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India’s Rise and the Future of the U.S.-India Relationship

Speaker: William J. Burns, Undersecretary of State for Political Affairs
Moderator: David R. Ignatius, Columnist and Associate Editor, The Washington Post
June 1, 2010, Washington D.C.
Council on Foreign Relations

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DAVID IGNATIUS: If people could please take your seats and cease conversation.

My name is David Ignatius. I am a columnist and associate editor for The Washington Post and will moderate today's discussion.

Let me make the ritual request -- not just a ritual; it's an absolute order -- to turn off your cell phones, pagers, whatever other device can be annoying and interrupt the conversation. I want to introduce Bill Burns, I'm sure known to everyone in the room, undersecretary of State for Political Affairs; has held that job now for two years. One of the few things that you could say, provides continuity in a direct way between the Bush administration and the Obama administration is the undersecretary for Political Affairs.

Before that, he was our ambassador in Moscow, where he met just- elected Senator Barack Obama, got to know him personally, building the relationship that's now important between the two of them. Before that he was assistant secretary of State for Near East and South Asia, monitoring one of, obviously, the key jobs in the department.

Today's conversation is on the record. Secretary Burns is going to give formal comments at the outset.

The event, really, that provides the platform for today's meeting is the strategic dialogue with India that will begin on Wednesday that will involve a range of senior officials from both countries and is part of the evolving U.S.-India partnership.

I'll ask Secretary Burns a few questions focused on that, but then we'll open it up to questions from you about whatever's on your mind. Don't feel that you're restricted to that subject.

So, again, the reminder that this is on the record today. Let me ask Secretary Burns to go ahead and give his remarks.

WILLIAM BURNS: Thank you.

Well, thank you very much for that kind introduction, and good afternoon to all of you. I truly am honored to speak at the Council on Foreign Relations, an institution for which I have great respect, and especially to share the stage with David Ignatius, a man for whom I have great admiration.

The issue that I've been asked to address today, India's rise and the promise of U.S.-Indian partnership, is one of those rarest of Washington species -- a genuinely bipartisan policy priority. I've been fortunate to play a small role in building our relationship with India through the past two U.S. administrations and just returned from my third visit to Delhi over the past year.

I watched with pride in the fall of 2008 as our two countries completed a civil nuclear agreement that helped transform our relationship. And I look forward to the new strategic dialogue that Secretary Clinton will launch with Minister Krishna two days from now, the first high-level dialogue of its kind between our two countries.

Like President Clinton and President Bush before him, President Obama has laid strong and consistent emphasis on the enormous stake that the United States has in India's emergence as a global power. When he invited Prime Minister Singh to the White House last year for the first state visit of the new administration, the president calledthe U.S.-Indian relationship one of the defining partnerships of the 21st century. And in a new National Security Strategy released last week, the president underscored that expanding our partnership with India will remain one of his highest priorities.

The simple truth is that India's strength and progress on the world stage is deeply in the strategic interest of the United States. Soon to be the world's most populous country and already the world's largest democracy, India is now the world's second-fastest-growing economy and a central player in the G-20. India plays an increasingly significant role in Asia and on a wide range of global challenges.

Growing ties between our societies, our economies and our governments have helped sustain and accelerate India's rise. The nearly 3 million Indian-Americans in this country provide a powerful connection between us, as do the more than 100,000 Indian students studying in U.S. universities.

Bilateral trade has more than tripled in the last decade, creating jobs and opportunities for both of us. Cooperation in counterterrorism and defense modernization is at unprecedented levels. Never has there been a moment when India and America mattered more to one another, and never has there been a moment when partnership between India and America mattered more to the rest of the globe.

As two of the world's leading democracies, we can help build a new global commons, an international system in which other democracies can flourish, human dignity is advanced, poverty is reduced, trade is expanded, our environment is preserved, violent extremists are marginalized, the spread of weapons of mass destruction is curbed, and new frontiers in science and technology are explored. That is the moment and that is the promise that lies before us.

The further truth, however, is that progress in U.S.-Indian partnership is not automatic. It requires continued hard work and vision on both sides. It requires patience and creativity, and it requires honesty in dealing head-on with concerns and doubts that arise on both sides.

We can't afford to gloss over such questions or pretend that they don't exist. Some in India do worry today that the United States seeks to re-hyphenate relations with India, that we see India mainly through the prism of preoccupations in Afghanistan and Pakistan, that we won't push Pakistan hard enough on terrorists who kill and threaten Indians, that we will hurry toward the exit in Afghanistan and leave India holding the strategic pieces.

Some in India worry that the new administration is tempted by visions of a G-2 world, that we have downgraded India because we see Asia exclusively through the lens of an emerging China, with India's role secondary. Some Americans, for their part, worry that it is India which self-hyphenates, that India sometimes has a hard time realizing how far its influence and its interests have taken it beyond its immediate neighborhood, that India doesn't always see as clearly as others do how vital its own role in Asia is becoming.

Some Americans worry that India is ambivalent about its own rise in the world, still torn between its G-77 and G-20 identities. And some Americans wonder if India has the drive to overcome obstacles to its own ambitious development efforts to cut through the license raj and speed up reform and attract more investment in more areas.

Let me speak plainly to those concerns. This administration has been and will remain deeply committed to supporting India's rise and to building the strongest possible partnership between us. A third of the U.S. Cabinet has visited India in the first 16 months of the new administration, and President Obama intends to visit later this year.

We have followed through energetically on our commitment to fulfilling the civil nuclear accord, completing a complicated reprocessing agreement nearly six months ahead of schedule.

The strategic dialogue that Secretary Clinton and Minister Krishna convene later this week will bring together Cabinet-level representatives on both sides to consider new initiatives in areas like education, energy, counterterrorism and agriculture, and launching new dialogues on regional issues, from East Asia to the Middle East and Africa.

Of course we seek a healthy relationship with China, as India itself seeks. But we do not see relations in Asia as a zero-sum game. Instead, we attach great significance to India's expanding role in East Asia and welcome our partnership across the region.

Of course the United States attaches considerable importance to relations with Pakistan, but those relations do not come at the expense of India. We refuse to accept the notion that somehow we can have strong relations with only one country in South Asia at a time.

Of course the United States is committed to progress in Afghanistan, but we also highly value India's role in building economic and social opportunities in Afghanistan and see India's continued involvement there as a key part of that country's future success, not part of its present problems.

And of course we have an interest in better relations between India and Pakistan, but we will not inject ourselves into issues that divide the two governments unless India and Pakistan ask for our help. And we will continue to urge Pakistan to take decisive action against the violent extremists who threaten its own interests as much as they do the security of India and America.

To put it simply, the only hyphen that we will pursue with respect to our relationship is the one that links the United States and India.

Realizing the full potential of our partnership in the years ahead will require some important choices from both America and India. Partnership means more than just having shared values and common interests. It also means developing complementary policies and habits of cooperation.

Before we look at the choices ahead of us, it's useful to take a step back and recall how far we have come in recent decades through three profound and interconnected transformations. The first is the post-Cold War transformation of the international system. The global architecture to which we have long been accustomed, centered on transatlantic structures, is under renovation. We need to adjust to the realities of 2010, not 1945 or 1989. New powers are emerging, especially in Asia. Globalization and sweeping domestic reforms have helped unleash extraordinary growth in China and India. More people have been lifted out of poverty in those two rising countries than at any other time in human history. Mutual dependence has grown as global financial connections have spread. Power is more diffuse, and challenges are more intertwined.

The United States not only recognizes these new realities, especially in Asia. It seeks to build even stronger partnerships with emerging powers such as India to adapt international architecture to support the roles their influence warrants and to share responsibility for the common challenges of the 21st century.

A second transformation is India's own dramatic economic and political evolution, which has both driven and benefited from the wider changes in the international system. Twenty years ago, India was deep in economic crisis and not well-integrated into the global economy. Thanks to the far-sighted reforms led by then-Finance Minister Manmohan Singh, India liberated its markets, embraced technology and set off rapid economic growth, averaging 8 percent annually.

India's urban middle class is booming, and it is a leading global player in information technology and telecommunications. India has earned a place at important global tables like the G-20. With more than a billion people living in a vibrant democracy, demonstrating every day the power of unity and diversity, of tolerance and of openness, India offers a model for others.

But huge challenges remain, as Indians know far better than any American. One-third of the world's poor still live in India, many in rural areas, many without electricity, and many untouched by the economic progress so evident elsewhere. More than half a billion people in India still live on less than two dollars a day.

Education is underdeveloped, despite massive advances in literacy. As Prime Minister Singh has so eloquently argued, India's great national task in the decades ahead is domestic. To turn the historic economic gains of the last 20 years into inclusive growth that lifts millions more out of poverty, that revitalizes rural India, and that creates a future of possibility for more and more Indians.

And that leads me to a third transformation: The remaking of the U.S.-India relationship over the last decade. Nowhere was that shift more vivid than at the completion of the civil nuclear agreement between President Bush and Prime Minister Singh in 2008.

Beyond its potential contributions to jobs, growth and energy cooperation, it brought important new Indian commitments to global non-proliferation goals. At a deeper level, the civil-nuclear accord cut through much of the misapprehension of decades past.

Ultimately, it was about trust: trust in India's future, trust in India's rising role and capacity to take on the responsibilities that come with it; trust in American intentions and capacity for genuine partnership; and trust in the conviction that Indians and Americans have far more to gain by working together than we do by working apart.

So where do we go from here? How do two leaderships and two peoples with so many shared values and common concerns help shape a more secure, stable, democratic and just international system within which India can complete its historic task of modernization and within which the United States can revitalize our economy and our society?

How do we work together in Asia, whose rise and dynamism will have such a large impact on everything else that we do? How can America contribute to India's inclusive growth? And how do we widen the arc of our cooperation in the years ahead?

Let me start with Asia then move outward to the wider global setting and, finally, offer a few thoughts on how America can contribute to the next phase of India's modernization.

India's reemergence as an Asian power is becoming an increasingly important feature of the world's most dynamic region. Rapid economic growth as driven the expansion of India's strategic horizons as it seeks to secure the resources and markets needed to fuel its continued prosperity. It is natural for India to look east where the soft power, long visible everywhere from the temples of Ankara to the food courts of Singapore to the crowds flocking to see the best of Bollywood is increasingly complimented by its economic power.

The huge Indian consumer market exerts a particularly powerful attraction for the export-driven economies of Southeast Asia and resulted in the conclusion of an ASEAN-India free trade agreement.

Widening economic interests have reinforced India's readiness to share a responsibility for securing the global commons in Asia, for safeguarding the sea and air routes on which much of the global economy depends.Secretary Gates has welcomed India's increasing role as a net security provider in the Indian Ocean and beyond. Nowhere was India's leadership in this area more evident than in its response to the 2004 tsunami. Even while dealing with its own tragic losses, India and its navy contributed rapidly and impressively to disaster relief efforts.

It is very much in the American interest for India to build on this role in the years ahead. And it is no coincidence that other large Asia-Pacific democracies -- Japan, Australia and South Korea -- are also engaging more closely with New Delhi and cooperating more systemically to security issues.

The United States supports broadened Indian participation in the institutional architecture of the Asia-Pacific region. India's voice as a successful democracy is important in a region where courageous leaders like Aung San Suu Kyi struggle in the non-violent footsteps of Gandhi.

We share with India an interest in regional stability and the geopolitical balance which maximizes opportunities for economic and human advancement while minimizing the risks of conflict and mistrust.

Central to that positive vision is a healthy relationship between India and China. As India national security adviser, Shankar Menon, noted wisely, our experience suggests that there is space in Asia and the world for both India and China to grow and develop and for us to do so in a way that is mutually reinforcing if we both wish it.

That approach echoes President Obama who has maintained that spheres of cooperation, not competing spheres of influence, are a source of strength for Asia.

As India looks east, its role in its immediate neighborhood, obviously, remains crucial. We have complimentary interests on the subcontinent, and the United States supports India's leadership in encouraging the emergence of a stable democratic government in Bangladesh, easing tensions in Nepal, and promoting peace and reconciliation in Sri Lanka.

Neither of us intends to outsource South Asia policy to the other, but more often than not, our policy prescriptions converge. The United States welcomes recent steps by India and Pakistan toward constructive dialogue, including the planned meeting in Islamabad in July between Minister Krishna and Minister Qureshi.

The president has welcomed Prime Minister Singh's willingness to take political risks in order to lessen tensions with Pakistan and has promised at the United States will continue to support those efforts. None of us, least of all Indians and Pakistanis, can afford a resurgence of tensions between two nuclear-armed states. And none of us, least of all Indians and Pakistanis, can afford to see groups with global terrorist ambitions like Laskhar-e-Taiba continue unchecked.As Secretary Clinton has emphasized to the Pakistani leadership, we have no time to waste in going after that common enemy as hard and as fast as we can.

It is similarly vital that we make common cause in supporting a stable future for Afghanistan. During President Karzai's recent visit to Washington, President Obama reinforced the long-term American commitment to an Afghanistan that can defend itself and provide for its own people and that cannot, again, become a platform for violent extremists.

That is a hugely complicated task and one that will not come to an end in July 2011. It will require strong contributions from many countries, including India, whose important development assistance to Afghanistan already totals over $1.3 billion.

India's leadership and the potential for U.S.-Indian partnership extends well beyond Asia. India's role in promoting global security is growing. India is, today, one of the largest troop contributors to U.N. peacekeeping operations building on a rich tradition of India military contributions, including in World War II.

The India navy is a leading player in counter-piracy operations off the Horn of Africa, and it is a striking fact that the U.S. military now holds more bilateral military exercises every year with India than any other nation. Expanded U.S.-India defense cooperation, unimaginable not so long ago, is a valuable means of supporting our shared interest in India's broadened international security role.

Our stake in India's defense modernization is real and increasing, and defense trade has taken off since our 2005 framework agreement. Two American companies are among the leading competitors today for a $10 billion sale of 126 advanced fighter aircraft to the Indian air force, currently the world's biggest defense tender. Timely completion of several key foundational agreements, such as a basic logistics supply accord, will open the door to even greater bilateral cooperation.

Building on the success of the civil-nuclear agreement, India is contributing constructively to global nonproliferation and nuclear security efforts. India has made clear its opposition to a nuclear- armed Iran and voted again at the IAEA Board of Governors meeting last November to hold Iran accountable for its failure to live up to its international obligations.

At the nuclear security summit in Washington in April of this year, President Obama praised India's leadership in launching a regional nuclear security training center. India and the United States have both suffered devastating terrorist attacks with the scars of 9/11 and 26/11 still fresh in both our societies.

Since the horrific assault on Mumbai in November 2008, U.S.-India cooperation in counterterrorism has deepened rapidly in the interestsof both our countries. Partnership in cybersecurity is another area ripe for development.

Our strategic dialogue this week elevates India to the rank of our most important global partners allowing us to discuss and coordinate policies of global import including on the future shape of the international economic system and on what we can do together to promote human development in other parts of the world.

Prime Minister Singh is one of President Obama's most valued partners in the G-20, and the United States strongly supported the recent expansion of India's World Bank voting share. Secretary Geithner traveled to New Delhi in April explicitly to consult on global stimulus plans, another clear indication of India's economic prominence.

In addition to the regular dialogue we have begun on East Asia, we look forward to quiet, systematic exchanges on other regional issues such as the Middle East and Africa where we can benefit from each other's perspectives and each look for ways to contribute to peace and security. India's expanding global role will naturally make it an important part of any future consideration of reform of the U.N. Security Council.

We've found greater common ground on climate change, and the Copenhagen Accord could not have happened without leadership at the highest levels from India. India is also a strategic partner in the new global Feed the Future initiative, and together we can help promote agricultural progress and food security in the developing world.

We can also compliment one another's efforts to promote better health conditions in the poorest countries in the world such as through India's new effort to provide affordable medicine in Africa.

India's widening role and contributions in Asia and around the world obviously hinge on its ambitious modernization plans at home.

As Prime Minister Singh has stressed, India's primary challenge is one of economic development. The United States has both a profound interest in India's success, and the capacity to contribute to that growth in ways that benefit us both. While the United States is already one of the largest foreign investors in India, much more is possible. McKinsey & Company reports that just 80 percent of the India of 2030 is yet to be built.

India has announced over $1 trillion worth of new projects to build highways, airports, electrical power stations, and other desperately needed infrastructure, creating major potential opportunities for American firms that can drive job creation and innovation in both our countries. More rapid Indian consideration of reforms, including the easing of caps on investment in critical sectors would also help, as Indian officials themselves have argued. So would more rapid movement by both of us toward a bilateral investment treaty.

The private sector has been a trailblazer in bringing our free market democracies together, and a reinvigorated U.S.-India CEO forum due to meet again in three weeks can offer a very useful, non- governmental perspective. Rapidly deepening commercial ties between our two countries are concentrated in the knowledge driven high end of our economies. And are critical to the global competitiveness of both U.S. and Indian companies.

We can and we should transform our export control relationship befitting the 21st century U.S.-Indian strategic partnership. That will open the door to historic new cooperation in space, and a number of other areas for high tech cooperation. In addition to expansion of trade and investment, U.S.-Indian partnerships in agriculture and clean energy could propel a second Green Revolution, (chromatically ?) linking to disparate but vital initiatives.

In the agriculture segment of our strategic dialogue, we are already exploring innovative new technologies and techniques -- cooperative advances in weather forecasting, and the practical value of streamlining farm to market integration. Equally useful is our ongoing exploration of other forms of Green cooperation, especially given the environmental impact of India's rapidly urbanizing population and rising energy consumption.

Next year, India will be the largest single-country recipient of U.S. climate funding, because India's success in charting a new energyfuture is deeply in America's interest. New energy technologies can help India supplement coal with hydro, wind, solar, nuclear and other clean renewable power sources. Urgent innovation in these areas can fuel India's continued high growth rates while sparing the world billions of tons of potential carbon emissions by 2030.

Implementation of our civil nuclear agreement can be particularly valuable in this regard. U.S. companies are prepared to support the expansion of India's civil nuclear infrastructure with two reactor park sites already identified. As Prime Minister Singh argued publicly last week, it is deeply in India's self interest for its parliament to enact liability legislation consistent with international standards so that it can attract the best foreign investors at the most competitive rates and build the role and capacity of its own companies.

India's development of its greatest resource, its immensely talented people, is another focus of U.S.-Indian partnership. We are already working together to expand cooperation in health, where USAID continues to help our Indian partners eradicate polio and attack HIV- AIDS, and provide nutrition to the 70,000 Indian babies born every day. Meanwhile, Indian doctors and researchers contribute every day to medical advances in many fields, benefiting both of us as well as the rest of the world.

With half of its population under the age of 25, India's workforce will expand significantly over coming decades. But this youth bulge could quickly become a liability if only 10 million out of 220 million secondary school students go on to post-secondary education, as currently projected. American universities can help fill that gap if the Indian parliament passes new legislation that would open doors to foreign universities setting up campuses in India.

The Singh-Obama 21st Century Knowledge Initiative offers new funding to increase linkages between American and Indian universities. Our governments have also doubled the funding for the Fulbright-Nehru scholarship program. As Kapil Sibal, India's dynamic minister of human resource development will discuss at the Council later today, cooperation in education is an extremely valuable ingredient in U.S.- Indian strategic partnership.

While the potential of our bilateral relationship is limitless, I want to assure you that my remarks this afternoon are not. So let me conclude simply by reemphasizing the central transformational fact about our relations in the years ahead. India and the United States have reached the stage where our individual success at home and abroad depends on our cooperation. That is what is different about our relationship today. That is the promise unlocked by the civil nuclear agreement and all the advances of recent years.

That is the big idea that can animate our partnership for decades to come. And that is the challenge before us symbolized by the inauguration of the first ever strategic dialogue. How to widen thearc of our cooperation, how to build systematic habits of collaboration, how to turn the transformational accomplishment of the civil nuclear accord into partnership across a much broader front.

I have no illusions that this will be neat or easy. It will take a lot of time, and a lot of effort. Differences will occur and doubts will linger. But at this extraordinary moment, we have leaderships who understand and respect one another, broad public and bipartisan support, a growing record of trust on which to build, and remarkable scope for partnership in Asia in promoting global security and prosperity, and in India's historic modernization.

If we get this moment right, Indians and Americans can have an enormously positive influence on each other's future, and on the course of the new century unfolding before us. Thank you very much. (Applause.)

IGNATIUS: Thank you, Mr. Secretary. That was a comprehensive, very helpful overview. I want to get down to the weeds just a little bit, and focus on one of the items that you mentioned, and that is the India-Pakistan bilateral relationship. I think it's fair to say that since Prime Minister Singh's visit to Washington last November, there is a growing understanding both here in Washington and in Pakistan that he provides an unusual opportunity because of his conviction that India will not be secure unless it has a better relationship with a stable Pakistan.

So there have been hopes that there might be a revival of the kind of back channel dialogue between India and Pakistan that took place earlier in this decade. And I'd ask you to summarize as best you can for this audience where the dialogue stands. There's been an announcement of renewed dialogue that has made some people think the back channel is back. Where is it now? And what, if anything, can the U.S. do to encourage a process that's so obviously -- is in our interest as well as India's and Pakistan's?

BURNS: Well, I think we're certainly encouraged, David, by the announcement that the Pakistan and Indian foreign secretaries are going to meet in June. The Indian home minister, Mr. Chidambaram, is also going to be traveling to Pakistan for a regional meeting, but also the opportunity to talk to his counterpart, and then in July the two foreign ministers are set to meet in Islamabad.

So, I think all of that is encouraging. The exchanges that Prime Minster Singh has had with the Pakistani leadership have also been encouraging and I think are a mark, as you suggested, of Prime Minister Singh's willingness to take political risks in the interest of India, and the interest of Pakistan as well.

From the perspective of the United States, we want to do everything we can to encourage that kind of a process, mindful of all the sensitivities that are involved. I think Prime Minister Singh has made clear the importance that he and that India attaches to effectivePakistani efforts against terrorists, against violent extremists, particularly those who were responsible for the attack in Mumbai in November of 2008.

And Pakistanis have stated that they're going to pursue the trial of the suspects in the Mumbai attacks rigorously. And I think it's very important for all of us -- not just the United States, but the rest of the international community -- to see that happen and to see effective measures taken against violent extremists who threaten not only India, but Pakistan's own security.

IGNATIUS: Given the centrality for India of the issue of terrorism, and the memories of Mumbai, is there anything the U.S. can do in advance of this Islamabad meeting this summer that would assist in confidence building?

Any way of providing a framework for sharing information for improved intelligence flows so that the Indians feel that they have a real partnership beginning in security?

BURNS: Sure.

Well, I think since the Mumbai attacks, you've seen a dramatic expansion of our law enforcement/counterterrorism cooperation with India. In practical terms, you know, improving the sort of forensics capacity, exchanging information in ways that didn't occur before that. And I think that has built greater confidence between security agencies on both sides and certainly reflects the very strong American commitment to fighting violent extremism in that part of the world.

And I think that also is a contribution to creating an atmosphere in which hopefully India and Pakistan can also make progress.

IGNATIUS: One more question I want to ask you, which I'm sure our audience would be too polite to pose as directly as I'm going to. It's my understanding that the U.K. and France have indicated that they would support membership in the U.N. Security Council for India.

So the obvious question is: What does the United States think about that? Is that something we think would be a good idea? I don't mean in the long run, in the abstract, I mean, you know, soon -- now? What do you think?

BURNS: Well, that's a very good question. (Laughter.)

IGNATIUS: That always proceeds a non-answer.

BURNS: Yeah -- well, I'll see if I can surprise you a little bit.

But, no. As I said my remarks, India's evolving role underscores the fact that it's going to have a very important part to play in any consideration of reform at the U.N. Security Council.

And it's obvious that the Security Council, as has been the case with other parts of international architecture over the last few years, is an issue that needs to be addressed so that it reflects the realities of 2010. Now, obviously, we want to try to do that in a way which is going to preserve the effectiveness of the Security Council, but this administration has made clear not only its openness to reform and some expansion of permanent membership in the Security Council, but we've also underscored the importance we attached to India's role.

So I think India's going to be a central part of the consideration that is bound to come of Security Council reform.

IGNATIUS: I'm going to have to think about that for a little while. (Laughter.)

BURNS: The answer was --

IGNATIUS: But I think that means that we support India's membership on the Security Council as part of a broader process of reform.

BURNS: Just as I said. I mean -- (laughter) -- you know, I'm reconfirming all your worst suspicions about State Department bureaucrats. (Laughter.)

No, I do very much understand the significance of Security Council reform. I think it's an important issue for the United States to address and I think India's going to be very much a part of that process.

IGNATIUS: Fair enough.

Let me turn to the audience for questions. Wait for the microphone to arrive. State your name and your affiliation.

Barbara.

QUESTIONER: Barbara Slavin. Always good to see you.

I'm going to switch you to two other Is -- I'm sure you were ready for this.

And let me ask first: Is the United States preparing a response to the Iranian letter to the IAEA where they formalized this Turkish- Brazilian deal? When would you expect that response to go? Do you anticipate talks with Iran in Vienna or anyplace else about this?

And then the other question is, how much has the incident off the shore of Gaza affected U.S. plans to impose sanctions on Iran? Do you think it's going to cause a problem for us in the Security Council?

Thank you.

BURNS: Thanks -- thanks, Barbara. On the first part of your question, we've been consulting with our partners in support of the original IAEA proposal with the Russians and with the French about what we believe are shared concerns about the proposal that the Iranians made most recently with regard to the Tehran research reactor.

I think it's important to underscore, as you well know, that a core concern of the international community has been Iran's unwillingness to live up to its international obligations; it's unwillingness since the meeting on the first of October last year to engage directly with the P-5 plus one, with a focus on international concerns about its nuclear program.

The Tehran research reactor proposal is a confidence-building measure. Its value as a confidence-building measure has diminished over time, for the simple fact that Iran's stockpile of low-enriched uranium has increased considerably. Whereas in October, the 1,200 kilograms that the IAEA proposed was three-quarters of Iran's stockpile, now it's about half. And in the meantime, Iran has also moved ahead to enrich to 20 percent.

So those are just some of the concerns that we're have. And we're consulting with the Russians and French and do plan to, at some point, to make those concerns clear to Mr. Amano. I can't give you an exact date for that, but that's certainly what we're consulting with our partners about now.

With regard to the recent tragedy off the coast of Gaza, I think we joined in a U.N. Security Council presidential statement in the early hours of this morning that made clear the fact that we and the rest of the international community deplores the loss of life; that we've supported a call for a full investigation of what happened; we've underscored the need to deal with the ongoing humanitarian tragedy in Gaza. And we've also underscored the importance that I think all of this suggested for continuing with the proximity talks and hopefully direct negotiations that Senator Mitchell has begun.

We intend, based on the agreed text that we reached with the permanent five members of the Security Council, to continue to move ahead towards a new resolution in New York, focused squarely on the reality that I mentioned before, and that is that Iran has thus far been unwilling to engage with the international community on the concerns that the IAEA underscored again yesterday when it released its most recent report.

IGNATIUS: In the -- yes, sir.

QUESTIONER: I'm Ambassador Petersen from Denmark.

In the international architecture today, you would say that the U.N. Security Council plays a very important role, but also that it's fair to say that among the ad hoc structures, contact groups for the Middle East, the Balkans, Iran is playing an increasingly important role -- G-20, G-8. Where is the administration at this point in time in history with a visionary president in sort of trying to determine where it should be on defining, redefining enlarging the U.N. Security Council with global powers like India, others?

Could you elaborate a little bit on that?

BURNS: Well, as I said before, I think it's an important part of the international architecture that needs to be renovated to reflect the realities of 2010.

We've already seen, as you've mentioned, considerable movement in a number of other areas -- the emergence of the G-20 in the wake of a global financial crisis; ad hoc groups, whether it's the P-5 plus one or the six-party talks on North Korea that have assumed increasing importance.

So, you know, on Security Council reform it's an issue that this administration recognizes as extremely important. We want to go about it in a way that's going to preserve the effectiveness of the Security Council, but we also recognize that that means that the realities of 1945 don't apply today. And that means that for countries like India and for other countries, we need very much to consider how their increasing role in global affairs is matched by the responsibilities that they can discharge in the most important parts of the international architecture.

So it's an issue that we look forward to taking on.

IGNATIUS: The second row, please.

QUESTIONER: Tety (sp) Schaffer from CSIS.

BURNS: Hi, Tety (sp).

QUESTIONER: Nice to see you.

And I wanted to ask you a bit -- to expand a bit on this idea of a dialogue with India on the Middle East.

It has struck me for a long time that there are important shared interests between India and the United States in the Persian Gulf, but there are also some very great differences in perspective regarding Iran.

First, do you expect that these subjects will come up in the course of the next week? And second, where would we like to take them?

BURNS: Well, I think it's very important -- as I described and as you know very well -- given India's expanding role around the world and it's expanding interests, for us to find a way to engagesystematically on East Asia issues, which have already begun; on the Middle East and the Gulf; in Africa and other places. Not because we're going to agree on everything, because we do have differences on some issues, but simply because it's important for us to understand one another's positions better, because I think we can complement one another's efforts in some important ways.

And so we will be continuing those discussions over the course of the next week. And we'll continue that with, you know, delegations of, you know, my colleagues who go out to Delhi as well.

We want to make this a systematic effort in a way that hasn't really happened before. And I think that's in both the interests of India and United States -- not because we're going to homogenize our approach to these issues, but because I think we have something to learn from one another and I think we can benefit from one another's perspective.

On Iran, I mean -- you know, we don't necessarily have a uniform view of the issue, although on the nuclear question, India has made quite clear its opposition to a nuclear-armed Iran. It has an admirable record of implementing previous security council resolutions. As I mentioned in my remarks, it's been quite straightforward in holding India accountable at the IAEA board of governors when its failed to meet its obligations, and so that's an issue on which it's also important for us to continue to stay in close touch.

IGNATIUS: Gentleman all the way in the back row and then I'll call after -- after him, on the gentleman just in from of him.

QUESTIONER: Thank you very much -- (inaudible) -- from India -- (inaudible) -- Asia Today.

Mr. Secretary, you have analyzed India-U.S. relations in a great way, but you left only one issue as a question, serious question. India's entry in the United Nations Security Council. I don't why deliberately, or you didn't want to mention this -- you think, are you going to make this case now, that India will be better sitting next door to you in the United Nations Security Council than China? Because you have many times, hard times convincing China on many issues, and I think, and many people think in India, time has come for the United States to support India's membership in the United Nations Security Council.

BURNS: I thank you for your question, sir. But I did actually mention in my remarks India and the Security Council. And as I've said in the meantime, we recognize, very clearly, India's increasing global role. We recognize the importance of reform of the U.N. Security Council; we're open to expansion of permanent membership of the council and we believe that India's going to have a central part to play in the consideration that's going to come of that reform of the U.N. Security Council.

IGNATIUS: There was a gentleman who had his hand up sitting just in front of the previous questioner. Yes, sir.

QUESTIONER: Ambassador Burns, Aziz Haniffa of India Abroad.

BURNS: Hi.

QUESTIONER: How are you? Good to see you.The administrations seems to have gone on overdrive in terms of emphasizing the U.S.-India strategic partnership. And we had Ambassador Blake here last week, and here you are, and then President Obama in fact is going to even be coming down the street for the reception that Secretary Hillary Clinton is hosting for the Indian delegation and Foreign Minister Krishna. Does this say something about the U.S.-India relationship in terms of, in a way, being defensive? Talking that, you know, it's not hyphenated. Does this say something that there may be something wrong? One year after the Obama administration has been in town -- and also the fact that you had -- President Obama had the Indian Prime Minister over for a state visit, et cetera. And you still have all the analysts and commentators talking about concerns in terms of the strategic partnership. The very fact that you keep emphasizing and emphasizing that this is a very solid, U.S.-India strategic partnership.

BURNS: Well, I think that the facts bear out the position that I argued. And that is that I'm very well aware of the historic progress that was made in the last administration in the partnership between the United States and India, and I was lucky to be able to contribute to it, last year, the last administration. And what I think you've seen demonstrated is the remarkable continuity in terms of the continuing commitment of the United States, at the very highest levels, to that partnership.

If you look at the practical steps that I mentioned, a fulfillment of our commitment to follow through in the civil nuclear accord, a reprocessing agreement which was concluded six months ahead of schedule, an agreement on end-use monitoring, progress in defense cooperation reflected in the C-17 sale worth almost five billion dollars, that's almost complete, progress in counter-terrorism cooperation, as I mentioned to David before. Those are all steady, practical steps that I talked about before. So you'll have to forgive me if from my perspective, I don't see that as overdrive. I see that as a steady, consistent effort running from the last administration through this one to underscore the significance of our partnership. And I think that's a view shared by Prime Minister Singh and we look forward, very much to continue to deepen it in the years ahead.

IGNATIUS: Yes, sir.

QUESTIONER: Bruce MacDonald with the United States Institute of Peace.

There's no doubt about the fact that this civil nuclear agreement between the United States and India has played an important role in strengthening relations. There has been a little down side to it though, of course, in the question about nonproliferation concerns. And we took a little heat in the recently -- the recent nonproliferation treaty review conference in New York. Change in that is probably unlikely, but going forward, what can we do to help ease or resolve the tension between that agreement and the little bit of acontradiction? Because with India not being an NPT signatory, some countries are saying, gee, why shouldn't we get the same break that India has?

What could we do to try to ease that tension that would be in the interest of the United States?

BURNS: It's a fair question, and I think the best thing that we and India could continue to do is follow through on the agreement and then look for other opportunities to demonstrate our shared commitment to curbing the spread of nuclear weapons and weapons of mass destruction and improving the safety and security of existing nuclear material sites.

I mean, I think that was reflected in the proposal that Prime Minister Singh made at the Nuclear Security Summit in April, to set up a regional nuclear security training center so that India, which has a very, very good record at preventing the proliferation of its materials and at safeguarding its own installations, can contribute to the same kinds of high standards of security on the part of other countries that are attempting to build civilian nuclear installations. I mean, I think that's one example of what we continue to do.

We also work together on some of the biggest nonproliferation challenges. I mentioned Iran; North Korea is certainly another one. And I think we can continue to work together in not only upholding India's unilateral moratorium on testing, but also working together with regard to the physical material cut-off treaty, which both of us have expressed support for. So, I think there are lots of opportunities for us to make very clear our continuing commitment to basic principles of nonproliferation.

IGNATIUS: Karen DeYoung.

QUESTIONER: Karen DeYoung from the Washington Post.

I wanted to try to probe a little deeper on David's question about India-Pakistan relations. The United States has played a role over the past several decades at moments of high tensions between the two of them, trying to slow things down on both sides. I wonder now, with this closer relationship with both of those governments, you have a situation where the United States has actually become a player in a way, where the Indians think the United States is too soft on Pakistan -- letting them off the hook, letting them off the hook on terrorism issues, Pakistanis think the United States is giving India nuclear advantage, giving them a weapons advantage. Why can't you play a bigger role? What good is it having these very close -- increasingly close relations with both countries and not pushing a little harder for them to resolve some of the issues between them?

BURNS: I think, Karen, we can and we will continue to provide support and encouragement. I think -- you know the ways in which we have deepened our counter-terrorism and law enforcementcooperation with India since the Mumbai attacks are a contribution to this.

Certainly we've been very direct, Secretary Clinton has as well as other members of the cabinet and the president himself about the importance we attach to Pakistan following through in its own self- interest. In fighting effectively against violent extremists, and we don't distinguish amongst terrorist or violent extremist groups who operate out of Pakistan. That means operating just as effectively against groups like Lashkar-e-Taiba as well.

So I think we want to do everything we can to encourage progress and relations between Pakistan and India and we will continue, as President Obama has made clear publicly, to offer that kind of support.

IGNATIUS: I have four people on my list and about as many minutes. So I'm going to cut off the hand recognition here.

Yes, Ma'am, in the third row.

QUESTIONER: Thank you very much for your overview, it's quite sweeping. Jan Piercy from ShoreBank.

I just want to ask you, you referenced prime minister's emphasis on India's own internal inclusive economic development. Could you say a word about financial sector reform and what role this may play in access to -- credit access to finance?

BURNS: Well, I'm not an expert on that issue, so I don't want to mislead you. But I do think, as I said, that you know, it's valuable as the Indians look as their own self-interest to look at issues like the kind of caps or restrictions that exist in certain sectors -- insurance is one of them, to look at them in ways that can benefit India and the competitiveness of Indian companies over the long term as well. And so those are things that, you know, thoughtful Indians are advocating as well, and we think that that'll help expand and amplify the kind of contribution that the United States and other foreign investors and foreign companies can make in India.

QUESTIONER: Jan Lodal, Atlantic Council.

Just an addendum to Bruce McDonald's (ph) very good question and your good answer.

Is it possible in the strategic dialogue to talk a little bit about the actual strategic relationship between Pakistan and India? Many people think that it's still the most risky place in the world with regard to crisis stability and the possibility of nuclear weapons being employed. And there's things associated even with India's own force structure that are problems there.

Has the relationship advanced to the point where we can openly discuss those kinds of things?

BURNS: Well, I think the strategic dialogue provides the kind of framework in which we can talk about lots of different issues. I mean, as I mentioned in my remarks, there has been no shortage of questions on the Indian side about our policy in Afghanistan, about our relationship with Pakistan.

And I think we've made a very concerted effort in recent months to try to consult carefully with India and explain clearly what we're about and what we're not about in those areas. And I think that can help create a greater confidence in our relationship that, over time, can lead to discussion of a whole range of issues.

So, you know, I can't predict for you the exact agenda in the meetings that are going to take place this week, but I think we're creating a climate of confidence in which lots of things are possible.

QUESTIONER: Let me just follow up on that question a little more pointedly.

At a time when the India, Pakistan border is a flashpoint -- it's a place where a major war could begin -- is it wise for the United States to be planning to sell such a large weapons package to one side -- the advanced fighters? Why does that make sense given the dangers?

BURNS: You're talking about sales to --

QUESTIONER: To India.

BURNS: India. Well, I mean, we've looked very carefully at the kind of sales that we're discussing consistent with the, you know, wider role that I think India is playing in Asia and in global security, its commitment, I think, to helping to secure sea and air trade routes that are important to all of us in Asia.

So we're very careful in how we try to calibrate those sorts of sales, and we think that's commensurate with India's expanding role as well as with our own interests. And we try to apply the same standard in looking to what our significant arms sales to Pakistan as well, focused, in the case of Pakistan, mainly at the current stage on how we can help enhance its capacity to deal with the immediate challenge it faces in terms of, you know, fighting against violent extremists.

And so, you know, you look at the significant package that we're proposing for Pakistan, it's very much focused on those kind of issues. And so, you know, we've been very careful I think in how we've approached the sorts of sales or transfers that we make to either India or Pakistan.

IGNATIUS: Two remaining questioners, and I'm going to ask you to do the two questions and then let Secretary Burns respond to both.

First, you, sir, and then you, madame, in the third row.

QUESTIONER: Yeah. Rob Cortel (ph) with Intelix. A business question.

India -- one of the residuals of Indian socialism is that it's the world's largest protected semi-closed market to Americans and others. What are we doing constructive there to open it up?

IGNATIUS: Yes, ma'am?

QUESTIONER: And I'm Gabby McCoy (ph) with 20/20 Capital.

My question is about internal terrorism in India, specifically, the Naxalites. And I'm curious to what extent the United States and India are collaborating to help the Indian government and military address the Naxalite issue.

BURNS: Well, I think on your question, first, I mean, you know, the United States is, you know, committed to doing everything we can to help not only India but other partners around the world fight against terrorist groups. And as I said, we've greatly expanded our exchange of information and law enforcement cooperation in recent years.

I think India clearly has the capacity to deal with those kind of challenges itself, but, you know, they represent a very serious threat as you see in the incidents in attacks that have been occurring recently.

So we'll continue to provide whatever kinds of support we can to India to help enhance its capacity to deal with a terrorist threat that's a very real one.I think with regard to the question about bureaucratic red tape, you're right, and more importantly than whether you or I recognize this, a lot of thoughtful Indians, starting with Prime Minister Singh, I think, understand that India's modernization, its very ambitious development programs are going to hinge, to a large extent, to cutting through some very bad habits of bureaucratic red tape and bureaucratism over a number of years.

It's going to take time to cut through that. What we've tried to do is help demonstrate in certain sectors the benefits for India's economy and India's modernization when you move in that direction. And we will keep pushing as hard as we can both in support of individual American companies who are competing for business there -- we make that a very high priority both at our embassy, whenever I travel there or my colleagues travel to India -- not as a matter of doing favors for the United States but in India's own self-interest.

And I think, you know, by the same token, we're also trying to lock at ways in which we can upgrade our approach to some of those issues and take a look at procedures like export controls which have their roots in a different era in U.S.-India relations and see if we can't update them to reflect, you know, the benefits and the potential of a 21st century partnership.

So there's more that we can do as well.

IGNATIUS: Mr. Secretary, you have given us a good roadmap for what is genuinely a big deal for the United States. I know everybody in the room wishes you good luck this week in the strategic dialogue.

Thank you so much for coming and being with us.

BURNS: Thanks, David. (Applause.)

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