nuclear weapons doctrine and proliferation under the Modi government?

    Answer. Any change to India's nuclear weapons policy must be 
decided by the Indian government. It is U.S. policy to discourage the 
spread of nuclear weapons, both in number and capacity. We continue to 
urge all nuclear-capable states, including India, to exercise restraint 
regarding their nuclear and missile capabilities, consistent with our 
shared interest in preventing the spread of nuclear weapons and in 
realizing a world without nuclear weapons.


    Question 30.  Do you consider India to be a ``problem'' or a 
``partner'' in the context of global nonproliferation efforts? Please 
explain.

    Answer. The United States and India are partners in the context of 
global nonproliferation efforts and share a commitment to prevent the 
proliferation of weapons of mass destruction and their means of 
delivery. India's domestic laws and regulations include provisions that 
support key principles of nonproliferation, disarmament, and the 
peaceful uses of nuclear energy.



                               __________


Responses to Additional Questions for the Record Submitted to Assistant 
      Secretary of State Nisha Biswal by Senator Christopher Coons


    Question 1.  In June 2015, India lost a case with the World Trade 
Organization that ruled that India's ban on U.S. poultry was 
inconsistent with global norms. India has requested eighteen months to 
remove these restrictions and open themselves up to $300 million in 
potential U.S. poultry exports.

   What is the status of India's efforts to remove restrictions on 
        poultry imports to India? What is the path forward for the 
        United States and India when it comes to agricultural exports, 
        and in particular U.S. poultry?


    Answer. The United States and India agreed that India would have 
one year from the date that the World Trade Organization Dispute 
Settlement Body adopted the recommendations and rulings of the panel 
and Appellate Body in order to bring its avian influenza measures into 
compliance. The U.S. government, at all levels, continues to press 
India to implement the WTO ruling.


    Question 2.  Illegal production and trade of counterfeit crop 
protection products is a major problem in global agriculture, harming 
farmers and consumers, undermining agricultural productivity and 
investment in innovation here in the United States. We are aware that 
according to the Federation of Indian Chambers of Commerce and 
Industry, fully 30% of pesticides used in Indian agriculture are 
``counterfeit, spurious, adulterated or substandard.'' Illegal 
manufacturing is an organized, criminal conspiracy that breeds 
corruption and threatens trade.

   Can the Department advise of mechanisms it has in place to promote 
        joint efforts with the Indian Government to address this 
        illegal trade?


    Answer. The U.S. Patent and Trademark Office (PTO) in Embassy New 
Delhi recently met with DuPont and Crop Life to discuss counterfeit 
pesticides and related products. DuPont noted its work with various 
Indian states on awareness programs. The PTO plans to organize a 
public-private program with the Indian Ministry of Consumer Affairs to 
address spurious and counterfeit pesticides and herbicides. PTO also 
plans told hold a cross-industry anti-counterfeiting program later this 
year on agricultural chemicals.


    Question 3.  India places import restrictions on parent seed and 
export restrictions on commercial seed. If these restrictions could be 
eliminated, it would allow companies to expand their seed production in 
India.

   Are there opportunities to work with the Indian Government to 
        reduce the current trade restrictions on seed, which would 
        benefit both Indian agriculture and American companies 
        investing in it?


    Answer. The United States is working with India through numerous 
bilateral channels to encourage the liberalization of India's economic 
policies and open India to greater trade and investment. For example, 
the United States and India engage in the U.S.-India Strategic and 
Commercial Dialogue and the Trade Policy Forum. The United States and 
India are also working toward a high-standard bilateral investment 
treaty that will deepen the bilateral economic relationship and support 
economic growth in both countries. Through these fora, we believe our 
efforts will encourage India to remove its trade restrictions on 
agriculture products, including seeds, and provide greater 
opportunities for U.S. investment in India.


    Question 4.  Sri Lanka has yet to begin undertaking many of the 
commitments it made in an October 2015 UN Human Rights Council 
resolution calling on Sri Lanka to take meaningful steps toward 
accountability for mass atrocities committed during Sri Lanka's civil 
war. Three weeks ago, Juan Mendez, UN Special Rapporteur on Torture, 
Cruel, Inhuman or Degrading Treatment or Punishment visited Sri Lanka 
and noted that torture of Tamils by police and security forces is 
ongoing and systemic.

   Given this context, why has the State Department lifted select 
        Directorate of Defense Trade Controls military export 
        restrictions on Sri Lanka?


    Answer. The United States takes seriously all reports of violations 
of human rights, including that of the UN Special Rapporteur on 
Torture, Cruel, Inhuman or Degrading Treatment, Juan Mendez. We have 
urged Sri Lanka to investigate these allegations and to hold 
perpetrators accountable, and continue to urge it to follow through on 
the commitments it made in the 2015 Human Right Council resolution.
    We note that Sri Lanka welcomed the visit by the UN High 
Commissioner for Human Rights, and visits by the UN Special Rapporteurs 
for Transitional Justice, Judicial Independence, and Torture, all of 
whom received full and unfettered access to the island after years of 
being denied entry. Sri Lanka has also directed most military personnel 
to return to their barracks, and in August 2015, the last military 
checkpoint to the northern former conflict zone was closed.
    In October 2015, a High Court convicted four members of the Army 
for sexually assaulting two women in the North, the first ever 
conviction of security sector personnel for post-war abuses. In 
December 2015, the Sri Lankan Army forced into retirement a 
controversial military general who allegedly committed war crimes. In 
May, the Sri Lankan Cabinet approved a bill establishing an Office of 
Missing Persons, and sent it to the Parliament for review and passage.
    The changes to the Department's export policy with respect to Sri 
Lanka reflect the fact that export restrictions from previous years' 
Appropriations Acts were not carried forward in the FY 2016 
Appropriations Act. It is important to note, however, that lifting the 
restrictions does not guarantee defense article transfers to Sri Lanka. 
The Directorate of Defense Trade Controls is now reviewing applications 
for licenses to export or temporarily import defense articles and 
defense services to or from Sri Lanka under the International Traffic 
in Arms Regulations (ITAR) on a case-by-case basis.
    In reviewing export licenses for U.S.-origin defense articles to 
any country, the United States takes into account a full range of 
foreign policy, national security, and human rights considerations. In 
addition, all equipment provided under our military assistance programs 
or sales is also subject to end-use restrictions and conditions, which 
grant U.S. government officials full access to monitor how the 
equipment is used.
    All assistance to security forces is subject to the world-wide 
standard established under the Leahy Law to ensure that no material 
support is provided to security forces where there is credible reason 
to believe that they have committed gross violations of human rights. 
As we do around the world, we will continue to vet all potential 
recipients of our security assistance to Sri Lanka.In addition, there 
are still laws and policies in place that restrict the export of 
munitions to countries with significant human rights concerns. 
Accordingly, exports of munitions to Sri Lanka will still be reviewed 
on a case-by-case basis for human rights concerns.



                               __________


Responses to Additional Questions for the Record Submitted to Assistant 
      Secretary of State Nisha Biswal by Senator Edward J. Markey


    Question 1.  Since the administration is insisting that India is 
``ready for NSG membership'' and is engaging in diplomacy to achieve 
that objective, will it seek to alter the NSG's guidelines for 
membership, or will it seek to set those guidelines aside in the case 
of India?
    In either case, Indian membership in the Nuclear Suppliers Group 
would represent a turning point in the NSG's history. The NSG was 
founded in response to India's 1974 nuclear test, and it has worked for 
decades to prevent the spread of technology that could contribute to 
the proliferation of nuclear weapons. If India joined the NSG, it would 
be the only Participating Government in the organization that was not a 
party to the NPT. It would also be the only nuclear-armed country in 
the NSG that has not signed the Comprehensive Test Ban Treaty.

    Answer. The NSG Guidelines fully allow for membership for non-NPT 
states, and the Administration does not believe that India needs to 
fulfill any additional requirements to support its already strong case 
for membership. As such, the United States is not seeking to alter the 
NSG's guidelines nor is it seeking to set aside those guidelines for 
India.


    Question 2.  If India has, as it claims, harmonized its nuclear 
export control guidelines with those of the NSG, how would Indian 
membership in the NSG advance India's compliance with and active 
support for those guidelines, including NSG policies regarding 
refraining from transferring sensitive enrichment and reprocessing 
technologies?

    Answer. India's NSG membership application is the culmination of 
years of domestic reform to align its laws and regulations with NSG 
Guidelines. As a member of the NSG, India's large and growing 
repository of nuclear technology would be subject to the current and 
future versions of the Guidelines, including the NSG's no undercut 
commitment under which one NSG state will not sell technology that 
another NSG state has previously notified as having refrained from 
selling until consultations have occurred. India also will make a 
commitment to paragraphs 6 and 7 of the NSG Guidelines, under which 
suppliers exercise a policy of restraint in the potential transfer of 
sensitive facilities, equipment, and technology.


    Question 3.  How, specifically, would India's membership in the NSG 
advance the organization's mission to promote the NPT and ensure 
nuclear trade with non-nuclear-weapon States occurs only if those 
states have an agreement with the IAEA for full-scope safeguards?

    Answer. The NSG's ability to advance the NPT's objectives will not 
be impacted by Indian admission. The Indian Government shares the 
political objectives of many of the provisions of the NPT, and India's 
domestic laws include provisions that support the key NPT principles of 
nonproliferation, disarmament, and peaceful uses of nuclear energy. The 
NSG Guidelines establish full scope safeguards as a condition of supply 
for all nuclear transfers to non-nuclear weapon states, and 
participating governments commit to implement the NSG conditions of 
supply in their domestic laws and export regulations. This condition 
would apply equally to transfers from India to other NPT-defined non-
nuclear weapon states.


    Question 4.  What is the State Department's assessment of the 
effect of Indian membership in the NSG on our ability to secure support 
from NPT member states for improving compliance with the NPT and its 
system of safeguards?

    Answer. We have not seen any indication that the India-specific 
exception to the Nuclear Suppliers Group (NSG) Guidelines has reduced 
the readiness of Nuclear Non-Proliferation Treaty (NPT) Parties to 
respond effectively to cases of non-compliance with the NPT or with 
International Atomic Energy Agency (IAEA) safeguards. Since this 
exception was adopted in 2008, NPT Parties have taken concerted action 
to respond to compliance and proliferation challenges from Iran, North 
Korea and Syria. NPT Parties recognize that non-compliance is a real 
threat to their security. By the same token, we do not expect Indian 
membership in the NSG to affect the willingness of NPT Parties to 
respond to the security challenges posed by non-compliance with the 
NPT.


    Question 5.  Is the administration seeking to secure any specific 
new nonproliferation commitments from India, such as signature of the 
Comprehensive Test Ban Treaty or agreement to halt production of 
fissile material, as part of its policy for Indian membership in the 
NSG? If not, why not?

    Answer. The United States is committed to seeking the entry into 
force of the Comprehensive Test Ban Treaty and has consistently called 
on all states to refrain from nuclear explosive testing and to sign and 
ratify the Treaty if they have not yet done so. Similarly, the United 
States remains steadfastly committed to launching negotiations on a 
Fissile Material Cutoff Treaty. The United States has not sought to 
link our support for India's NSG membership to any specific new 
nonproliferation commitment. We believe that membership applications 
should be reviewed on their merits against the NSG's factors for 
consideration. The application would require a consensus of all 48 
current members to be accepted.


    Question 7.  Is India continuing to produce fissile material for 
weapons? Has India's rate of production of fissile material increased 
since 2008? Is India actively expanding the type and number of nuclear 
weapons that it fields?

    Answer. India continues to produce fissile material that can 
increase its nuclear weapon stockpiles. We refer you to the classified 
annex of the annual U.S. Report on Civil Nuclear Cooperation with India 
pursuant to the Hyde Act for additional information.


    Question.  If India violated the nonproliferation commitments it 
made in 2008 to help secure the NSG waiver that allowed nuclear trade 
with India, would the United States seek to terminate nuclear trade 
with India as then-Senator Barack Obama and Richard Lugar suggested in 
a colloquy on the floor of the U.S. Senate on November 16, 2006?

    Answer. The United States is unaware of any violations of the 
nonproliferation commitments made in 2008 to help secure the NSG waiver 
that allowed for nuclear trade with India. That said, the policy 
articulated by then-Secretary of State Condoleeza Rice in April 2006 
and reaffirmed during the 2008 congressional hearings regarding the 
India Civil Nuclear Cooperation Initiative remains--``should India 
test, as it has agreed not to do, or should India in any way violate 
the IAEA safeguards agreements to which it would be adhering, the deal, 
from our point of view, would, at that point, be off.''


    Question 8.  Has the Modi government publicly expressed that it 
will not be the first country in South Asia to resume nuclear testing 
and that it supports the objectives of the CTBT, as Pakistan has 
recently stated following a meeting last month with Undersecretary of 
State Rose Gottemoeller?

    Answer. India has abided by the unilateral testing moratorium it 
put in place in 1998 and, in August 2014, Prime Minister Modi publicly 
reiterated India's commitment to ``maintaining a unilateral and 
voluntary moratorium on nuclear explosive testing.'' Additionally, in 
its May 2016 application for membership to the Nuclear Suppliers Group, 
India reaffirmed its commitment to maintaining its moratorium.