[Weekly Compilation of Presidential Documents Volume 42, Number 9 (Monday, March 6, 2006)]
[Pages 385-388]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks in a Discussion With Business Students in Hyderabad, India

March 3, 2006

    The President. Thank you for the warm welcome. You know, I was a 
Harvard Business School graduate. This isn't exactly how I went to class 
when I was there, but I am honored to be here at ISB.
    Yesterday I had the honor of standing on the stage with your Prime 
Minister, talking about a new relationship between the United States and 
India. I am excited about our strategic partnership. I'm equally excited 
about the future of India. It is in the interest of the United States to 
be friends with India; it's in the interest of the United States to work 
for free and fair trade with India; it's in the interest of the United 
States that an entrepreneurial class grow in this great country. It's in 
the interest of India that an entrepreneurial class grow in this great 
country so that people can realize dreams and find good jobs.
    You know, I said something really interesting, I thought 
interesting--otherwise, I wouldn't have said it--the other day in a 
speech I gave in Washington. There are--the middle class of India is 300 
million people large. That's larger than the entire United States. And 
when America looks at India,

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America ought to look at India as a strategic partner in keeping the 
peace, a great democracy which is capable of having people from 
different religions live side by side in peace and harmony, and a 
wonderful opportunity to--with whom to trade.
    One of the things that you can judge a country by is the vitality of 
the youth, and one of the reasons I really wanted to come to ISB was 
because I understand it's the center of excellence in education. It's a 
new school that is using innovative techniques to give people the tools 
necessary to succeed.
    Yesterday I met with some Indian CEOs and American CEOs--kind of the 
old folks. Today I'm meeting with the CEOs of tomorrow, the people that 
are going to help drive this great engine of economic prosperity for 
India--for the good of the world, is how I view it.
    And so thanks for letting me and the Ambassador come. Ambassador, 
thanks for setting this up. I want to thank Chairman Gupta, a fellow 
Harvard Business School graduate, who helped form this school. I want to 
thank the dean of this school, as well as the professors and faculty for 
being here as well, and the rest of the students--thanks for letting me 
come by to say hello. I think it would be interesting for you to tell me 
what's on your mind or ask me questions, the whole purpose of which is 
to help, kind of foster this partnership that is developing on the 
political level so that people in my own country can see that there's 
folks just like themselves here in India working to realize dreams and 
create opportunities.
    So whoever would like to begin, we can start. And if not, I'm just 
going to call on somebody--like you. [Laughter]

Globalization/Trade With India

    Q. I guess I'll do the honors. Thank you for being here. I didn't 
graduate from ISB, but it seems like a great place. I graduated from 
Carnegie Melon in Pittsburgh----
    The President. That's also a good place. [Laughter] I will tell you 
something--she's really smart--to go there. [Laughter] You don't go 
there unless you're smart. [Laughter]
    Q. Anyways, so I'm from the IT industry, so let me ask a question 
relating to that--not just IT, I guess generally outsourcing. So India 
and China have experienced a lot of growth because of globalization and 
outsourcing, in general--IT outsourcing, in particular. And I live in 
the U.S., so I know that there is a lot of resistance in the media and 
also in the industry about outsourcing. But as entrepreneurs and as 
people who believe in capitalism, we feel that there's no other way to 
go but capitalism and globalization and outsourcing, et cetera. So does 
the government or--does it have a political strategy on how to manage, 
do a balancing act?
    The President. I appreciate it. First of all, what do you do?
    Q. I have a IT consulting company.
    The President. Okay. One of the--the future of any country is to 
make sure women have got opportunity, and so I congratulate you for 
being a CEO. By the way, I've got a strong woman who travels with me in 
the Secretary of State. [Laughter] I'm not trying to avoid your 
question, by the way. [Laughter]
    People do lose jobs as a result of globalization, and it's painful 
for those who lose jobs. But the fundamental question is, how does a 
government or society react to that? And it's basically one of two ways. 
One is to say, ``Losing jobs is painful; therefore, let's throw up 
protectionist walls.'' And the other is to say, ``Losing jobs is 
painful, so let's make sure people are educated so they can find--fill 
the jobs of the 21st century.'' And let's make sure that there's 
progrowth economic policies in place. What does that mean? That means 
low taxes; it means less regulation; it means fewer lawsuits; it means 
wise energy policy.
    So I've taken the position--I've taken it as recently as my State of 
the Union, where I said, the United States of America will reject 
protectionism. We won't fear competition; we welcome competition. But we 
won't fear the future, either, because we intend to shape it through 
good policies.
    And that's how you deal in a global economy. You don't retrench and 
pull back. You welcome competition, and you understand globalization 
provides great opportunities. And the class opportunity for our American

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farmers and entrepreneurs and small businesses to understand, there's a 
300-million-person market of middle-class citizens here in India, and 
that if we can make a product they want, then it becomes--at a 
reasonable price--and then all of a sudden, people will be able to have 
a market here. And so--and people in America should, I hope, maintain 
their confidence about the future.
    Thanks for the question. Good luck to you.
    Yes, ma'am.

India-U.S. Relations/Investment

    Q. I actually went to Wellesley College, and I'm actually a student 
at the ISB.
    The President. Let me say something before you ask the question. One 
of the most important things for America is to make sure our 
universities and colleges are accessible to Indian students, because I 
find it really interesting the first two questioners have gone to school 
in the United States. There can be sometimes perceptions about our 
country that simply aren't the truth, but nevertheless, become stuck in 
people's minds. And one way to defeat those perceptions is to welcome 
people to the United States so you can see firsthand our good side and 
our bad side, and you can draw your own conclusions without being told 
what to think.
    Sorry to interrupt.
    Q. No problem. This is actually related to the point you just made 
about the market with the 300 million people. I actually run the non-
profit club and social enterprise club here at the ISB, with a lot of 
help from the faculty from the Center of Entrepreneurship and the 
student body. And we're a fairly active group who are very--who believe 
in what we call compassionate capitalism, through providing for venture 
capital funding for the small businesses and social entrepreneurs so 
that they can innovate and actually sustain themselves by providing 
affordable goods, and using a market-based model, rather than the 
traditional aid-based model.
    So my question to you, Mr. President, is what do you feel and how do 
you feel that your Government will support India in this sort of 
bilateral partnership, whereby your investors can get a financial 
return, as well as create social impact in a developing country such as 
India?
    The President. Well, there's two types of investments. One is 
private capital, which goes to places where people think they can get a 
reasonable return relative to risk. And Government can help assuage some 
concerns about risk by having transparency in policy, consistent law. 
One of the things you don't want to do is invest in a country, and then 
all of a sudden, laws change, or transparency into why people make 
decisions, or less bureaucratic hurdles in order to invest.
    People look around at places to invest. In my country, for example, 
there's competition between the States. And if they see there's a lot of 
bureaucratic hurdles you have to get over in order to invest in one 
State versus another, people tend to mitigate risk in order to maximize 
return.
    There's also public investment, and through USAID and other aspects 
of our State Department, we do provide microfinancing--small loans to 
entrepreneurs.
    Today I went over to the Agricultural Center and saw some of the 
benefits of not only good agricultural research but the concept of 
micro-loans to encourage entrepreneurship, particularly amongst women in 
rural India. And it's an effective program. And microloans have worked 
around the world.
    And so one of the things we do through our State Department, ably 
led by Secretary Rice, I want you to know, is to encourage microloan 
financing.
    Yes, sir.

Civilian Nuclear Power Program in India

    Q. Yes, Mr. President. My company is based in the U.S., and we deal 
mostly with electronic components, exports to India. My question is, 
after this nuclear deal, do you think the same thing will come in the 
electronics field? Like there are a lot of sanctions, export 
restrictions on shipping components to India. That same product they can 
buy at--they pay more, but they get it from Europe where there's no 
export restrictions.
    The President. We're constantly reviewing what's called the Export 
Control List. And I thank you for bringing that up. And obviously, as 
this relationship changes, as a strategic partner, the folks involved 
with the Export Control List will be taking that into account.

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    Yesterday's energy agreement was an important agreement. It's 
important for the United States, and it's important for India. It's 
important for the United States because--in that we live in a global 
energy market when a fast-growing country like India consumes more 
fossil fuels, it causes the price of fossil fuels to go up not only in 
India but around the world, including the United States. And therefore, 
the extent to which we can help nations develop civilian nuclear power 
is in the nation's interest.
    Secondly, India has been an excellent partner in nonproliferation 
over the past decades, and therefore, I can tell the American people 
that this is an important agreement to help deal with the proliferation 
issue.
    For India, it makes sense because it will enable India to be able to 
meet electricity needs in a way that doesn't pollute the air. The United 
States and India and China must use technologies to do our duty to not 
only make sure our economies expand but also to be good stewards of the 
environment. And nuclear energy is a--is a renewable source of energy in 
which there is zero greenhouse gases.
    Yesterday was a--as I mentioned to you in our private meeting, 
yesterday was a way to put the cold war behind us and to move forward as 
strategic partners. And I want to congratulate your Prime Minister and 
the Indian Government for its--for working with me and our Government to 
show the world what's possible when people can come together and think 
strategically.
    Yes, sir.

India-U.S. Relations

    Q. Mr. President, I did my MBA--from Johnson and Wales, Rhode 
Island, and I loved every bit of it. I saw your speech on the Asia 
Society, and I thought it was very spectacular.
    The President. Thank you. You can leave it right there. [Laughter] 
No, go ahead.
    Q. My question is, India was never this important. Why has it become 
so important now?
    The President. That's a really good question. I think India has 
always been an important country, but the problem is, international 
politics made it very difficult for previous Presidents and previous 
Prime Ministers to reach common agreement. As I said, we're getting rid 
of the cold war, and the truth of the matter is, the cold war caused the 
world to become pretty well divided. And if you're on one side of the 
divide, it was politically difficult to work with people on the other 
side of the divide.
    That began to change, of course. And so I wouldn't say that India 
was not an important country up to now, because it was.

[At this point, the public portion of the event concluded.]

Note: The President spoke at 12:38 p.m. at the Indian School of 
Business. In his remarks, he referred to Prime Minister Manmohan Singh 
of India; Ambassador to India David C. Mulford; Rajat Gupta, chairman, 
and M. Rammohan Rao, dean, Indian School of Business. A tape was not 
available for verification of the content of these remarks.