Deputy Secretary John J. Sullivan
New Delhi, India
August 16, 2019
Deputy Secretary Sullivan: Thank you, Ambassador Sarna for that kind introduction and thanks to the Ananta Centre and the Ministry of External Affairs for hosting this forum.
It’s great to see so many familiar faces here in the audience. As everyone at this forum knows, we are living in a consequential time in the Indo-Pacific region. Many of the basic norms and principles that unleashed economic growth and dynamism in the region — such as free markets under a rules-based order with increasingly open trade and investment — are being challenged.
To meet that challenge, the United States and India working with other like-minded nations must redouble our efforts to strengthen and promote the fundamental principles necessary for economic prosperity in the Indo-Pacific. Those economic principles are underpinned by the more basic values that India and the United States hold dear — our commitment to democracy, the rule of law, the freedoms of religion and expression. The United States and India have had, and will continue to have, our values tested over time, but our democratic institutions and respect for fundamental human rights will guide us to continue to progress in our relationship for years to come.
Indeed, the progress in our relationship over the last 15 years or so has been remarkable. I offer that observation as someone who’s served in the Bush  administration first, in the Defense Department in the President’s first term as the Deputy General Counsel for Secretary Rumsfeld. Then in his second term, of Bush  in the Commerce Department, culminating in my service as Deputy Secretary of Commerce.
Coming back into government now eight years later, it’s become clear to me how much more important the relationship is between the United States and India. How it’s grown substantially in the past 15 years, in large part because of those shared principles and values that I mentioned.
I can also say from experience that where our common principles and values do not prevail, we have seen the almost inevitable outcome — coercion, corruption, and intimidation. From the South Pacific to the Indian Ocean, China’s model of development is upending the cooperative approach that has advanced peace and prosperity throughout the region. Despite its claims of mutual benefit, China’s policies and actions seek to rewire the Indo-Pacific to advance its own interests.
From my vantage point, countries in the region are increasingly aware of these challenges. Under the leadership of the current administration, the United States is putting a stop to the abusive trade practices that have harmed U.S. companies for far too long.
As Secretary Pompeo said earlier this month during his visit to Australia, and I quote, “we welcome China’s continued growth, but it’s got to be right. It’s got to be fair. It’s got to be equitable. It’s got to be reciprocal.” Unquote.
And make no mistake, there has been a change in our approach to China since I served as the U.S. Deputy Secretary of Commerce. Our eyes our now open, and the tide is turning.
It is also true, that we are not looking to constrain China’s rise or to force countries to choose between the United States and China. Rather, what we seek is a China that competes fairly in the rules-based order that has brought increased prosperity to so many over so many decades.
But we recognize we can’t do this alone. We need like-minded partners. That’s why the vitality of the U.S.-India partnership is such an important factor in determining whether China ultimately succeeds in reshaping Asia to its purposes. Leaders of both of the United States and India recognize this. It’s why I’m here today; why Secretary Pompeo met with External Affairs Minister Jaishankar in Bangkok earlier this month, not long after his visit here to New Delhi.
As Secretary Pompeo said during his recent speech at the India Ideas Summit, the United States believes that our two nations have a unique opportunity to move forward together, for the good of both of our peoples, the Indo-Pacific region, and the entire world.
Together we’re seizing this opportunity by growing our 2+2 Dialogue, working together to counter the scourge of terrorism, and maintaining freedom of navigation in the South China Sea. Not only are we cooperating closely on defense issues but we’re also working together in health care, space exploration, science and technology, and peacekeeping.
The results of our efforts will extend far beyond our mutual benefit. Our vision and hard work will also serve like-minded partners throughout the region.
While bilateral trade between the United States and India hit a new record — $142 billion last year — the potential for our economic partnership is far greater, and as we continue our discussions on trade issues, we urge India to remove those market access barriers that adversely impact those companies outside of India receiving [inaudible] here. Anything that impedes India’s own integration into global supply chains. And I know that [inaudible] U.S. yesterday, in which he focused on increasing exports from India.
A key foreign policy for the United States is to foster conditions for private sector led development across the region — the only proven path for long-term, sustainable, and inclusive growth.
To that end, we have created the new U.S. Development Finance Corporation, the DFC, to support U.S. companies operating abroad. This is an important part of our economic diplomacy, and I look forward to working with the Secretary to chair the Board of the DFC.
Upon its launch on October 1st, the DFC will improve capital formation, identify deals, and reduce risk in markets that can at times be difficult to access. In conjunction with the DFC launch, we hope to ensure that citizens in countries everywhere will know the clear difference between transparent projects that enhance national prosperity and those projects that hollow out national sovereignty, erode ethics and good government, and indebt societies and citizens to outside actors.
Already our Overseas Private Investment Corporation (OPIC), which will become part of the DFC in combination with other agencies in a little over a month. OPIC has invested throughout the Indo-Pacific region in projects that are expanding access to energy, education and financial services, and supporting local farmers and agriculture.
OPIC’s current portfolio in India comprises more than $1.5 billion across 50 projects, including those supporting access to capital for small and medium-sized firms, expanding access to clean water, and supporting women entrepreneurs which is a priority of this administration.
The new DFC which will subsume OPIC, will double the amount of capital available for development finance, and bring new financial products to bear. Countries can maximize the potential benefits from the DFC by improving business climates to facilitate private sector growth.
In addition to investing in key projects throughout the region, we are increasing our technical assistance to governments willing to undertake reforms to improve their business climates and attract foreign firms.
We are also standing up a Transaction Advisory Fund, which will provide countries with assistance on negotiating contracts and evaluating bids or proposals for specific infrastructure projects.
We also know that India has a long history of working with governments in the region, including through the Indian Technical and Economic Cooperation program, and we would welcome more opportunities to coordinate on those efforts.
Our engagement is also multilateral. Since November 2017, we have held four quadrilateral consultations on the Indo-Pacific with India, Japan, and Australia — known informally as the Quad. This is an important mechanism for senior officials from our four countries to discuss our shared and complementary vision of a free and open Indo-Pacific region and to explore opportunities for cooperation. Indeed, just last month, I hosted an informal meeting of Quad Ambassadors in Washington to discuss how we can deepen our existing cooperation.
President Trump and Prime Minister Modi met with Japanese Prime Minister Abe in Osaka in June to discuss how our three countries can coordinate more closely on regional issues.
It’s clear to me that India sees the great potential in this region and a vision of a free and open Indo-Pacific. We welcome
India’s revised guidelines last December that will facilitate cross-border electricity trade. The new rules allow Nepal, Bangladesh, and Bhutan to trade electricity through Indian transmission lines. In turn, India and Nepal are looking to construct a new transmission line which will strengthen connectivity and power security, and facilitate Nepal’s clean energy export.
Nepal is in fact undertaking this work funded in part by a U.S. Millennium Challenge Compact grant which I had the honor to witness and sign on behalf of the United States several years ago in Washington.
The Indo-Pacific region will continue to gain from the promotion of a rules-based order that prioritizes private sector led growth. As foreign companies look to de-leverage and de-risk their operations in China, they will look to invest elsewhere. We support India’s efforts to take on meaningful reforms designed to increase infrastructure development, liberalize trade, and maximize its integration into global supply chains.
Now I know it’s been a long day, a long and fruitful day for discussion here, so I’ll stop here. The focus is as much about listening as it is talking. I will go back and join my dear friend, the Ambassador, to continue this discussion and I hope engage in topics that you’d like to — [Applause].