November 9, 2001


The following is the text of the remarks made by the Prime Minister, Shri Atal Bihari Vajpayee at the lunch hosted by India Caucus at Washington yesterday:

~It is a great pleasure to be with you in Washington. As I have said before, the India Caucus is a great tribute to the strong democratic traditions of our two countries.

I was deeply touched to receive from many of you recently a letter with the strong message of India-U.S. friendship. It was a reflection of your commitment to India-U.S. relations that you wrote it in this hour of anxiety and concern for the United States. It was also a testimony to the resilience of your institutions and the strength of your resolve to resume normal life in the face of an unprecedented challenge to the Congress and to the country.

As friends of India, you would be aware of our outrage at the events of September 11, followed by terror caused by Anthrax. To you, in particular, I would like to convey the concern and solidarity of the Indian people. Our response was not motivated by tactical or foreign policy considerations. It was spontaneous. It emanated from our fellow-feeling for you and from the pain of our own experience with terrorism.

I also wish to thank you for reaching out to reassure the Indian American community that terrorists will not succeed in destroying Americanís rich tradition of pluralism, tolerance and accommodation.

In recent years, your vision has helped open new avenues of India-US cooperation, and reinforced mutual trust and confidence between the two countries.

Your sustained efforts have helped remove a major impediment to the enhancement of economic, defence and technology cooperation. Your support will be vital in realising the enormous potential for mutually beneficial cooperation that exists in these areas. I am confident that it will make our relationship more productive and meaningful in pursuit of our many common goals.

Despite the global economic downturn, India last year maintained a GDP growth rate of 5.2 per cent. Among major economies, this was exceeded only by China. Our macro-economic fundamentals are sound. The Indian economy is fifth in the world in Purchasing Power Parity. The current inflation rate is below 4 per cent. The rupee has remained relatively stable against major

currencies. Our foreign exchange reserves are at a comfortably high level.

In the past three years, economic reforms in India have gained further momentum. The avenues opened to Foreign Direct Investment have increased manifold. The process of investment approvals has been further streamlined. Nevertheless, we are acutely conscious that in moving from approval to implementation, many procedural obstacles remain. We expect to soon put in place more streamlined and transparent procedures for the regulatory agencies.

The Government has resolved to retain only a very small set of strategic industries in the Public Sector and the process of privatisation in the non-strategic Public Sector Undertakings has gathered momentum.

A Bill for the regulatory convergence of the telecom, information and electronic media sectors has been introduced in our Parliament.

My Government is also committed to dismantling the administered pricing mechanism for the petroleum sector. Investment in all upstream and downstream segments of the petroleum sector are open to private and Foreign Direct Investment.

A relatively new aspect has been our expanding cooperation in the field of information technology. Indian IT and software companies have several significant advantages which should be particularly attractive to their US counterparts. Areas such as bio-technology, pharmaceuticals, and the services sector offer fresh perspectives for the development of close bilateral linkages between our private industry. For example, India is one of a handful of countries undertaking stem-cell research in the private sector.

India has to its credit very substantial accomplishments in the field of peaceful exploration of space, including the fabricating and the launching of satellites for communication, weather forecasting, remote sensing and other developmental purposes. We see tremendous scope for India-US cooperation in this area.

We commend to you to encourage your constituents to seriously explore the possibilities for strengthening their bilateral linkages with India through trade and investment. On our part, I would like to assure you that my Government will make every effort to facilitate such cooperation and further strengthen our trade and economic ties.

Events of recent weeks will have long-term and unpredictable consequences in international relations. I believe, however, that the momentum of our relationship will sustain itself through these difficult times for the world. Last year, I said in Washington that India and the United States were natural allies. As the contours of the long-term changes in the world take shape, new challenges that will emerge will draw our two countries into a more cooperative partnership. I have no doubt that our partnership, grounded in the pluralist and democratic temper of our peoples, will continue to enjoy broad political support in both countries.

Thank you.~