Two questions on economics and trade, firstly, several Indian ministers, including Sachin Pilot and more recently Mallikarjun Kharge, have made references to the fact that Indians and Indian companies pay a lot of money towards social security here in the U.S. and yet do not see any benefits coming out of such contributions as they do not remain in this country long enough. From these statements it is obvious that this is becoming a growing concern in India. Can you explain what, if anything, the U.S. is planning to do to address this concern?

Well this has been a long-standing issue on our agenda and it is called “totalisation.” The problem is that our social security systems are not synchronised. We certainly have heard the Indian concerns on this and sought to be responsive. But our social security administration has really grappled with this but thus far not found a way to be responsive. But we will continue to look at this and see what we can do.

With Indian state institutions such as ISRO still on the Entities List of the BIS, there is a real concern in India that this will come in the way of high-tech trade and cooperation promised under the Obama-Singh umbrella of initiatives (especially for dual-use items). While the administration has said that its policies in this area will be reviewed, the concern on the Indian side has been magnified by the fact that the administration is altering tax laws against off-shoring of U.S. business and the rhetoric seems to point towards a deliberate intent towards greater protectionism. What could you say that would reassure India in this regard?

I can tell you that we are not moving towards a more protectionist position vis-à-vis India or any other country. The President has repeatedly stated his commitment to free trade and has stated his commitment to the existing trade agreements that we have with countries that are pending, like Colombia, but more broadly to the Doha Round. Obviously the role and cooperation of countries like India is going to be critical in achieving a successful outcome. You have seen our trade representative Ron Kirk make statements with Minister Sharma on this.

On the question of export controls, there is a broader administration-wide export-control review that is taking place. You saw, recently, statements by Secretary Gates, that referred to the fact that the laws on the books are now quite dated and do not reflect the tremendous advances that have taken place in technology; and the fact that many of the technologies that are now controlled are available in RadioShack and there is usually not need for any controls on many of these things [laughs]. So there is a need to rationalise that list and there is also a need to make one agency responsible and not the whole bunch of agencies right now that have responsibilities for export control. The administration is really committed to trying to look at this in a really positive way. One of the most important benefits to the United States is that it will enable us to export more to countries like India.

As part of that export control review we will then be able to look at what we might be able to do on the Entities List, for example, with India – I know ISRO and there are several others. We have already been looking at ways that the U.S. and India could take reciprocal measures that would allow us to continue to enhance trade in high technology goods of all kinds. As you know we have already had the high-technology corporation group which has been in existence for many years and has made really very significant progress in reducing the number of goods that require a license for export to India. Now it is well over 96-97 per cent of the things that we trade are not subject to any license at all. It is really a very small proportion of the overall goods.

But again we feel that there are very significant opportunities to work in space. We were already part of the Chandrayaan launch. We are already doing a lot of cooperation through the National Oceanic and Atmospheric Administration on things like meteorological forecasting and things like that. We would very much like to do this and space will be another important area of cooperation going forward.

On David Coleman Headley, it has been over one month since he struck a plea agreement with the Department of Justice. When you spoke to us at the Foreign Press Centre you said that no decision had been made on giving India direct access to Mr. Headley. So there are a few questions here: Could you please explain why Indian authorities should not feel frustrated that this process is taking so long and how much longer will they have to wait? Secondly what is the exact nature of the procedures that are stalling the process – is it simply a question of formal filings required by either side or is it something more fundamental such as Mr. Headley reconsidering his offer to cooperate or the U.S. still trying to put in place modalities to manage Mr. Headley’s interaction with India tightly?

It is not so much a question of the U.S. putting [modalities in place]. It is more a question of getting agreement from Mr. Headley and his lawyers about this – what are going to be the parameters of that access, should it occur. I do not think anyone should read too much into this. People at a very high level with very good intentions are working on this and we are in very close touch with Indian authorities on this. I think it is just important to be patient, but I can tell you that we are well aware of India’s interest but also India’s equities as well. Obviously Mr. Headley was involved in reconnoitring sites for not only the Mumbai bombings but perhaps other ones. They have a very clear interest in knowing what further information he may have and we understand that.

So what is it that is the specific problem, because the plea agreement clearly says that the death penalty was waived based on his cooperation.

I really do not want to say more than what I have already said. It is not really our department that is working on this but the Department of Justice.

On your recent trip to the region, you mentioned that you had urged authorities in Pakistan to take action against Punjab-based groups, such as LeT, “not only because that is important to India but it is important to the U.S..” Apart from the earlier indirect actions by Pakistan in the Swat and South Waziristan offensives, in what ways are they following your advice? How about more immediate goals such as banning them and their associates from holding public meetings (as they have been doing) or seeing through the trial of the Mumbai attacks suspects to its completion?

First of all with respect to the case, my impression is that is moving forward and that there is not any effort on the part of the Pakistani government to slow that down in any way. It is just that the judicial process is moving ahead.

On the question of LeT, I will just say what I have said before, which is that we really see that LeT is an organisation of growing scope and ambition, as the Headley case itself illustrates; and also a threat to the U.S. but also a threat to India and other countries, and potentially a threat to Pakistan too. So it is important for all countries to do what they can to circumscribe and control the activities of LeT. We will be continuing to urge our friends in Pakistan to deal with this. As I said earlier, they have made a lot of progress in Swat and then in South Waziristan, in arresting senior members of the Taliban. There is good momentum that has been taking place. At the same time it is important for all of us that these other groups – many of which have attacked Pakistan itself, like Jaish-e-Mohammed and groups like that – that they also be a target of Pakistani actions. We will continue to urge for progress on that.

It has wider benefit for not only counterterrorism priority, but also Indian and Pakistani relations. One of the things that I said to our Indian and Pakistani friends when I was there, particularly to the business community, is that there are tremendous under-exploited opportunities for trade between the two countries and that if progress can continue to be made on terrorism and on the judicial actions that we talked about earlier, that would really open up a way for the business communities of both sides to expand trade relations and business investment relations.

From my conversations both in India and Pakistan, they are both ready to do that. But they are both waiting for political signals from their governments before they take actions. These small but important steps on things like LeT can have a wider and positive effect on bilateral relations.

Yes but in that same vein do you not think that some of these related organisations could have public meetings and also the slightly unrelated point on attacks in Afghanistan on Indian personnel. Do these things not dissuade this sort of process from kicking off?

Well they do, yes, so again that underlines the importance of Pakistan fulfilling what it has always said it would do, which is to not allow its territory to be used as a platform against other countries.

Well I guess what many Indians would wonder is, what role could the U.S. play in pushing that forward on the ground. Certainly they have made the right statements but there is a sense that action is not following.

Yes, Pakistan has a sovereign government and they are a friend of the U.S. and we will continue to work with them on this but all I can say is we have identified this as a priority.

President Obama said at his Nuclear Security Summit press conference that the U.S. wanted to reduce nuclear tension in South Asia. Does the U.S. see Chinese nuclear weapons and the Chinese proliferation link with Pakistan as factors which have contributed to this tension historically and at the present time?

We all know the historical ties between Pakistan and China. But I do not think I would want to make any statements about the current [situation]. I do not think that there are any significant proliferation issues right now with regard to China and Pakistan.

There are no concerns?

I do not think that that is at the forefront of things that we are working on. Our dialogue with China now is first of all urging them to work with the international community to help stabilise Pakistan and then help provide the assistance that it needs. But then also on the counter-terrorism front there are groups operating in Pakistan that are antithetical to Chinese interests – [for example] the East Turkistan [Islamic] Movement. It is certainly in their interest and in our interest to see that action is taken against those groups to prevent the destabilisation of China. Then we are of course very closely working with China in Afghanistan as well, and we appreciate the role they are playing there in terms of new investments and a lot of the projects they have undertaken there.

On Sri Lanka, what would you say is your single biggest worry about how the post-election scenario could play out in terms of continuing the process of rehabilitations of IDPs and a longer-term political solution for lasting peace between the major ethnic groups? Does the President’s appointment of his brothers to powerful portfolios and his attitude towards Sarath Fonseka, who is still in custody, worry you at all in this regard?

I would rather not talk about worries; I would rather talk about opportunities. Again I think the President has scored a very significant victory in both the Presidential elections and in the Parliamentary elections. It shows that the President has a great deal of personal support around the country and particularly in the south, where he won an overwhelming victory. Now, he has a really historic opportunity to unify the country, to bring the country together as one country as never before – or at least not in the last 30 years. So we look very much forward to working with the new government to help that process of unifying the country. I hope to have the opportunity to meet with President Rajapaksa during the SAARC summit which is going to be taking place in Bhutan next week to hear about his plans in that regard.

So what about the question of Mr. Fonseka?

That is a in the Sri Lankan judicial system now and I do not have any independent information about the charges that are against him. We will have to wait and see on that. Our interest, like the interests of the Sri Lankan people, is to make sure that he is tried in accordance with Sri Lankan law.

Do you see any obstacles at all in terms of this President reaching out to Tamil groups and IDPs and fostering a long-term solution? That is the harder bit and that is something that this country wrestled with for decades and that is what people are going to be watching for now.

The election results were only announced yesterday so we have to give the President a chance to articulate his plans. I do not want to make statements that are going to in any way circumscribe what he is going to say. I would rather give the President a chance to make his comments and then we will comment after that [laughs].

Finally as the Assistant Secretary of State for South and Central Asian affairs, what is your view of India, Pakistan and Iran joining the Shanghai Cooperation Organisation? The SCO is expected to announce membership criteria at its Tashkent summit next month and all three countries are known to be interested. How does the U.S. see the SCO in general, and specifically, in relation to U.S. involvement in Afghanistan. Could the SCO play a role in stabilising the situation there?

We see that the SCO can play a very important role in bringing in the countries of Central Asia and the wider region together. That could be a very important vehicle for dialogue and also for economic development and economic integration. As long as the SCO sees those things as its goal, we certainly welcome that. The expansion to other countries, such as India and Pakistan, would be welcome. I know India particularly has a great deal of interest in trying to expand relations into Central Asia, and many Central Asians tell me that they have interest in doing more business with India, and also Pakistan eventually. But the security situation in Pakistan sometimes constrains them right now. But many Central Asian business people that I have spoken to see quite significant trade and investment opportunities both from South Asian countries coming up to invest in Central Asia but also in terms of export opportunities into South Asia for Central Asian companies. The SCO can play quite an important role in that respect and it is good for friends like Pakistan and India to be involved in that.

Again in that context you earlier mentioned that you were concerned about both India and Pakistan tying up with Iran, in the context of pipelines, talking of business in the region. What is your thinking on that either in the context of the SCO or even otherwise, with such projects going forward? Do you think that both at forums such as the SCO and on independent commercial projects the coming together of countries like India and Iran is a cause for concern for the U.S., vis-à-vis stability in the region or what you are trying to achieve with Iran in a global context?

You are well aware of what we are trying to accomplish with Iran right now. We are at a very sensitive stage in our diplomacy with them. The President has pursued the dual-track policy of holding out a hand of friendship, but if the Iranians are not willing to accept that, to build international consensus to bring the Iranians to the table and stop their efforts to acquire nuclear weapons. At the moment we are trying to discourage all countries from pursuing projects that would put significant resources into the hands of, particularly groups like the Iranian Revolutionary Guard corps, that have pursued terrorist actions and that have given money and weapons to terrorist groups in the Middle East and have sought actively to destabilise and attack Israel and pursue terrorist policies in the wider part of the world.

So we have a very strong interest in stopping that. All the countries of the world have a very strong interest in stopping that. It is in that context that we discourage friends like India and Pakistan from pursuing, for example, energy projects and so forth.

But the coming together of these countries on the platform of the SCO per se does not worry you?

I do not know, I cannot comment on the Iranian part of the SCO. I have not really followed it that closely – what Iran’s intentions are with regard to SCO.

Click here for the abridged version that appeared in the print edition of The Hindu.