Smart Partners: U.S. Business, Smart Cities, and the U.S. – India Relationship
Thank you to AmCham for inviting me to speak at your annual meeting. I truly wish we were meeting under more auspicious circumstances. As we come together today, the search for survivors continues in Nepal and the process of grieving and rebuilding is just beginning. We hope and pray for the safe and the speedy recovery of the injured and the missing. Our deepest condolences go out to all in Nepal and elsewhere who have been affected by this horrible tragedy.
Right now the collective focus of the U.S. government is to support Nepal’s efforts to provide immediate relief in any way we can. We have provided $10 million in humanitarian funding. The Embassy has deployed personnel and disaster response resources to Nepal to participate in the rescue effort. Our USAID Disaster Assistance Response Team (DART) and two elite urban search and rescue teams from the United States have been deployed. Because of USAID’s ongoing coordination and training programs in the region, these teams will work with local search and rescue teams that have received USAID training and they will have access to pre-positioned emergency commodities.
While I know we all extend our heartfelt sympathies to those affected by the earthquake, we are also here to discuss the growing U.S. – India relationship. The recent high-level visits have shown that both sides recognize that in the century to come, a robust U.S. – India partnership can achieve better results than acting alone. Times like these show just how true that is. India has demonstrated its global leadership in recent weeks, first in Yemen and now in Nepal. We are grateful; we are impressed; we are inspired. And because our cooperation is expanding, India is using C-17s and C-130s on the front lines of its response. The U.S. side received administrative clearances for our relief efforts without delay. As our relationship progresses, we will be able to do even more together.
I am also heartened by the response we are already seeing from U.S. industry. I know many companies represented here have employees, friends, partners, and families that have been affected by the earthquake. Some quite personally. I also know the humanitarian instinct, energy, and spirit of your members and so many American companies around the world has led to important contributions toward both immediate relief and longer-term recovery from disasters like these. Oftentimes these contributions come in the form of public-private partnerships that leverage resources to amplify the positive impact of assistance for victims and their communities. It will take some time before we know the true human, social, and economic impacts of the Nepal earthquake and how we can best support the rebuilding process. I won’t name any names, but a few American technology companies are already being lauded in the press for apps that are assisting in search and recovery efforts. Over lunch, perhaps we can think about other ways we can work together to support Nepal in this time of great need.
Let me turn now to a more general discussion of the relationship, beginning with a quick overview of where we are now and industry’s role in bringing us to this point. I’ll then turn to Smart Cities, a concept with seemingly unlimited potential . . . and some challenges. But let’s focus on how U.S. businesses and the U.S. government can work together to address those challenges on the road to becoming India’s best partner, as the President envisions.
Strategic Plus & U.S. Businesses
Let me start with our bilateral relationship. A lot has been said and written about the positive turns in the relationship since the Prime Minister’s visit to the United States and the President’s visit here. It is clear that these visits brought new energy to our partnership, along with a recognition that our relationship is about more than convergent strategic interests. It is also about the full scope of the ties between our two great nations. Ties built through educational exchanges and academic cooperation, families, joint scientific endeavors, and military training exchanges. Ties built through shared grief and effort as our nations respond to disasters at home or abroad. We’re using these ties to support cooperative efforts in over seventy areas, ranging from space to vaccines. This is the scope of our expanded relationship, which I like to call a strategic-plus partnership.
Business to Business Ties
Of the myriad ties between our nations and people, our economic and business connections might have played the greatest role in transforming the U.S. – India relationship over the past decade. Fifteen years ago, our bilateral trade in goods and services stood at 19 billion. I’m happy to share that the U.S. Census Bureau announced earlier this month that our bilateral trade in goods and services finally crossed that elusive 100 billion dollar threshold last year and now stands at approximately 103 billion dollars. We stand ready to work with our Indian counterparts to increase that mark to 500 billion.
Can you imagine the impact an expansion like this will have on our relationship? If we achieve this goal sometime in the next several years, our economic relationship will be twenty-five times larger than it was just fifteen years ago. Right now, U.S. and Indian ventures create over a million jobs in India and tens of thousands in the United States. Another five-fold increase will link the livelihoods of millions of new workers in the United States and India to the success of the U.S. – India partnership.
We recognize at the Embassy that we’re not going to hit that mark standing still. So we are working just as energetically with the Indian government now as we were before the Presidential and Prime Ministerial visits. Indeed, we are pushing forward actively with the Indian government on more than seventy projects. These efforts are already generating results.
Let me mention just a few recent initiatives. Earlier this month, Transportation Secretary Foxx visited to sign a Transportation Memorandum of Cooperation with Transportation Minister Gadkari. This MOC deepens our existing cooperation on items like road safety and includes important new activities related to the development of Smart Cities and sustainability. On Smart Cities, we will look at intelligent transportation systems, multi-modal planning, livability, and infrastructure financing. On sustainability, we agreed to cooperate on vehicle fuel efficiency standards and promotion of dedicated freight corridors to facilitate the movement of goods from India’s ports to major cities of the region.
In March, an EPA team visited to further President Obama and Prime Minister Modi’s agreement to launch air quality cooperation. In a series of meetings over a week, the EPA engaged with Indian officials about ways and opportunities to implement the Environmental Protection Agency’s AirNow-International and megacities partnerships programs. Our next step will be to submit a written proposal to the Indians on the implementation of AirNow-International.
We are also working hard to assess the prospects for moving forward with a high-standard bilateral investment treaty (BIT). Our teams met at the end of March to discuss India’s draft model text. A high standard BIT would further enhance investor confidence. India has already signed on to high standard investment protections with other strategic partners, such as Japan in 2010, so we know it is possible and doable. Increasingly, India’s companies are helping to power America’s growth and job creation. The SelectUSA Summit in March in Washington included the participation of 80 Indian companies, who want to follow in the footsteps of the many, many other Indian companies already invested in the United States. So we are looking for a negotiated outcome that yields the same minimum standards of protection for both Indian and U.S. investors.
Finally, President Obama and Prime Minister Modi recognized during their January meeting in Delhi that expanding our Strategic Dialogue to include a specific commercial focus would be an excellent way to prioritize key issues and activities of mutual interest. We are therefore formalizing the involvement of our Commerce Secretary and India’s Commerce Minister in a newly reconstituted Strategic and Commercial Dialogue. Assistant Secretary Kumar is here today to help ensure this joint ministerial paves the way for more opportunities for our companies to engage in productive, two-way trade and investment that supports jobs in both countries. We expect the inaugural meeting of the expanded dialogue to take place in Washington this summer and are focused on reconstituting the U.S. side of the CEO Forum in support of the dialogue.
So these are just some of the ways we are working together with the Indian side to realize the President and Prime Minister’s vision of “Shared Effort, Progress for All.”
This brings me to cooperation on infrastructure development and Prime Minister Modi’s “Smart Cities” initiative, two of the largest potential areas for U.S. investment and commercial cooperation. Some demographers predict India will grow to a population of 1.8 billion by 2050. As India grows, so will its needs, not just in infrastructure, but also in health, education, energy, and other areas. Indeed, some experts estimate that India will need infrastructure improvements of $1.5 – 2.0 trillion over the next 10 – 15 years. The U.S. government and industry can play a leading role in helping India manage this unprecedented growth. That is why we recently concluded an agreement establishing an Infrastructure Collaboration Platform to formalize cooperation between multiple agencies of our two governments. This platform can support U.S. and Indian companies to work together on a range of infrastructure projects all over India. In addition to the transportation MOC I discussed earlier, we also have signed three Memoranda of Cooperation designating leading roles for U.S. industry in smart city projects in Vizag, Ajmer, and Allahabad.
Before I talk in depth about some of the things business can do in the near term to address what is coming in the longer term, let me start by acknowledging that right now we are very much in the nascent stages of finding ways forward with India on Smart Cities issues. We do not have clarity on financing for the many projects that need to be done. To be successful, Indian state and central governments and Indian industry will need to take the lead in providing finance for smart cities, but they are still deciding how much funding they will allocate. Land acquisition, foreign direct investment, and other questions still remain unresolved. The expectation of large of amounts of private sector finance, either domestic or foreign, will be a challenge. These concerns mean many projects may not be commercially viable at the outset. The challenge for the U.S. government and U.S. companies will be to work with our Indian partners on creative approaches to develop appropriate, long-term financing that will help realize these ambitious plans.
And while we realize there are challenges, we should also recall President Obama’s recognition when he was here that his visit reflected “the possibilities of a new moment.” That is where we are with the infrastructure and Smart Cities initiatives. The Prime Minister’s call for 100 Smart Cities was a forward-looking call to prepare India for the century ahead. It will ultimately be up to India to follow through on his call to action. In the meantime, we can help by starting to think about the possibilities. To think about the things that can be done now and should be done in the future.
This is where we are in the Embassy. We’re aware of the challenges, but we’re also focused on what we can and should do now. One thing we are able to do now is to meet with our Indian counterparts to start to define the contours of what they expect and what we can do, and vice versa. For instance, we participated in CII and AmCham organized conferences in Vizag and Jaipur earlier this month focused on Smart Cities. We are using these opportunities to come to a shared understanding and develop a roadmap for the possibilities.
The Mission is also working actively to make concrete progress in areas where that is possible. For instance, USAID is working on a “Smart Energy Cities” initiative that consists of a series of pilot projects showcasing the policies, technologies, and business models needed to turn clean energy into a commercial opportunity. The business and development approaches that these programs might prove should spur additional investment opportunities. The U.S. and India also recently agreed to expand the highly successful U.S. – India Partnership to Advance Clean Energy, or PACE. The expansion includes support for turning Vizag, Ajmer, and Allahabad not only into Smart Cities, but into Smart Energy Cities.
We are also engaged in brainstorming about what other approaches might make sense. One focus has been the electronic spaces and digital connections that will need to be developed for future mega cities. Cisco CEO John Chambers and one of his colleagues recently penned an exceptional article on the “Future of Cities.” If you haven’t read it, I highly recommend it. One of the things Chambers talked about was something he called the “Internet of Everything” which he described as “the intelligent connection of people, processes, data, and things” not just to traditional computing devices, “but also to parking spaces, alarm clocks, railroad tracks, street lights, garbage cans and components of jet engines.” He described how important it will be for public and private partners to collaborate and cooperate to defray costs, look for programs and outcomes across departments, and adhere to deadlines. He emphasized the importance of using scalable pilot projects with clear metrics to test ideas. The gist was that the risks and rewards would need to be shared between government, innovators, and industry. He also emphasized that we could and should get started now. Chambers’ vision was a sweeping one. And though some of the ideas he talked about won’t be viable in all markets, he does make a convincing argument in favor of focusing on what can be done, rather than what cannot.
U.S. Smart Cities in Action
Many American cities are focusing on ways to become smarter. We had visits recently from former New York Mayor Bloomberg and Former Charlotte Mayor Foxx. Houston Mayor Annise Parker was just here last week. During her visit, Mayor Parker discussed some of the ways Houston is becoming smarter. One thing she mentioned was that Houston decided to build a wireless municipal network to support city services. Among other things, the network is designed to improve traffic safety and congestion by automated control of traffic intersections. It improves customer service by expanding the connectivity of over 500 city facilities. Excess bandwidth from the network is provided free to residents in underserved communities.
These are all ways Houston is using technology to get smarter. And they are examples of how e-infrastructure could support Indian Smart Cities too. Many experts agree that cities and governments that “digitize” will grow faster through better urban planning, government response to citizen needs and concerns, and better management of limited resources. So when you’re thinking about whether your businesses can participate in Smart Cities, remember that maybe the highway that Ajmer really needs is an electronic one that helps the city stimulate its economy, creates jobs, and manages its energy grid.
Another American city – New York– provides examples of the type of inexpensive innovation we might consider. As part of Mayor Bloomberg’s PlaNYCinitiative, a group called NYC Cool Roofs started painting roof tops with a special reflective white coating that reduces internal building temperatures during summers that are growing hotter every year. Bike-sharing, privately funded “pocket parks”, converting old phone booths to Wi-Fi points, and providing touchscreen stations for 24/7 access to city services are all low-cost ways New York is getting smarter. And in Charlotte, North Carolina, a group of private and public interests has come together in an initiative called “Envision Charlotte” to look at energy, water efficiency, waste reduction, and other concerns. Working with local community land and building owners, it created a Center City for innovation, an incubator where smart solutions are tested and applied.
These examples demonstrate a fundamental truth about creating Smart Cities. It will take public and private initiative and cooperation to meet the needs of our future cities and their residents. We all know that American companies are adept at applying solutions around the globe and scaling them to fit context and scope, meaning the possibilities are nearly endless for U.S. and Indian companies willing to innovate and create. The most successful will also be the ones that patiently seek ways forward with an Indian bureaucracy that is also figuring out how it should address the great challenges before it. Our objective is to provide the smartest solutions to work with India to address the challenges of a growing population and urban migration. Doing so will create great business opportunities while also helping India, the United States, and the world become more safe, stable, and prosperous. I’m looking forward to working with all of you in the years ahead as we march forward, together, in this direction.