Under Secretary of Commerce For International Trade Francisco SÁnchez
United States-India Business Council
Wednesday, June 30, 2010
As prepared for delivery
Thank you, Lisa, for welcoming me, and thank you, Ron, for having me back so soon after the Strategic Dialogue. A few weeks ago, Larry Summers spoke eloquently about India’s promise, and I know that all of us here want to help make that a reality.
I want to thank everyone for your interest and for being here today.
We structured this conference to build on an idea that some of you have started thinking about and that others have begun to adopt: The business development strategies for the states and cities beyond Mumbai and Dehli.
We wanted to share our thinking on this new approach with you, the individuals who are remaking the future of India and the United States.
The growth in emerging metropolitan sectors will accelerate and will form great markets for U.S. and Indian businesses. However significant and productive the relationship between our national governments, this new approach to these growing metropolitan areas can help sink deeper into the ground the pillars that already support our common U.S.-India partnership. We are calling this new initiative GEMS – Growth in Emerging Metropolitan Sectors.
Developing the economies of these cities and states can hold fast the future that we build together as equal partners with mutual interests.
Our forward progress is made possible by the integration of India into the world economy that depends on free markets to nurture growth. India has come a long way in a short time as the full measure of its potential clearly becomes evident.
Forming this economic opportunity of unparalleled proportions are GDP projections for the next 20 years; the expectation that almost 600 million people will live in urbanized settings; and the projections that 68 cities will grow to populations of more than one million each in the next two decades.
Untapped opportunities lie in gems, emerging cities like Pune and Nagpur to name a few. This is a mass market ready to burst forth, seeking to improve its standard of living. The human aspiration to improve the standing of one’s family is an economic force that beats within the heart of this strategy.
This same aspiration exists in all of the emerging states and cities of the world, and our GEMS strategy will not be limited to India. The promise of India is, of course, the GDP of its urbanized areas that will grow from about $700 billion today and reach almost $4 trillion in 20 years.
These mind-boggling figures represent the acceleration of the change we are witnessing in the world market and the potential for the growth and power of India, the largest democracy in the world. The average GDP growth rates for states in India from 2000 to 2008 were as high as eight percent while the lowest averaged between three and four percent – better than most countries in the world. We must also target the rural areas in which 65 percent of the population lives.
Our strategy, which includes a series of conferences and major trade missions targeting specific sectors in need of development, is to integrate strategic thinking at every level of government, business and industry. We need to harness the resources of these communities in ways to achieve full-scale development. We can do so by working together to develop the potential of these new areas of growth.
The benefits to India and the world are clear. The sheer size of the economic potential of India suggests that the underutilized U.S. labor force can play an important role as well – thus helping sustain the American economy which remains critical to continued global stability.
In the coming weeks and months, I will be leading meetings with federal agencies and other interested parties to plan how we can elevate our involvement -- within global trading rules -- to add to the momentum that is already building.
The smaller and medium-sized cities of India are, indeed, gems. We want to showcase one of these gems at a conference in the fall when we will bring together representatives from local and state governments and from the infrastructure, energy, healthcare and retail sectors within and from outside India.
At the International Trade Administration, we will be managing the GEMS strategy and working to leverage the federal government to provide additional momentum to the economic growth of these cities that can help American companies simultaneously.
In this context, the Commercial Dialogue which I co-chair is critical: Today’s developing markets comprise nothing less than tomorrow’s new global market. These emerging markets with their new and productive populations will propel companies to develop new technologies, and the demand for those technologies will create new global markets for those products -- and improve the condition of humankind.
When we look back at our work, and at this moment in history, we should be able to see companies like the Spire Corporation of Bedford, Massachusetts. Spire produces capital equipment used to manufacture solar technologies. Clean energy is one of the key sectors in our business strategy for the future.
Spire’s exports account for about 70 percent of the company’s sales, and India is its top international market. For Spire, India’s need for renewable technologies is a source for the company’s dynamic growth. Spire helps equip the solar farms that India is building to increase the coverage of its power grid system to help supply electricity to rural areas of the country.
To meet the growing demand from India, Spire has established an office there and is supplying India’s solar factories with products made here in the United States. Last year, Spire made a multi-million dollar sale of its equipment to an Indian firm, Evergreen Solar Systems.
The Spire example showcases the international diversification of the growing global marketplace around us. We are living through a momentous period in world history. The small and medium cities and states of India are a critical component of the new global economy. Each should be viewed as a whole market, that is to say, as a market that needs everything imaginable that a city requires to acquire higher standards of living.
The upside of this model is evident. These small cities and states – that are small only in comparison to Mumbai and Dehli – are of a size large enough to be rewarding yet small enough to be manageable. The return is almost immediate, and projects such as Spire’s can create jobs in both countries. Spire currently employs 200 persons at its Bedford manufacturing facility in high-skilled jobs in research, high-tech manufacturing and engineering.
I use Spire to exemplify the potential of the GEMS strategy. ITA played an important role in Spire securing its multi-million dollar contract with Evergreen.
Through its Commercial Service in India, ITA had recruited Evergreen to a major renewable energy trade show and connected the two companies, and they can continue to benefit from ongoing U.S. Commercial Service trade counseling – and India and America benefit.
President Obama and Prime Minister Dr. Singh are highly attuned to how American investment in India and the expansion of American companies here can help build out the industrial base and the economic infrastructure of an important friend and how these strategies can strengthen America’s economy.
Their announcement at the White House in November to begin work on a framework for cooperation on trade and investment inaugurated an environment conducive to technological innovation and collaboration.
The framework will support opportunities for trade and investment especially for small and medium-sized businesses, and it can lead to an India that is more self-reliant and increasingly self-assured and to an America that itself grows and prospers.
The opportunities for the United States and India understandably keep a strong grip on our imagination. Before us is the prospect of creating a new world through much-needed infrastructure while introducing new technologies simultaneously. If we do this right, we will create growth at increased rates and transform the world as we know it today.
We live in an age when the new global economy can explode and change the trajectory of humankind to create a new world.
Some of you I am sure were seated in the Blue Room of the White House when Prime Minister Dr. Singh and President Obama met in November. Most of us were not.
But all of us are seated on the front row of the future. In this new future, small is very big indeed.
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