THE U.S.-INDIA STRATEGIC DIALOGUE

Photo Credit:  U.S. Library of Congress and Wikimedia.
FROM:  U.S. STATE DEPARTMENT
Readout of the U.S.-India Strategic Dialogue
Remarks Robert O. Blake, Jr.
Assistant Secretary, Bureau of South and Central Asian AffairsWashington Foreign Press Center
Washington, DC
June 14, 2012
ASSISTANT SECRETARY BLAKE: Well, thank you very much. I appreciate the introduction and thank you all for coming. It’s nice to see a lot of old friends in the crowd today. I’ll provide a readout, not just of the Strategic Dialogue, but really the whole week because we’ve had a great many different dialogues over the course of the last five days. So let me just briefly summarize some of those.

One was the Science and Technology Joint Commission meeting that was chaired by the President’s Science Advisor, John Holdren, as well as India’s Science and Technology Minister Deshmukh. Second was, of course, the Higher Education Dialogue chaired by Secretary Clinton and Minister of Human Resources Development Kapil Sibal. The third were regional consultations that were held earlier today between Foreign Secretary Mathai and Under Secretary of State for Political Affairs Wendy Sherman, and then also our Global Issues Forum that is probably still going on between, again, Foreign Secretary Mathai and Under Secretary Otero.

And then last but not least was, of course, the Strategic Dialogue itself. You all heard Secretary Clinton and External Affairs Minister Krishna describe the progress that we are making. Secretary Clinton remarked that the strategic fundamentals of our relationship are pushing our two countries into ever closer strategic convergence, and she highlighted progress in five separate areas. Since we’re celebrating Global Economic Statecraft Day today, let me start with the economic piece of it.

The Secretary remarked that bilateral trade between our two countries is up 40 percent since we began our Strategic Dialogue three years ago, and it is on track to exceed what we hope will be a hundred billion dollars this year. In addition, we want to advance our negotiations on the Bilateral Investment Treaty, and of course, we want to continue to do everything we can to reduce barriers to trade and investment in both directions.
The Secretary welcomed the Memorandum of Understanding that was signed between Westinghouse and India’s Nuclear Power Corporation, committing both sides to work towards early works agreements on things like preliminary licensing and site development that will be needed to begin construction work in Gujarat. She also noted that General Electric is also making progress in its talks with NPCIL. The Westinghouse MOU marks a very significant step towards the fulfillment of our landmark civil-nuclear cooperation agreement. The Secretary finally described in this area how we have mobilized more than $1 billion in clean energy finance for projects of various kinds. You’ve all heard me describe in the past how OPIC and Ex-Im and others have extremely large programs in India as a result.

The second major area of cooperation and progress was in the area of science and technology. The Secretary described how our joint commission is working to improve our linkages in sciences, engineering, and data-sharing. And she also welcomed the agreement concluded earlier this week to share the U.S.-India Open Government Platform software that is promoting transparency and accountability, and we’re very pleased to welcome a third-country partner, our first third-country partner, which will be Rwanda, and we hope to, of course, welcome many, many more.

The third area of cooperation was in the area of education and people-to-people ties. And again, the Secretary welcomed the progress that both sides have been making in the Higher Education Dialogue to increase educational exchanges and strengthen ties between our universities with a particular focus on community colleges.

Fourth, on security and defense cooperation, Secretary Clinton highlighted progress in the fight against violent extremism, our growing security cooperation both on the military exercise front but also on our bilateral trade, defense trade, which now exceeds $8 billion.
And finally, in our cooperation in South and East Asia, the United States welcomed India’s contribution towards building a stable, secure, and prosperous Afghanistan, including its more than $2 billion in assistance that it is providing. The Secretary thanked the Indians for hosting on June 28th a very important investment conference that will take place in Delhi to galvanize more international private sector investment for Afghanistan to look ahead to the transition there. She announced our intention to have a U.S.-India-Afghanistan trilateral dialogue. And the U.S. welcomes India’s support for our participation as a dialogue partner in the Indian Ocean Rim Association for Regional Cooperation.

We have a lot more information on all of the things that we have talked about and negotiated. You will have all seen the very lengthy joint statement that we put out. And then I also just wanted to call your attention to four different fact sheets that we put out in the areas of energy and climate change, public health and research, science and technology, and security and regional cooperation. So you’ll find a wealth of really terrific information in all of those as well.

So with that, I’d be happy to take some of your questions, including those from our friends in New York who I understand are joining us as well.

MODERATOR: All right. As we move to the question-and-answer session, please wait for the microphone, identify yourself by name and media organization, and we’ll start over here on the right, please.

QUESTION: Thank you. Chidu Rajghatta, the Times of India. Ambassador, about the trilateral on Afghanistan involving Afghanistan, U.S., and India, how do you expect to get around Pakistan? And at any point, was a quadrilateral considered? And why not a quadrilateral?

ASSISTANT SECRETARY BLAKE: Well, I think first of all, we want to start with a trilateral. First off, we start with a bilateral, and so of course we have very good bilateral dialogues with – well, each of us with Afghanistan. We’ve each signed strategic partnership agreements. So there’s a great deal to talk about with respect to Afghanistan. This is certainly not in any way seen as directed against Pakistan. On the contrary, it’s to talk about the situation inside Afghanistan, but also how we continue to support Afghanistan and the very important three transitions that are going to be taking place – not only the security transition, but the political transition, because Afghanistan will be holding very important elections in 2014, and then the equally important economic transition that you’ve heard me talk about a great deal.

So we haven’t really yet talked about the details of this since we’ve just agreed on this trilateral consultation, but we’ll be doing so in the days and weeks ahead.

MODERATOR: All right. Sir, we have a question from New York, so we’ll go ahead and turn the audio over to them. New York, go ahead.

QUESTION: Yes, good afternoon, Assistant Secretary. Thank you first for giving the opportunity to ask a question. And basically, as it has become the threat for not only Bangladesh, also for the regional peace and security, is there any formula for a permanent – I mean, to – for the permanent solution of the Rohingya issues in Myanmar and in Bangladesh borders?

ASSISTANT SECRETARY BLAKE: Is there any permanent formula? Is that what you said?

QUESTION: Yes. I mean any formulas to solve this problem permanently.

ASSISTANT SECRETARY BLAKE: Well, I think we’re focused right now particularly on the Rohingya situation as it affects Burma. As you know, there’s been a lot of ethnic fighting between – inside Burma, and several have sought refuge in Bangladesh. And we have urged our friends in Bangladesh to provide humanitarian access and to honor their international obligations to do so. And we hope they will because, again, I think many of these are fleeing potential violence, many need medical assistance, and many others will need access to shelter and food and water. So Bangladesh has a long history of accommodating the Rohingyas, and we hope that they will continue to do so.

MODERATOR: We have a question here in the front.

QUESTION: Seema Sirohi, Firstpost.com and Gateway House.
Mr. Ambassador, I was wondering if this agreement signed between Westinghouse and NBCIL, does it mean that your issues with the nuclear liability law are resolved? Is there – has that been taken care of? And the other question is --

ASSISTANT SECRETARY BLAKE: Sorry, let me answer that question first, Seema.
QUESTION: Okay.

ASSISTANT SECRETARY BLAKE: No, it doesn’t mean that the issues with respect to liability law are resolved. But I think both of our countries wanted to show that we still share a strong interest in seeing these commercial contracts come to fruition. We do have, still, some concerns about the liability law. But the signing of this MOU and the future conclusion of early works agreements will provide very concrete evidence of our intention to move forward, and particularly from our perspective, the interests of our companies in continuing to work with NPCIL to develop the very promising opportunities in this – what will be a $40 billion sector.
QUESTION: I have another question.

ASSISTANT SECRETARY BLAKE: Please.

QUESTION: On India’s desire to negotiate a totalization agreement with the United States, the minister said that you don’t even want to talk about it. So what’s going on? Why doesn’t the U.S. want to talk about it and be fair on this issue?

ASSISTANT SECRETARY BLAKE: Well, this is a legal question for us as well. There’s a great imbalance in our systems right now, and so there are legal restrictions on what kind of agreements we can enter into with partner countries. But certainly, we have a dialogue with this and we understand the importance of this issue to our Indian friends.
MODERATOR: We’ll take our next question in the back on the left, please.

QUESTION: Aziz Haniffa with India Abroad and Rediff.com. Piggybacking on Chidu’s question on Afghanistan, sometimes you come to regret what you wish for. Earlier, there was a perception by – in India that India was being kept out of the whole process because of pressure from Pakistan, et cetera. Now you guys seem to be going overboard in terms of trilateral commissions and everything else.

Is India going to be left with the baby in the bathwater in terms of responsibilities – because the Taliban is still a major force there – in terms of security also?

ASSISTANT SECRETARY BLAKE: Well, I think, first of all, Aziz, I would take issue with the premise of your question, which is we have not always welcomed the important role that India has played in Afghanistan. I don’t think you’ll ever – if you go back years and years, you’ll not hear criticism from me or any other spokesman talking about India’s role in Afghanistan. And we continue to welcome that across a broad range of what your country is doing, not only in terms of the assistance program that I talked about, the investments that are taking place in things like that Hajigak iron ore facility and deposit, but then also the very important support that India is providing in terms of private sector investment and, more broadly, the whole concept of regional integration. So we very much welcome India’s strong support for Afghanistan in all of these areas, and as Secretary Panetta said during his trip, we also welcome India doing more in terms of training, particularly the ANSF and police training back to Indian facilities in India itself.

As we look ahead to the transition, we are very focused on showing to Afghanistan that there will be strong international community support for all of these transitions that I just mentioned. So you’ve heard me and many, many other people talk about what we are calling the transition dividend, but also the “transformation decade,” as we say, of the next decade, 2014 to 2024, where we hope very much that the international community will continue to be very engaged not just in helping to support the ANSF, but also to provide the economic assistance that Afghanistan will need to develop. And so I think this upcoming conference that’s going to take place in Tokyo on July 8th will be a very important milestone in, again, looking forward to the economic piece of what I just talked about.

QUESTION: But a quick follow-up --

ASSISTANT SECRETARY BLAKE: So we’re certainly not leaving India to – in Afghanistan. We’re all going to be working very closely to help support Afghanistan.

QUESTION: But as a quick follow-up, is there going to be a security dimension too at this conference? Because the Taliban is still a major force. There has no – been no vanquishing of them, you know?
ASSISTANT SECRETARY BLAKE: Right.

QUESTION: And of course, elements of Haqqani and others have been responsible for attacks on the Indian Embassy in Kabul, et cetera.

ASSISTANT SECRETARY BLAKE: Well, there’s not a direct security focus. It’s obviously – there’s an economic focus. But the more success we have in developing private sector investment to developing private sector jobs and sustainable jobs for Afghans, of course, that will help to undermine the appeal of the Taliban. So in that sense, there is a security aspect to it.

MODERATOR: We’ll take another question here on the right.

QUESTION: Thank you. This is Lalit Jha from Press Trust of India. Welcome here to the Foreign Press Center.

ASSISTANT SECRETARY BLAKE: Only one question, Lalit. (Laughter.)

QUESTION: This is the fun part. (Laughter.)

QUESTION: Let’s begin with the follow-ups. The two follow-ups I have – (laughter) – on Afghanistan, at what level do you think this dialogue is going to be? And have you spoken to Pakistan or informed Pakistan that this is what you’re going to do, the trilateral consultations between India, Afghanistan, and the U.S.?

ASSISTANT SECRETARY BLAKE: Sorry, let me answer that because I won’t remember them. (Laughter.)
We haven’t yet. As I say, we’re just beginning to think about this and talk to both India and Afghanistan about how we’re going to structure this dialogue. So we haven’t made a decision yet about things like the level. But yes, we did have some contacts with the Government of Pakistan.

QUESTION: On Rohingya, Bangladesh, you know as a poor country it doesn’t have much resources. Is the U.S. willing to help or provide some kind of financial assistance to Bangladesh to take care of the refugees that are coming across the border from Burma?

ASSISTANT SECRETARY BLAKE: Certainly. And normally, the way this works, Lalit, is that UNHCR, the UN High Commission for Refugees, has – is supporting assistance efforts there. They have their own camps, but also they work with NGOs. So we typically respond to an appeal from the UNHCR. So if the UNHCR determines that it needs more resources to help Bangladesh to accommodate these refugees, then I’m sure that we will be more than happy to accommodate that request, because the United States, as you know, is always one of the most generous and early supporters of these kinds of appeals.

So again, Bangladesh will not be facing this problem alone. We understand that these kind of things impose a burden on countries and a cost on countries, so again, we hope very much that they will open their borders and allow people in and that UNHCR and others will be permitted to work very closely with the Bangladeshi authorities to accommodate those new refugees.

QUESTION: And my question: Was China factor discussed during the Strategic Dialogue? Because in the last couple of years, I have seen all the joint statements, but U.S.-China Dialogue didn’t mention to South Asia. And India-U.S. Dialogue, there is some mention to China. In this joint – 14-page joint statement, there’s no reference to China at all. Even the briefing, there has been no reference to China. So was this discussed or have you kept out of it?

ASSISTANT SECRETARY BLAKE: Well, China was discussed. I don’t want to say China was a focus. I mean, we were much more focused on things like Afghanistan and so forth. But as you’ve heard me say before, both India and the United States want a good, strong engagement with China, and we don’t see our strategic partnership as coming in any way at the expense of China. And so, again, I think it was more in that context. And we will continue to look for opportunities to engage bilaterally with China, but also, as you know, we have offered a trilateral dialogue with China as well that we hope that they will agree to.

MODERATOR: All right. We have a few questions on the left. We’ll start in the back.

QUESTION: Thank you. Kitty Wang (ph) with NTD TV. Regarding deepening the defense cooperation with India, did you heard any concern from the Indian part in the dialogue such as increased U.S. military presence there or deployment there?
And also, could you talk a more about your cooperation with India on the cyber security aspect?

ASSISTANT SECRETARY BLAKE: We didn’t hear any complaints, if that’s what you’re asking about, any kind of military presence. Whenever we have a military presence, it’s only at the invitation of the Government of India. And for – typically for our bilateral exercises – as you know, we have the largest program that India has with any country of bilateral military exercises. We certainly welcome those opportunities.

So we talked a little bit about that, but we also talked about how we both want to continue to try to work to expand our defense trade, particularly to take it into new areas like co-production and co-development.

MODERATOR: All right. We’ll take another –

ASSISTANT SECRETARY BLAKE: Sorry. You have one more question? Go ahead.

QUESTION: Yeah. Regarding the cyber security, how will you defend --

ASSISTANT SECRETARY BLAKE: Oh, yes. I mean, we had a good discussion on cyber security. To be honest, I don’t want to get too much into the details of what we talked about for understandable reasons, but, again, I think we see this as a very important new area of cooperation, not just because of our very large IT sectors that each of us have and the growing cooperation in that area in terms of the service industry, but also in terms of the threats that each of us face as well. And so we – again, we have common interest in sharing best practices and again, addressing those. But again, for obvious reasons, we don’t want to go too much into the details of that.

MODERATOR: All right. We’ll stay here on the left.

QUESTION: Thank you. Raghubir Goyal, India Globe and Asia Today. Mr. Secretary, two questions: One, is how much Pakistan was discussed, because Minister spoke about this yesterday at the media conference with the Indian media? He was not very happy the response he got from the U.S. as far as – many terrorists are wanted by India from Pakistan who were involved in Mumbai attacks, and also he spoke about Headley, among others. So response is not very good from Pakistan, and Pakistan is still helping those, Haqqani Network and all that are against India.

And second, my question will be: As far as U.S.-India Business Council and –
ASSISTANT SECRETARY BLAKE: Sorry. Let me answer the first one – question. Well, I didn’t see the Minister’s comments, but let me just say that we had a good conversation. We obviously share India’s concerns about some of the threats that are emanating from Pakistan, from groups like Lashkar-e Tayyiba. And we’re working very hard to – both to encourage Pakistan to take action against those, but also to prevent those kinds of attacks from occurring through our intelligence and other kinds of cooperation.

With respect to your question about David Headley and things like that, that’s really the province of the Department of Justice, and so I’d refer you to them. But as a whole, I would just tell you that there’s been very good information exchange between our two countries on – with respect to Mr. Headley and others. And we are very firmly committed to continuing that information exchange and certainly to sharing any kind of threat information the instant that we get it, because that is – that, of course, is extremely important to the security of India, but also to – an important part of our counterterrorism cooperation.

QUESTION: And second question will be on economy and trade. Since two countries, India and U.S., are the world’s largest and richest democracy, both are moving towards (inaudible) trade, economic, and other issues. But visa is a major issue among those U.S.-India Business Council and 500 Fortune companies doing business or who wants to do business in India and also vice versa, companies from India. One, are you moving forward as far as free trade agreement with India, just like you have with South Korea and other countries? Because since when you are saying that India is the most moving forward partnership now in the future? And finally visa, how far these companies they are seeking and asking more visas and but you are cutting visas rather than giving them more visas to do business in India – to do business in the U.S. Thank you, sir.

ASSISTANT SECRETARY BLAKE: Okay. There are a lot of different questions in that question. So let me try to unpack those a little a bit. (Laughter.) First of all, with respect to visas, you’re – I think you’re referring primarily to H1-B visas and, as you well know, India now receives 65 percent of the worldwide total of H1-B visas. So I think that’s a pretty commendable number and percentage and in terms of the L-1 visas – the so-called intra-company transfer visas – India receives 37 percent of those -- again, 37 of the worldwide total. Congress is the one that determines the caps for H1-B visas, not the United States Government. So – and that cap has remained fairly steady for quite a long time now.

So, again, I think we’re doing everything we can within our own, within the law to give Indian companies fair access to the H1-B system, and I think that they have shown themselves more than capable of taking advantage of all the opportunities, and we continue to welcome those kinds of workers. And the real quibble, if I might say, has been more on the L-1 – the intra-company transferees where the number of – the rate of rejections has gone up slightly. And we have a refusal rate that’s gone up a little bit because we’ve seen a higher level of unqualified applicants and in some cases some fraud. So naturally, we want to make sure that everybody that comes in is a qualified applicant and is coming for the purposes that are stated in the visa application.

So we’re looking at why that refusal rate seems to have gone up a little bit more but – in response to the concerns that have been raised. But again, I’m a strong supporter of all of our consular officers and think they do a superb job.

MODERATOR: All right. I think --

QUESTION: (Inaudible.)

ASSISTANT SECRETARY BLAKE: Oh sorry, FTA. I told you, you can’t ask me more than question at once, I can’t remember.
We’re not currently now working on a Free Trade Agreement with India. As I said earlier, our efforts are focused first on trying to conclude a Bilateral Investment Treaty. We have had a model Bilateral Investment Treaty approved earlier this year, so that then gave us the opportunity to again re-launch negotiations on the bit with India, and we’ve had some good early rounds of discussions and, again, we hope to advance those as rapidly as possible.

MODERATOR: Sir, I know your time is running short. Do we have time for one more question?

ASSISTANT SECRETARY BLAKE: Sure, sure – or a couple more.

QUESTION: I just wanted to come back to the $1 billion question and the visas.

ASSISTANT SECRETARY BLAKE: Sure.

QUESTION: What is the legal justification you mentioned for extracting a billion dollars annually from people who are ostensibly guest workers in terms of social security payments? And what is the moral justification for not returning the money? You say that there is an ongoing dialogue, but the minister actually distinctly said that the U.S. refuses to even talk about this. And this is $1 billion annually from a country that’s not very --

ASSISTANT SECRETARY BLAKE: Well, again, I don’t want to make it sound like we are discriminating against Indians. I mean, these are taxes that are taken out of every single worker in the United States, and that’s – when you come to the United States, that’s one of the things that you agree to do, is that --
QUESTION: (Inaudible.)

ASSISTANT SECRETARY BLAKE: Well, any worker. That’s just part of our system to make sure that taxes and social security and other – are automatically deducted from your paycheck. And so I don’t want to – your question implies that we’re somehow discriminating against Indians. Everybody is subject is to this --

QUESTION: Because – there are totalization agreements with countries like Belgium where the money’s returned. So why not with India?

ASSISTANT SECRETARY BLAKE: Right. But that’s – see, again, there’s an imbalance in our system between – in between what -- your system is configured completely differently from our own. If you want, I could have a chat with you offline, because it’s – it gets into very technical, complicated details. But essentially, for the moment, we’re not in a position to be able to enter into a totalization agreement with India, and we’ve explained the reasons why we can’t do that. But we understand very well their concerns.

MODERATOR: So maybe one final question.

QUESTION: I have two questions. On the sidelines of the SCO meeting, the Chinese vice premier apparently pulled aside Minister Krishna and whispered in his ear that the "real relationship," quote/unquote, is between China and India. And this was with an eye to sort of criticizing the growing U.S.-India relationship. So I was wondering if you’d like to comment on that.

ASSISTANT SECRETARY BLAKE: I don’t have anything to say beyond what I’ve already said on that. So what else?

QUESTION: Okay. The second question is on Iran oil sanctions.

ASSISTANT SECRETARY BLAKE: Sure.

QUESTION: Are we done with this, or is this going to be a recurring demand that we – India keep cutting oil imports, because this is causing unnecessary friction?

ASSISTANT SECRETARY BLAKE: No, no. We’re certainly not done. And again, this is something that we’re asking of all of our partners around the world. This is not something that’s focused on India. But the current exceptions that have been granted apply for a period of 180 days – so for a period of six months.

So we’re asking all of our friends and all countries around the world to continue to reduce their imports of oil from Iran and to discontinue transactions with the Central Bank of Iran and that there needs to be continued progress on that. So we hope we’ll see that. And again, I think that as many others have said, these sanctions have had a real impact, and they’ve helped to bring Iran to the negotiating table. And so – and have again helped to dramatically reduce Iranian oil exports from I think a high of 2.5 million barrels to down to a range of 1.2 to 1.8 million barrels a day. So that’s quite significant and it’s, again, it’s just important to keep the pressure on Iran so that they will come and negotiate with in good faith with the P-5+1 and with – and to continue, again, to work very closely with the IAEA and allow the IAEA access to all relevant facilities inside Iran.

MODERATOR: Sir, thank you very much for coming to the Foreign Press Center. This event is now concluded. Thank you all for coming.

ASSISTANT SECRETARY BLAKE: Thank you all. It was great to see you all. Thanks a lot.

U.S. SECRETARY OF STATE HILLARY CLINTON OP-ED ON U.S.-INDIA RELATIONS

Photo Credit:  Wikimedia.
FROM:  U.S. STATE DEPARTMENT
India and the United States: A Focus on the Fundamentals
Media Note Office of the Spokesperson Washington, DC
June 13, 2012
The following op-ed written by Secretary Clinton is appearing in print in India Abroad.
This week, leaders from India and the United States will gather in Washington to discuss our expanding cooperation on everything from trade to technology to terrorism. There also will be issues on which we don't see eye to eye, and some of those may dominate the media coverage. But if we look at the trend-lines as well as the headlines, a much more important story emerges: The strategic fundamentals of our relationship – shared democratic values, economic imperatives and diplomatic priorities – are pushing both countries' interests into closer convergence. The world's oldest democracy and the world's largest democracy are entering a new, more mature phase in our relationship.

The most important bond between our two nations continues to be our common democratic heritage. We are both big, diverse, noisy democracies, committed to pluralism, freedom, and opportunity. Yet, for many decades, our economic and strategic policies often diverged. Only after the end of the Cold War, with India's rapid economic development and growing regional leadership, did the trajectory of our relationship begin to change.

India's expanding GDP, thriving private sector, emerging consumer class, and increasing diplomatic clout have all combined to make it a global power with a big stake in maintaining international security and prosperity. As a result, we find ourselves sharing more than just common values and political systems -- we also increasingly share common interests in an open, free, fair, and transparent global economic system; peace and prosperity in South Asia and the Asia-Pacific; and a coordinated international response to violent extremism and other shared global challenges.

A bipartisan commitment across successive American and Indian administrations has driven a steady improvement in relations, marked by high-profile visits like the one my husband took to India in 2000 and achievements such as President Bush's landmark civilian nuclear cooperation agreement. Today, under President Obama and Prime Minister Singh's leadership, we are continuing those efforts. There is less need for dramatic breakthroughs and more need for steady, focused cooperation. So together, we are building a mature partnership defined by near-constant consultation aimed at working through our differences and advancing the interests and values we share. This kind of daily collaboration isn't always glamorous, but it is strategically significant -- and a long way from the old days of the Cold War.

Let's look at three examples of how this works.
First, on the economic front. Two decades after it began to open its economy, India's industries and innovators have gone global, investing and trading all over the world. Like American businesses, they have come to see that further growth depends on open markets, transparent regulations, and fair mechanisms to settle disputes. And while people in both India and America have important and sometimes conflicting concerns about market access and the effects of globalisation, the benefits of growing economic ties are clear: bilateral trade and investment has reached $100 billion a year, creating jobs and opportunities for Americans and Indians alike. There is much room for growth, and so we need to keep up the momentum, further reducing barriers to trade and investment in areas like multi-brand retail and creating hospitable environments for companies to do business. Because the world's two biggest democracies should have one of the world's most robust and consequential economic relationships.

Second, on Asia. For years, Pakistan and South Asia were a chief focus of India's strategic thinkers. Today, India is also looking east, and playing a larger role in the broader Asia-Pacific. Both India and the United States recognise the strategic and economic significance of the waterways that connect the Indian Ocean through to the Pacific, and the necessity of protecting freedom of navigation. So we are working together and through multilateral institutions such as the East Asia Summit to build a regional architecture that will boost economic growth, settle disputes peacefully, and uphold universal rights and norms. And we are exploring ways to ensure a constructive relationship among the United States, India, and China. Effective cooperation between all three countries will be essential to tackling many of the greatest challenges in the 21st century.

Third, on global challenges like terrorism, climate change, human rights, and nuclear proliferation. Both India and the United States have been targeted by violent extremists, and we understand that defeating terrorist networks takes international coordination and a comprehensive approach that goes after recruits, safe havens, and finances. We also both know that addressing cross-cutting challenges like climate change will require developed and developing countries alike to work together. Even on issues where we have at times disagreed, like human rights in Burma or sanctions on Iran, you can see our new habits of cooperation paying off. India understands the importance of denying Iran a nuclear weapon and supports efforts to ensure Iran's compliance with its international obligations. And India has taken steps to diversify its sources of imported crude by reducing purchases of Iranian oil. At the same time, the US recognises India's energy needs, and we're working together, along with other partners around the world, to ensure stable oil markets that can meet global demand. And that's what a good partnership is all about -- respecting each other's interests and needs and working to find mutually-acceptable approaches to common challenges.

These are just three of the most significant areas in which the strategic fundamentals of our relationship are redefining the US-India partnership. On issue after issue, we find that India's interests and America's interests are lining up.

The effectiveness of this partnership will hinge on our ability together to convert common interests into common action. It's not enough to talk about cooperating on civilian nuclear energy or attracting more US investment in India or defending human rights, we have to follow through so that our people can see the results. And we recognise that some Indians still fear that working closely with the United States will undermine their "strategic autonomy." But at the end of the day, a strategic partnership isn't about one country supporting the policies or priorities of the other. It's about working together on shared goals and preventing short-term disagreements from derailing long-term cooperation.
The United States is determined to keep this partnership going and growing. And that means working together -- including through mechanisms like this week's US-India Strategic Dialogue -- to build trust and deepen the habits of cooperation that will help break through areas of disagreement and bring benefits to the people of both countries.
Together, we can turn strategic fundamentals into strategic partnership.

Hillary Clinton

SECRETARY OF DEFENSE PANETTA'S REMARKS IN NEW DELHI, INDIA

FROM:  U.S. DEPARTMENT OF DEFENSE
Remarks by Secretary Panetta at the Institute for Defense Studies and Analyses in New Delhi, India

            SECRETARY LEON PANETTA:  Thank you very much, Mr. Ambassador, Dr. Gupta.  Thank you for inviting me to the Institute for Defense Studies and Analysis, and thank you for your leadership of this distinguished organization.  It's a special honor for me to have this opportunity on my first visit to India as secretary of defense to be able to address the issues in the defense arena that involve both the United States and India.

            This trip has taken me from the Pacific Command headquarters in Hawaii to the Shangri-La Dialogue in Singapore to Cam Ranh Bay and Hanoi in Vietnam.  It's appropriate that as I've had the opportunity to define our new defense strategy for the 21st century that I am now here with a very key partner in India, particularly in this important region.

            Over the past two days I have held some very excellent meetings with Prime Minister Singh, with Defense Minister Antony, with National Security Adviser Menon.  And I want to thank them all for welcoming me back to this country.  I've had the opportunity to visit here a number of times in my prior capacity as director of the CIA and now have the opportunity to visit as secretary of defense.

            I also want to take this moment to thank Ambassador Chandra for his role in helping to convene and moderate today's discussion.  And I also want to thank him for his contributions.  He's made a number of very important contributions in helping to advance United States-India relationship during his career in public service.  And I had the opportunity to see that personally during the time I was in the White House.

            His first year in Washington as India's ambassador overlapped with the end of my tenure as President Clinton's chief of staff in the 1990s.  It was a time when the legacy of the Cold War and the suspicions that developed during that period still loomed large.  And though the United States and India shared many values and many common interests, our bilateral relationship suffered from many of those suspicions.

            My former boss, President Bill Clinton, I think got it right at the time twelve years ago here in New Delhi when he said, and I quote, "India and America are natural allies, two nations conceived in liberty, each finding strength in its diversity, each seeing in the other a reflection of its own aspiration for a more humane and a more just world," unquote.  Thanks to the efforts of past presidents, both Republican and Democrat, our two nations, I believe, have finally and irreversibly started a new chapter of our history.

            When I returned to government in 2009 to serve as director of the CIA, I found a transformed United States-India relationship.  We had acted together to get past our differences and re-establish better cooperation.  It required that we get beyond our outdated notions about one another.  And today, thanks to President Obama and Prime Minister Singh, along with Indian leaders from across the country's political spectrum, our two nations now engage actively and effectively as partners on a whole host of bilateral, regional and global issues.

            President Obama has said that the United States and India will be one of the defining partnerships of the 21st century, and I believe that to be true.  Today we have growing economic, social, diplomatic ties that benefit both of our nations.  But for this relationship to truly provide security for this region and for the world, we need to deepen our defense and our security cooperation, and this is why I have come to India.

            America is at a turning point.  After a decade of war, we are developing a new defense strategy for the 21st century, a central feature of that strategy is rebalancing toward the Asia-Pacific region.  In particular, we will expand our military partnerships and our presence in the arc extending from the Western Pacific and East Asia into the Indian Ocean region and South Asia.  Defense cooperation, defense cooperation with India is a linchpin in this strategy.

            India is one of the largest and most dynamic countries in the region and, for that matter, in the world, with one of the most capable militaries.  India also shares with the United States a strong commitment to a set of principles that help maintain international security and prosperity.  We share a commitment to open and free commerce.  We share a commitment to open access by all to our shared domains of sea, air, space and cyberspace.  We share a commitment to resolving disputes without coercion or the use of force and in accordance with international law.  We share a commitment to abide by international standards and international norms -- rules of the road, if you will -- which promote international stability and peace for the world.  One of the ways we will advance these principles is to help develop the capabilities of countries who share these values, and India certainly is one of those countries.

            Our two nations face many of the same security challenges: from violent extremism and terrorism to piracy on the high seas, and from the proliferation of weapons of mass destruction to regional instability.  Handling these challenges requires a forward-looking vision for our defense partnership and a plan for advancing it month by month and year by year.  We have built a strong foundation, and we will enhance this partnership over time in the spirit of equality, common interest and mutual respect.

            In particular, I believe our relationship is, can and should become more strategic, more practical and more collaborative.  Our defense cooperation is strategic, in that we consult and share views on all major regional and international security developments.  Our defense policy exchanges are now regular, candid and invaluable.  Our partnership is practical because we take concrete steps, through military exercises and exchanges, to improve our ability to operate together and with other nations to meet a range of challenges.  And our defense relationship is growing ever more collaborative as we seek to do more -- more advanced research, more advanced development, share new technologies and enter into the joint production of defense articles.

            Let me share my view on the progress we have made in each of these areas and outline additional steps that I believe we can take in the coming months and years.  First of all, with regards to strategic cooperation, we've built a strong strategic relationship.  That is the nature of the relationship between the United States and India.  In my own experience, including during my visits here as director of the CIA, my Indian counterparts always offer clear strategic analysis and recommendations.  We are transparent.  We are honest in our discussions, something that has come to define the strength of our relationship.

            During my two days here we discussed the new defense strategy that is guiding the United States' military rebalance to the Asia-Pacific region.  We also talked about the value of the ASEAN (Association of Southeast Asian Nations) regional architecture in promoting international norms and in guaranteeing freedom of navigation.  We discussed Afghanistan, where we have embarked on a transition to Afghan responsibility for security, for governance and for economic affairs.

            India has supported this process through its own significant investments in Afghan reconstruction and has signed a long-term partnership agreement with Afghanistan.  We are making significant progress towards a successful transition.  The United States now has an enduring partnership agreement with Afghanistan, and we are committed to the long term in assuring that Afghanistan is a stable nation in this region of the world.

            I urge India's leaders to continue with additional support to Afghanistan through trade and investment, reconstruction and help for Afghan security forces.  We both realize how important it is to ultimately have a stable Afghanistan if we are to have peace and prosperity in this region.

            We also discussed India's immediate neighborhood.  In particular, I welcomed the initial steps that India and Pakistan have taken to normalize trade relations.  This is a process that we believe is key to resolving their differences and to helping Pakistan turn around its economy and counter extremism within its borders.  Pakistan is a complicated relationship, complicated for both of our countries, but it is one that we must continue to work to improve.

            And finally, we exchanged views about other key issues, like piracy and terrorism, tensions in the South China Sea, our concerns about Iran, about North Korea's destabilizing activities, and new challenges like cyber-intrusions and cyberwarfare.

            Second, what is -- what is it we can do to improve a practical defense partnership?  At a very practical level, our defense partnership is coming of age.  Expanded military exercises, defense sales, intelligence sharing are key examples of the relationship's maturation.  Last year alone we held more than 50 cooperative defense events.  Some of the most significant include our military exercises, which enhance our ability to prepare for real-world challenges.

            The annual MALABAR naval exercise has grown from a passing exercise for our ships into a full-scale engagement across all functional areas of naval warfare.  In March U.S. Army soldiers joined their counterparts in India to rehearse scenarios involving United Nations peacekeeping and humanitarian assistance/disaster relief in a post-conflict setting.  U.S. soldiers even had the chance to participate in a Holi celebration, in which, I gather, all experienced a colorful -- a colorful occasion.  One month later the
SHATRUJEET exercise took place at Camp Pendleton in California, my home state, with amphibious operations and other exercises between U.S. Marines and Indian soldiers.

            These engagements, these exercises provide opportunities for our militaries to learn from each other.  This will sharpen our skills the next time we are called upon to interdict a weapons of mass destruction shipment or break up a terrorist plot or respond to a future tsunami.

            We've also increased our defense sales relationship from virtually nothing early in the last decade to sales worth well over $8 billion today.  Our sales are rapidly growing.

            For example, India and the U.S. have agreed to sales of maritime surveillance and transport aircraft.  India will soon have the largest -- the second-largest fleet of C-17s in the world, expanding the reach and strength of India's forces and their ability to rapidly deploy.  Your C-130J transport aircraft and P-8I maritime surveillance aircraft purchases are also historic.  In fact, India and the United States will be the only countries operating the P-8I aircraft.

            In providing such world-class capabilities to the Indian armed forces, we also enabled new training and exchange opportunities between our militaries.  For example, our sales of transport aircraft included U.S. Air Force training of Indian pilots, loadmasters and maintenance staff.

            The third area is defense collaboration.

            Finally, in terms of building collaboration, we have some early successes and are poised to embark on technology sharing, co-production and other initiatives that will be a great value to each of our nations.  Lockheed Martin, Sikorsky, India's Tata Group are already jointly manufacturing spare parts for transport aircraft in Hyderabad.  This project benefits each of our nations by creating jobs in India and America and strengthening our defense industries.  Our shared goal should be to solidify progress and deepen defense engagement and cooperation in all of these areas.

            So now let me turn to the future.  At a strategic level, we have worked together to counter piracy, to counter terrorism, and now we should join forces to tackle new and even more complex threats.

            We can do more to drive the creation of a rules-based order that protects our common interests in new areas like cybersecurity and space.  We need to develop rules of the road in these domains to help confront dangerous activities by states and non-state actors alike.

 In terms of regional security, our vision is a peaceful Indian Ocean region supported by growing Indian capabilities.  America will do its part through doing things like rotating the presence of Marines in Australia.  We will have littoral combat ships rotating through Singapore.  And we will have other deployments in the region.  But the fundamental challenge here is to develop India's capabilities so that it can respond to security challenges in this region.

            The United States supports Southeast Asia multilateral forums such as the ASEAN Defense Ministers' Meeting-Plus, or ADMM-Plus.  These mechanisms will prevent and manage regional tensions.  As I told my Indian colleagues over the past two days, India's voice and involvement in these international forums will be critical.

            As the United States and India deepen our defense partnership with each other, both of us will also seek to strengthen our relations with China.  We recognize that China has a critical role to play advancing security and prosperity in this region.  The United States welcomes the rise of a strong and prosperous and successful China that plays a greater role in global affairs and respects and enforces the international norms and international rules that have governed this region for six decades.

            And again, with regard to Pakistan, India and the United States will need to continue to engage Pakistan, overcoming our respective and often deep differences with Pakistan, to make all of South Asia peaceful and prosperous.

            And to improve our practical cooperation, I do believe that the United States' and India's participation in military exercises, which are already strong, should continue to be more regular and complex.  And we must move beyond a focus on individual arms sales to regular cooperation that increases the quantity and the quality of our defense trade.

            I want to stress that the United States is firmly committed to providing the best defense technology possible to India.  We are both leaders in technology development, and we can do incredible work together.  Indeed, I think a close partnership with America will be key to meeting India's own stated names -- aims -- of a modern and effective defense force.

            The Obama administration is hard at work on export control reforms, in cooperation with our Congress, in order to improve our ability to deliver the best technologies even more quickly.  Meanwhile, we look to India to modernize its own regulations in areas like defense procurement and nuclear liability legislation.

            But to realize the full potential of defense trade relations, we need to cut through the bureaucratic red tape on both sides.  For that reason, I've asked my deputy secretary, Ash Carter, to lead an effort at the Pentagon to engage with Indian leaders on a new initiative to streamline our bureaucratic processes and make our defense trade more simple, more responsive and more effective.

            Believe me, I know this is not going to be easy.  This is hard.  But that's the nature of the democratic systems that we share.  Your leaders understand the challenges I face, and we understand the obstacles you face.  But we both need to persevere to support our defense needs and our strategic interests.  Over the long term, I am certain that we will transition our defense trade beyond the buyer-seller relationship to a substantial co-production and eventually high-technology joint research and development.

            During my visit to Asia this week, I have sought to bring closure to some of the past chapters of the United States involvement in this region.  The government of Vietnam opened three new areas to search for our missing in action from the Vietnam War.

            And here in India, I'm pleased to announce that the Indian government will allow a team to return to India to continue the search for U.S. service members that were lost during World War II.  This is a humanitarian gesture by a government with whom we share so many values.  The ability to return these heroes and the remains of these heroes to their loved ones is something that America deeply, deeply appreciates.

            America's involvement in Asia has an important past, but it has an even more important future.  India is at the crossroads of Asia.  It is at the crossroads of a new global economy, and it is at the crossroads of regional security.  We, the United States, will stand with India at those crossroads.

            I began my trip across the Asia-Pacific region eight days ago.  Along the way, I have laid out how the United States military plans to rebalance towards this region.  As I come to the end of my trip, I'm struck by the opportunities for closer cooperation, the strong support throughout this region for the rebalance, and the hope that this cooperation can help forge an even brighter future for this region and for the world.

            The United States and India have built a strong foundation for defense cooperation in this new century.  My country is committed to an even greater role in the Asia-Pacific, extending all the way to the Indian Ocean, and our attention and resources will advance partnerships throughout the region, including in particular a partnership with India.

            Our two nations -- our two nations may not agree on the solution to every challenge that faces us.  And we both face the challenge of political gridlock at home that sometimes prohibits advancing our broader strategic objectives.  But I am sure that we will continue to draw closer -- closer together because we do share the same values, because the same challenges and threats confront both of our countries, and we share the same vision of a just and stable and peaceful regional order.

            Our people, our businesses, our militaries and our governments will all be partners in this effort to serve the dream that guides both of our great democracies, the dream of building a better and more prosperous future for our children.  Together as partners, we will help one another realize this great dream of the 21st century.  Thank you.  (Applause.)

            MODERATOR:  Thank you, Secretary Panetta, for a very lucid statement.  You have very comprehensively covered almost every area and subject of great interest to us -- (inaudible).  I think -- I think I have not heard such a clear enunciation of policy and -- (inaudible) -- in a long time.

            I wanted to ask you if you would be willing to take a few questions, and in the interest of proper management of time, which is going to be very difficult, I would request, friends, to be to the point, and I know most of you, but it would help if you would please identify yourselves before you ask the questions.  And pointed questions will be most welcome.  Comments, if any, might be of interest also.

            So may I request the gentlemen -- (inaudible) to go first.

            Q:  Mr. Secretary, I congratulate you for a most illuminating -- (inaudible).  The first point I have, 60 percent of your warships are being moved into the Pacific.  Is that enough?  Warships can't operate on their own.  I presume that you are moving ground forces, amphibious forces; we have not heard about that.  But warships can't be all alone; they need ground backing.

            Secondly is command and control.  With the center of gravity moving to the Western Pacific, would Hawaii be a suitable place for command and control?  In World War II, you remember MacArthur operated from Australia.  So as the center of gravity is shifting to the western seaboard of the Pacific, I hope you are taking that into control -- into consideration.  The -- otherwise you need amphibious forces.  No word on that.  I see a Marine Corps general here.  Presumably the Marines will do that.

             (Off mic.)  (Laughter.)

            Q:  I worked with them in World War II.  They're great guys.  I -- the other thing is, better interaction is now required between the U.S.A. and India.  There has not been enough of it.  We should work closely together.  We have common interests.  I'm not really going into details; other people want to speak.  But I will just finish with a quotation from George Canning.  Do you remember George Canning?  The Monroe Doctrine?  (Laughter.)  He said:  I called a new world into existence to redress the balance of the old.  Surely that is what is required now.  Thank you.

            SEC. PANETTA:  Thank you.  Thank you very much for your questions and for that last statement, which I think is very appropriate to the moment.

            Q:  Monroe doctrine was really George Canning.

            SEC. PANETTA:  I know.

            With regards to the rebalancing issue, to the Pacific, we will -- as we transition, as I stated the other day, we will move to a 60/40 balance in the Pacific, and I listed the ships that would be involved in that transition.  At the same time, we will not only maintain a significant ground force in the Pacific -- we have a large number of forces in the Pacific at the present time, most of them located in Korea.  We have a presence elsewhere.  And our hope is to expand what we have termed a rotational presence throughout the Pacific.  The Marines are locating in a rotational process in Australia.  We've already located some there.  They'll -- that will continue to expand.  We're exploring the rotational -- a rotational presence in the Philippines as well as elsewhere.  In Okinawa, where we just arrived, in an agreement with the Japanese, we will continue to maintain a presence there, but we are moving those troops as well, these are Marines, to Guam.  And we will establish a larger presence in Guam.

            So part and parcel of our focus on the Pacific will involve obviously the kind of forces that you identify, to ensure that we have ground forces in place to be able to enhance that capability.

            With regards to command and control, our view is that the present PACOM, which operates out of Hawaii, provides the kind of joint force capability that is going to be very important for the Pacific.  Admiral Sam Locklear -- who incidentally commanded the effort in Libya which required a very significant coordination capability.  A number of nations were involved in that effort, and he was remarkable at the way that coordinated effort became successful in returning Libya to the Libyan people.  He brings that same capability to the Pacific.

            We have -- we believe in joint forces.  We will have a significant Air Force as well as Army and Marine Corps and Navy presence in this region.  But more importantly, he also believes very strongly in working with other countries to improve their capabilities, and that's one of the things that I want to point out to all of you that we are not -- we are not in the process of doing what we did in the Cold War of establishing permanent bases from which we can project our power.  Our approach here is to work with the countries in the region to develop their capabilities so that they can play a larger role in helping to secure and defend their countries in this region.  We think that is a better way to promote peace and prosperity and security in the region.

            So I think the headquarters at PACOM is very efficient and effective at being able to take charge of this rebalancing effort.  And again, with regards to amphibious forces, we do have a significant number of Marines in the region, and we will continue to maintain those.

            MODERATOR:  Going back to World War II and earlier makes me recall that today, the sixth day of June, that as we discuss this, I think the light forces that were in the process establishing a foothold on the beaches of Normandy -- so that's about the quality of sacrifice (inaudible) at this moment.

            MR.            :  (Inaudible.)

            Q:  Secretary Panetta and Maresh -- (inaudible) -- I cover strategic affairs for Business Times (inaudible) It's one of our -- (inaudible) -- news -- (inaudible).  And you would be aware that not everyone in India will -- (inaudible) -- support the India and U.S. developing relationship, and their hands get strengthened every time there's some apparent friction between the two sides.

            Now given that the United States has made an arms and defense cooperation one of the tenets and one of the pillars of the relationship, it appears to be a bit surprising that on this ongoing -- on the ongoing FMS sale of Javelin missiles, the United States has cut down India's request to just half.  I don't want to get into individual arms deals, but this seems to be a contradiction of the United States' statement that it wants to work with India.  Could you tell us something about why this was done, especially given that the Javelin is essentially a defensive -- (inaudible)?

            SEC. PANETTA:  Yeah, no, I'm -- I'd be pleased to address that issue because it's just not true.  We have not cut the sale in half; I don't know where the hell that story came from, but we get used to those stories appearing every now and then in the press.  But I want to assure you that we're committed to a full sale of the Javelin to India.  And we are -- we are working very closely with India not only on that sale, but on other sales as well to try to improve their capabilities.  So I want you to know that, you know, I recognize, as I said in my statement, that as we provide these new technologies that oftentimes we run into the barriers of various laws that have been passed either by our Congress or your congress and that sometimes provide bureaucratic barriers to trying to complete these sales.

            What my goal is -- in appointing my deputy's -- my deputy secretary to oversee this effort is to try and develop a broader strategy if we can:  What is it that India needs?  What is it that we can be helpful on and therefore be more effective in trying to reduce the barriers and improve the efficiency in those sales?  So that -- that's the approach that I'm hoping to take, and I think it will benefit not only your country but our country as well.

            MODERATOR:  (Inaudible.)

            Q:  (Inaudible) -- Secretary Panetta, I am a graduate of Fort Leavenworth of the bicentennial era and thank you for those very kind words and for words that encourage strengthening of India-U.S. defense relationship.  You've spoken extensively about Asia-Pacific, and during your presentation, you mentioned about your conversations with our leadership on Afghanistan.

            I want to ask you a question about Afghanistan.  Firstly, what is the U.S title -- the new -- (inaudible) -- about Afghanistan good enough as a policy?  Because we are not clear what that means.

            Secondly, I do believe that the United States as part of this defense cooperation, they seek more intensive Indian efforts inside Afghanistan on what India can do on security cooperation with the Afghan national security forces or in other areas.  Did you, in your conversations with the ministry of defense or other -- the defense minister or the national security adviser, make any specific requests other than what is in the ambit of the India-Afghanistan strategic partnership that you would like Indians to do in Afghanistan for a post-2014 scenario?

            Thank you, Secretary.

            SEC. PANETTA:  Thank you very much for the question.  My goal -- the United States' goal in Afghanistan is to complete the mission.  This isn't about good enough; this is about completing the mission.  And what the mission is, is to have an Afghanistan that can secure and govern itself.  That's what our mission is about, so that Afghanistan never again becomes a safe haven for terrorism and for those that would attack not only our country, but other countries as well.

            So the fundamental mission that we are embarked on is the mission of establishing an Afghanistan that can secure and govern itself, obviously be sovereign, be independent, but more importantly, be stable in its ability to be able to proceed and join the family of nations in this region.

            That's our goal.  We think we are on the way to accomplishing that mission.  General Allen has laid out a plan for transition.  I believe 2011 was a turning point in the Afghan war.  We weakened the Taliban significantly.  The levels of violence went down.  They continue to be down.  Even though we are seeing efforts at trying to increase their attacks, the level of violence still remains down.  We have seen an improvement in the operations of the Afghan army and police.  There are roughly about 346,000 in the Afghan army.  Our goal is to achieve a number of 352,000 and to be able to use the Afghan army in the transition process.

  We are also proceeding with the transition of key areas in Afghanistan to their control and to their governance.  As we speak, 50 percent of the Afghan population has been transitioned into Afghan security and control.  We announced -- President Karzai announced -- a third tranche of areas, to be completed, hopefully, by the end of the summer.  When we do that, 75 percent of the Afghan population will be under their security and control.

            So we are proceeding on a very effective plan that General Allen has laid out and has now been endorsed by the 50 nations of ISAF (International Security Assistance Force).  Both NATO and our partners in Chicago are committed to that transition towards -- and drawdown -- towards the end of 2014.

            In addition, we are -- we have signed a strategic partnership agreement with Afghanistan that will have us maintaining an enduring presence in Afghanistan.  We will continue beyond 2014.  We will continue working on counterterrorism, we'll continue to provide training and assistance to their forces, and we will continue to provide support.  That's a commitment that the president has made and that we have made clear we will maintain in Afghanistan.

            What I asked of the leaders here is that they continue to provide the training that they are providing now.  My understanding is that the training takes place here in India for the -- those that are brought here.  What I urged is that they continue to do that, if possible expand that training in order to improve the efficiency of the Afghan army.  There was nothing said about doing anything in terms of additional military efforts in Afghanistan itself.

            MODERATOR:  (Inaudible.)

            Q:  (Inaudible.)  And my question also pertains to Afghanistan and what you have said -- (inaudible).  Number one, you have many of us sitting here in this room today who do not share your feelings about NATO and ISAF forces for the ability of the Afghan national security forces to take over independent charge of security in Afghanistan after the departure of NATO and ISAF in 2014 so as to prevent the Taliban from taking over the country once again.  Is there a plan B in place already?  And what are your views on the regional peacekeeping and stabilization force but as under the U.S. plan?  Thank you.

            SEC. PANETTA:  No, as always when these things -- when these efforts begin, there are -- there were questions raised about the capability of the Afghans to be able to develop an effective armed forces and an effective police force to maintain security.

            I should say the same questions were raised in Iraq, and a large question's about whether or not they would be able to develop their capabilities.  They did.  The reason that we were able to withdraw from Iraq is because Iraq was able to secure and defend itself and govern itself.

            Is there -- are there -- are there going to be bumps in the road?  I - as a democracy, you bet.  But that's the nature of democracy.  India goes through bumps in the road.  The United States goes through bumps in the road.  And the fact is that we have established a democracy, a governing system there in which they can defend and secure themselves.  That's our mission.  That's true in Afghanistan as well.

            And what I saw happening in 2011 was that the Afghan army has indeed developed the capability to engage with our forces in operations and to maintain stability in those areas that they're involved with in terms of securing.  When the bombing attacks took place in Kabul, the army and the police were very effective at securing Kabul as a result -- (inaudible).  We've seen that happen now in the southern part of Afghanistan.  We've seen it happen in the other areas that we've transitioned.  The Afghan army is taking control, and they are taking the battle to the enemy.  That's the important point.

            So, we don't have a plan B because we don't think we need a plan B.  This is about plan A, which is to give the Afghans the capability to govern and secure themselves.  And so our goal will be to continue to train and support and assist the Afghan army so that they will be a permanent force that can protect that country in the future.  And the fact that we will be there past 2014 is additional insurance to assure that they continue to train and develop as they must in order to maintain a stable Afghanistan.  I honestly believe that they are developing the capabilities they need in order to do the job.

            MODERATOR:  (Inaudible.)

            Q:  Sir, two questions.  Every time you have a drone attack in Pakistan, or when you kill Osama, the Pakistanis come to you charging that violating their sovereignty.  How do you counter that?  It's one of their terrorist (inaudible) sanctuaries.

            Second on the aircraft carriers.  You've been quoted as saying that you will be stationing about six aircraft carriers, six or about seven in Asia Pacific region, which actually  means that your entire carrier force will be committed to India, oh sorry, the Asia Pacific region because -- (inaudible) -- to go back for replenishment and the other -- (inaudible).  You have always been wanting some foothold in the Indian Ocean.  (Inaudible)  I remember in 1980 I'd gone to Sri Lanka and I heard that you were looking for a justification -- (inaudible).  I reported that and of course Mrs. Gandhi opposed it very strongly.  (Inaudible) -- in the region would still oppose that, and also probably in the same circumstances might.

            It is reported here on one of the TV stations here that Bangladesh -- (inaudible).  Can you just kindly elaborate how would you deploy, how long?  Thank you.

            SEC. PANETTA:  Sure.

            Q:  I would also mention that you deployed three aircraft carriers off Pakistan during operation Osama -- (inaudible) – did Pakistanis in some way not interfere with your operation at that time?

            SEC. PANETTA:  They didn't know about our operation.  (Laughter.)  That was the whole idea.  (Laughter.)

            With regards to the aircraft carriers first, we have 11 aircraft carriers in our fleet.  And we will maintain 11 aircraft carriers.  The carriers -- when we say that 60 percent will move to the region, that means that some of them are going to be based on the Pacific.  So they'll be ported.  They're not all going to be floating around the Pacific.  They're going to be in ports on the Pacific side, probably along the West Coast as well as, obviously, Hawaii, and the other bases in Japan that we currently use.  So we're not looking for additional bases.

            Q: Also Diego Garcia?

            SEC. PANETTA:  Pardon me?

            Q:  Also Diego Garcia?

            SEC. PANETTA:  That's correct.  I mean, those -- the ones we use now are going to supply for the force that we need to maintain here, but we are moving them into the Pacific and porting them on the Pacific side so that if we need to deploy them, they'll be there for that purpose.

            With regards to the drones, again without getting into operational details on that, look, this is about our sovereignty as well, because there were a group of individuals who attacked the United States on 9/11 and killed 3,000 of our citizens.  And we went to war against those who attacked the United States of America.

            The leadership of those that were involved in planning this attack are located in Pakistan, in the FATA (Federally Administered Tribal Areas).  And we have made clear to the Pakistanis that the United States of America is going to defend ourselves against those that would attack us.  And we have done just that.  We have gone after their leadership, and we have done it effectively, targeting at -- targeting al-Qaida leadership and terrorists.  And very frankly, the terrorists who threaten the United States threaten Pakistan, as well.  This is not just about protecting the United States; it's also about protecting Pakistan.  And we have made very clear that we are going to continue to defend ourselves.

            Q:  (Inaudible.)  You spoke about the American planes that went out during World War II -- (inaudible).  You brought this up with prime minister.  Can you tell us exactly what you told the prime minister, what the reaction was?

            As far as another issue is concerned, you said that you will stand by India -- (inaudible).  What happens to these three agreements that you are looking at -- (inaudible)?  Did they come up during the discussions, and what was the Indian reaction?  Also, did you mention the evaluation to Mr. Antony today when you met?

            SEC. PANETTA:  First of all, on the 400 pilots, the prime minister was very moving and -- in the discussion, because I think he understands how important it is to be able to do what we can to return the remains of those that we are able to find, for their families.

            We always -- we have a pledge in the military that we leave nobody behind.  And for that reason, we do try to seek the remains of those that were lost in combat.  And I must say that India has been very cooperative in that effort.  We deeply appreciate their cooperation as we try to determine whether or not those -- we can find those remains.

            With regards to -- no, we did not -- we did not discuss the agreements.  I know that my predecessor had raised the issue of the -- with the agreements.  Frankly, my view is that, look, we can continue discussions in those areas.

            But I believe we have a strong relationship.  We have good cooperation.  I think we can continue to move towards the goals that I outlined in my speech; that even though we might -- you know, we might not always agree with regards to the specific agreements that we're discussing, I don't -- I don't see those as barriers to improving our relationship with India.

            A last point -- I'm sorry.  What was the last point?

            Q:  Haqqani.

            SEC. PANETTA:  On the Haqqanis.  Yes, I did discuss this with the -- with the Indian leadership.  Look, Afghanistan -- the effort to succeed in Afghanistan in many ways is dependent on our ability to eliminate the safe haven in Pakistan.  We can't have a stable Afghanistan if we don't have a stable Pakistan that is dealing with the threats that come across the border.

            And the principal threat that we're confronting right now are the Haqqanis.  The Haqqanis were involved in some recent attacks on our forces.  And that raises great concern that -- we cannot allow those who simply come across the border, attack our -- attack and kill people on our side of the border, to attack our troops, and then escape back into a safe haven -- and so we have urged and we will continue to urge Pakistan to take steps to deal with that safe haven in order to prevent that from happening.

            This -- the ability to achieve the kind of Afghanistan that we want -- one that can secure and govern itself for the future -- it is going to be in large measure dependent on a Pakistan that is able to confront terrorism within their own borders.  That's an important issue that has to be confronted by Pakistan.

            MODERATOR:  (Off mic.)

            Q:  (Inaudible) Just two quick questions.  One is about the -- (inaudible) -- relations between the U.S. and India, how are they going to impact on China -- (inaudible) -- amazing relationship that -- (inaudible)?  Do you think that that -- (inaudible) – have adverse reaction?

            And secondly, on Pakistan and U.S. relations -- (inaudible) -- seem to have sort of dipped quite a bit over the last few weeks and months and years.  So is that going to impact on your pullout from Afghanistan and your fight against terrorism in the region?

            SEC. PANETTA:  On the first point, I believe, in the discussions that I've had here, that I think both India and certainly the United States recognize that it is in our interest to develop a cooperative relationship with China.

            I'm in the process of trying to strengthen our military-to-military relationship with China.  I met with Vice President Xi in Washington and then met with General Liang and discussed ways to try to improve our military-to-military relationship.

            I believe that it is important that we have strong lines of communication and that we improve the transparency between our countries with regards to what we're seeking to achieve.  I mean, I believe that it is in China's interest -- in China's interest to be able to have a region that is secure and prosperous and peaceful.

            Now China faces the same threats that we all face in this region.  They face the threat of terrorism.  They face the threat of piracy.  They face the threat of humanitarian and disaster needs that have to be met.  They face the threat that if we don't have free trade in this region, it could impact on everyone's economies.  The ability to use our sea-lanes, the ability to protect maritime rights on our oceans are something that is extremely important to all nations in this region.  And we also face the threat of, frankly, nuclear proliferation from an unstable North Korea -- that's something that is as much a threat to China as it is to others in this region -- and the proliferation of weapons of mass destruction.

            All of these things are common threats.  They're not -- they're not just threats to the United States.  They're not just threats to India.  They're not just threats to other countries -- Philippines, Indonesia.  They're threats to all of the countries in this region.  And it's for that reason that we all have to work together in developing a cooperative relationship and developing the capabilities of these countries so that we can all confront these issues -- so that we can all confront these issues.

            So my goal is to do what I can to improve our mil-to-mil relationship with China.  I think India's goal is to try to improve that relationship as well with China.  I think that's the healthy way to try to approach a better relationship between the powers in the Pacific.
            You asked one other thing.

            Q:  (Inaudible) U.S., Pakistan.

            SEC. PANETTA:  Yes.  No, it -- just as India views the relationship with Pakistan as complicated, so do we.  (Laughter.)  And it is.  It's a -- it's a complicated relationship, oftentimes frustrating, oftentimes difficult.  But at the same time, it is a necessary relationship.

            India shares a border with Pakistan.  It's important that you continue to try to make what progress you can in dealing with Pakistan in trying to resolve your differences.  The same thing is true for the United States.  We are fighting a war in the FATA.  We are fighting a war against terrorism.  We have -- I think what I try to stress with the Pakistanis is that terrorism is just as much a threat to their country as it is for ours.  They have lost many lives in their country as a result of terrorist attacks.

            They also happen to be a nuclear power, and it's extremely important that we maintain the relationship with them.

            They had been cooperative oftentimes in the efforts that we've engaged with as far as what we've done in going after those that threaten our country.  They, they have provided some cooperation.  There are other times when, frankly, that cooperation is not there.

            The United States cannot just walk away from that relationship.  We have to continue to try to do what we can, to try to improve what -- you know, areas where we can find some mutual cooperation.  We are now engaged in negotiations to try to see if we can open up the transit centers; it's an important area for us.  We're engaging in negotiations with them to try to see if we can arrive at an agreement that would reopen those areas.

            We've been going through the north right now.  We have the northern transit center.  It, you know, obviously meets our needs.  It's a little more expensive because we do have to go farther in terms of the routes that we're involved with.  We would prefer -- we don't prefer, we would -- we would like to have the additional transit centers through Pakistan as well.

            So we'll continue to negotiate on that.  We'll continue to discuss with them the drone operations.  We'll continue to discuss with them other forms of assistance.  Our goal is to try to do what we can to try to improve the relationship with them.  That is not easy, but it is necessary that we continue that effort.

            MODERATOR:  (Inaudible) --

            Q:  Thank you --

            MODERATOR:  -- with the confusion, and I would like, I mean, to -- have patience and understanding if your turn doesn't come before -- (inaudible).
            Is there some --

            Q:  Thank you, sir.  Sir, I want to request your views on the timings which you have chosen to announce the change in your strategies, with more -- (inaudible) -- and force being deployed in the Asia-Pacific.  Normally -- (inaudible) -- I'm sure it has been done because you realized after 10, 15 years a change in the strategic environment in the region while you have -- (inaudible) -- philosophy that you are developing stronger relationship with China and you hope to succeed.  Actually, it doesn't appear to be so.  Otherwise, why would you change the -- (inaudible) -- of your forces from the one side to the other?

            And secondly, do you visualize or foresee in the coming years a greater cooperation between Russia and China, becoming again one superpower, or of several of the world organizations -- (inaudible) – America so that you are able to take action -- (inaudible) -- or is it because any other reason?  Thank you, sir.

            SEC. PANETTA:  Thank you for that question.

            Look, as I indicated, we are at a turning point after 10 years of war in the United States.  It's been the longest continuous period that we've been at war.

            And what we now see is that, you know, we have brought the mission in Iraq to a conclusion.  We were in the process of hopefully being able to transition in Afghanistan.  We certainly have impacted on terrorism.  We have significantly impacted the leadership of al-Qaida.  We had a strike yesterday that hit another deputy leader in al-Qaida.  And as you know, we were successful at going after bin Laden.  And we have impacted their ability to have command and control so that they can -- they cannot effectively put together a 9/11-type attack, because of our efforts.  We were successful in the NATO effort in Libya.  So we are in a period where after 10 years of war, you know, hopefully we are -- we are able to turn a corner here.

            At the same time we are facing budget constrictions in the United States.  We are running a high deficit and a high debt in the United States.  And the Congress, in what was called the Budget Control Act, passed a number in defense savings of roughly $487 billion over 10 years that I was asked to reduce the defense budget by.

            So faced – faced with a turning point, faced with the need to find additional savings, but also facing a world in which there are continuing threats -- we continue to face the threat of terrorism, not just in Pakistan but in Yemen and Somalia and North Africa.  We continue to face the instability of North Korea and the potential for some kind of conflict with that country.  We face the same thing with Iran.  We face turmoil in the Middle East.  We're facing cyberattacks now, which has become a whole new arena, a whole new battlefield for the future.

            So you put all of that together, we are continuing to face some major threats in the world.  And so my view was, faced with that, it was important for the United States to sit back and develop a strategy for what our defense strategy ought to be not just now, but into 2020 and beyond.  And so that led us -- myself, the service leaders at the Pentagon, the undersecretaries, the president of the United States -- to sit down and develop the strategies that we felt were important in order to deal with the challenges we face in the future.
            It's made up of five elements.  The rebalancing is one of those, but there are five elements.  Let me just summarize them.  One, we know we are going to be a smaller force.  We'll be a leaner force.  But we have to be agile, we have to be deployable, we have to be flexible and we have to be on the cutting edge of technology.  That's one.
            Two, we felt it was important to focus on the two areas that represent the biggest problems that we are going to confront in the future.  One is the Pacific -- Pacific region -- because of the threat from North Korea, because of other challenges that we think are going to be extremely important to our future prosperity and security; and secondly, the Middle East.  The Middle East is a -- continues to be an area that we have to maintain a focus on.  So those two major refocuses.

            Three, we have to maintain a presence in the rest of the world as well.  We can't just walk away from that.  And so what we've developed is this innovative and, I think, very creative, approach to rotational  presence, where we can send our forces in, do exercises, develop new partnerships, develop new alliances, work with the capabilities in those countries to develop their capabilities as well.  We'll do that in Latin America; we'll do that in Africa; we'll do that in countries in this region; we'll do that in Europe.

            In addition to that, we felt it was very important to have enough power so that we could confront more than one enemy at a time.  For example, if we have a war in Korea and we face a threat in the Straits of Hormuz, we have to have the ability to address both of those and to win.  And we think we have projected a sufficient force to do that.

            And lastly, we thought it was important to invest, not just to cut back, but to invest in areas for the future.  We need to invest in cyber.  We need to invest in space.  We need to invest in unmanned systems.  We need to invest in special forces.  And we need to invest in the capability to mobilize if we have to, if we are facing a crisis.

            All of those elements I just described are part of the strategy that we've developed for the 21st century.

            MODERATOR:  I'm told we have completely run out of time, so I regret -- (inaudible) -- those who were very anxious -- (inaudible).  But I want to thank you -- (inaudible).

SECRETARY OF DEFENSE PANNETA WANTS TO DEEPEN U.S.-INDIA RELATIONS

FROM:  AMERICAN FORCES PRESS SERVICE

Panetta Says U.S.-India Relations Must Deepen, Grow for Peace

By Jim Garamone

DELHI, India, June 6, 2012 - The U.S.-India relationship must deepen and grow to truly provide security for the Asia-Pacific region and the world, Defense Secretary Leon E. Panetta told the Institute for Defense Studies and Analyses here today.

Panetta met with Indian leaders to explore ways to expand the defense and security relationship between the two natural allies. His speech at the institute, the oldest Indian defense think tank, was to inform opinion-makers of the background behind the new strategic guidance and why it is important to both countries.

The secretary is building on President Barack Obama's statement that the relationship between the United States and India "will be one of the defining partnerships of the 21st century."

The United States is at a turning point, Panetta said, and it is now rebalancing its military forces in the critical Asia-Pacific region. Earlier this week in Singapore, the secretary announced that 60 percent of the U.S. naval fleet would be based in the Asia-Pacific. "In particular, we will expand our military partnerships and our presence in the arc extending from the Western Pacific and East Asia into the Indian Ocean region and South Asia," Panetta said in prepared remarks.

Defense cooperation with India is a linchpin in this strategy, he said. India is one of the largest and most dynamic countries in the region and the world, with one of the most capable militaries. The Indian military has more than 1.3 million members on active service and another 1 million in reserve. In addition, the countries share a set of values.

"We share a commitment to open and free commerce; to open access by all to our shared domains of sea, air, space, and cyberspace; and to resolving disputes without coercion or the use of force, in accordance with international law," Panetta said.

The two nations also share a commitment to abide by international standards and norms -- "rules of the road" -- that promote international peace and stability, the secretary said.

The two countries also face many of the same threats. Panetta listed the challenges coming from violent extremism and terrorism to piracy on the high seas and from the proliferation of weapons of mass destruction to regional instability. "Handling these challenges requires a forward-looking vision for our defense partnership, and a plan for advancing it month-by-month and year-by-year," he said.

The two militaries have built a strong foundation; U.S. and Indian troops from all services routinely exercise together. And Indian forces participate in United Nations missions.

But more should be done. "In particular, I believe our relationship can and should become more strategic, more practical, and more collaborative," Panetta said.

The U.S.-Indian defense cooperation is strategic in that the two nations consult and share views on all major regional and international security developments. "Our defense policy exchanges are now regular, candid and invaluable," he said.

The military exercises and exchanges now underway show the relationship is practical and "our defense relationship is growing ever more collaborative as we seek to do more advanced research and development, share new technologies and enter into joint production of defense articles," the secretary said.

At a strategic level, the United States and India have worked to counter piracy and terrorism. Panetta wants to expand that cooperation. "We can do more to drive the creation of a rules-based order that protects our common interests in new areas like cybersecurity and space," he said. "We need to develop 'rules of the road' in these domains to help confront dangerous activities by states and non-state actors alike."

Within the region, the U.S. vision is a peaceful Indian Ocean supported by growing Indian military capabilities. "America will do its part through the rotational presence of Marines in Australia, littoral combat ships rotating through Singapore and other U.S. military deployments in the region," he said.

China is obviously a factor in the region, and Panetta said both India and the United States must do all they can to strengthen relations with China. "We recognize that China has a critical role to play advancing security and prosperity in this region," he said. "The United States welcomes the rise of a strong, prosperous and a successful China that plays a greater role in global affairs -- and respects and enforces the international norms that have governed this region for six decades."

Pakistan is another regional player that must be kept in mind. The Indians have fought three major wars with Pakistan since 1947. "India and the United States will need to continue to engage Pakistan, overcoming our respective -- and often deep -- differences with Pakistan to make all of South Asia peaceful and prosperous," the secretary said.

On a practical aspect, Panetta wants U.S.-Indian military exercises to become more regular and more complex.

India and the United States may not always agree on every aspect of their relationship, Panetta said. But the two nations share so much in common that they are natural partners.

"Our two nations may not agree on the solution to every challenge facing us, and we both face the challenge of political gridlock at home that sometimes prohibits advancing our broader strategic objectives," he said. "But I am sure that we will continue to draw closer together because we share the same values, the same challenges and threats, and the same vision of a just, stable and peaceful regional order."