S. HRG. 114–764 U.S.-INDIA RELATIONS: BALANCING PROGRESS AND MANAGING EXPECTATIONS HEARING BEFORE THE COMMITTEE ON FOREIGN RELATIONS UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION MAY 24, 2016 Printed for the use of the Committee on Foreign Relations ( Available via the World Wide Web: http://www.govinfo.gov U.S. GOVERNMENT PUBLISHING OFFICE 28–984 PDF WASHINGTON : 2018 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Mar 15 2010 11:15 Apr 26, 2018 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\FULL COMMITTEE\HEARING FILES\MOVED TO RUN\28-984.TXT MIKE FOREI-42327 with DISTILLER COMMITTEE ON FOREIGN RELATIONS BOB CORKER, Tennessee, Chairman JAMES E. RISCH, Idaho BENJAMIN L. CARDIN, Maryland MARCO RUBIO, Florida BARBARA BOXER, California RON JOHNSON, Wisconsin ROBERT MENENDEZ, New Jersey JEFF FLAKE, Arizona JEANNE SHAHEEN, New Hampshire CORY GARDNER, Colorado CHRISTOPHER A. COONS, Delaware DAVID PERDUE, Georgia TOM UDALL, New Mexico JOHNNY ISAKSON, Georgia CHRISTOPHER MURPHY, Connecticut RAND PAUL, Kentucky TIM KAINE, Virginia JOHN BARRASSO, Wyoming EDWARD J. MARKEY, Massachusetts TODD WOMACK, Staff Director JESSICA LEWIS, Democratic Staff Director JOHN DUTTON, Chief Clerk (II) VerDate Mar 15 2010 11:15 Apr 26, 2018 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\FULL COMMITTEE\HEARING FILES\MOVED TO RUN\28-984.TXT MIKE FOREI-42327 with DISTILLER CONTENTS Page Corker, Hon. Bob, U.S. Senator From Tennessee ................................................. 1 Cardin, Hon. Benjamin L., U.S. Senator From Maryland ................................... 2 Biswall, Hon. Nisha Desai, Assistant Secretary, Bureau of South and Central Asian Affairs, U.S. Department of State, Washington, DC .............................. 4 Dhume, Sadanand, Resident Fellow, American Enterprise Institute, Wash- ington, DC ............................................................................................................. 29 Ayres, Alyssa, Senior Fellow for India, Pakistan, and South Asia, Council on Foreign Relations, Washington, DC .............................................................. 30 ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD Witnesses’ Prepared Statements: Nisha Desai Biswall ......................................................................................... 41 Sadanand Dhume ............................................................................................. 46 Alyssa Ayers ...................................................................................................... 51 Additional Questions Submitted by Members of the Committee: Responses to Additional Questions for the Record Submitted to Assistant Secretary of State Nisha Biswal by Senator David Perdue ...................... 57 Responses to Additional Questions for the Record Submitted to Assistant Secretary of State Nisha Biswal by Senator Christopher Coons .............. 64 Responses to Additional Questions for the Record Submitted to Assistant Secretary of State Nisha Biswal by Senator Edward J Markey ............... 66 (III) VerDate Mar 15 2010 11:15 Apr 26, 2018 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\FULL COMMITTEE\HEARING FILES\MOVED TO RUN\28-984.TXT MIKE FOREI-42327 with DISTILLER VerDate Mar 15 2010 11:15 Apr 26, 2018 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\FULL COMMITTEE\HEARING FILES\MOVED TO RUN\28-984.TXT MIKE FOREI-42327 with DISTILLER U.S.-INDIA RELATIONS: BALANCING PROGRESS AND MANAGING EXPECTATIONS TUESDAY, MAY 24, 2016 U.S. SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, DC. The committee met, pursuant to notice, at 10:03 a.m. in Room SD–419, Dirksen Senate Office Building, Hon. Bob Corker, chair- man of the committee, presiding. Present: Senators Corker [presiding], Rubio, Johnson, Gardner, Perdue, Cardin, Menendez, Shaheen, Coons, Murphy, Kaine, and Markey. OPENING STATEMENT OF HON. BOB CORKER, U.S. SENATOR FROM TENNESSEE The CHAIRMAN. The Foreign Relations Committee will come to order. We welcome everybody. The nature and scope of the U.S.-India relationship has changed significantly over the past couple of decades. Indeed, political, eco- nomic, and strategic cooperation between the United States and India is at an all-time high. There is considerable potential to further strengthen many as- pects of our relationship. For example, I am encouraged by efforts to expand U.S.-India defense and security cooperation specifically in the maritime sphere. As the world’s two largest democracies, it is essential that Washington and Delhi stand together to uphold democratic values, principles, and norms in the Indo-Pacific, par- ticularly as China seeks to gain greater influence in the region. India’s positive engagement and support for peace and stability in Afghanistan is also another reason for optimism. Unquestionably India has much to contribute to the international efforts to tackle complex global challenges. And there is little doubt that the overall trajectory of the U.S.- India relations is positive, and we talked a little bit about that be- fore the meeting. And again, we thank you for being here to testify. But there remain a number of challenges as well, including our economic and trade relationship. Onerous and unreasonable local- ization requirements, high tariffs, limits on foreign investment, and unparalleled bureaucratic red tape hinder further access to the In- dian market by American businesses. There are also serious concerns about the treatment of intellec- tual property in India. Prime Minister Modi has made repeated statements about undertaking economic reforms and making India (1) VerDate Mar 15 2010 11:15 Apr 26, 2018 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\FULL COMMITTEE\HEARING FILES\MOVED TO RUN\28-984.TXT MIKE FOREI-42327 with DISTILLER 2 more hospitable for foreign investors. And there have been some small movements in certain sectors such as defense. However, the rhetoric has far outpaced the reforms. Moreover, it appears that trade and investment remain principally transactional for the Indians rather than serving as indispensable tools to estab- lishing a genuinely free market economy. I am concerned that the robust rhetoric has created a widening expectations gap between Washington and Delhi. Of course, we must aspire as a government to achieve certain goals in any relationship, especially with India. But in the case of U.S.-India relations, the hopeful rhetoric has far exceeded actual, tangible achievements. I can think of no more poignant example than the U.S.-India civil nuclear cooperation agreement. Nearly 8 years have passed since the nuclear cooperation agreement was signed, and only in recent weeks have we been assured that contracts for U.S. companies are imminent. Of course, we need to see what those contracts actually look like as well. For these reasons, U.S.-India relations would be better served by a more sober and pragmatic approach that could go a long way to- wards laying the groundwork for genuine progress in areas that would be mutually beneficial to both the United States and India. I look forward to hearing the witness, and I want to thank you for being here. I look forward to our distinguished ranking member and his opening comments. And thank you for being here. STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR FROM MARYLAND Senator CARDIN. Well, thank you, Mr. Chairman, and I welcome both panels of our witnesses today. And thank you for calling this hearing. It could not be more timely with Prime Minister Modi’s visit scheduled early next month. It is important that this committee have this hearing to look at the deepening ties between India and the United States. It has been a relationship that has only grown stronger in recent years. We look at the 2-year anniversary of the Modi administra- tion, which has, I think, deepened the ties between the United States and India. And as you pointed out, the United States and India are the two largest democracies in the world. So there is an expectation that that relationship would get stronger and it has. Today I hope we will have a chance to explore our defense rela- tionship. Clearly we have a lot in common. The South China Sea and China’s activities on maritime security dictate that the United States and India work a closer defense cooperative arrangement to make sure that we maintain the commerce of the seas and the openness of the shipping lanes. We also need to deal with counterterrorism. We still recall the tragic terrorist episode in Mumbai in 2008. Three of my constitu- ents from Maryland were killed during that attack, and that is still fresh in the minds of the people of India. So I think strengthening our ties on counterterrorism, working towards further cooperation in South Asia is an important part of the growing relationship be- tween our two countries. VerDate Mar 15 2010 11:15 Apr 26, 2018 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\FULL COMMITTEE\HEARING FILES\MOVED TO RUN\28-984.TXT MIKE FOREI-42327 with DISTILLER 3 You mentioned the nuclear agreements on civil nuclear coopera- tion. India, of course, which has nuclear power and also nuclear weapons, is a country that we need to make sure that we have a close tie on the nuclear front, on nuclear safety, and nuclear pro- liferation. So I would be interested in hearing from our witness the status of the agreements between