Speeches & Articles

U.S. Consul General Henry V. Jardine
Remarks to the Bengal Chamber of Commerce & Industry

December, 08 2005
Calcutta

Members of the Bengal Chamber of Commerce and Industry, Members of the Diplomatic Community, Distinguished Guests, Ladies and Gentlemen, I would like to thank the Bengal Chamber for inviting me here today to make remarks on the subject of “Current Trends in Indo-U.S. Commercial Relations.”  I have been in Calcutta for just a few months but I can say that those have been very busy months, reflecting the depth of the U.S.-India commercial relationship here in East India and West Bengal in particular.

In discussing our commercial relationship, we should see how it fits within the context of a Global Partnership between the United States and India.  This partnership is managed through a framework of agreements, which we on the ground play a role in implementing through a wide-range of programs, public affairs and mutual exchange.

U.S. trade with West Bengal is not something new.  As I have mentioned at other fora, the excitement generated in the press recently regarding new foreign investment and economic reforms gives the impression that trade in West Bengal is unique to the 21^st century.  However, the U.S. trade relationship with the Bengali Traders dates back to over two hundred years, from the arrival of the first U.S. merchant ship, the Washington in 1787.   Reflecting the early importance that the U.S. placed on trade with India, this U.S.-flagged ship arrived only a few years after our War of Independence.  In fact, our Consulate in Calcutta is the U.S. Department of State’s second oldest Consulate and dates from November 19, 1792, when President George Washington appointed our first Consul, Benjamin Joy. 

The U.S. commitment to doing business in West Bengal continues today and is again growing in importance as part of a comprehensive engagement with India.  Prime Minister Singh’s very successful visit to the United States in July clearly demonstrated the growing Global Partnership between our two countries.  It marked the completion of the Next Steps in Strategic Partnership (NSSP) begun in January 2004 and the beginning of a new even more dynamic phase.  In the area of economy and trade, the July agreement included the following commitments to:

Revitalize the U.S.-India Economic Dialogue and to launch a CEO Forum to harness the private sector’s energy and ideas in order to deepen the bilateral economic relationship.

-           Support and accelerate economic growth in both countries through greater trade, investment and technology collaboration.

-           Promote modernization of India’s infrastructure as a prerequisite for the continued growth of the Indian economy.  As India enhances its investment climate opportunities for investment will increase.

-           Launch a U.S.  India Knowledge Initiative on Agriculture focused on promoting teaching, research, services and commercial linkages.

Overall, India-U.S. trade is very important to both countries.  The United States is India’s largest single national trading partner and India is doing very well in that relationship, sustaining a surplus of approximately US$ 9 billion in trade. 

India’s primary exports include:

• Cut and polished diamonds and Jewelry, which has seen an increase from US$ 2.6 billion in 2001, to now approximately US$ 4 billion.
• Textiles exports have gone from US$ 2.827 billion in 2001 to approximately US$ 3.5 billion.
• Engineering goods and machinery including electrical machinery went from US$ 513 million in 2001, to in excess of US$ 700 million.

The United States’ major exports to India consist of the following:

• Engineering goods and machinery, including electrical machinery, which contributed to a third of the total US exports to India.  Just in April, Boeing announced its very large US$ 8 billion sale to Air India, which has helped to spike that sector of exports.
• Export of miscellaneous chemical products (HS chapter 38) from US to India has also increased in the recent years and is now approximately US$ 500 million.
• And export of precious stones and metals from US is over US $400 million.[1]   

And the trade continues to grow.  In the first quarter of 2005, U.S. exports to India were up 50 percent and Indian exports to the U.S. were up 15%.

So what does this mean for West Bengal?   We at the Consulate have been seeing growing U.S. business presence in this State as well – just last week I met with the CEO of Acclaris, a U.S. accounting company, as he was inaugurating his firm’s new offices here in Calcutta.  He was very positive about the potential of doing business here, and will likely expand his operations over time as well.  The previous month we saw the opening of IT communication company IXIA.  And I understand other established U.S. businesses are also growing.

On a larger scale too, big-name U.S. businesses are here in West Bengal such as IBM and INTEL in IT.  Banking services are also here with American Express, Bank of America and Citibank as well as accounting firms like PriceWaterhouse Coopers and KPMG International.  In the food sector, Coca-Cola, PespiCo and Frito-Lay have all made significant investments and recently announced plans to expand their operations in the State.

The close business relationship is also being mirrored in our growing military and strategic partnership.  Last week again saw the completion of the very successful COPE – India exercise here in West Bengal at Kalaikunda Air Base.  The exercise was an important step in the growing cooperation between our two air forces.  It was also an opportunity to highlight some of the most sophisticated systems in our air arsenal.  As India considers its decision to purchase 126 fighter airplanes, there could be a significant economic impact for this region as a potential purchase of a US aircraft could provide over a billion dollars in contract set-asides for Indian businesses.

Even with the recent COPE-India exercises, there were significant economic benefits as local supplies, services and equipment were purchased to support the several hundred U.S. servicemen and women.   

We at the U.S. Consulate General in Calcutta are also energized to promote this long-standing and profitable relationship.  Our role is to effectively implement the goals set in the agreements between the U.S. and Indian governments.  We do this through a sizeable operation of over 100 people, each person with an important role in developing our relations here in West Bengal.   As I noted in the beginning of my remarks, the Consulate views the issue of trade in the context of a range of broader social issues.

For us to enhance the environment for trade, we must seek to promote social development in a number of areas such as child development, trafficking of people, health and municipal finance.  We have assisted our New Delhi-based USAID office in their local implementation of the multi-state, USD 35 million, Financial Institution Reform and Expansion – Debt (FIRE-D) program. This project supports the development of commercially viable urban infrastructure finance systems by developing demonstration projects, and capacity building of local urban institutions on the efficient delivery of urban infrastructure services.  These infrastructure services are naturally critical for economic development. 

We have also worked to educate the broader public on the merits of improved trade relations between the U.S. and India and to promote greater receptivity by West Bengal to U.S. business.  The American Center, the public affairs office of the Consulate, has been out front in engaging with the community on the question of trade.  In 2005 alone, the American Center had over 30 different events related to just this issue.  Some of these events have included book discussions on privatization, lectures on Indo-U.S. economic relations, and Digital Video Conferences on Indo-U.S. business opportunities.  The Center has also sponsored many visitors to the U.S. and in August arranged an International Visitor program to study U.S. financial Systems.

Our Foreign Commercial Service (FCS) office supports the other side of the equation in promoting trade by assisting the U.S. businesses seeking to work here.  The FCS helps by educating the U.S. business people on local procedures, arranging meetings and providing critical support during the difficult initial phase of assessing the viability of doing business in West Bengal.

Trade is fundamentally a person-to-person relation and to facilitate that we again work very hard.  Our Consular section processes over 24,000 visas a year, giving Indian business people an opportunity to travel to the U.S. and to make the critical contacts needed for successful trade.  India as a whole ranks second worldwide in the volume of U.S. visa applications, with almost 400,000 visas processed this year.  India leads in the number of temporary workers visas issued by four times the next closest country. 

Related to assisting business visitors, we also assist students traveling to the U.S. in the hope that they can serve as future business partners when they return to India.  Our United States Education Foundation in India (USEFI) office located at the American Center provides advice and counseling to prospective students.  To those of you in the audience with children looking to study in the U.S., I advise you to consider their excellent services.  USEFI in the past year gave assistance to over 25,000 prospective students. 

Recently, The Institute of International Education and The Department of State’s Bureau of Educational and Cultural Affairs reported that India remains the largest sending country for students, the fourth year in a row, seeing a 1 percent increase to 80,466 students.  On release of the latest data, Assistant Secretary of State for Educational And Cultural Affairs Dina Habib Powell noted, “The United States remains the best place in the world to pursue higher education and we continue to assure international students that they are welcome to our country.”

To further our research cooperation, last month our two Governments signed The India-U.S. Science and Technology Agreement at Johns Hopkins University in Baltimore, Maryland.  The agreement to will allow for exchange of data and establish collaborative projects in nanotechnology and biotechnology.  Union Science and Technology Minister Kapil Sibal said on signing the agreement, it “will be a great leap forward in joint cooperation.”   An earlier effort in 1993 to negotiate a similar agreement stalled over disagreements regarding IPR provisions.  This agreement will now serve hopefully as the first step in even more scientific cooperation in the areas of space, energy, health and other technologies

Reflecting the level of research cooperation, the U.S. National Institute of Health (NIH) has given around 20 million dollars to the University of Calcutta, Institute of Molecular Medicine and the Indian Institute of Management to conduct joint research with universities and organizations in the U.S. on areas related to immunology, HIV/AIDS and child health.

So as you can all see the level of U.S. involvement in this region is quite extensive and the U.S. Consulate in Calcutta is very serious in promoting trade between the United States and West Bengal.  Arriving only recently to Calcutta, I feel especially fortunate and privileged to come at a time of so much potential for doing business.  My hope is that now with the greater understanding of the need for market reforms and trade liberalization that a new and even more prosperous chapter will be added to the 200-year history of our close and profitable business relations. 

Thank you.