Joint Interview with Mike Forman and Dave Cote

Joint interview with the US Trade Representative Mike Forman and Honeywell CEO Dave Cote, Co-Chair of the US India CEOs Forum, at the conclusion of the CEOs Forum meeting in Washington on July 12.

Question: This was the first CEOs Forum meeting of the second term of the Obama Administration. How do you see the relationship between the two countries and the role of the CEOs Forum in it?

Mike Froman: From the perspective of the government officials, this is an incredibly useful forum for giving us feedback back from both the India and the US private sector, what matters to them, as they are making decisions on where to invest, to trade and how to do the business together. So in the last few years under Dave leadership, we are pleased that this year we have teed on a number of issues for both governments to work on. And by working on them together we are able to remove barriers

DAVE COTE: It starts first with the fundaments of the both government recognizing that stronger commercial ties are great way to build peaceful and expanding relationship between two countries. When you start with that, it takes the rest of it is easier to get done. I felt was the significance of this is the President appointing Mike (Forman) and when you appoint Mike, you know something is going to happen. Prime Minister appointed Montek which says both governments are serious in trying to make something happen here. And both sides picked very reputable CEOs. We always felt like as CEOs we can always talk to each other. I know, most of our Indian counterparts and vice versa already. This gave us a great place for to be able to talk to the both countries leadership about things what are the things needed to change to create more trade, commercial relationship, kind of expanding peaceful ties between ourselves. I have been very encouraged about the progress we made. The role that he (Mike Froman) and Montel played is significant in making something happen here.

Mike Froman: Today having the Finance Minister, Chidambaram and Minister Sharma from India and Secretary Lew and Secretary Pritzker, was very helpful. In both democracies, we have multiple agencies involved in policies and it is important that we have whole of government approaches to resolving these issues.

Question: In the last several week or past few months, you see lot of voices coming from the US industry side about Indian policies, reservations on several issues. Indians also taking up the issues of their concerns like visa policy. Can you give us a sense, what was discussed today – issues and any kind of recommendations that the CEOs Forum or the leaders came up with?

Froman: There was a very frank discussion, where in body held back any issues

Cote: Nicely. Politely

Froman: As I mentioned it last night and the Finance Minister in his speech took up some of these issues directly. We may agree or disagree over the significance of some of the actions, we certainly appreciate that he recognized that and that he is going to address them and we want to address them directly and that was most of the case in the CEOs Forum. Where We talked about IPR issues, tax issue, policy issues and actions, regulatory concerns. The Indian sides they raised the immigration issue, the via issues among others. So this is a very useful forum. We have done this now for four years, working closely together. No body holds back, everybody is very open about sharing their perspective.

Cote: There is a lot easier to do when you have a friendlier environment to deal with. As Mike points out, we had a number of years to create friendship, between governments and business leaders, it makes lot easier to be able to talk about things in a nice way, but you still get your points across. And we thought it was important for example as US business leaders to be able to say that over the last two years we have felt a cooling when it comes to US interests in investing in India. They are cooling, because we have seen a number of actions taken, each explainable in itself but cumulatively causing US investors to say aaaann, you know, I may be want to think up a little bit more. Well it is important to have that kind of a conversation and do it in a way that the other side is not offended by it. Ok and say each of these things is explainable, but I get it, they did not say what happened nothing was promised there, but being friends allows you to have that kind of conversation. Again I applaud the US India CEO Forum, because it allows you to be able to do this.

Question: India is looking for massive investment in fields like infrastructure. Is the policy conducive enough right now? Or did you get any kind of promises / assurances which gives you a comfort level that US companies would go and invest in India, the kind of investment India needs?

COTE: I do not know how much that figure is or is needed. I would say though what I said earlier, there is more concern now about investing in India than was a few years ago. And it is important that as all actions get taken, it is important to recognize what is being done, what kind of context it is being done with. This is all very recoverable. It is not like that everybody just washed their hands and say I am done with this but it is important to recognize that that’s a real concern right now. And I think the Secretary of Treasury did a nice job teeing that, the same concern from the commerce department,

FROMAN: And the context is the same (US) companies represented on the table are very much committed to India.

COTE: I have about 13,000 people there (in India) now.

FROMAN: So these are the friends of India. Which allows them to say to the Government of India, here are the things that we are concerned about if you really wants to attract massive foreign direct investment in infrastructure and other areas, these are the short of things that the industries are concerns about

COTE: I want India to do well. I have almost 13,000 people there.

Question: The business sector has been a strong pillar in pushing for India US relationship, we have seen that in the civilian nuclear deal. But do you see that the kind of honeymoon was between the two countries last seven eight years, is that over?

FROMAN: Look, I … thinking about a good analogy

Question: You have got 250 Congressmen writing to the US President and the Secretary of State, writing letters expressing their concerns over Indian policies. That has never been the case.

FROMAN: This is a very important point. In our relationship with a number of different countries, look at the number of bilateral relationships that we work on, the business community often has been the strongest component of close relationships and when the business community feels that things are not going well and begin to raise questions about the relationship, it has an impact on the bilateral relationship on the politics, which you seen by the reaction from the members of the Congress as well. So that is so important. Dave says it is recoverable. That is why it is so important that we are requesting the Government of India to address these issues so that we can maintain the strong foundations for a good US India relationship.

COTE: There is a long time financial phrase it was so good, I wish I made it up which says capitalism coward, this really encapsulates how businesses invest. When you are afraid about where you are putting your money, you look for other places where you are going to be less fearful about it. Over the last few years that fear has been going up, not down. This is all recoverable. It is not like people giving up. But it is important to recognize the dynamics.

FROMAN: I would like to commend in particularly the Finance Minister Chidambaram, Minister Sharma, Montek Singh Ahluwalia, because they were very much engaged, heard the concerns, responded very forthrightly and we know that they are working with the Prime Minister to address many of the issues and we want them to succeed.

QUESTION: As Deputy Chairman Planning Commission said in his remarks, till the next elections any major legislative reforms are unlikely to happen. Is the US willing to wait till then? Do you see the commitment (to reforms) from the Indian side?

FROMAN: I think, I had the privilege of having meeting with the two Ministers separately over the past 24 hours. I think, both would like to make progress on some of these issues and some of those issues may be dealt with executive actions rather than through parliamentary action and we are looking forward to seeing how they address them going forward.

CUTE: I think, both would also say there are a number of things they can point to, reforms have been occurring. Our only point is it could be even greater and necessary for them to be greater than it has been.

FROMAN: For example the recent decision by the Government of India on PMA to hold in abeyance, review it and potentially modify that is a positive signal.

Question: How is the US planning to address India’s concerns related to visa issues?

FROMAN: The Comprehensive immigration Reform Bill is working its way through members in Congress where the focus of the effort and debate is. Our Indian colleagues made clear to us that they intended it directly through the business community to convey to Congress their concerns about elements of bill and that was the outcome of the meeting.

QUESTION: As Co-Chair of the CEOs Forum, what is your stand on the via issue. Two questions.. do you think there is some kind of divisions among the US industry itself on these provisions on visas.

COTE: I would say trying to get 100 percent of the votes for something in the parliament, while I am sure there were some who would disagree, with the idea, by and large you will find most business people in favor of immigration just looking at it in terms of what it does for the economy and given how we all got here. I was born here, but my great grandparents were not. It is kind of hard to say, you are not in favorable of the immigration you want to close the door after the party has begun, still makes sense. I think, you will find most business supports the idea. I am pretty confident of that.

QUESTION: Supports the idea of what the Indian companies are saying or

COTE: For the immigration bill in general and the speed of visas and number of visas.

QUESTION: And the concerns that the Indian IT companies have like TCS or Wipro or Infosys have with H-1B issues?

COTE: I may not be familiar with this specific issue to be able to speak intelligently?

QUESTION: You have been handling India (from the White House) for last four years and meeting a large number of Indian leaders. How do you see these four years how the relationship has developed and what would be the key agenda focus areas in the next four years?

FROMAN: This has been an important four years for this relationship. The visit of Prime Minister Singh to the United States, the visit of the President Obama to India, the underscoring of this strategic partnership between the two countries involving step changes in the relationship in many respects, there is immense co-operation across security issues, political issues, counter terrorism, homeland security, defense co-operation has begun, and even in the economic area, we work very closely together in G-20, which of course we strongly promoted as the premier forum for international economic cooperation precisely because players like India had a seat at the table. So we see the last four years have been very important change in relationship and it has been a very positive evolution of relationship. Having said that there is a long way to go. And as many people said over the last 24 hours, while the trading relationship for example has improved significantly in the last 10 years, it is very small compared to the size of our economy. The two way trade is 100 billion dollars. Our two way trade with China is more than four times of that. And so there is a lot more to be done together, if we can address some of the issues and concerns. That would be the focus of the next four years.

COTE: The next four years, when you look at the last four years Mike and Montek yielded some good results, when you look at some of the export controls, changes that occurred, completion of the bilateral safety agreement, progress on civil nuclear, some of the energy efficiency is being done, the diabetes joint research got launched, infrastructure debt fund and all came out of the CEOs Forum. So there is a good way to say good process through this CEO Forum to get things done, there is opportunity for more of them.

Question: In the next six months, or before the elections what are the top three things that you would like India to do? What is your wish list?

COTE: We talked about it today. We have our list. We talked about 14-15 items.

FROMAN: I think, it is hard to prioritize like that. It is important for India to figure out what is the best thing for it to achieve its objectives in terms of attracting investment, manufacturing, achieving security. There are a numbers of things that they can do in those areas.