Updated February 9, 2006
CONTENTS SUMMARY MOST RECENT DEVELOPMENTS BACKGROUND AND ANALYSIS Context of the U.S.-India Relationship Regional Rivalries Pakistan China Political Setting National Elections The Congress Party The Bharatiya Janata Party (BJP) India-U.S. Relations and Bilateral Issues "Next Steps in Strategic Partnership" and Beyond Security Issues Nuclear Weapons and Missile Proliferation U.S. Nonproliferation Efforts and Congressional Action U.S.-India Security Cooperation The Kashmir Issue India-Iran Relations Regional Dissidence and Human Rights The Northeast "Naxalites" Gujarat Human Rights India's Economy and U.S. Concerns Overview Trade and Investment U.S. Assistance Economic Security
The end of the Cold War freed India-U.S. relations from the constraints of global bipolarity, but interactions continued for a decade to be affected by the burden of history, most notably the longstanding India-Pakistan rivalry and nuclear weapons proliferation in the region. Recent years, however, have witnessed a sea change in bilateral relations, with more positive interactions becoming the norm. India's swift offer of full support for U.S.-led counterterrorism operations after September 2001 was widely viewed as reflective of such change. Today, the Bush Administration vows to "help India become a major world power in the 21st century."
In July 2005, President Bush and Indian Prime Minister Singh issued a Joint Statement resolving to establish a U.S.-India "global partnership." In recent years, the United States and India have engaged in numerous and unprecedented joint military exercises. Discussions of possible sales to India of major U.S.-built weapons systems are ongoing. Plans to expand high-technology trade and civilian space and civilian nuclear cooperation, as well as to expand dialogue on missile defense, have become key bilateral issues in recent years. The Bush Administration has dubbed India "a responsible state with advanced nuclear technology" and seeks to achieve "full civilian nuclear energy cooperation with India." Such proposed cooperation is controversial and would require changes in both U.S. law and international guidelines.
The United States seeks to curtail the proliferation of nuclear weapons and ballistic missiles in South Asia. Both India and Pakistan have resisted external pressure to sign the major nonproliferation treaties. In May 1998, the two countries conducted nuclear tests that evoked international condemnation. Proliferation-related restrictions on U.S. aid were triggered, then later lifted through congressional-executive cooperation from 1998 to 2000. Remaining sanctions on India (and Pakistan) were removed in October 2001.
Continuing U.S. interest in South Asia focuses on ongoing tensions between India and Pakistan, a problem rooted in unfinished business from the 1947 Partition and competing claims to the Kashmir region. The United States strongly encourages maintenance of a cease-fire in Kashmir and continued, substantive dialogue between India and Pakistan.
The United States remains concerned with human rights issues related to regional dissidence and separatistism in several Indian states. Strife in these areas has killed tens of thousands of civilians, militants, and security forces over the past two decades. Hindu-Muslim tensions have been another matter of concern. Many in Congress, as well as in the State Department and international human rights groups, have criticized India for perceived human rights abuses in these areas.
India is in the midst of major and rapid economic expansion Many U.S. business interests view India as a lucrative market and candidate for foreign investment. The United States supports India's efforts to transform its once quasi-socialist economy through fiscal reform and market opening. Since 1991, India has taken steps in this direction, with coalition governments keeping the country on a general path of reform. However, there is U.S. concern that movement remains slow and inconsistent. See also CRS Report RL33072, U.S.-India Bilateral Agreements in 2005; CRS Report RL32259, Terrorism in South Asia; and CRS Report RS21502, India-U.S. Economic Relations.
MOST RECENT DEVELOPMENTS
In July 2005, President Bush vowed to achieve "full civilian nuclear energy cooperation with India." Such proposed cooperation is controversial and would require changes in both U.S. law and international guidelines. Ensuing congressional hearings have seen Administration officials present their case, expert witnesses discuss potential problems, and Members raise questions about the wisdom and details of Administration plans. In December, H.Con.Res. 318, expressing concern regarding nuclear proliferation with respect to proposed full civilian nuclear cooperation with India, was introduced in the House. Close U.S.-India diplomatic interactions continue apace: in late 2005, U.S. Trade Representative Portman met with Commerce Minister Nath in New Delhi for the inaugural session of the U.S.-India Trade Policy Forum; U.S. Secretary of Defense Rumsfeld met with Defense Secretary Dutt in Washington for the seventh session of the U.S.-India Defense Policy Group; Under Secretary of Commerce McCormick traveled to New Delhi for the fourth meeting of the U.S.-India High-Technology Cooperation Group; and Indian Foreign Secretary Saran met with top U.S. officials in Washington. In February, Under Secretary of State for Global Affairs Dobriansky led the U.S. delegation for a fourth meeting of the U.S.-India Global Issues Forum in New Delhi. President Bush is slated to travel to India in March in what would be the first such visit by a U.S. president in six years. (See CRS Report RL33072, U.S.-India Bilateral Agreements in 2005, and CRS Report RL33016, U.S. Nuclear Cooperation With India.)
Under Secretary of State Burns met with top Indian officials in New Delhi January 19-20, where the proposed nuclear deal and India's position on Iran's controversial nuclear program were leading topics of discussion. Secretary Burns called negotiations toward establishing bilateral nuclear power cooperation "quite challenging" and "quite complex," but expressed confidence that an agreement would be reached. A diplomatic stir came on January 25, when U.S. Ambassador to India Mulford explicitly linked progress on the proposed nuclear deal with India's upcoming IAEA vote on Iran, saying if India chose not to vote with the United States, he believed the U.S.-India initiative "will die in the Congress." A State Department spokesman called the Ambassador's comments a "personal opinion" and denied that the issues were linked. India's External Affairs Ministry responded that India "categorically rejects" any attempts to link the two issues, and opposition and leftist Indian political criticized the remarks as "a serious affront to India and its sovereignty." On February 4, India voted with the majority (and the United States) on an IAEA resolution to refer Iran to the U.N. Security Council. New Delhi called the resolution "well-balanced" and insisted that its vote should not be interpreted as detracting from India's traditionally close relations with Iran. The United States later expressed being pleased with India's vote.
A two-year-old India-Pakistan peace initiative continued with a third round of "composite dialogue" talks January 17-18. Officials from both countries offered a positive assessment of the ongoing dialogue and arrangements for new cross-border transit services have been made, but Indian Foreign Secretary Saran also asserted that the peace process is hamstrung as Pakistan had not taken sufficient steps to end "cross-border terrorism" in India (and lethal separatist-related violence in India's Jammu and Kashmir state continues). Other bilateral frictions arose with India's December expression of concern over Pakistan's "heavy military action" in Baluchistan. Islamabad sternly rejected India's comments and Pakistani President Musharraf later accused India of arming and financing militants in that region.
On January 19, Career Foreign Service officer Richard Boucher was nominated to be Assistant Secretary of State for South Asian Affairs. On January 27, India and Saudi Arabia agreed to develop a "strategic energy partnership." On January 29, Prime Minister Singh replaced Oil Minister Aiyar with Murli Deora, who is considered to be pro-reform and pro-U.S. On February 3, the Indian Navy declined an offer to lease two U.S. P-3C maritime reconnaissance aircraft, calling the arrangements "expensive and time-consuming." For more information, see CRS Report RS21589, India: Chronology of Recent Events.
BACKGROUND AND ANALYSIS
Context of the U.S.-India Relationship
In the wake of the September 2001 terrorist attacks on the United States, India took the immediate and unprecedented step of offering to the United States full cooperation and the use of India's bases for counterterrorism operations. The offer reflected the sea change that has occurred in recent years in the U.S.-India relationship, which for decades was mired in the politics of the Cold War and India's friendly relations with the Soviet Union. A marked improvement of relations began in the latter months of the Clinton Administration--President Clinton spent six days in India in March 2000--and was accelerated after a November 2001 meeting between President Bush and Indian Prime Minister Atal Bihari Vajpayee, when the two leaders agreed to greatly expand U.S.-India cooperation on a wide range of issues, including counterterrorism, regional security, space and scientific collaboration, civilian nuclear safety, and …