Prepared for Members and Committees of Congress
Long considered a “strategic backwater” from Washington’s perspective, South Asia has emerged st
in the 21 century as increasingly vital to core U.S. foreign policy interests. India, the region’s
dominant actor with more than one billion citizens, is often characterized as a nascent major
power and “natural partner” of the United States, one that many analysts view as a potential
counterweight to China’s growing clout. Washington and New Delhi have since 2004 been
pursuing a “strategic partnership” based on shared values such as democracy, pluralism, and rule
of law. Numerous economic, security, and global initiatives, including plans for “full civilian
nuclear energy cooperation,” are underway. This latter initiative, launched by President Bush in th
July 2005 and provisionally endorsed by the 109 Congress in 2006 (P.L. 109-401, the “Hyde
Act”), would reverse three decades of U.S. nonproliferation policy. It requires, among other steps,
a Joint Resolution of Approval by Congress. Also in 2005, the United States and India signed a
ten-year defense framework agreement that calls for expanding bilateral security cooperation.
Since 2002, the two countries have engaged in numerous and unprecedented combined military
exercises. Major U.S. arms sales to India are planned. The influence of a growing and relatively
wealthy Indian-American community of more than two million is reflected in Congress’s largest
Further U.S. interest in South Asia focuses on ongoing tensions between India and Pakistan
rooted in unfinished business from the 1947 Partition, competing claims to the Kashmir region,
and, in more recent years, “cross-border terrorism” in both Kashmir and major Indian cities. In
the interests of regional stability, the United States strongly encourages an ongoing India-Pakistan
peace initiative and remains concerned about the potential for conflict over Kashmiri sovereignty
to cause open hostilities between these two nuclear-armed countries. 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 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
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 major steps in this direction and coalition governments have
kept the country on a general path of reform, yet there is U.S. concern that such movement is
slow and inconsistent. India is the world’s fourth-largest emitter of greenhouse gases. Congress
also continues to have concerns about abuses of human rights, including caste- and gender-based
discrimination, and religious freedoms in India. Moreover, the spread of HIV/AIDS in India has
been identified as a serious development. See also CRS Report RL34161, India-U.S. Economic
and Trade Relations, by Michael F. Martin and K. Alan Kronstadt. This report will be updated
Introduc tion ..................................................................................................................................... 1
Key Current Issues and Developments............................................................................................2
U.S.-India Civil Nuclear Cooperation.......................................................................................2
Domestic Political Realignment................................................................................................7
Terrorism and Deteriorating Relations With Pakistan...............................................................9
Renewed Conflict in Kashmir.................................................................................................10
Other Recent Developments....................................................................................................11
Context of the U.S.-India Relationship.........................................................................................12
Backgr ound ............................................................................................................................. 12
India’s Regional Relations......................................................................................................14
China .......................................................................................................................... ....... 18
Burma ................................................................................................................................ 21
The “IPI” Pipeline Project ...............................................................................................24
National Elections ............................................................................................................28
The Congress Party ..........................................................................................................29
The Bharatiya Janata Party (BJP) ....................................................................................30
The Left Front ..................................................................................................................31
“Next Steps in Strategic Partnership” and Beyond.................................................................31
Civil Nuclear Cooperation ...............................................................................................32
Civil Space Cooperation...................................................................................................38
High-Technology Trade ...................................................................................................39
The Indian Military ..........................................................................................................40
U.S.-India Security Cooperation.......................................................................................41
Nuclear Weapons and Missile Proliferation .....................................................................45
U.S. Nonproliferation Efforts and Congressional Action.................................................46
India’s Economy and U.S. Interests........................................................................................47
Overvi ew ....................................................................................................................... .... 47
Trade and Investment........................................................................................................49
Barriers to Trade and Investment......................................................................................50
Special Economic Zones (SEZs)......................................................................................51
Multilateral Trade Negotiations .......................................................................................52
The Energy Sector and Climate Change...........................................................................53
The Kashmir Issue...................................................................................................................56
Other Regional Dissidence......................................................................................................60
Human Rights Issues...............................................................................................................63
Female Infanticide and Feticide........................................................................................65
H IV / AIDS ....................................................................................................................... ........ 66
Economic .......................................................................................................................... 67
Selected Relevant Legislation in the 110 Congress..............................................................68
Figure 1. Deaths Related to Kashmiri Separatism, 1988-2006.....................................................59
Figure 2. Map of India...................................................................................................................70
Table 1. Direct U.S. Assistance to India, FY2001-FY2009...........................................................69
Author Contact Information..........................................................................................................70
Long considered a “strategic backwater” from Washington’s perspective, South Asia has emerged st
in the 21 century as increasingly vital to core U.S. foreign policy interests. India, the region’s
dominant actor with more than one billion citizens, is often characterized as a nascent major
power and “natural partner” of the United States, one that many analysts view as a potential
counterweight to China’s growing clout. Washington and New Delhi have since 2004 been
pursuing a “strategic partnership” based on shared values such as democracy, pluralism, and rule
of law. Numerous economic, security, and global initiatives, including plans for “full civilian
nuclear energy cooperation,” are underway. This latter initiative, launched by President Bush in th
July 2005 and provisionally endorsed by the 109 Congress in 2006 (P.L. 109-401, the “Hyde
Act”), would reverse three decades of U.S. nonproliferation policy. It requires, among other steps,
a Joint Resolution of Approval by Congress.
Also in 2005, the United States and India India in Brief
signed a ten-year defense framework Population: 1.15 billion; growth rate: 1.6% (2008 est.)
agreement that calls for expanding bilateral Area: 3,287,590 sq. km. (slightly more than one-third
security cooperation. Since 2002, the two the size of the United States)
countries have engaged in numerous and
unprecedented combined military exercises. Capital: New Delhi
Major U.S. arms sales to India are planned. Head of Government: Prime Minister Manmohan
The influence of a growing and relatively Singh (Congress Party)
wealthy Indian-American community of more Ethnic Groups: Indo-Aryan 72%; Dravidian 25%; other
than two million is reflected in Congress’s 3%
largest country-specific caucus. Languages: 22 official, 13 of which are the primary
tongue of at least 10 million people; Hindi is the primary
Both leading U.S. presidential candidates tongue of about 30%; English widely used
express full-throated support for a deepened Religions: Hindu 81%; Muslim 13%; Christian 2%; Sikh
and expanded U.S.-India partnership. Senator 2%, other 2% (2001 census)
Barak Obama would like to see U.S.-India ties Life Expectancy at Birth: female 72 years; male 67
strengthened “across the board,” with a years (2008 est.)
particular focus on energy issues. Senator John Literacy: female 48%; male 73% (2001 census)
McCain claims the United States has a “vested
interest in India’s success” and he calls for Gross Domestic Product (at PPP): $3.03 trillion; per capita: $2,784; growth rate 9% (2007)
improved military and counterterrorism
cooperation, along with mutual efforts to Currency: Rupee (100 = $2.37)
strengthen democracy and energy security. Inflation: 6.4% (2007)
Both Senators are explicit supporters of U.S.-Defense Budget: $28.5 billion (2.4% of GDP; 2007)
India civil nuclear cooperation as proposed by 1
the Bush Administration. U.S. Trade: exports to U.S. $24.0 billion; imports from U.S. $17.6 billion (2007)
Sources: CIA World Factbook; U.S. Department of
Commerce; Economist Intelligence Unit; Global Insight;
1 “‘‘I Am Reluctant To Seek Changes In The N-Deal’” (interview), Outlook (Delhi), July 21, 2008; John McCain,
“America Has a Vested Interest in India’s Success” (op-ed), Indian Express (Mumbai), August 8, 2008.
Plans to initiate U.S.-India civil nuclear cooperation were long hampered by domestic political
resistance in India, but are again underway in mid-2008. In a major policy shift by the United
States, a July 2005 U.S.-India Joint Statement notably asserted that “as a responsible state with
advanced nuclear technology, India should acquire the same benefits and advantages as other
such states,” and President Bush vowed to work on achieving “full civilian nuclear energy
cooperation with India.” As a reversal of three decades of U.S. nonproliferation policy, such
proposed cooperation stirred controversy and required changes in both U.S. law and in
international guidelines. Enabling U.S. legislation became public law in December 2006 (P.L.
For nearly one year from mid-2007 to mid-2008, however, India’s United Progressive Alliance
(UPA) coalition government, led by the Congress Party of Prime Minister Manmohan Singh, was
unable to overcome persistent and unrelenting resistance to the pact from communist party
leaders who provide the ruling coalition with crucial parliamentary support. By threatening to
withdraw such support if the UPA went forward with the initiative, the Left Front obstructed its
potential consummation, leading many analysts to conclude that planned cooperation would not
take place in the foreseeable future. A July 2008 political realignment in New Delhi, however,
freed the UPA to continue its pursuit of the deal. On August 1, the International Atomic Energy
Agency (IAEA) Board of Governors approved the safeguards accord with India. On August 21,
the 45-member Nuclear Suppliers Group (NSG) is set to meet to discuss adjusting its guidelines
to permit nuclear trade with India. If this step is taken, U.S.-India civil nuclear cooperation can
commence only after Congress approves a Joint Resolution of Approval. The text of the 123
Agreement must be submitted for 30 days of continuous congressional session before any vote
can take place. Thus, by nearly all accounts, the U.S. congressional calendar presents a major 3
obstacle to the deal’s consummation in 2008.
In July 2007, the United States and India announced having concluded negotiations on a peaceful
nuclear cooperation (or “123”) agreement. Then-Under Secretary of State for Political Affairs
Nicholas Burns, the lead U.S. negotiator, called the deal “perhaps the single most important
initiative that India and the United States have agreed to in the 60 years of our relationship” and 4
“the symbolic centerpiece of a growing global partnership between our two countries.” U.S.
2 See also CRS Report RL33016, U.S. Nuclear Cooperation with India: Issues for Congress, by Paul K. Kerr, and
“Next Steps in Strategic Partnership” and Beyond section below.
3 “Congress May Not Pass U.S.-India Nuclear Pact,” Washington Post, July 9, 2008. According to Section 123b of the
Atomic Energy Act, the President is to submit the text to the Senate Foreign Relations Committee and the House
Committee on Foreign Affairs. The President is then to consult with the committees for a period of not less than thirty
days of continuous session.” According to Section 123d, the two committees shall, after that time, “each hold hearings
on the proposed agreement for cooperation and submit a report to their respective bodies recommending whether it
should be approved or disapproved.” Therefore, the minimum amount of time that must elapse before Congress can
vote on a joint resolution of approval is 30 days of continuous session, in addition to the amount of time Congress
would take to hold hearings.
4 See http://www.state.gov/p/us/rm/2007/89559.htm.
officials urged New Delhi to move rapidly toward completing remaining steps to consummation
of the pact. These included finalizing arrangements for IAEA inspections of India’s civilian
nuclear facilities and winning the endorsement of the NSG for nuclear trade. Following these
steps, the 123 Agreement can become operative only through a Joint Resolution of Approval from
Congress. There have been significant apparent contradictions between the expectations of and 5
public statements by U.S. and Indian officials on this issue.
Many independent Indian commentators approved of the pact, seeing in it an end to “nuclear 6
apartheid” that likely will “go down as one of the finest achievements of Indian diplomacy.”
There also is evidence that the Indian business community supports the deal as a means of
contributing to India’s rise as a major power and of bolstering the country’s energy security. In
November 2007, 23 former Indian military chiefs, senior bureaucrats, and scientists signed an
open letter to Parliament urging approval of the pact so as to remove the “crippling constraints” 7
India suffers due to international regimes that deny it high-technology goods. With multiple
admonitions from senior U.S. government officials in 2008 that the time needed to consummate
the deal was growing short, many Indian commentators joined in pressing their government to
avoid an uncertain future by moving quickly to finalize the pact. Some see India’s nuclear power
industry in dire need of uranium supplies that can only come from the international market.
Uranium shortages appear to be hampering India nuclear power sector, which is running at or 8
below half capacity.
In New Delhi, where the executive can enter international agreements without parliamentary
approval, Prime Minister Singh’s Congress Party-dominated cabinet endorsed the agreement text
immediately upon its finalization. His UPA coalition government then set about assuring domestic
skeptics that the autonomy of the country’s nuclear weapons program would be maintained and
that all key commitments previously made to parliament were being adhered to, including those
related to plutonium reprocessing and nuclear weapons testing rights, as well as assured and 9
uninterrupted supplies of nuclear fuel even if the agreement is terminated. Later, in response to
continued controversy over whether or not India’s freedom to conduct future nuclear weapons
tests is restricted by the agreement, External Affairs Minister Pranab Mukherjee told Parliament,
“There is nothing in the bilateral agreement that would tie the hands of a future government or 10
legally constrain its options.”
Despite such assurances, ensuing debate over the deal divided the New Delhi establishment as
much as any issue in the country’s history. Prime Minister Singh may have underestimated the
degree of anti-Americanism and anti-imperialism held by his coalition’s communist Left Front
allies, who provided his ruling coalition with crucial parliamentary support. In August 2007,
senior leaders of the main opposition Bharatiya Janata Party (BJP) reiterated their party’s
5 A useful table is at http://www.carnegieendowment.org/files/123agreementchart.pdf.
6 “End of Nuke Apartheid Against India,” Times of India (Delhi), August 4, 2007; C. Raja Mohan, “India Gains, US
Doesn’t Lose” (op-ed), Indian Express (Delhi), August 4, 2007.
7 See http://www.indianexpress.com/story/239308.html.
8 G. Parthasarathy, “We Won’t Get a Better Deal” (op-ed), Times of India (Delhi); “Don’t Wait for Obama”(editorial),
Indian Express (Mumbai), both February 22, 2008; M.R. Srinavasan, “Nuclear Ground Realities” (op-ed), Indian
Express (Mumbai), March 29, 2008; K. Subramanyam, “Why the Nuke Deal is Crucial” (op-ed), Times of India
(Delhi), April 7, 2008; “Govt Admits Lack of Fuel Delayed Start-Up of Two N-Power Plants,” Indian Express
(Mumbai), May 8, 2008.
9 See http://www.indianembassy.org/newsite/press_release/2007/Aug/4.asp.
10 See http://www.indianembassy.org/newsite/press_release/2007/Aug/7.asp.
“reservations” about the nuclear deal and its potentially negative impact on India’s nuclear
weapons program. Yet India’s communist parties went much further in their criticisms, issuing a
joint statement which called the 123 Agreement “flawed” and claiming that it “must be seen as a
crucial step to lock India into the U.S. global strategic designs.” Their view is not limited to those
with communist sentiments: One former Indian national security advisor asserted that while a
vast majority of the country’s rising urban middle class firmly favors closer India-U.S. ties, it
“will not tolerate a subservient relationship” and retains significant differences in approaches to 11
third parties such as Iran and Pakistan.
The political squabbling in New Delhi put the nuclear deal on lengthy hold. In October 2007,
Prime Minister Singh informed President Bush that “certain difficulties have arisen with respect 12
to the operationalization” of the deal. Hopes for consummation were revived in November when
the Left Front allowed the Indian government to begin talks with the IAEA. Yet, by year’s end,
the communist leadership was again threatening to withdraw support for the ruling coalition
unless talks were halted. December negotiations with the IAEA reportedly were hampered by
“technical glitches” related to India’s demand for “unconditional” guarantees of fuel supplies in
perpetuity. External Affairs Minister Mukherjee insisted in the first days of 2008 that New Delhi
had not given up on the deal and was continuing with its efforts to resolve the face-off with the 13
Nonproliferation experts have been consistent in their opposition to the nuclear deal, believing it
will significantly damage the global nonproliferation regime and facilitate an Asian nuclear arms
race. Some have asserted that the text of the 123 Agreement disregards the legislative intent of the
Hyde Act, especially in the area of continued supplies of nuclear fuel to India even if that country
tests a nuclear weapons and the agreement is terminated. Others warn that NSG endorsement of 14
an exception for India will “virtually ensure the demise of global nuclear export restraints.” A
January 2008 letter to NSG officials endorsed by more than 130 nonproliferation experts and
nongovernmental organizations argued that India’s commitments thus far did not justify making
“far-reaching” exceptions to international nonproliferation rules and norms. The document asked
that NSG members consider the potential costs of granting to India any special safeguards
exceptions and urged the body to make clear that all nuclear trade with India would cease upon 15
that country’s resumption of nuclear testing for any reason. Opponents warn that the already
weakened international nonproliferation regime may be mortally damaged by the proposed
alteration of international norms. Particular criticism arises in the area of future nuclear testing, 16
which nonproliferation advocates say is likely to be facilitated by the deal.
At least one nonproliferation advocate in Congress concluded that the 123 Agreement “is not
consistent with [congressional] requirements and restrictions” and would “deeply damage” the
11 “Indian Communists Reject U.S. Nuclear Pact,” Reuters, August 7, 2007; Brajesh Mishra, “No to Subservient
Relations,” India Today (Delhi), September 24, 2007.
12 See http://www.indianembassy.org/newsite/press_release/2007/Oct/12.asp.
13 “India Says Not Given Up on U.S. Nuclear Deal,” Reuters, January 4, 2008.
14 See, for example, William Potter and Jayantha Dhanapala, “The Perils of Non-Proliferation Amnesia,” Hindu
(Chennai), September 1, 2007.
15 See “Fix the Proposal for Renewed Cooperation With India,” January 7, 2008, at http://www.armscontrol.org/
16 “Indo-US N-Deal ‘Nonproliferation Disaster’: Critics,” Press Trust of India, July 11, 2008” Michael Krepon, “Faits
Accompli, Complicity, and Nuclear Proliferation,” July 30, 2008, at http://www.stimson.org/pub.cfm?ID=654.
global nonproliferation regime. He identified the issues of nuclear testing, assurances of fuel 17
supply, and the reprocessing of U.S.-origin nuclear material three core concerns. During a
February 2008 hearing, Secretary of State Condoleezza Rice assured the House Foreign Affairs
Committee (HFAC) that the U.S. government will support India in the NSG only if any resulting
exemptions are fully consistent with the provisions of the Hyde Act. Nonproliferation advocates
say Secretary Rice’s pledge will require a shift in U.S. policy, in particular by placing conditions 18
on India’s ability to engage in global nuclear trade. Representative Howard Berman, the HFAC
Chairman and a supporter of the initiative, finds it “incomprehensible” that the Administration
would seek or accept an NSG exemption that omits many of the conditions contained in the Hyde
Act. He says such an exemption would be inconsistent with U.S. law, be harmful to U.S. business
interests, and undermine U.S. nonproliferation objectives. In line with previous Administration
assurances to Congress, he expects U.S. negotiators to reject any NSG exemption “that does not 19
faithfully reflect all of the Hyde Act conditions.”
Left Front leaders maintained their adamant opposition to any “operationalization” of the nuclear
deal, which for them meant the government should not seek IAEA Board of Governors approval
for the draft agreement on safeguarding India’s nuclear facilities. They saw Prime Minister Singh
following a timeline set by the Bush Administration at the expense of India’s national interests, 20
and they threatened to withdraw support for the UPA coalition. There were signs in May that the
U.S. government had wound down its efforts to persuade NSG members to provide an exemption
for India. In mid-May, U.S. officials were saying the window for completing the necessary steps 21
had become “very narrow” and, by June, reports of the deal’s outright failure were appearing.
On July 8, the communist parties formally withdrew their support for the Congress-led ruling
coalition, saying they opposed a “strategic embrace with the most aggressive power in the world 22
today.” Days later, with his domestic political standing bolstered by a regional party that could
partially compensate for the loss of Left Front support (see “Domestic Political Realignment”
section below), Prime Minister Singh was able to attend a G8 summit meeting in Japan with
renewed optimism about the nuclear deal’s prospects. New Delhi moved quickly to obtain IAEA
approval by submitting a draft safeguards accord and, in mid-July, Foreign Secretary Menon was
joined in Vienna by Under Secretary of State William Burns for consultations with IAEA
Secretary-General Mohammed ElBaradei, an avid proponent of the deal. Indian officials were
then dispatched to numerous foreign capitals to lobby IAEA and NSG member governments for 23
support. President Bush agrees with Prime Minister Singh that the pact should be finalized “as
17 “Courses of Action for Congress and the Nuclear Suppliers Group: A Conversation with the Hon. Edward J. Markey
on Nuclear Cooperation Between the United States and India,” Council on Foreign Relations, September 13, 2007.
18 Transcript: House Foreign Affairs Committee Holds Hearing on the Fiscal 2009 International Relations Budget,
February 13, 2008; Arms Control Association press release at http://www.armscontrol.org/pressroom/2008/
19 See http://www.armscontrol.org/node/3240.
20 Prakash Karat, “Left Will Not Compromise,” People’s Democracy (New Delhi), June 29, 2008; “India’s Left-Wing
to Reconsider Support for Gov’t: Officials,” Agence France Presse, July 1, 2008.
21 “Zilchonium Bomb,” Outlook (Delhi), May 12, 2008; “Nuclear Deal Is Not Dead But Down to Last Days: Mulford,”
Hindu (Chennai), May 20, 2008; “US-India Nuclear Deal Dead,” Financial Times (London), June 10, 2008.
22 “India Left Ends Coalition Support,” BBC News, July 8, 2008.
23 “India Begins Lobbying With IAEA, NSG for Nuclear Deal,” Hindu (Chennai), July 25, 2008.
expeditiously as possible.” Some observers, already viewing the deal overly favoring of India, see 24
little reason for the U.S. government to move precipitously in finalizing it.
On August 1, the IAEA Board of Governors approved the safeguards accord with India. The
IAEA Secretary-General insisted that the accord met all of the body’s legal requirements and was 25
of “indefinite duration.” The next major step toward consummation is obtaining an adjustment
of NSG guidelines so as to allow India to purchase nuclear fuel and technologies on the
international market. Representatives from all 45 NSG member states are scheduled to gather in
Vienna on August 21. New Delhi has been firm in demanding a “clean and unconditional
exemption” from the NSG, one that would waive all guidelines normally applied to non-nuclear 26
weapons states under the NPT. Yet unconditional NSG approval may not be a given, as some
member states may be hesitant to endorse nuclear trade with a country that is not signatory to the
NPT and that has tested nuclear weapons. Japan, for example, recently has expressed such
concerns. Some reports indicate that smaller member states may seek to add amendments
(conditions) such as requests that India join the NPT and/or CTBT, or that safeguards be made 27
permanent regardless of the status of fuel supply.
The text of a draft U.S. proposal for the NSG, circulated on August 6, has come under fire from
nonproliferation advocates for its alleged weakening of NSG credibility and its failure to include
clear statements that would end all cooperation in the event of a future Indian nuclear weapons
test; prohibit the transfer to India of sensitive processing, enrichment, or heavy water
technologies; and call upon India to stop producing fissile materials. According to one analysis, 28
the U.S. draft contains language contrary to the 2006 Hyde Act.
While top U.S. officials withheld comment on India’s internal political processes, there remains a
sense of urgency in Washington, with the Bush Administration (and many in Congress) eager to
see the deal consummated during its remaining term in office. Some analysts warned that a failure
submit the 123 Agreement to Congress by mid-summer would require starting the difficult
negotiation process anew in 2009, perhaps involving a Democratic U.S. Administration and/or
Congress that might be more favorable to arguments made by nonproliferation advocates. Former
Under Secretary of State Burns has himself opined that a future U.S. presidential administration is
highly unlikely to replicate the deal in its present form, meaning that “the only opportunity to 29
realize the potential of this deal is with the administration of President Bush.”
24 “Bush, Singh Agree to Forge Ahead on Nuclear Pact,” Agence France Presse, July 24, 2008; “No Rush, Please”
(editorial), New York Times, July 5, 2008.
25 “India Inspections Deal Meets IAEA Standards: ElBaradei,” Agence France Presse, August 1, 2008.
26 “Kakodkar: India is Firm on Unconditional Waiver,” Hindu (Chennai), August 3, 2008; “India Firm on
‘Unconditional’ Exemption,” Hindu (Chennai), August 12, 2008.
27 “Japan Has ‘Concerns’ on US-India Nuclear Deal,” Associated Press, August 5, 2008; “Smaller NSG Nations for
Changes in N-Deal?,” Times of India (Delhi), August 13, 2008. See also “Nuclear Trade Exemption for India Won’t
Come Easy,” Reuters, August 8, 2008.
28 See http://armscontrol.org/node/3274.
29 “Post-Bush, India May Have to Start From Scratch,” Hindustan Times (Delhi), October 23, 2007;
Domestic debate in India on the pending U.S.-India nuclear deal triggered the most serious crisis
faced by the UPA government since it came to power in May 2004. In fact, the turmoil nearly led
to a collapse of the ruling coalition and early elections as both Prime Minister Singh and the Left
Front parties maintained staunch and mutually incompatible positions on the deal. The August
2007 release of the 123 Agreement text brought an uproar in the Indian Parliament—effectively
shutting the body down at times—with numerous lawmakers complaining that the deal would
restrict India’s ability to test nuclear weapons in the future and threaten its foreign policy 30
independence. An urgent meeting between Singh and communist leader Prakash Karat ended
without reconciliation, and the Left Front warned the central government of “serious 31
consequences” if it moved forward with the plan.
To facilitate what could only be an interim truce between the Congress party and the Left Front,
the government created a panel of government officials, politicians, and scientists to “study” the
nuclear deal. Communist leaders agreed to join the 15-member panel, which met for the first time
in September 2007. Ten rounds of talks were held over ensuing months, but neither side budged
from its strident position. With Prime Minister Singh and Congress Party chief Gandhi seeming to
veer from strident support for the deal to an acceptance of its potentially permanent hibernation in
only a matter of days during October, the New Delhi government’s credibility came into 32
question. By March 2008, communist leaders again were openly threatening to withdraw
support for the UPA coalition and so bring an early end to the government’s term, which is
scheduled to terminate in May 2009.
Indications arose in June that Prime Minister Singh would push for approval of U.S.-India civil
nuclear cooperation despite Left Front opposition. Talk of early elections again increased. Yet, on
July 8, the same day India’s communist parties formally withdrew their support for the Congress-
led ruling coalition, the regional powerhouse Samajwadi Party (SP) formally announced that its
39 parliamentarians would support—but not join—the UPA. It brushed off criticism by the
Bahujan Samaj Party (BSP), its Uttar Pradesh political rivals, that the nuclear deal was “anti-33
Muslim.” (The SP and BSP are both reliant on the state’s large Muslim electorate; Muslims
account for about one-fifth of Uttar Pradesh’s population.) As conveyed by SP leader Amar
Singh, “For us, communalism is a bigger danger than imperialism. Advani is a bigger danger than
30 In September, India’s leading communist party issued an open letter to Parliament expressing the Left Front’s strong
opposition to the proposed nuclear deal, calling the alleged creation of a “strategic alliance with America” an
unacceptable departure from the Common Minimum Program and rejecting a perceived “military alliance with
America” (see http://www.cpim.org/statement/statements_2007.htm).
31 “India’s Left Issues Blunt Threat Over Nuclear Deal,” Reuters, September 13, 2007.
32 According to a U.S.-based analyst, “The abrupt halt ... casts a serious doubt about the willingness and ability of any
government in New Delhi to act in a responsible, predictable, and reliable fashion” (Sumit Ganguly, “Save the Nuclear
Deal,” Times of India (Delhi), October 26, 2007).
33 SP chief Mulayam Singh is viewed as a secular and liberal figure, but he has faced corruption probes and accusations
of incompetence as three-time past chief minister of India’s most populous state. His key rival is BSP leader and
current state Chief Minister Mayawati, whose party won an outright majority in May 2007 state assembly elections.
Mayawati, the most important low-caste politician in India’s history, has aspirations to become the country’s Prime
Minister, but also suffers from accusations of corruption (“As Communists Fade, India’s New Kingmaker Emerges,”
Reuters, July 12, 2008; “Mayawati Plans to Seek India’s Premier Post,” Wall Street Journal, August 11, 2008).
Bush.”34 Some analysts view the Congress Party’s embrace of the SP as evidence of a rightward 35
shift in national politics.
With a partial replacement for the Left Front secured, the government set a July 22 date for a
confidence vote, which requires the 543-member Lok Sabha (lower house) to vote yes or no on a
motion expressing confidence in the ruling coalition. The opposition-leading BJP mobilized for
the perceived opportunity to topple the UPA government and trigger early elections in which it
might prevail. As the date neared and the anticipated outcome remained unclear, the Congress
Party used the advantages of incumbency to entice wavering parliamentarians. Such efforts
reportedly included offering ministerships and other perquisites to gain the support of smaller 36
regional parties, some of them comprised of but one Lok Sabhan. On July 22, after two days of
raucous parliamentary debate, the Singh government survived the vote by a wider-than-expected
margin of 275-256, with 11 abstentions, thus averting early elections. Yet the victory may have
come at some cost: bribery charge were immediate and included claims by BJP legislators that
they had been offered huge sums of cash to abstain from voting. Moreover, the UPA may be 37
haunted by deal-making with smaller parties of questionable reliability.
India’s economy has in recent months been rocked by soaring inflation, and power shortages have
sparked public outrage and protests. In June, the New Delhi government took a political risk in
announcing a ten percent hike in fuel prices. The move triggered street protests in several states,
including strikes that virtually shut down the Andhra Pradesh and West Bengal. Investor concerns
about soaring gasoline costs likely contributed to a 3.3% one-day drop in the value of the Sensex
index of the Bombay Stock Exchange. Indeed, a sharp increase in food and fuel costs may 38
counterbalance recent growth in the Indian economy. In mid-June, inflation rates reached a 13-
year high of more than 11% and prices for basic foodstuffs reportedly rose by as much as 50% in
some smaller Indian cities in less than six months. The Reserve Bank of India responded by
raising its benchmark lending rate to the highest level in six years. Inflationary pressures
continued throughout July and, in early August, breached 12%, due mainly to soaring food prices.
The central government’s deteriorating public finances, due mainly to rising subsidies, are
threatening India’s investment grade credit ratings. Power shortages have forced some key state
governments, including Maharashtra, Andhra Pradesh, and Karnataka, to strictly ration 39
commercial electricity supplies.
Some observers have expressed optimism that, with the Left Front no longer a central factor for
the central government’s decision making, stalled economic reform efforts could move forward
with the help of the pro-business Samajwadi Party, potentially boosting rates of foreign
34 “SP Says It Will Back Congress in Trust Vote,” Economic Times (Delhi), July 6, 2008.
35 Praful Bidwai, “Rightward Turn” (op-ed), Frontline (Chennai), August 1, 2008.
36 “Cong Ready to Open Bag of Bounties,” Telegraph (Kolkata), July 18, 2008.
37 “Bribery – and Charges of It – Run Rampant in India,” Wall Street Journal, July 24, 2008; “Indian Government’s
Unstable Win,” Christian Science Monitor, July 24, 2008; “What Price Victory?,” Frontline (Chennai), August 15,
38 “India Wobbles on Fuel Hikes After Anger, Malaysia Firm,” Reuters, June 6, 2008; “India’s Fiscal Gains Offset by
Rising Prices,” New York Times, June 11, 2008.
39 “Scale of India’s Inflation Revealed,” BBC News, June23, 2008; “India’s Ratings Under Cloud as Govt Finances
Sour,” Reuters, July 15, 2008; “Power Crisis Hits Indian states,” BBC News, July 25, 2008.
investment. In late July, Finance Minister P. Chidambaram pledged to revive reforms, especially
in the banking and insurance sectors. Yet it is considered likely that more urgent economic
problems and impending national elections will combine to keep such efforts on the back 40
burner. Despite serious difficulties, some more optimistic commentators offer that, because the
shocks are largely external, and high investment rates persist, India’s economy can be expected to 41
continue to perform strongly.
Among the top goals of Indian officials in 2008 has been gauging the new Pakistani government’s
commitment to the bilateral peace process. Within this modest context, the outcome of Pakistan’s 42
February national election was viewed as generally positive. However, ensuing months have
seen a deterioration of India-Pakistan relations, and some in New Delhi express frustration that
the new civilian leaders in Islamabad have little influence over Pakistan’s powerful military and 43
intelligence agencies. In August, the Indian national security advisor expressed worry at the
possibly imminent removal from office of Pakistani President Pervez Musharraf, saying such a
development would “leave radical extremist outfits with freedom to do what they like” in the 44
In May, India accused Pakistan of committing multiple cease-fire and territorial violations along
the Kashmiri Line of Control (LOC); one incident left an Indian soldier dead. June visits to
Islamabad by External Affairs Minister Mukherjee, and later by Pakistan’s foreign minister to
New Delhi, were cordial and appeared to get the peace process back on track, but produced no
new initiatives. Then, on July 7, a suicide car bomb killed 58 people, including four Indian
nationals, at the Indian Embassy in Kabul, Afghanistan. Afghan and Indian officials later claimed
to have evidence that Pakistan’s intelligence agency was complicit in the attack, a charge
reportedly echoed by the U.S. government. Late July serial bomb attacks in the cities of
Bangalore and Ahmedabad killed scores of people and triggered heightened suspicions of foreign 45
involvement in terrorist acts inside India. Indian security officials also claim that Pakistan’s 46
Inter-Services Intelligence Directorate (ISI) is poised to send 800 religious militants into India.
40 “India Inc: Reforms May Get Impetus,” Financial Express (Mumbai), July 23, 2008; “India Vows to Revive
Economic Reforms,” Financial Times (London), July 23, 208; “Despite Left Exit, India Shackled Over Reforms,”
Reuters, July 7, 2008.
41 Kaushik Basu, “India’s Economy - Reasons to Be Cheerful” (op-ed), BBC News, June 18, 2008.
42 “Quietly Forward,” Frontline (Chennai), June 20, 2008.
43 ”India Frustrated by a Rudderless Pakistan,” New York Times, August 12, 2008; “India Yearns for Pakistan’s
Musharraf Amid Turmoil,” Associated Press, August 12, 2008.
44 “Q&A With Indian National Security Advisor MK Narayanan,” Straits Times (Singapore), August 12, 2008.
45 July’s terrorist attacks may represent the “Indianization of the jihad,” according to some analysts. The violence
spurred many commentators to lament what they describe as an incompetent national security apparatus (“Sophisticated
Attacks Catch Indian Agencies Napping,” Reuters, July 29, 2008; “Hello, Anybody There?” (editorial), Times of India
(Delhi), July 29, 2008).
46 “India to Protest to Pakistan Over Border Shooting,” Reuters, May 19, 2008; “Pakistan ‘Behind Afghan Attacks,’”
BBC News, July 14, 2008; “India Blames Pakistan in Embassy Bombing,” Associated Press, July 21, 2008; “Pakistanis
Aided Attack in Kabul, U.S. Officials Say,” New York Times, August 1, 2008; “Bombings May Threaten India-Pakistan
Relations,”Christian Science Monitor, July 28, 2008; “ISI Looking to Push 800 Militants Into India: BSF,” Indian
Express (Mumbai), August 4, 2008.
On July 21, Foreign Secretary Menon met with his Pakistani counterpart in New Delhi to launch
the fifth round of the bilateral Composite Dialogue. Following the meeting, the Menon warned
that recent events—culminating in embassy bombing—had brought the peace process “under
stress.” Blunt language again followed a high-level meeting in Sri Lanka, where Menon 47
suggested that India-Pakistan relations were at a four-year low ebb. Along with the Kabul
bombing, Indians widely suspect Pakistani complicity in recent terrorist attacks inside India. At
the same time, further lethal shooting incidents along the LOC in July exacerbated bilateral
tensions. When the Pakistani Senate passed a resolution on the situation in India’s Jammu and
Kashmir state (see below), an Indian official called the move “gross interference” in India’s
internal affairs. The exchange was soon repeated when the Pakistani foreign minister decried
“excessive and unwarranted use of force” in Kashmir by the Indian government, a charge rejected
as unhelpful by New Delhi. Moreover, New Delhi’s progress in an initiative that would allow
India to purchase nuclear materials and technologies on the international market spurred 48
Islamabad to warn of a potential new nuclear arms race on the Asian subcontinent.
In late June, a state government decision to grant 99 acres of land to a trust for the popular
Amarnath Hindu shrine in the Jammu and Kashmir state sparked violent protests by Muslims who
say the move seeks to change the demographic balance in their Muslim-majority state. Public
expressions of anger included a withdrawal from the state’s coalition government by the
influential regional People’s Democratic Party and the subsequent resignation of Chief Minister
Ghulam Nabi Azad, which placed the state under federal rule. Azad had responded to resistance
by revoking the land grant decision, but protests did not subside and later spread to the Hindu-
majority Jammu region. Dozens of people have been killed and hundreds wounded in clashes
with police over more than one month of unrest.
Many of the state’s Hindus were upset by the government’s reversal; their efforts to block the sole
road connecting the Kashmir Valley from the rest of India have left the capital of Srinagar short
of food, fuel, and medical supplies. A high-level federal government meeting convened by Prime
Minister Singh in early August concluded that a dialogue process was needed and would benefit
from the active support of the opposition BJP, whose Hindu nationalist leanings may help to fuel
the resentments the state’s Hindu minority. Yet worsening strife, with at least 19 protesters killed
at up to 300 security troops injured on August 11-12 alone, has led some to warn that the state 49
could fall into “communal meltdown,” squandering years of improvement.
A July 2008 public opinion survey conducted in both India and Pakistan found a majority of
respondents expressing an openness to a range of possible outcomes for Kashmir, including
outright independence. While such an outcome was described as “unacceptable” by half of the
47 “Briefing by Foreign Secretary After India-Pakistan Foreign Secretary-Level Talks,” Indian Ministry of External
Affairs, July 21, 2008; “India Official Sees Sinking Relations With Pakistan,” New York Times, August 1, 2008.
48 “Bombings May Threaten India-Pakistan Relations,”Christian Science Monitor, July 28, 2008; “Skirmishes Can Hurt
India-Pakistan Peace Process,” Reuters, July 30, 2008; Indian Ministry of External Affairs Press Briefing, August 7,
2008; “India Reacts ‘Strongly’ to Pakistan Comments on Kashmir Violence,” BBC Monitoring South Asia, August 12,
2008; “Pakistan Warns of New Nuclear Arms Race With India,” Associated Press, July 23, 2008.
49 “Kashmir Strike as Tensions Rise,” BBC News, August 7, 2008; “Kashmir Short of Essentials After Highway
Blockade,” Reuters, August 5, 2008; “Indian Leaders Urge Kashmir Talks,” BBC News, August 6, 2008”; “Violence
Threatens Kashmir Peace,” BBC News, August 11, 2008.
Indians surveyed, the pollsters concluded that, “If a majority of all Kashmiris were to choose
independence, a majority of Indians and Pakistanis would find such independence at least 50
• On August 12, at least 19 protesters were killed and up to 300 security troops
injured in two days of clashes in Kashmir.
• On July 26, some 53 people were killed and more than 120 wounded by 16 small
bomb explosions in Ahmedabad, Gujarat.
• On July 25, two people were killed by 7 small bomb explosions in Bangalore,
• On July 24, suspected separatist militants killed nine people, including a woman
and her four children, in Indian Kashmir.
• On July 21, Foreign Secretary Menon met with his Pakistani counterpart in New
Delhi to launch the fifth round of the bilateral Composite Dialogue.
• On July 19, at least nine soldiers were killed by a landmine explosion near
• On July 18, the India-Pakistan Working Group on confidence-building measures
for Kashmir met in Islamabad.
• On July 16, least 20 special commando police officers were killed when their
vehicle struck a landmine planted by suspected Maoist militants in Orissa.
• On July 9, President Bush met with Prime Minister Singh on the sidelines of the
G8 Summit in Japan.
• On July 7, a suicide car bomb killed 58 people, including four Indian nationals, at
the Indian Embassy in Kabul, Afghanistan.
• On July 2, 11 separatist militants and an army officer were killed in a gun battle
in Indian Kashmir.
• On July 1, National Security Advisor Narayanan paid a visit to Tehran for talks
with top Iranian leaders.
• Also on July 1, at least six people were killed after suspected separatist militants
exploded a bomb in a crowded Assam market.
• On June 30, the New Delhi government unveiled India’s first-ever national action
plan to address climate change.
• On June 29, at least 39 elite Indian anti-insurgency troops were feared drowned
after their boat capsized following an attack by Maoist militants in Orissa.
50 See http://www.worldpublicopinion.org/pipa/pdf/jul08/Kashmir_Jul08_rpt.pdf.
• On June 27, External Affairs Minister Mukherjee met with his Pakistani
counterpart in New Delhi, where the two leaders agreed to launch the fifth round
of the Composite Dialogue in July.
• On June 24, Indian and Pakistan officials held a third meeting of their Joint Anti-
Terrorism Mechanism in Islamabad.
• On June 16, a Singaporean national was sentenced to three years in U.S. federal
prison for conspiring with Indian government officials to illegally ship controlled
U.S. computer technology to India for use in military missile systems.
U.S. and congressional interests in India cover a wide spectrum of issues, ranging from the
militarized dispute with Pakistan and weapons proliferation to concerns about regional security,
terrorism, human rights, health, energy, and trade and investment opportunities. In the 1990s,
India-U.S. relations were particularly affected by the demise of the Soviet Union—India’s main
trading partner and most reliable source of economic and military assistance for most of the Cold
War—and New Delhi’s resulting need to diversify its international relationships. Also significant
were India’s adoption of significant economic policy reforms beginning in 1991, a deepening
bitterness between India and Pakistan over Kashmir, and signs of a growing Indian preoccupation
with China as a potential long-term strategic rival. With the fading of Cold War constraints, the
United States and India began exploring the possibilities for a more normalized relationship
between the world’s two largest democracies. Throughout the 1990s, however, regional rivalries,
separatist tendencies, and sectarian tensions continued to divert India’s attention and resources
from economic and social development. Fallout from these unresolved problems—particularly
nuclear proliferation and human rights issues—presented major irritants in bilateral relations.
India’s May 1998 nuclear tests were an unwelcome surprise and seen to be a policy failure in
Washington, and they spurred then-Deputy Secretary of State Strobe Talbott to launch a series of
meetings with Indian External Affairs Minister Jaswant Singh in an effort to bring New Delhi
more in line with U.S. arms control and nonproliferation goals. While this proximate purpose
went unfulfilled, the two officials soon engaged a broader agenda on the entire scope of U.S.-
India relations, eventually meeting fourteen times in seven different countries over a two-year
period. The Talbott-Singh talks were considered the most extensive U.S.-India engagement up to
that time and likely enabled circumstances in which the United States could play a key role in
defusing the 1999 Kargil crisis, as well as laying the groundwork for a landmark U.S. presidential
visit in 2000.
President Bill Clinton’s March 2000 visit to South Asia seemed a major U.S. initiative to improve
relations with India. One outcome was a Joint Statement in which the two countries pledged to 51
“deepen the India-American partnership in tangible ways.” A U.S.-India Joint Working Group
on Counterterrorism was established that year and continues to meet regularly. During his
subsequent visit to the United States later in 2000, Prime Minister Atal Bihari Vajpayee addressed
51 See http://www.usindiafriendship.net/archives/usindiavision/delhideclaration.htm.
a joint session of Congress and issued a second Joint Statement with President Clinton agreeing 52
to cooperate on arms control, terrorism, and HIV/AIDS.
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. Engagement was accelerated after a November
2001 meeting between President Bush and Prime Minister Vajpayee, when the two leaders agreed
to greatly expand U.S.-India cooperation on a wide range of issues, including regional security, 53
space and scientific collaboration, civilian nuclear safety, and broadened economic ties. Notable
progress has come in the area of security cooperation, with an increasing focus on
counterterrorism, joint military exercises, and arms sales. In late 2001, the U.S.-India Defense
Policy Group met in New Delhi for the first time since India’s 1998 nuclear tests and outlined a
defense partnership based on regular and high-level policy dialogue.
Prime Minister Manmohan Singh paid a landmark July 2005 visit to Washington, where what 54
may be the most significant joint U.S.-India statement to date was issued. In March 2006,
President Bush spent three days in India, discussed further strengthening a bilateral “global 55
partnership,” and issued another Joint Statement. The Bush Administration has vowed to “help st
India become a major world power in the 21 century,” and U.S.-India relations are today
conducted under the rubric of three major “dialogue” areas: strategic (including global issues and
defense), economic (including trade, finance, commerce, and environment), and energy. President
Bush’s 2002 National Security Strategy of the United States stated that “U.S. interests require a
strong relationship with India.” The 2006 version claims that “India now is poised to shoulder 56
global obligations in cooperation with the United States in a way befitting a major power.” In
the course of an annual assessment of global threats, Director of National Intelligence Mike
We expect India’s growing confidence on the world stage as a result of its sustained high
rates of economic growth will make New Delhi a more effective partner of the United States 57
but also a more formidable interlocutor in areas of disagreement, particularly in the WTO.
In late 2007, Under Secretary of State Burns, who traveled to New Delhi at least eight times over
a two-year period, penned an article lauding stronger U.S.-India relations while also identifying
“considerable hurdles” to achieving an effective “global partnership.” Foremost among these are
terrorism, narcotics trafficking, and nuclear proliferation, which he avers must be dealt with 58
through stronger bilateral security ties that will include defense sales. At a 2007 U.S.-India
business conference in Washington, Secretary of State Rice laid out the perspective that,
We in America look to the rise of India as an opportunity, a chance to work with a great
fellow democracy to share not only the benefits of the international system, but indeed, the
burdens and the responsibilities of maintaining it, of strengthening it, and defending it. We
52 See http://clinton4.nara.gov/WH/new/html/Wed_Oct_4_105959_2000.html.
53 See http://www.state.gov/p/sca/rls/rm/6057.htm.
56 See http://www.comw.org/qdr/fulltext/nss2002.pdf and http://www.comw.org/qdr/fulltext/nss2006.pdf.
58 Nicholas Burns, “America’s New Strategic Opportunity With India,” Foreign Affairs, November/December 2007.
are eager to continue charting a global partnership with India, one that addresses the global
challenges upon which the safety and success of every nation now depends: stemming
nuclear proliferation, fighting terrorism, combating disease, protecting the environment,
supporting education and upward mobility, expanding economic development, and 59
promoting freedom under the rule of law.
Some analysts, however, see great potential but little likelihood of India becoming a major global
power in the foreseeable future. Despite possession of a large, youthful, entrepreneurial
population, a booming national economy, and growing power projection capabilities in the
military realm, there remains much doubt about the capacity of India’s leaders to engage in
effective long-term strategic thinking and policy making. One senior Washington-based India-
watcher has opined that, “The Indian strategic community is hopelessly unstrategic,” and that its
political community is “too domestically focused,” thus precluding India’s emergence as a
substantive major power. Some Indian analysts agree that their national leaders lack a “coherent 60
national grand strategy.”
Recognition of India’s increasing stature and importance—and of the growing political influence
some 2.3 million Indian-Americans—is found in the U.S. Congress, where the India and Indian-
American Caucus is now the largest of all country-specific caucuses. Over the past seven years,
legal Indian immigrants have come to the United States at a more rapid rate than any other group.
In 2005 and 2006, the Indian-American community, relatively wealthy, geographically dispersed,
and well-entrenched in several U.S. business sectors, conducted a major (and apparently
successful) lobbying effort to encourage congressional passage of legislation to enable U.S.-India 61
civil nuclear cooperation.
India is geographically dominant in both South Asia and the Indian Ocean region. While all of
South Asia’s smaller continental states (Pakistan, Bangladesh, Nepal, and Bhutan) share borders
with India, none share borders with each other. The country possesses the region’s largest
economy and, with more than one billion inhabitants, is by far the most populous on the Asian
Subcontinent. The United States has a keen interest in South Asian stability, perhaps especially
with regard to the India-Pakistan conflict nexus and nuclear weapons dyad, and so closely
monitors India’s regional relationships.
Decades of militarized tensions and territorial disputes between India and Pakistan arguably have
hamstrung economic and social development in both countries while also precluding
establishment of effective regional economic or security institutions. Seemingly incompatible
national identities contributed to both wars and to the nuclearization of the Asian Subcontinent,
with the nuclear weapons capabilities of both countries becoming overt in 1998. Since that time, a
59 See http://www.state.gov/secretary/rm/2007/06/87487.htm.
60 Stephen Cohen cited in “Look Before You Hop” (interview); Harsh Pant, “‘Adamant for Drift, Solid for Fluidity,’”
both in Pragati: The Indian National Interest Review, June 2008 and July 2008, respectively.
61 See “Indian Community Burgeoning in America,” Associated Press, October 22, 2006; “Forget the Israel Lobby, the
Hill’s Next Big Player is Made in India,” Washington Post, September 30, 2007.
62 See also CRS Report RL33498, Pakistan-U.S. Relations, by K. Alan Kronstadt.
central aspect of U.S. policy in South Asia has been prevention of interstate conflict that could
destabilize the region and lead to nuclear war. In 2004, New Delhi and Islamabad launched their
most recent comprehensive effort to reduce tensions and resolve outstanding disputes, an effort
that has to date resulted in modest, but still meaningful successes. New Delhi acknowledges that a
stable Pakistan is in India’s interests. At the same time, however, many top Indian leaders are
convinced that Pakistan has long been and remains the main source India’s significant domestic
terrorism problems. They continue to blame Islamabad for maintaining an “infrastructure of
terror” and for actively supporting terrorist groups such as Jaish-e-Mohammed and Laskar-e-63
Taiba that are held responsible for attacks inside India.
The halting India-Pakistan peace initiative was revived in mid-2008 after becoming moribund in
the final months of 2007, when domestic political and security crises diverted the Pakistani
government’s attention away from its relations with India. New Delhi has watched the domestic
turmoil of its neighbor and long-time rival with great interest, but little public comment. India
takes pains to avoid even the perception of meddling in Pakistan’s domestic political problems
and so has been reticent and extremely cautious in its relevant public statements. A destabilized
Pakistan represents a major security concern for New Delhi, but at the same time history shows
that as Pakistan’s internal difficulties grow, Pakistani interference in Indian affairs tends to
decrease. Some view India’s relatively muted response as strong evidence that the two countries
have finally become “de-hyphenated.” Others call on New Delhi to reach out to the new
Islamabad government with conciliatory gestures that could facilitate the consolidation of 64
democratization in Pakistan.
In 2006, India and Pakistan agreed to open a second Kashmiri bus route and to allow new truck
service to facilitate trade in Kashmir (the new bus service began in June of that year). Subsequent
“Composite Dialogue” talks were held to discuss militarized territorial disputes, terrorism and
narcotics, and cultural exchanges, but high hopes for a settlement of differences over the Siachen
Glacier have been dashed with repeated sessions ending without progress. Multiple sessions on
the Tubal navigation project/Wullar barrage water dispute similarly have ended without forward
The serial bombing of Bombay commuter trains in July 2006 killed nearly 200 people and injured
many hundreds more. With suspicions regarding the involvement of Pakistan-based groups, New
Delhi suspended talks with Islamabad pending an investigation. However, at a September
63 While levels of violence in Kashmir declined significantly in 2007 as compared to the previous year, some Indian
analysts see signs that Islamist militants will seek to reverse this trend, perhaps with the urging and even support of
Pakistani government elements. According to Indian National Security Advisor M.K. Narayanan, a former chief of the
country’s domestic intelligence agency, very few Indian Muslims have played major roles in domestic terrorism. He
has asserted that, “Mostly, the [terrorist] activity has been generated from outside” and “the overwhelming majority” of
India’s terrorism problems emanates from the Pakistan-Afghanistan border region. Internal Indian government
documents reportedly conclude that Pakistan’s main intelligence agency has not changed its central objectives, which,
according to these sources, include supporting anti-Indian militancy in Kashmir, Punjab, Assam, and along the India-
Nepal and India-Bangladesh borders (“Negotiating War,” Outlook (Delhi), May 28, 2008; “MK Narayanan”
(interview), India Abroad, September 21, 2007; “ISI Still Helping Terror Groups Against India: Narayanan,” Times of
India (Delhi), March 26, 2008; “No Let Up in ISI Operations: Report,” Times of India (Delhi), June 9, 2008).
64 ”As Pakistan Boils, India Watches,” Chicago Tribune, December 30, 2007; “Pakistan Turmoil Draws Muted
Concern in India,” Washington Post, January 19, 2008; Praful Bidwai, “Changing Pakistan” (op-ed), Frontline
(Chennai), July 4, 2008.
meeting on the sidelines of a Nonaligned Movement summit in Cuba, Prime Minister Singh and
Pakistani President Musharraf announced a resumption of formal peace negotiations and also
decided to implement a new Joint Anti-Terrorism Mechanism. Soon after, however, Bombay’s top
police official said the 7/11 train bombings were planned by Pakistan’s intelligence services and,
in October 2006, Prime Minister Singh himself said India had “credible evidence” of Pakistani
involvement. (To date, India is not known to have gone public with or shared with Pakistan any
incriminating evidence of Pakistani government involvement in the Bombay bombings.)
The Composite Dialogue resumed with a third round of foreign secretary-level talks when
Foreign Secretary Shiv Shankar Menon hosted a New Delhi visit by his Pakistani counterpart in
late 2006. No progress came on outstanding territorial disputes, but the two officials did give
shape to the new anti-terrorism mechanism. Such a mechanism is controversial in India, where
some analysts are skeptical about the efficacy of institutional engagement with Pakistan in this
issue-area even as Islamabad is suspected of complicity in anti-India terrorism.
Indian External Affairs Minister Mukherjee met with his Pakistani counterpart in Islamabad in
early 2007 for the first such visit in more than a year. The two men reviewed past progress and
planned for a new round of talks. In February of that year, two bombs exploded on an Indian
segment of the Samjhauta [Friendship] Express train linking Lahore, Pakistan, with Delhi.
Resulting fires killed 68 people, most of them Pakistanis. Days later, Mukherjee hosted Kasuri in
New Delhi, where the two men reaffirmed a bilateral commitment to the peace process despite
the apparent effort to subvert it. While India refused a Pakistani request to undertake a joint
investigation into that attack, the two countries did sign an agreement to reduce the risk of
accidental nuclear war.
The new India-Pakistan anti-terrorism mechanism met for the first time in March 2007 and
produced a joint statement in which both governments agreed to use the forum for exchanging
information about investigations of and/or efforts to prevent terrorist acts on either side of the
shared border, and to meet quarterly while immediately conveying urgent information. Hopes that
the Samjhauta train bombing would provide a fitting “test case” apparently were dashed,
however, when India declined to share relevant investigative information with Pakistan.
Moreover, Indian officials were unhappy with Islamabad’s insistence that the “freedom struggle”
underway in Kashmir should not be treated as terrorism under this framework. Still, the
continuing engagement even after a major terrorist attack was widely viewed as evidence that the
bilateral peace process had gained a sturdy momentum.
A fourth round of the Composite Dialogue also was launched in March 2007, when the two
foreign ministers met again in Islamabad. No new agreements were reached, but both officials
lauded improved bilateral relations and held “the most sustained and intensive dialogue” ever on 65
the Kashmir problem. A fourth round of bilateral talks on economic and commercial
cooperation held in August 2007 ended with agreements to facilitate importation of cement from
Pakistan and tea from India, among others. Indian and Pakistani officials also held technical-level
talks on the modalities of cross-border movement.
In September 2007, Pakistan issued a formal protest and expressed “deep concern” in response to
the Indian government’s announced intention to open the disputed territory of the Siachen Glacier
65 See Pakistan Foreign Ministry Press Release No. 81/2007 at http://www.mofa.gov.pk/Press_Releases/2007/March/
to tourism, saying the region was “illegally occupied” by Indian troops in 1984 and its final status 66
has yet to be determined due to an “inflexible Indian attitude.” October saw a second meeting of
the Joint Anti-Terrorism Mechanism in New Delhi, where the two sides shared new information
on terrorism and agreed to continue mutual investigatory cooperation.
Following a November 2007 imposition of emergency rule in Pakistan, political crisis in
Islamabad is widely seen as having put what are at least temporary brakes on the bilateral peace
process, and has also brought into question the efficacy of India’s seeking to strike agreements
with a Pakistani leader (Musharraf) whose political legitimacy and longevity in office are in
doubt. New Delhi lauded Pakistan’s February 2008 electoral processes and expressed
preparedness to resume the Composite Dialogue once a new government is in place in Islamabad.
The leader of Pakistan’s leading political party, Asif Zardari, expressed hope that India-Pakistan
economic ties should be strengthened even without a settlement of the Kashmir issue, saying
Kashmir is a situation upon which Pakistan and India “can agree to disagree.” Prime Minister
Singh has invited Pakistan’s new civilian leaders to put the past behind them and build a new 67
cooperative relationship with India.
In May 2008, External Affairs Minister Mukherjee met with his Pakistani counterpart in
Islamabad for a review of the fourth round of the Composite Dialogue. The two leaders
reaffirmed their determination to not let terrorism impede the bilateral peace process. A month
later, the new Pakistani Foreign Minister, Shah Mehmood Qureshi, made his first official trip to
New Delhi, where it was agreed that the fifth round of the Composite Dialogue would take place
in July. June 2008 also saw the bilateral anti-terrorism mechanism meet for only the third time in
nearly two years. Among the top goals of Indian officials has been gauging the new Pakistani
government’s commitment to the bilateral peace process. Within this modest context, the 68
outcomes have been viewed as positive.
Three wars—in 1947-48, 1965, and 1971—and a constant state of military preparedness on both
sides of the border have marked six decades of bitter rivalry between India and Pakistan. The
bloody and acrimonious nature of the 1947 partition of British India and continuing violence in
Kashmir remain major sources of interstate tensions. Despite the existence of widespread poverty
across South Asia, both India and Pakistan have built large defense establishments—including
nuclear weapons capability and ballistic missile programs—at the cost of economic and social
development. The two countries reportedly continue to stockpile a combined 11 million
landmines and up to 2,000 square kilometers of India’s Jammu and Kashmir state may remain 69
mined. The nuclear weapons capabilities of India and Pakistan became overt in May 1998,
magnifying greatly the potential dangers of a fourth war. Although a bilateral peace process has
been underway for more than four years, little substantive progress has been made toward
66 See http://www.mofa.gov.pk/Spokesperson/2007/Sep/Spokes_17_09_07.htm.
67 See http://www.indianembassy.org/newsite/press_release/2008/Mar/1.asp; “Benazir Bhutto’s Widow Wants
Improved Relations With India,” Associated Press, March 1, 2008; “India PM Wants to Meet Pakistan’s Leaders
Halfway,” Reuters, March 5, 2008.
68 “India, Pakistan Say Satisfied With Peace Process,” Agence France Presse, May 20, 2008; “Quietly Forward,”
Frontline (Chennai), June 20, 2008.
69 See a 2007 International Campaign to Ban Landmines report at http://www.icbl.org/lm/2007/india.html.
resolving the Kashmir issue, and New Delhi continues to be rankled by what it calls Islamabad’s
insufficient effort to end Islamic militancy that affects India.
The Kashmir problem is itself rooted in claims by both countries to the former princely state, now
divided by a military Line of Control (LOC) into the Indian state of Jammu and Kashmir and
Pakistan-controlled Azad [Free] Kashmir (see “The Kashmir Issue,” below). Normal relations
between New Delhi and Islamabad were severed in December 2001 after a terrorist attack on the
Indian Parliament was blamed on Pakistan-supported Islamic militants. Other lethal attacks on
Indian civilians spurred Indian leaders to call for a “decisive war,” but intense international
diplomatic engagement, including multiple trips to the region by high-level U.S. officials, 70
apparently persuaded India to refrain from attacking. In October 2002, the two countries ended
a tense, ten-month military standoff at their shared border, but there remained no high-level
diplomatic dialogue between India and Pakistan (a July 2001 summit meeting in the Indian city of
Agra had failed to produce any movement toward a settlement of the bilateral dispute).
In April 2003, Prime Minister Vajpayee extended a symbolic “hand of friendship” to Pakistan.
The initiative resulted in slow, but perceptible progress in confidence-building, and within months
full diplomatic relations between the two countries were restored. Islamabad responded positively
and, in November, took its own initiatives, most significantly the offer of a cease-fire along the
Kashmir LOC. A major breakthrough in bilateral relations came at the close of a January 2004
summit session of the South Asian Association for Regional Cooperation in Islamabad. After a
meeting between Vajpayee and Pakistani President Musharraf—their first since July 2001—the
two leaders agreed to re-engage a “composite dialogue” to bring about “peaceful settlement of all
bilateral issues, including Jammu and Kashmir, to the satisfaction of both sides.” A May 2004
change of governments in New Delhi had no effect on the expressed commitment of both sides to
carry on the process of mid- and high-level discussions. Some analysts believe that increased
people-to-people contacts have significantly altered public perceptions in both countries and may
have acquired permanent momentum. Others are less optimistic about the respective
governments’ long-term commitment to dispute resolution. Moreover, an apparent new U.S.
embrace of India has fueled Pakistan’s anxieties about the regional balance of power.
India and China together account for one-third of the world’s population, and are seen to be rising st
21 century powers and potential strategic rivals. The two countries fought a brief but intense
border war in 1962 that left China in control of large swaths of territory still claimed by India.
Today, India accuses China of illegitimately occupying nearly 15,000 square miles of Indian
territory in Kashmir, while China lays claim to 35,000 square miles in the northeastern Indian
state of Arunachal Pradesh. The 1962 clash ended a previously friendly relationship between the
two leaders of the Cold War “nonaligned movement” and left many Indians feeling shocked and
betrayed. While Sino-Indian relations have warmed considerably in recent years, the two
countries have yet to reach a final boundary agreement. Adding to New Delhi’s sense of
insecurity have been suspicions regarding China’s long-term nuclear weapons capabilities and
strategic intentions in South and Southeast Asia. A strategic orientation focused on China appears
70 See Polly Nayak and Michael Krepon, “US Crisis Management in South Asia’s Twin Peaks Crisis” at
to have affected the course and scope of New Delhi’s own nuclear weapons, ballistic missile, and 71
other power projection programs.
Beijing’s military and economic support for Pakistan—support that is widely understood to have
included nuclear weapons- and missile-related transfers—is a major and ongoing source of
friction; past Chinese support for Pakistan’s Kashmir position has added to the discomfort of
Indian leaders. New Delhi takes note of Beijing’s security relations with neighboring Burma and 72
the construction of military and port facilities on the Indian Ocean. The two countries also have
competed for trade partners and energy resources to feed their rapidly growing economies; India’s 73
relative poverty puts New Delhi at a significant disadvantage in such competition.
Analysts taking a realist political theory perspective view China as an external balancer in the
South Asian subsystem, with Beijing’s material support for Islamabad allowing Pakistan to
challenge the aspiring regional hegemony of a more powerful India. More wary observers,
especially in India, see Chinese support for Pakistan as a key aspect of Beijing’s perceived policy
of “encirclement,” or constraint, of India as a means of preventing or delaying New Delhi’s
ability to challenge Beijing’s region-wide influence.
Despite historic and strategic differences, high-level exchanges between India and China
regularly include statements that there exists no fundamental conflict of interest between the two
countries. During a landmark 1993 visit to Beijing, then-Prime Minister Narasimha Rao signed an
agreement to reduce troops and maintain peace along the Line of Actual Control that divides the
two countries’ forces at the disputed border. Numerous rounds of border talks and joint working
group meetings aimed at reaching a final settlement have been held since 1981—a dozen of these
since both countries appointed special representatives in 2003—with New Delhi and Beijing
agreeing to move forward in other issue-areas even as territorial claims remain unresolved. Some
skeptical Indian analysts believe China is using the so far unavailing border dialogue as 74
“diplomatic cover to be intractable and revanchist.”
A 2003 visit to Beijing by then-Prime Minister Vajpayee was viewed as marking a period of much
improved relations. In 2004, India’s army chief visited Beijing to discuss deepening bilateral
defense cooperation and a first-ever India-China strategic dialogue was later held in New Delhi.
Military-to-military contacts have included modest but unprecedented combined naval and army
exercises. During Chinese Prime Minister Wen Jiabao’s 2005 visit to New Delhi, India and China
inked 11 new agreements and vowed to launch a “strategic partnership” to include broadened 75
defense links and efforts to expand economic relations. In a move that eased border tensions,
China formally recognized Indian sovereignty over the former kingdom of Sikkim, and India 76
reiterated its view that Tibet is a part of China. Moreover, in 2006, dubbed the “Year of India-
71 See, for example, “Wary of China, India to Boost Eastern Naval Fleet,” Reuters, November 14, 2007; “Indian Army
Wants Military Space Program,” Associated Press, June17, 2008.
72 For example, China is developing a billion dollar commercial port on the southern tip of Sri Lanka. Some Indian
analysts fear the port could be used to support Chinese naval activity in the India Ocean (“India, China Jostle for
Influence in Indian Ocean,” Associated Press, June 7, 2008).
73 An example is found in relations with Africa, where India’s historical advantage has been eroded by Beijing’s deeper
pockets. The value of China’s two-way trade with African countries is now more than double that of India’s (“On
China’s Heels, India Vies for Its Old Edge in Africa,” Christian Science Monitor, May 5, 2008).
74 Brahma Chellaney, “Don’t Get Cowed Down” (op-ed), Times of India (Delhi), October 2, 2007.
75 See “India, China Hoping to ‘Reshape the World Order’ Together,” Washington Post, April 12, 2005.
76 March 2008 saw growing violence and instability in the disputed Tibet region when pro-independence protesters
China Friendship,” the two countries formally agreed to cooperate in securing overseas oil
resources. In July of that year, India and China reopened the Nathu La border crossing for local
trade (the Himalayan pass had been closed since the 1962 war). Sino-India trade relations are
soaring—bilateral commerce was worth nearly $39 billion in 2007, a 15-fold increase over the
Still, Indian leaders are concerned that trade with China is woefully unbalanced, with China
enjoying a large surplus.
Indo-Chinese relations further warmed in late 2006, when Chinese President Hu Jintao made a
trip to India, the first such visit by a Chinese president in a decade. There India and China issued
a Joint Declaration outlining a “ten-pronged strategy” to boost bilateral socio-economic ties and
defense cooperation, and to “reinforce their strategic partnership.” The two countries, which
declared themselves “partners for mutual benefit” rather than rivals or competitors, also signed 13
new pacts on a variety of bilateral initiatives. The Joint Declaration notably contained an
agreement to “promote cooperation in the field of nuclear energy,” although no details have been
provided on what form such cooperation might take. India’s army chief spent a week in China in
mid-2007, providing fresh impetus to bilateral defense cooperation. A late 2007 visit to Beijing by
Congress Party chief Sonia Gandhi may have been part of an effort to balance New Delhi’s
increasingly close relations with the United States, Japan, and other regional countries, relations
that may be straining Indo-Chinese ties.
Prime Minister Singh’s January 2008 visit to Beijing, his first as Prime Minister, saw India and
China agreed to further strengthen trade and defense relations. Singh called on Beijing to expand
market access for Indian goods so as to correct his country’s growing trade imbalance with China.
A number of significant unresolved bilateral issues, not least the conflicting territorial claims, had
analysts foreseeing no major new initiatives growing from the summit. The resulting document, st
“A Shared Vision for the 21 Century,” resolved to promote global peace and prosperity through
an India-China relationship built on trust and based on equality. It included an unprecedented
expression of Chinese support for a greater Indian in the U.N. Security Council, as well as calls
for further regional economic integration and resolution of outstanding territorial disputes through 77
peaceful negotiations. External Affairs Minister Mukherjee met with his Chinese counterpart in
Beijing in June 2008; the two leaders pledged to maintain peace on the India-China border but 78
offered no new approaches to resolving outstanding territorial disputes.
Militarized bilateral frictions persist. Ahead of Prime Minister Singh’s China trip, External Affairs
Minister Mukherjee conceded that Chinese troops had sometimes intruded on Indian territory and
there took to the streets of Lhasa and Chinese government forces were deployed to suppress the agitators. While India
recognizes Chinese sovereignty in Tibet, for 50 years the Indian city of Dharamasala has been home to the exiled Dalai
Lama—a Tibetan spiritual leader and focus of the pro-independence movement—as well as to some 180,000 other
Tibetan exiles who are given refuge but who are not allowed to engage in political activities on Indian soil. Discord in
Tibet creates a dilemma for New Delhi, where officials seek to balance human rights concerns with a desire to maintain
warm relations with Beijing. Many large Indian rivers originate in Tibet. Both India and the United States support
Chinese dialogue with the Dalai Lama, even as New Delhi warns that figure to refrain from political activity. Some
analysts criticize New Delhi’s perceived timidity on the issue and assert that India’s aspired great power status requires
standing up to China on human rights issues. During her March visit to India, Speaker of the House Rep. Nancy Pelosi
met with and expressed support for the Dalai Lama, and called on the Chinese government to end its violent crackdown
in Lhasa (see http://www.house.gov/pelosi/press/releases/March08/dalai-lama.html).
77 “Aiming Low at China-India Summit,” BBC News, January 13, 2008; “Shared Vision” at http://meaindia.nic.in.
78 “India, China Pledge Stronger Ties on Foreign Minister’s Visit Amid Tensions,” Associated Press, June 6, 2008.
that infrastructure development on the Chinese side of the border was “much superior” to that on
the Indian side. Just two weeks after returning from China, Singh was in India’s remote
Arunachal Pradesh state for the first such prime ministerial trip in nearly a decade. The visit
ostensibly was meant to assure the region’s citizens that New Delhi remained mindful of their
development needs. Indian officials have been clear in conveying to Beijing that they consider the 79
state to be “an integral part of India.” Some Indian analysts, wary of China’s territorial claims
and military presence in the region, lauded what they saw as Singh’s symbolic demonstration of
Indian resolve in the face of Chinese provocations. In apparent response to China’s rapid
development of infrastructure on its side of the disputed border, the Indian army plans to deploy 80
two new mountain divisions to the region within eight years. In May 2008, reports that China
was basing a nuclear submarine on Hainan Island in the South China Sea triggered alarm in New
Delhi. Hainan is 1,200 miles from the strategically vital Malacca Straits. Indian concern was
compounded by reports of apparent missile launch sites from which Chinese nuclear forces may
target northern India. Moreover, India’s pursuit of a military space program to defend its satellites 81
may portend a regional arms race and exacerbate existing India-China tensions.
India continues to pursue closer relations with the repressive regime in neighboring Burma, with
an interest in energy cooperation and to counterbalance China’s influence there. Such engagement
seeks to achieve economic integration of India’s northeast region and western Burma, as well as
to bolster energy security. The Bush Administration urges India to be more active in pressing for
democracy in Burma: in October 2007, Deputy Secretary of State John Negroponte said, “Now is
the time for Beijing and New Delhi to forgo any energy deals that put money in the pockets of the
junta and to suspend weapons sales to this regime.” However, New Delhi calls democracy and 82
human rights internal Burmese issues.
During September 2007, major pro-democracy street protests in Burma grew in scale and the
Rangoon military regime launched a violent crackdown to suppress the movement being led by
Buddhist monks. In response, the United States announced new sanctions on Burma and urged
other countries to follow suit. Following Rangoon’s crackdown, New Delhi has continued to
favor dialogue and is opposed to imposing sanctions on Rangoon. India is, in fact, moving ahead
with plans to assist Rangoon in building a port in northwestern Burma as part of an effort develop
that country’s natural gas industry. This approach, justified by Indian leaders as being a pragmatic
pursuit of their national interest, has elicited accusations of Indian complicity in Burmese 83
79 See http://www.indianembassy.org/newsite/press_release/2008/Mar/1.asp.
80 “Belated Awakening,” India Today (Delhi), February 18, 2008; “India to Counter China With Strengthened Border
Presence,” Jane’s Defense Weekly, February 20, 2008.
81 “China Does Intrude Into India, Admits India,” Indian Express (Delhi), January 12, 2008; “China’s New N-
Submarine Base Sets Off Alarm Bells,” Indian Express (Mumbai),May 3, 2008; “India in China’s Nuke Crosshairs,”
Times of India (Delhi), May 17, 2008; “Indian Army Wants Military Space Program,” Associated Press, June 17, 2008;
“India Army Chief Wary of Growing China Military,” Reuters, July 3, 2008.
82 See http://www.state.gov/s/d/2007/94077.htmand http://meaindia.nic.in/pbhome.htm.
83 “India to Push On With Myanmar Port Despite Unrest,” Reuters, October 10, 2007; “India Silent on Myanmar
Crackdown,” Associated Press, October 23, 2007. One observer called New Delhi’s policy a “reprehensively passive
and callous posture” toward Burma’s pro-democracy forces (Praful Bidwai, “Failing the Foreign Policy Test” (op-ed),
Frontline (Chennai), October 19, 2007).
On October 1, 2007, S.Res. 339, expressing the sense of the Senate on the situation in Burma,
was passed by the full Senate. The resolution includes a call for the United States and the United
Nations to “strongly encourage China, India, and Russia to modify their position on Burma and
use their influence to convince the Government of Burma to engage in dialogue with opposition
leaders and ethnic minorities towards national reconciliation.” On the same day, New Delhi
reiterated its calls for political reform in Burma and urged Rangoon to launch a formal inquiry
into recent use of force against pro-democracy protestors there, but New Delhi was not seen to be 84
adjusting its Burma policy in any meaningful way. In a justification of New Delhi’s relatively
uncritical approach to the Rangoon regime, some commentators call past and continued
cooperation by the Burmese military vital in New Delhi’s efforts to battle separatist militants in 85
Press reports in late 2007 indicated that New Delhi was halting arms sales to Rangoon; however it 86
appears that India’s supply of military equipment to Burma has only been “slowed.”
International human rights groups and some in Congress have criticized New Delhi’s military 87
interactions with Rangoon. Burma’s foreign affairs minister visited New Delhi in the first week
of 2008 for wide-ranging discussions with his Indian counterpart. Prime Minister Singh expressed
satisfaction with positive India-Burma relations while also stressing “the need for greater urgency
in bringing about political reforms and national reconciliation” through a “broad-based” 88
process. When Burma’s second-highest ranking military ruler visited New Delhi in April 2008,
the two countries reached agreement on a $120 million-project that will see India upgrade
numerous waterways and highways in Burma. An early May cyclone devastated Burma’s coastal
areas and left at least 78,000 people dead. The New Delhi government sought to keep with
“India’s close and good neighborly ties with the friendly people” of Burma by quickly rushing 89
food, water, and medical supplies to its devastated neighbor.
84 “India Renews Pressure on Myanmar, Suggests Probe,” Reuters, October 1, 2007; “India Silent on Myanmar
Crackdown,” Associated Press, October 23, 2007.
85 See, for example, Shishir Gupta, “Rangoon Isn’t Kathmandu” (op-ed), Indian Express (Delhi), October 2, 2007.
86 “India’s Halt to Burma Arms Sales May Pressure Junta,” Washington Post, December 30, 2007; “Indian arms Sales
to Myanmar Remain Under Scrutiny,” Jane’s Defense Weekly, January 16, 2008. In 2006, India transferred to Burma
two maritime surveillance aircraft and a number of air defense guns, and the Indian defense minister announced the
sale to Burma of more defense equipment—including tanks and heavy artillery—in exchange for Rangoon’s
counterterrorism cooperation and assistance in neutralizing Indian separatists operating near their shared border. Such
transfers reportedly are underway (“Why India is Selling Weapons to Burma” Christian Science Monitor, July 23,
87 Since 1988, the United States has imposed a wide range of sanctions against Burma, including congressional passage
in 2003 of the Burma Freedom and Democracy Act (P.L. 108-61) banning imports from Burma (renewed by Congress
in 2007). In a July 23, 2007, floor statement, the Chairman of the House Foreign Affairs Committee criticized India
(and China) for propping up the Rangoon government “through shockingly direct, blatant deals, including arms trading
with this cruel junta in Burma.” New York-based Human Rights Watch has lambasted India (among other countries)
for “supplying Burma with weapons that the military uses to commit human rights abuses and to bolster its ability to
maintain power” (see http://hrw.org/english/docs/2007/10/10/burma17066.htm).
88 See the External Affairs Ministry January 2, 2008, press briefing at http://meaindia.nic.in/pbhome.htm.
89 “India Rushes Aid to Myanmar, Helping Warming Ties,” Reuters, May 5, 2008.
India-Iran relations may complicate progress in New Delhi’s nascent “strategic partnership” with
Washington. India’s relations with Iran traditionally have been positive and, in 2003, the two 91
countries launched a bilateral “strategic partnership” of their own. The Indian government and th
firms have invested a reported total of nearly $10 billion in Iran since 2000, placing India 10 on
the list of international investors worldwide. Some in the U.S. Congress voiced past concerns that
New Delhi’s policies toward Tehran’s controversial nuclear program were not congruent with
those of Washington, although these concerns were eased when India voted with the United States
(and the majority) at the IAEA sessions of September 2005 and February 2006. India urges the
United States to refrain from unilaterally taking on the task of preventing Iran’s potential
development of nuclear weapons and leave the job to the IAEA. New Delhi believes there is no
military solution to the issue and warns that any military strike on Iran “would have disastrous 92
consequences for the entire region.”
During the period from 2004 to 2006, the United States sanctioned Indian scientists and chemical
companies for transferring to Iran WMD-related equipment and/or technology (most sanctions
were chemical-related, but one scientist was alleged to have aided Iran’s nuclear program). New
Delhi called the moves unjustified. Included in legislation to enable U.S.-India civil nuclear
cooperation (P.L. 109-141, the “Hyde Act”) was a non-binding assertion that U.S. policy should
“secure India’s full and active participation” in U.S. efforts to prevent Iran from acquiring 93
weapons of mass destruction. New Delhi firmly opposes the emergence of any new nuclear
weapons powers in the region.
Many in Congress have voiced concern about India’s relations with Iran and their relevance to
U.S. interests. Some worry especially about New Delhi’s defense ties with Tehran and have 94
sought to link the issue with congressional approval of U.S.-India civil nuclear cooperation. 95
Expressions of these congressional concerns became more pointed in 2007. New Delhi has
90 See also CRS Report RS22486, India-Iran Relations and U.S. Interests, by K. Alan Kronstadt and Kenneth Katzman,
and CRS Report RS20871, The Iran Sanctions Act (ISA), by Kenneth Katzman.
91 See text of the January 2003 “New Delhi Declaration” at http://meaindia.nic.in/declarestatement/2003/01/25jd1.htm.
In December 2007, Indian Foreign Secretary Menon visited Iran, where he held several high-level meetings and
reiterated New Delhi’s interest in establishing a strategic partnership with Tehran.
92 Indian Ministry of External Affairs Press Briefing, July 14, 2008.
93 Although President Bush indicated he has not adopted the law’s statements of policy as U.S. foreign policy, this
provision rankled many in New Delhi who view it as an “extraneous” constraint on India’s foreign policy
independence. In their explanatory statement accompanying P.L. 109-401, congressional conferees repeatedly
emphasized their belief that securing India’s assistance on this matter was “critical” (H.Rept. 109-721).
94 See, for example, ”Indian Navy Trains Iranian Sailors,” Defense News, March 27, 2006; C. Christine Fair, “India and
Iran: New Delhi’s Balancing Act,” Washington Quarterly, Summer 2007; “India Trains Iranian Navy Despite US
Pressure,” Hindustan Times (Delhi), September 4, 2007.
95 In April, eight U.S. Senators sent a letter to Prime Minister Singh requesting that New Delhi “suspend its military
cooperation” with Iran, asserting that “India’s own interests are damaged by its support for the Iranian military” and
that “India’s principles are also poorly served by deepening its military relationship with Iran.” In May, eight U.S.
Representatives—including the Chair and Ranking Member of the House Foreign Affairs Committee—sent Singh a
letter expressing “grave concern” at India’s “increasing cooperation” with Iran. In July, a letter to President Bush by 23
House Members expressed concern with “India’s deepening military-to-military relationship with Iran ... [which]
places congressional approval of the Agreement for Nuclear Cooperation in jeopardy.” In September, two Senators
wrote to Secretary of State Rice to express their concern about India-Iran military-to-military relations, saying that, as
supporters of the U.S.-India civil nuclear deal, they are “apprehensive that the  agreement could be sidetracked by
what appears to be a growing relationship between Iran and India.”
offered assurances that all of India’s dealings with Iran are permitted under U.N. Security Council
Resolutions; one official expressed being “quite amazed” at reports of closer India-Iran military
ties. In September 2007, Assistant Secretary of State Boucher conceded that some concerns about
India-Iran military relations are “exaggerated,” but that the onus is on New Delhi to “explain” its 96
relations with Tehran.
In April 2008, President Ahmadinejad arrived in New Delhi for a five-hour visit and met with top
Indian leaders. It was the first such visit by an Iranian president since 2003. India’s foreign
secretary took the opportunity to express satisfaction with the course of the bilateral relationship
and stressed his government’s view that building a physically secure, economically and
commercially viable natural gas pipeline from Iran to India would be in both countries’ interests.
When asked if India’s relations with Iran could jeopardize warm relations with the Untied States,
the foreign secretary said he did not think so, offering that deeper engagement with Iran would
facilitate regional stability and that, “Everything we do with Iran is open, above-board, and quite 97
clear to everybody.” In the run-up to the Iranian leader’s visit, a State Department spokesman
had expressed hope that New Delhi would call on Ahmadinejad to meet U.N. Security Council
requirements that Iran suspend its uranium enrichment activities. The comment sparked outrage
and indignation in New Delhi, where the External Affairs Ministry responded by saying India and
Iran were “perfectly capable” of managing their own bilateral relations and needed no external 98
guidance in this regard.
There are further U.S. concerns that India will seek energy resources from Iran, thus benefitting
financially a country the United States is seeking to isolate. Indian firms have in recent years
taken long-term contracts for purchase of Iranian gas and oil. Natural gas purchases could be
worth many billions of dollars, but thus far differences over pricing and transport have precluded
sales. Building upon growing energy ties is the proposed construction of a pipeline to deliver
Iranian natural gas to India through Pakistan. The Bush Administration repeatedly expresses
strong opposition to any gas pipeline projects involving Iran, but top Indian officials insist the
project is in India’s national interest and they remain “fully committed” to the multi-billion-dollar
venture. The Iran-Libya Sanctions Act (P.L. 107-24) required the President to impose sanctions
on foreign companies that make an “investment” of more than $20 million in one year in Iran’s th
energy sector. The 109 Congress extended this provision in the Iran Freedom Support Act (P.L.
New Delhi insists it is going ahead with a proposed joint pipeline project to deliver Iranian
natural gas to Pakistan and on to India. Despite positive signaling, New Delhi had in the latter
months of 2007 maintained only low-profile participation in relevant negotiations, perhaps in part
96 “India Official Dismisses Iran Reports,” Washington Post, May 2, 2007; “US Asks India to Come Clean On Ties
With Iran,” Press Trust India, September 19, 2007. See also “India’s Long-Standing Ties With Iran Straining Alliance
With U.S.,” Washington Post, September 20, 2007.
97 “Briefing by Foreign Secretary Shri Shivshankar Menon on Visit of President Ahmadinejad of Iran to India,” Indian
Ministry of External Affairs, April 29, 2008.
98 See http://www.state.gov/r/pa/prs/dpb/2008/apr/103842.htm; “India Bristles at US Comments on Ahmadinejad
Visit,” Agence France Presse, May 22, 2008.
99 See also CRS Report RS22486, India-Iran Relations and U.S. Interests, by K. Alan Kronstadt and Kenneth Katzman,
and CRS Report RS20871, The Iran Sanctions Act (ISA), by Kenneth Katzman.
due to sensitivities surrounding the as-yet unconsummated U.S.-India civil nuclear cooperation
agreement. Earlier in 2007, officials from the three countries resolved a long-running price-
mechanism dispute, opening the way for a fourth meeting of the India-Pakistan Joint Working
Group on the IPI (Iran-Pakistan-India) Pipeline in Islamabad, where the two countries agreed to
split equally expected gas supplies. Indian leaders consistently describe the pipeline project as
being in the nation’s interest for greater energy security. As Iran and Pakistan move to finalize the
pipeline project, India in April 2008 confirmed that it would rejoin talks. Beijing has expressed
interest in Pakistani proposals that China participate in the IPI project, possibly spurring more 100
energetic Indian participation. Ever-optimistic Iranian leaders anticipate a trilateral agreement
to launch the project will be inked by mid-summer 2008. Such a development could be
considered a significant failure of U.S. policy that could convey a sobering message about 101
America’s allegedly declining international and regional clout.
Some independent analysts and Members of Congress assert that completion of an IPI pipeline
would represent a major confidence-building measure in the region and could bolster regional
energy security while facilitating friendlier Pakistan-India ties (see, for example H.Res. 353 in the th
Pakistani leadership if it were to withdraw from the project. As part of its efforts to isolate Iran
economically, the Bush Administration actively seeks to dissuade New Delhi from participation
in this project, and a State Department official has suggested that current U.S. law dictates
American opposition. Some independent analysts concur with this view and urge Washington to
assist the Indian and Pakistani governments in developing alternative energy sources, including
liquefied natural gas and pursuit of a proposed pipeline that would deliver Turkmen natural gas to 103
South Asia through Afghanistan. In May 2007, Indian Oil Minister Murli Deora assured
concerned Left Front parties that India “will not be cowed down by any threat” regarding its
relations with Iran, saying that India’s participation in the IPI pipeline project “is not the business 104
of the United States.”
India takes an active role in assisting reconstruction efforts in Afghanistan, having committed
some $1.2 billion to this cause, as well as contributing some 4,000 workers and opening
numerous consulates there (much to the dismay of Pakistan, which fears strategic encirclement
and takes note of India’s past support for Afghan Tajik and Uzbek militias). Among Indian
assistance to Afghanistan are funding for a new $111 million power station, an $84 million road-
building project, a $77 million dam project, and construction of Kabul’s new $67 Parliament
building, to be completed in 2010. There are reported to be several hundred Indian commandos
stationed in Afghanistan to provide protection for Indian reconstruction workers. The United
States has welcomed India’s role in Afghanistan. A July 2008 suicide bombing at India’s Kabul
Embassy was taken as a stark message to Indian leaders that Taliban militants and their allies
100 “China Shows Interest in Iran-Pakistan-India Gas Pipeline Project,” BBC Monitoring South Asia, April 26, 2008.
101 ”Iran Sees Pipeline Deal With India, Pakistan by Mid-Year: Report,” Agence France Presse, May 28, 2008; “India’s
Iran Pipeline Deal,” Forbes, July 1, 2008.
102 See, for example, K. Subrahmanyam, “Pipeline Dreams” (op-ed), Indian Express (Mumbai), July 3, 2008.
103 Ariel Cohen, Lisa Curtis, and Owen Graham, “The Proposed Iran-Pakistan-India Gas Pipeline: An Unacceptable
Risk to Regional Security,” Heritage Foundation Backgrounder No. 2139, May 30, 2008.
104 “India Won’t Be Cowed Down: Deora” Hindu (Chennai), May 9, 2007.
want New Delhi to withdraw from Afghanistan. Prime Minster Singh instead responded by 105
vowing $450 million in new Indian aid for Afghan reconstruction.
Looking to the north, New Delhi supports consolidation of Nepal’s democratic and conflict
resolution processes, in particular through continued political assimilation of the Maoists. India
remains concerned by political instability in Kathmandu and by the cross-border infiltration of
Maoist militants into India. In April 2008, Nepali Maoists won a surprise electoral victory in
taking more than one-third of Kathmandu’s Constituent Assembly seats to oversee a new
coalition government. The new Kathmandu government has since threatened to abrogate the 1950
Indo-Nepal Peace and Friendship Treaty, which allows for unrestricted travel and residency
across the shared border. While Indian officials are fairly sanguine about the development and
vow openness to working with the new Nepali government, they are likely to have concerns about 106
the potential for instability in Nepal to exacerbate India’s own internal insecurities.
To the east, and despite India’s key role in the 1971 creation of neighboring Bangladesh, New
Delhi’s relations with Dhaka have been fraught with tensions related mainly to the cross-border
infiltration of Islamic and separatist militants, and tens of millions of illegal migrants into India.
New Delhi is undertaking a $1.2 billion project to fence India’s entire 2,000-mile shared border
with Bangladesh. The two countries’ border forces engage in periodic gun battles. Still, New
Delhi and Dhaka have cooperated on counterterrorism efforts and talks on energy cooperation
continue. The Bangladeshi faction of the Harakat ul-Jihad-I-Islami—an Islamist militant outfit
that was designated as a Foreign Terrorist Organization under U.S. law in March 2008 and that
has links to Pakistan-based terrorist groups—has been implicated in several terrorist attacks
inside India, including May 2008 terrorist bombings that killed at least 63 people in Jaipur,
Rajasthan. Bangladesh’s military-backed interim government, which took power in 2007, may
benefit India by reducing anti-India rhetoric and by addressing the apparently growing influence
of Islamist forces that are seen as a threat to Indian interests.
In the island nation of Sri Lanka off India’s southeastern coast, a Tamil Hindu minority has been
fighting a separatist war against the Sinhalese Buddhist majority since 1983. A Norwegian-
brokered cease-fire unraveled in 2006 and, after a series of military successes in 2007, the
Colombo government abrogated the cease-fire in January 2008. More than 60 million Indian
Tamils live in southern India and tens of thousands of Sri Lankan Tamil refugees have fled to
India in recent months and years. India’s armed 1987 intervention to assist in enforcing a peace
accord resulted in the deaths of more than 1,200 Indian troops and led to the 1991 assassination of
former Indian Prime Minister Rajiv Gandhi by Tamil militants. Since that time, New Delhi has
maintained friendly relations with Colombo while refraining from any deep engagement in third-
party peace efforts. New Delhi resists Colombo’s push for more direct Indian involvement and
insists there can be “no military solution” to the island’s ethnic troubles. The Indian Navy played
a key role in providing disaster relief to Sri Lanka following the catastrophic December 2004
Indian Ocean tsunami.
Moscow was New Delhi’s main foreign benefactor for the first four decades of Indian
independence. Russia continues to be “indispensable to India’s foreign policy interests,”
105 ”Afghan Bombing Sends Stark Message to India,” New York Times, July 9, 2008; “India Announces $450 Million
Aid to Afghanistan,” Reuters, August 4, 2008.
106 “Maoists Scrap 1950 Indo-Nepal Treaty,” Indian Express (Mumbai), April 24, 2008; “Elections in Nepal: Maoists
Offer an Uncharted Course,” CSIS South Asia Monitor 118, May 2, 2008.
according to Prime Minister Singh, who calls energy cooperation the core of the two countries’ 107
“strategic partnership.” India’s single largest foreign investment is a $1 billion stake in a joint
oil and gas venture on Russia’s Sakhalin Island. Moreover, and despite some post-Cold War
diversification of its defense suppliers, India continues to obtain the bulk of its imported military
hardware from Russian firms. In 2007, Russian President Vladimir Putin paid a visit to New
Delhi, where he met with top Indian officials; signed several bilateral agreements on energy,
science, and space cooperation; and offered to sell four new 1,000-megawatt nuclear reactors to
India. In November, Prime Minister Singh visited Moscow, where he and Putin discussed
economic, energy, and defense ties. Agreement for the construction of four new nuclear reactors
was deferred due to “technical hitches.” Some commentators believe the U.S. government
pressured New Delhi to avoid the deal. Russia’s status as a main supplier of Indian defense
equipment currently is threatened by several disputes, including over the refitting of an aircraft
carrier (which has seen major delays and cost overruns), a spat over Russia’s allegedly 108
substandard up gradation of an Indian attack submarine, and other irritants.
India’s relations with Japan only began to blossom in the current decade after being significantly
undermined by India’s 1998 nuclear weapons tests. Today, leaders from both countries
acknowledge numerous common values and interests. They are engaging a “strategic dialogue”
formally launched with a 2007 visit to Tokyo by Foreign Minister Mukherjee, who spoke of
Japan as a “natural partner in the quest to create an arc of advantage and prosperity” in Asia.
Mukherjee emphasized India’s desire for economic integration in Asia and cooperative efforts to
secure vital sea lanes, especially in the Indian Ocean. Japan’s support for the latter initiative has
included plans for unprecedented joint naval exercises. New Delhi and Tokyo also share an
interest in seeing membership of the U.N. Security Council expanded; both governments aspire to
permanent seats. India seeks Japan’s endorsement for proposed U.S.-India civil nuclear
cooperation, which has not been forthcoming to date. A mid-2007 visit to New Delhi by Japanese
Prime Minister Shinzo Abe, who was effusive in his praise of India as a “partner and friend,” was
seen by many as part of a long-term Japanese effort to hedge against China’s growing regional
influence. Abe and Prime Minister Singh issued a “Roadmap for New Dimensions to the Strategic
and Global Partnership” outlining plans for security cooperation and comprehensive economic 109
engagement. Singh met with the new Japanese Prime Minister, Yasuo Fukada, in Singapore in
November and reiterated a commitment to the India-Japan “strategic and global partnership.”
The U.S. and Japanese governments have sought India’s participation in a prospective
quadrilateral “axis of democracy” that would include Australia and could conceivably have a
security alliance dimension (Australian officials reportedly are skeptical of such a pact for fear of
alienating China). In 2007, U.S., Indian, and Japanese naval vessels conducted unprecedented
combined exercises off Japan’s east coast. In September of that year, India hosted unprecedented
five-country naval exercises in the Bay of Bengal (with Australian and Singaporean vessels also
participating). Officials stressed that the exercises—which involved a total of 27 ships and
submarines, among them two U.S. aircraft carriers—were not prompted by China’s growing
military strength. New Delhi favors greater trilateral India-U.S.-Japan cooperation, especially in
the areas of trade and energy security, but shies from anything that could be construed as a 110
multilateral security alliance.
107 “Russia, India Cement Nuclear Ties With Offer of 4 New Reactors,” Associated Press, January 25, 2007.
108 “Are India and Russia No Longer Comrades?,” BBC News, March 12, 2008.
109 See http://www.mofa.go.jp/region/asia-paci/pmv0708/joint-2.html.
110 See an address by the Indian Ambassador to the United States at http://www.indianembassy.org/newsite/
India is the world’s most populous democracy and remains firmly committed to representative
government and rule of law. As a nation-state, India presents a vast mosaic of hundreds of
different ethnic groups, religious sects, and social castes. U.S. policymakers commonly identify
in the Indian political system shared core values, and this has facilitated increasingly friendly
relations between the U.S. and Indian governments. In 2008, the often-cited Freedom House
again rated India as “free” in the areas of political rights and civil liberties.
With a robust and working democratic system, India is a federal republic where the bulk of
executive power rests with the prime minister and his or her cabinet (the Indian president is a
ceremonial chief of state with limited executive powers). Most of India’s prime ministers have
come from the country’s Hindi-speaking northern regions and all but two have been upper-caste
Hindus. The 543-seat Lok Sabha (People’s House) is the locus of national power, with directly
elected representatives from each of the country’s 28 states and 7 union territories. A smaller
upper house, the Rajya Sabha (Council of States), may review, but not veto, most legislation, and
has no power over the prime minister or the cabinet. National and state legislators are elected to
five-year terms. The most recent parliamentary elections were held in the spring of 2004.
National elections in October 1999 had secured ruling power for a Bharatiya Janata Party (BJP)-
led coalition government headed by Prime Minister Vajpayee. That outcome decisively ended the
historic dominance of the Nehru-Gandhi-led Congress Party, which was relegated to sitting in
opposition at the national level (its members continued to lead many state governments).
However, a surprise Congress resurgence under Sonia Gandhi in the 2004 elections brought to
power a new left-leaning coalition government led by former finance minister and Oxford-
educated economist Manmohan Singh, a Sikh and India’s first-ever non-Hindu prime minister.
Many analysts attributed Congress’s 2004 resurgence to the resentment of rural and poverty-
stricken urban voters who felt left out of the “India shining” campaign of a BJP more associated
with urban, middle-class interests. Others saw in the results a rejection of the Hindu nationalism
associated with the BJP.
The current Congress-led United Progressive Alliance (UPA) ruling coalition has marked nearly
four years in power, exceeding the expectations of some observers. Opinion surveys suggest that
both Prime Minister Singh and party chief Gandhi have remained fairly popular national figures.
However, February 2007 state elections in Punjab and Uttaranchal saw Congress candidates
decisively defeated by the BJP and its allies, causing some pundits to suggest that national
economic policies and rising inflation may have damaged the ruling coalition’s standing. Such
arguments were forwarded when the Bahujan Samaj Party (BSP) won an outright majority in
May 2007 state assembly elections in Uttar Pradesh, India’s most populous state. During its four
years overseeing a national ruling coalition, the Congress Party has lost 12 assembly elections
and was dislodged by the main opposition BJP in four states, including Karnataka and Punjab.
Meanwhile, under the party presidency of Rajnath Singh, the BJP has enjoyed seven consecutive
111 See also CRS Report RL32465, India’s 2004 National Elections, by K. Alan Kronstadt.
election victories.112 Congress’s surprise May 2008 loss in Karnataka set the party on its heels in
the run-up to national polls expected in late 2008 or early 2009, with many analysts concluding
that national political momentum has shifted away from the party. Some observers saw in the
Karnataka election dynamics signs that urban voters are exercising new-found muscle in ways 113
that could weaken the country’s traditionally pro-rural politicians.
Prime Minister Singh, though widely admired as an honest and intelligent figure, has been unable
to succeed in pushing through most of the UPA agenda, and his party’s state-level electoral
setbacks have most analysts predicting no bold policy initiatives before the next national election
expected in 2009. This is especially so in the wake of the New Delhi government’s failure to
consummate a civil nuclear cooperation deal with the United States, an issue upon which the UPA
leadership had staked considerable political capital. By most accounts, 2007 was a particularly 114
unsuccessful year for the incumbent national government.
Congress’s electoral strength reached a nadir in 1999, when the party won only 110 Lok Sabha
seats. Observers attributed the poor showing to a number of factors, including the failure of
Congress to make strong pre-election alliances (as had the BJP) and perceptions that party leader
Sonia Gandhi lacked the experience to lead the country. Support for the Congress, which
dominated Indian politics for decades, had been in fairly steady decline following the 1984
assassination of Prime Minister Indira Gandhi and the 1991 assassination of her son, Prime
Minister Rajiv Gandhi.
Sonia Gandhi, Rajiv’s Italian-born, Catholic widow, refrained from active politics until the 1998
elections. She later made efforts to revitalize the party by phasing out older leaders and attracting
more women and lower castes—efforts that appear to have paid off in 2004. Today, Congress
again occupies more parliamentary seats (145) than any other party and, through unprecedented
alliances with powerful regional parties, it again leads India’s government under the UPA
coalition. As party chief and UPA chair, Gandhi is seen to wield considerable influence over the
coalition’s policy making process. Her foreign origins have presented an obstacle and likely were
a major factor in her May 2004 decision to decline the prime ministership. As key Congress party
figures express support for the future leadership of her son and new parliamentarian, Rahul 116
Gandhi, Manmohan Singh’s political authority is correspondingly undermined.
112 “BJP on a Roll, Congress on the Ropes,” India Today (Delhi), June 9, 2008.
113 “Wake-Up Call for the Congress,” Hindustan Times (Delhi), May 25, 2008; “Cracks of Doom for India’s Ruling
Party,” Reuters, May 26, 2008; “BJP on a Roll, Congress on the Ropes,” India Today (Delhi), June 9, 2008; “India’s
Silicon Valley Eyes Political Change,” Reuters, May 19, 2008.
114 “Unfinished Progressive Agenda,” India Today (Delhi), June 11, 2007; “Weak India PM Battered by Allies and
Enemies,” Reuters, October 23, 2007; “The Nuclear Shadow,” India Today (Delhi), January 14, 2008.
115 See the Indian National Congress at http://www.congress.org.in.
116 “Ruling Party Wonders if India Needs Another Gandhi,” Reuters, April 15, 2008; “Downsizing Manmohan,” India
Today (Delhi), April 28, 2008.
With the rise of Hindu nationalism, the BJP rapidly increased its parliamentary strength during
the 1980s. In 1993, the party’s image was tarnished among some, burnished for others, by its
alleged complicity in serious communal violence in Bombay and elsewhere. Some hold elements
of the BJP, as the political arm of extremist Hindu groups, responsible for the incidents (the party
has advocated “Hindutva,” or an India based on Hindu culture, and views this as key to nation-
While leading a national coalition from 1998-2004, the BJP worked—with only limited success—
to change its image from right-wing Hindu fundamentalist to conservative and secular, although
2002 communal rioting in Gujarat again damaged the party’s credentials as a moderate
organization. The BJP-led National Democratic Alliance (NDA) was overseen by party notable
Prime Minister Atal Vajpayee, whose widespread personal popularity helped to keep the BJP in
power. After 2004, the BJP was weakened by leadership disputes, criticism from Hindu
nationalists, and controversy involving party president Lal Advani (in 2005, Advani ceded his
leadership post and Vajpayee announced his retirement from politics). The party did, however,
take control of the Karnataka state government in November 2007, the first time the BJP has held
power in southern India. In preparing for a new round of national elections, the party may adhere
to its core Hindutva philosophy; it has nominated hardliner Advani to be its next prime ministerial
candidate and may continue efforts to demonize India’s Muslim minority as part of a long-118
standing electoral strategy. Some observers, however, believe the party is looking beyond its
traditional vote bank to appeal to urban, middle-class concerns such as governance and
commerce, especially in the wake of party notable Narendra Modi’s reelection as Chief Minister 119
of the western Gujarat state in December 2007.
The influence of regional and caste-based parties has become an increasingly important variable
in Indian politics; the 2004 national elections saw such parties receiving nearly half of all votes
cast. Never before 2004 had the Congress Party entered into pre-poll alliances at the national
level, and numerous analysts attributed Congress’s success to precisely this new tack, especially
thorough arrangements with the Bihar-based Rashtriya Janata Dal and Tamil Nadu’s Dravida
Munnetra Kazhagam. The newfound power of both large and smaller regional parties, alike, is
seen to be reflected in the UPA’s ministerial appointments, and in the Congress-led coalition’s
professed attention to rural issues and to relations between state governments and New Delhi.
Two significant regional parties currently independent of both the ruling coalition and the BJP-led
opposition are the Samajwadi Party, a largely Muslim- and lower caste-based organization highly
influential in Uttar Pradesh, and the Bahujan Samaj Party (BSP) of Bihar, which also represents
mainly lower-caste constituents. State assembly elections in Uttar Pradesh—home to more than
117 See the Bharatiya Janata Party at http://www.bjp.org.
118 See, for example, A.G. Noorani, “Merchants of Hate” (op-ed), Frontline (Chennai), June 21, 2008.
119 “BJP Goes Back to Hindutva,” Telegraph (Kolkata), September 2, 2007; “Finally Number One,” India Today
(Delhi), February 11, 2008. In mid-2008, a fanatic Hindu nationalist party and regional ally of the BJP appeared to
issue a call for “Hindu suicide squads” as a response to Islamist terrorism, spurring widespread public outrage and
embarrassment for the NDA alliance (“Call for Hindu Suicide Squads Sparks Anger in India,” Reuters, June 1, 2008).
concluded in May 2007 and saw a major victory for the BSP and its lower-caste, female leader
Mayawati, who reached out to upper-caste and other groups to secure an outright majority, the
first time in 14 years that a single party secured such status. Mayawati is believed to have national
political aspirations and her party’s success with caste-based politics may erode support for the 120
Congress party in expected 2009 national elections. The outcome may have been an important
indicator of national political trends, especially in gauging satisfaction with the current center
coalition. In June 2007, eight regional parties formally launched a new “Third Front” that might
emerge as a national alternative to the UPA and NDA. Well-known Tamil Nadu politician 121
Jayalalithaa is a notable leader.
Although the Communist Party of India (Marxist) seated the third largest number of
parliamentarians in 2004, its vote bank is almost wholly limited to West Bengal and Kerala (the
Left Front coalition holds about 11% of all Lok Sabha seats). Communist parties have in the past
been bitter rivals of the Congress in these states, but a mutual commitment to secularism appears 123
to have motivated their cooperation against the BJP in 2004. Early alarm was sounded that the
new influence of communists in New Delhi might derail India’s economic reform efforts; Indian
industrial leaders sought to assure foreign investors that Left Front members are not “Cuba-style
communists,” but could be expected to support the UPA reform agenda. The communist Chief
Minister of West Bengal, Buddhadeb Bhattacharya, has himself actively sought corporate
investment in his state. However, since coming to power, the Congress-led coalition has slowed
most aspects of its economic reform program, including suspending major government
disinvestment and special economic zone initiatives. These moves are widely viewed as gestures 124
to the strongly opposed communists. The Left Front also has been vocal in criticisms of closer
India-U.S. relations, taking particular aim at proposed civil nuclear cooperation and any signs that
the United States seeks to make India a “junior partner” in efforts to counter China.
The now-concluded Next Steps in Strategic Partnership (NSSP) initiative encompassed several
major issues in U.S.-India relations. New Delhi has long pressed Washington to ease restrictions
on the export to India of dual-use high-technology goods (those with military applications), as
well as to increase civilian nuclear and civilian space cooperation. These three key issues came to
be known as the “trinity,” and top Indian officials insisted that progress in these areas was
necessary to provide tangible evidence of a changed U.S.-India relationship. There were later
120 See, for example, “India’s ‘Untouchables Queen’ Gains Power, Enemies,” Reuters, January 21, 2008.
121 The new front includes such regional powerhouses as the Telugu Desam of Andhra Pradesh, the AIADMK of Tamil
Nadu, and the Samajwadi of Uttar Pradesh.
122 See the Communist Party of India (Marxist) at http://www.cpim.org.
123 In 2008, Congress Party officials have warned Left Front leaders that any effort by communists to forge a “third
front” could leave the electoral field open to Hindu nationalist forces found mainly in the BJP and its allies (“India’s
Ruling Congress Slams Left Ally’s ‘Third Front,’” Reuters, January 21, 2008).
124 “India Gets Populist Pre-Election Budget,” BBC News, February 29, 2008.
references to a “quartet” when the issue of missile defense was included. In January 2004,
President Bush and Prime Minister Vajpayee issued a joint statement declaring that the U.S.-India
“strategic partnership” included expanding cooperation in the “trinity” areas, as well as 125
expanding dialogue on missile defense. This initiative was dubbed as the NSSP and involved a
series of reciprocal steps.
In July 2005, the State Department announced successful completion of the NSSP, allowing for
expanded bilateral commercial satellite cooperation, and removal/revision of some U.S. export
license requirements for certain dual-use and civil nuclear items. Taken together, the July 2005
U.S.-India Joint Statement and a June 2005 U.S.-India Defense Framework Agreement include 126
provisions for moving forward in all four NSSP issue-areas. Many observers saw in the NSSP
evidence of a major and positive shift in the U.S. strategic orientation toward India, a shift later
illuminated more starkly with the Bush Administration’s intention to initiate full civil nuclear
cooperation with India.
India’s status as a non-signatory to the 1968 Nuclear Nonproliferation Treaty (NPT) has kept it
from accessing most nuclear-related materials and fuels on the international market for more than
three decades. New Delhi’s 1974 “peaceful nuclear explosion” spurred the U.S.-led creation of
the Nuclear Suppliers Group (NSG)—an international export control regime for nuclear-related
trade—and Washington further tightened its own export laws with the Nuclear Nonproliferation
Act of 1978 (P.L. 95-242). New Delhi has long railed at a “nuclear apartheid” created by an
apparent double standard inherent in the NPT, which, they maintain, allows certain states to
legitimately employ nuclear deterrents while other states cannot. Senior Indian officials reiterate
the widely-held Indian perspective that reaching a civil nuclear deal with the United States
remains crucial to the process of removing constraints placed on India by “an increasingly
selective, rigorous, and continually expanding regime of technology denial,” claiming that only
by “turning the nuclear key” will India be able to open the door to global trade in dual use and 128
other sophisticated technologies.
Under U.S. and international law, civil nuclear cooperation with India cannot commence until
Washington and New Delhi finalize a peaceful nuclear cooperation agreement (and Congress
endorses such an agreement), until New Delhi concludes its own safeguards agreement with the
International Atomic Energy Agency, and until the NSG allows for such cooperation. At present,
nuclear power accounts for less than 3% of India’s total electricity generation, and an Indian
government official has estimated that, even under optimistic scenarios, this percentage would 129
likely no more than double over the next 25 years.
125 See http://www.whitehouse.gov/news/releases/2004/01/20040112-1.html.
126 See http://www.whitehouse.gov/news/releases/2005/07/20050718-6.html and http://www.indianembassy.org/
127 See also CRS Report RL33016, U.S. Nuclear Cooperation with India: Issues for Congress, by Paul K. Kerr.
128 See, for example, a February 2008 speech by Indian Special Envoy and former Foreign Secretary Shyam Saran at
129 Cited in “U.S. Nuclear Deal Won’t Power India’s Boom,” Reuters, March 13, 2007.
Differences over nuclear policy bedeviled U.S.-India ties for decades and—given New Delhi’s
lingering resentments—have presented a serious psychological obstacle to more expansive
bilateral relations. In a major policy shift, the July 2005 U.S.-India Joint Statement notably
asserted that “as a responsible state with advanced nuclear technology, India should acquire the
same benefits and advantages as other such states,” and President Bush vowed to work on
achieving “full civilian nuclear energy cooperation with India.” As a reversal of three decades of
U.S. nonproliferation policy, such proposed cooperation stirred controversy and required changes
in both U.S. law and in NSG guidelines. India reciprocally agreed to take its own steps, including
identifying and separating its civilian and military nuclear facilities in a phased manner and
placing the former under international safeguards. Some in Congress express concern that civil
nuclear cooperation with India might allow that country to advance its military nuclear projects
and be harmful to broader U.S. nonproliferation efforts. While the Bush Administration
previously had insisted that such cooperation would take place only within the limits set by
multilateral nonproliferation regimes, it later actively sought adjustments to U.S. laws and
policies, and has approached the NSG in an effort to adjust that regime’s guidelines, which are set
by member consensus.
In March 2006, President Bush and Prime Minister Singh issued a Joint Statement that included 130
an announcement of “successful completion of India’s [nuclear facility] separation plan.” After
months of complex and difficult negotiations, the Indian government had presented a plan to
separate its civilian and military nuclear facilities as per the July 2005 Joint Statement. The
separation plan would require India to move 14 of its 22 reactors into permanent international
oversight by the year 2014 and place all future civilian reactors under permanent safeguards.
Shortly thereafter, legislation to waive the application of certain requirements under the Atomic
Energy Act of 1954 with respect to India was, at the President’s request, introduced in the U.S.
Secretary of State Rice appeared before key Senate and House committees in April 2006 to press
the Bush Administration’s case for civil nuclear cooperation with India. The Administration
offered five main justifications for making changes in U.S. law to allow for such cooperation,
contending that doing so would
• benefit U.S. security by bringing India “into the nonproliferation mainstream;”
• benefit U.S. consumers by reducing pressures on global energy markets,
especially carbon-based fuels;
• benefit the environment by reducing carbon emissions/greenhouse gases;
• benefit U.S. business interests through sales to India of nuclear reactors, fuel, and
support services; and
• benefit progress of the broader U.S.-India “global partnership.”131
130 See http://www.whitehouse.gov/news/releases/2006/03/20060302-5.html.
131 See “U.S.-India Civil Nuclear Cooperation Initiative Fact Sheet,” U.S. Department of State, at http://www.state.gov/
r/pa/scp/2006/62904.htm; Condoleezza Rice, “Our Opportunity With India” (op-ed), Washington Post, March 13,
Many leading American experts on South Asian affairs joined the Administration in urging
Congress to support the new policy, placing particular emphasis on the “necessary” role it would 132
play in promoting a U.S.-India global partnership.
The U.S. Chamber of Commerce—which, along with the U.S.-India Business Council, lobbied
vigorously in favor of President Bush’s initiative—speculated that civil nuclear cooperation with
India could generate contracts for American businesses worth up to $100 billion, as well as
generate up to 27,000 new American jobs each year for a decade. A more modest estimate 133
foresees the deal generating as much as $40 billion in new foreign investment into India.
However, foreign companies such as Russia’s Atomstroyexport and France’s Areva may be better
poised to take advantage of the Indian market. Moreover, U.S. nuclear suppliers will likely balk at
entering the Indian market in the absence of nuclear liability protection, which New Delhi does
not offer at present.
Further hearings in the Senate and House during mid-2006 saw a total of fifteen independent
analysts weigh in on the potential benefits and/or problems that might accrue from such
cooperation. Numerous nonproliferation experts, scientists, and former U.S. government officials
warned that the Bush Administration’s initiative was ill-considered, arguing that it would
facilitate an increase in the size of India’s nuclear arsenal, potentially leading to a nuclear arms
race in Asia, and would undermine the global nonproliferation regime and cause significant
damage to key U.S. security interests. Some experts opined that the Administration’s optimism,
perhaps especially as related to the potential effects on global energy markets and carbon 134
emissions, could not be supported through realistic projections.
In the realm of geopolitics, much of the Administration’s argument for moving forward with the
U.S.-India nuclear initiative appears rooted in an anticipation/expectation that New Delhi will in
coming years and decades make policy choices that are more congruent with U.S. regional and
global interests (a desire for such congruence is, in fact, written into the enabling legislation, P.L.
109-401). Proponents suggest that this U.S. “gesture” will have significant and lasting
psychological and symbolic effects in addition to the material ones, and that Indian leaders
require such a gesture in order to feel confident in the United States as a reliable partner on the
world stage. Skeptics aver that the potential strategic benefits of the nuclear initiative are being
over-sold. Indeed, centuries of Indian anti-colonial sentiments and oftentimes prickly,
independent foreign policy choices are unlikely to be set aside in the short run, meaning that the
anticipated geopolitical benefits of civil nuclear cooperation with India remain speculative and at
least somewhat dependent upon unknowable global political developments.
132 See, for example, an open letter Congress at http://www.indianembassy.org/newsite/press_release/2006/Mar/30.asp.
133 See Sridhar Krishnaswami, “Indo-US N-Deal a Historic Opportunity” (op-ed), India Abroad, March 22, 2006; “US
Nuclear Deal Likely to Get India 40bn Dollars Business,” BBC Monitoring South Asia, August 13, 2007.
134 See, for example, open letters to Congress at http://fas.org/intt2006/X3e_FDC01218.pdf;
http://www.armscontrol.org/pdf/20060912_India_Ltr_Congress.pdf; and http://www.armscontrol.org/pdf/
After months of consideration, key House and Senate committees took action on relevant
legislation in June 2006, passing modified versions of the Administration’s proposals by wide
margins. The new bills (H.R. 5682 and S. 3709) made significant procedural changes to the
Administration’s original proposal, changes that sought to retain congressional oversight of the
negotiation process, in part by requiring the Administration to gain future congressional approval
of a completed peaceful nuclear cooperation agreement with India (this is often referred to as a
“123 Agreement,” as it is negotiated under the conditions set forth in Section 123 of the Atomic th
Energy Act). During the final months of its tenure, the 109 Congress passed enabling legislation 135
with broad bipartisan support. So-called “killer amendments” were rejected by both chambers
(Indian government and Bush Administration officials had warned that certain proposed new
provisions, such as those requiring that India halt its fissile material production or end its military
relations with Iran, would trigger New Delhi’s withdrawal from the entire negotiation).
In a December 2006 “lame duck” session, congressional conferees reconciled the House and
Senate versions of the legislation and provided an explanatory statement (H.Rept. 109-721).
President Bush then signed the Henry J. Hyde United States-India Peaceful Atomic Energy
Cooperation Act of 2006 (P.L. 109-401 or the “Hyde Act”) into law, calling it a “historic
agreement” that would help the United States and India meet the energy and security challenges st
of the 21 century. The President also issued a signing statement asserting that his approval of the
act “does not constitute [his] adoption of the statements of policy as U.S. foreign policy” and that
he will construe such policy statements as “advisory.” Some in Congress expressed concern that 136
President Bush would seek to disregard Congress’s will.
In mid-2007, as negotiations on a 123 Agreement were underway,16 experts, scholars, and former
U.S. government officials signed a letter urging Senators to hold the Bush Administration to the
“set of core conditions and limitations” of the Hyde Act, including termination of assistance upon
an Indian nuclear test, permanent and unconditional safeguards on civilian Indian facilities, and 137
prohibitions on reprocessing and enrichment technologies. A July letter to President Bush
signed by 23 Members of the House stressed the need for any civil nuclear cooperation agreement
with India to conform to “the legal boundaries set by Congress.” The letter noted that the U.S.
Constitution provides Congress with the sole authority to regulate foreign commerce, and it
expressed ongoing concerns about “India’s deepening military-to-military relationship with Iran
... [which] places congressional approval of the Agreement for Nuclear Cooperation in 138
135 In July 2006, the House passed H.R. 5682 by a vote of 359-68. In November, the Senate passed an amended version
of the same bill by a vote of 85-12.
136 See http://www.whitehouse.gov/news/releases/2006/12/20061218-1.html; http://www.whitehouse.gov/news/
releases/2006/12/20061218-12.html; “Bush India Statement Raises Congress Concerns,” Reuters, December 21, 2006.
137 See http://www.armscontrol.org/pdf/20070515letteronUSIndia123House.pdf. The Chairman of the Senate Foreign
Relations Committee reportedly has said it would be unlikely that Congress would be willing to further amend U.S. law
on nuclear testing and reprocessing (“Biden Cool to US Compromise on India Deal,” Reuters, May 2, 2007).
Almost immediately upon the release of the July 2005 Joint Statement, key Indian political
figures and members of the country’s insular nuclear scientific community issued strong
criticisms of the bilateral civil nuclear initiative; some such criticisms continue to this day.
Former Prime Minister Vajpayee, along with many leading figures in his opposition BJP party,
insisted that the deal as envisioned would place unreasonable and unduly expensive demands on
India, particularly with regard to the separation of nuclear facilities. In reaction to the U.S.
Congress’s passage of enabling legislation in late 2006, the BJP listed numerous continuing
objections, and went so far as to call the deal “unacceptable” and aimed at “capping, rolling back, 139
and eventually eliminating India’s nuclear weapons capability.” Many analysts view the BJP’s
opposition as political rather than substantive, especially in light of the fact that the 2004 NSSP 140
initiative was launched during the BJP’s tenure.
Some Indian analysts, wary of U.S. intentions in pursuing bilateral civil nuclear cooperation,
believe the initiative may be cover for a broader effort to cement India’s cooperation in a number
of non-energy-related areas, such as defense trade and New Delhi’s relations with Iran. From this
perspective, the U.S. government repeatedly “shifted the goalposts” to forward its own (veiled) 141
nonproliferation goals. India’s influential communist parties, whose Left Front provides crucial
support to the Congress-led ruling coalition in New Delhi, have focused their ire on geopolitical
aspects of the civil nuclear initiative. In late 2006, the leader of India’s main communist party
declared the U.S.-India civil nuclear deal “not acceptable” as it would “seriously undermine
India’s independent foreign policy.” Previously, the Left Front had called India’s two IAEA votes 142
on Iran a “capitulation” to U.S. pressure. Indian leftists thus have been at the forefront of
political resistance to India’s becoming a “junior partner” of the United States.
Equally stinging and perhaps more substantive criticism came from several key Indian scientists,
whose perspectives on the technical details of the civil nuclear initiative are considered highly
credible. India’s nuclear scientific community, mostly barred from collaboration with
international civil nuclear enterprises as well as direct access to key technologies, has worked for
decades in relative isolation, making its members both proud of their singular accomplishments
and sensitive to any signs of foreign “interference.” Many viewed the enabling legislation passed
by the U.S. Congress as being more about nonproliferation and less about energy cooperation.
They considered it both intrusive on and preclusive of their activities.
The major criticisms of existing plans for U.S.-India civil nuclear cooperation made by Indian
commentators (and at times by the Indian government) are summarized as follows:
139 See “Press Statement of the BJP on the Indo-US Nuclear Deal,” December 10, 2006, at http://www.bjp.org.
140 See, for example, “Politics of BJP’s Nuclear Tantrum,” Telegraph (Kolkata), August 7, 2007. Strobe Talbott, a
Deputy Secretary of State in the Clinton Administration and a key interlocutor with India, has opined that the BJP
government of the 1990s “would have been astonished” at and eager to accept a similar deal, had it been offered then
(“Buzz of the Week,” India Today (Delhi), March 17, 2008).
141 Siddharth Varadarajan, “This Has Nothing To Do With Energy” (op-ed), Hindu (Chennai), May 2, 2007; Brahma
Chellaney, “Nuclear Non-Starter” (op-ed), Wall Street Journal, May 9, 2007.
142 In February 2007, a former U.S. Assistant Secretary of Defense reportedly said that India’s two IAEA votes on Iran
had been “coerced” and paved the way for congressional approval of proposed U.S.-India civil nuclear cooperation.
U.S. Ambassador to India David Mulford later called the attributed statement “inaccurate” (“Rademaker is Not a U.S.
Official,” Hindu (Chennai), February 17, 2007).
• India’s unilateral moratorium on nuclear tests was being codified into a bilateral
obligation through a clause that would allow the United States to reclaim any
supplied nuclear equipment if India were to test a nuclear device;
• India was being denied nuclear reprocessing technologies warranted under “full
• India was not being given prior authorization to reprocess spent fuel;
• India was not being given assurances that it will receive uninterrupted fuel
supplies in perpetuity; and
• language on securing India’s assistance with U.S. efforts to prevent Iran from
obtaining weapons of mass destruction would limit New Delhi’s foreign policy 143
Prime Minister Singh stood firm against such wide-ranging and high-profile criticisms, repeatedly
assuring his Parliament that relevant negotiations with the United States have not altered basic
Indian policies or affected New Delhi’s independence on matters of national interest. Within this 144
context, however, Singh expressed concern about some of the points listed above. Regardless
of the legally binding or non-binding nature of certain controversial sections of the U.S.
legislation, New Delhi found many of them to be either “prescriptive” in ways incompatible with
the provisions of the July 2005 and March 2006 Joint Statements, or “extraneous” and 145
“inappropriate to engagements among friends.”
In July 2007, the United States and India announced having concluded negotiations on a peaceful
nuclear cooperation (“123”) agreement, calling it a “historic milestone” in the bilateral strategic
partnership. The announcement came one week after a fifth round of formal bilateral negotiations
had ended in Washington, where a high-level Indian delegation led by National Security Advisor
M.K. Narayanan had met with numerous top U.S. officials, including Vice President Cheney and
Secretary of State Rice. Under Secretary of State Burns, the lead U.S. negotiator, called the deal
“perhaps the single most important initiative that India and the United States have agreed to in the
between our two countries.” U.S. officials urged New Delhi to move rapidly toward completing
remaining steps to consummation of the pact.
Among the text’s more salient provisions are the following:
• India is granted authorization to reprocess spent fuel at a national reprocessing
facility that New Delhi plans to establish under International Atomic Energy
143 “Major Obstacles Persist in Nuclear Deal,” Hindu (Chennai), April 25, 2007; A. Gopalakrishnan, “Hyde-Bound N-
Deal Cannot Be Accepted” (op-ed), Asian Age (Mumbai), May 15, 2007.
144 See “Excerpts from PM’s Reply to Discussion in Rajya Sabha on Civil Nuclear Energy Cooperation with the United
States,” August 17, 2006, at http://www.carnegieendowment.org/static/npp/Singh_speech_Aug_2006.pdf.
145 Author interview with Indian government official, New Delhi, September 2006.
146 See http://www.state.gov/p/us/rm/2007/89559.htm.
• In the event of a future nuclear test by India, the two countries would launch
immediate bilateral consultations to “consider carefully the circumstances” and
take into account whether the circumstances resulted from “serious concern about
a changed security environment or as a response to similar actions by other states
which could impact national security.” While the U.S. President would have a
right to demand the return of all U.S.-supplied nuclear equipment and material in
such a circumstance, the text recognizes that “exercising the right of return would
have profound implications” for bilateral relations and calls for both parties to
“take into account the potential negative consequences” of any termination of
• India is given assurances that supplies of fuel for its civilian reactors will not be
interrupted—even if the United States terminates the 123 Agreement—through
U.S. commitments to “work with friends and allies ... to create the necessary
conditions for India to obtain full access to the international fuel market,” and to 147
“support an Indian effort to develop a strategic reserve of nuclear fuel.”
Press reports had indicated that U.S. granting of unambiguous reprocessing rights, along with an
Indian insistence on U.S. guarantees of an uninterrupted fuel supply for all imported reactors, had
become a central obstacle in the lead-up to the talks, and that Indian negotiators had taken
uncompromising positions in both areas. Subsequent reports suggested that U.S. negotiators made
considerable concessions to Indian demands and that the agreement could face resistance in 148
Congress if its legal stipulations are seen to deviate from those found in the Hyde Act. In early
2008, External Affairs Minister Mukherjee reassured the Indian Parliament of his government’s
view that the Hyde Act is relevant only to interaction between the legislative and executive
branches of the U.S. government, and that only the provisions of the 123 Agreement will be
binding upon New Delhi. This distinction was echoed by Assistant Secretary of State Boucher 149
during his contemporaneous visit to New Delhi.
India has long sought access to American space technology; such access has since the 1980s been
limited by U.S. and international “red lines” meant to prevent assistance that could benefit India’s
military missile programs. India’s space-launch vehicle technology was obtained largely from
foreign sources, including the United States, and forms the basis of its intermediate-range Agni
ballistic missile booster, as well as its suspected Surya intercontinental ballistic missile program. 150
India is today seen to maintain one of the world’s most advanced space programs.
147 See text of the 123 Agreement at http://www.state.gov/r/pa/prs/ps/2007/aug/90050.htm.
148 “In Its Nuclear Deal With India, Washington Appears to Make More Concessions,” New York Times, July 28, 2007;
“India Nuclear Deal Said Complies With US Law,” Reuters, July 25, 2007; “US Congress to Scrutinize Nuclear Pact
With India,” Agence France Presse, August 3, 2007. H.Res. 711, introduced in the House in October 2007, would seek
the Bush Administration clarifications on the 123 Agreement’s compliance with U.S. law.
149 See http://www.indianembassy.org/newsite/press_release/2008/Mar/1.asp; “We Can Move Forward With Hyde Act
and 123 Agreement: Boucher,” Hindu (Chennai), March 4, 2008. In a move that angered many nonproliferation
advocates who oppose the deal, the State Department requested that congressional staff adhere to unusually strict
confidentiality restrictions and not share the answers to congressional inquiries with the general public. Some observers
called this “virtual gag order” a strong indication that the answers contained information harmful to the deal’s prospects
(“State Department Asks Congress to Keep Quiet About Details of Deal,” Washington Post, May 9, 2008).
150 In April 2008, India’s space agency set a world record by successfully launching ten satellites at one time in what
The NSSP called for enhanced U.S.-India cooperation on the peaceful uses of space technology,
and the July 2005 Joint Statement anticipated closer ties in space exploration, satellite navigation
and launch, and in the commercial space arena. Major conferences on India-U.S. space science
and commerce were held in Bangalore (headquarters of the Indian Space Research Organization)
in both 2004 and 2005. During President Bush’s 2006 visit to India, the two countries committed
to move forward with agreements that will permit the launch of U.S. satellites and satellites
containing U.S. components by Indian space launch vehicles and they later agreed to include two
U.S. scientific instruments on India’s planned Chandrayaan lunar mission. In 2007, a meeting of
the U.S.-India Joint Working Group on Civil Space Cooperation was held in Washington, where
officials expressed satisfaction with growing bilateral ties in the aerospace field.
U.S. Commerce Department officials have sought to dispel “trade-deterring myths” about limits
on dual-use trade by noting that less than 0.5% of total U.S. trade value with India is now subject
to licensing requirements and that the great majority of dual-use licensing applications for India
are approved (about 95% in 2007). July 2003 saw the inaugural session of the U.S.-India High-
Technology Cooperation Group (HTCG), where officials discussed a wide range of issues
relevant to creating the conditions for more robust bilateral high technology commerce; the sixth
HTCG meeting was held in New Delhi in February 2008 (at the 2007 session, U.S. Commerce
Secretary Carlos Gutierrez had unveiled a new “Trusted Customer” program designed to facilitate
greater high-tech trade with India). In 2005, the inaugural session of the U.S.-India High-152
Technology Defense Working Group was held under HTCG auspices. Commerce’s Bureau of
Industry and Security formally designated India as an eligible country under its “Validated End-
User” program in October 2007. This designation will allow certain trusted Indian buyers to 153
purchase high-technology goods without an individual license.
Since 1998, a number of Indian entities have been subjected to case-by-case licensing
requirements and appear on the U.S. export control “Entity List” of foreign end users involved in
weapons proliferation activities. In 2004, as part of NSSP implementation, the United States
modified some export licensing policies and removed the Indian Space Research Organization
(ISRO) headquarters from the Entity List. Further adjustments came in 2005 when six more
subordinate entities were removed. Indian entities remaining on the Entity List are four
subordinates of the ISRO, four subordinates of the Defense Research and Development
Organization, three Department of Atomic Energy entities, and Bharat Dynamics Limited, a 154
missile production agency.
was viewed as an impressive achievement and further sign that Indian scientists had made great and largely indigenous
strides in mastering complex aerospace technologies (“India’s Growing Strides in Space,” BBC News, April 30, 2008).
151 See also CRS Report RL34161, India-U.S. Economic and Trade Relations, by Michael F. Martin and K. Alan
152 See U.S. Department of Commerce, Bureau of Industry and Security, fact sheets at http://www.bis.doc.gov/
InternationalPrograms/IndiaCooperation.htm and http://www.bis.doc.gov/InternationalPrograms/
153 “US Streamlines High-Tech Export Controls on India,” Reuters, October 2, 2007.
154 See Commerce’s Entity List at http://www.bis.doc.gov/Entities.
With more than 1.3 million active personnel, India’s is the world’s third-largest military (after
China and the United States). The country’s defense budget grew by 11% to about $28 billion in
2007 and is up more than 30% since 2000 (adjusted for inflation). The army—more than one
million strong and accounting for nearly half of the budget—has traditionally dominated, but the
navy and air force are becoming more important as India seeks to project its power and protect an
Exclusive Economic Zone of more than two million square kilometers. For 2007, the air force
procurement budget of $3.75 billion was nearly 44% of the service-specific total, with the navy
receiving another $2.56 billion.
The Indian army possesses more than 4,000 main battle tanks and as many as 4,500 towed
artillery tubes. The navy has grown rapidly in recent years, currently operating 48 principal
surface combatants (including one aircraft carrier) and 16 submarines. There also is a significant
amphibious capacity: 17 landing ships (including one recently acquired from the United States)
can carry nearly 5,000 troops or 100 tanks. The navy is developing an indigenous nuclear-
powered attack submarine to be armed with nuclear-tipped cruise missiles and also plans to lease
a Russian Akula-class submarine as part of its “sea-based strategic deterrence.” The air force flies
model Sukhoi-30, as well as French-built Mirage and Anglo-French Jaguar aircraft. It also
possesses modest airborne early warning and in-flight refueling capabilities provided by Russian-
made platforms. A Strategic Forces Command oversees as many as 170 intermediate- and short-
range ballistic missiles capable of delivering nuclear warheads, and has plans to field a new Agni-
IV missile with a range that would give it inter-continental capabilities.
New Delhi increasingly seeks to shift advanced military imports from finished platforms to co-
production with foreign suppliers. A 2005 deal with France provides for technology transfers and
Indian construction of six Scorpene submarines to be delivered in 2012-2017. In seeking to
replace its aging arsenal of MiG-21 fighters, India may purchase up to 186 new jets (126 for the
air force and 60 for the navy) and has signaled a desire for technology sharing and co-production
in this effort: only 18 of the new air force jets are to be manufactured abroad. In addition to the
Scorpene submarines, other notable recent purchases for the Indian military include hundreds of
the latest Russian T-90 tanks and upgrades on 600 existing T-72s; 3 new Russian-built missile
frigates; 24 new MiG-29K naval jets for deployment on the INS Vitramaditya (formerly the
Russian Gorshkov); 40 upgraded Su-30 MKI ground attack aircraft, major upgrades on existing
MiG and Jaguar combat aircraft; and 66 jet trainers from Britain.
Russia continues to provide the bulk of India’s imported defense wares. In recent years, however,
Israel has roughly equaled Russia in the value of defense exports to India, with each country
providing about $1.5 billion worth of defense supplies in 2006. Moreover, India and Israel are 156
engaging in new joint development projects involving missile technology. India was the
155 Much information in this section comes from The Military Balance 2008 (Institute for International and Strategic
Studies, London, 2008).
156 India’s January 2008 space launch of an Israeli military satellite elicited a formal complaint from Tehran, especially
due to Iranian concerns that the satellite’s sophisticated imaging systems will be used to monitor Iran’s controversial
nuclear program (“Iran Angered Over India’s Launch of Israeli Spy Satellite,” Agence France Presse, February 5,
leading developing world arms purchaser from 1999-2006, making arms transfer agreements 157
totaling $22.4 billion during that period. As India seeks to expand its power projection
capabilities, it has come under fire from some for continuing to prepare for a conventional
interstate war that may be unlikely to occur. According to one report, of the country’s nearly two 158
million persons in uniform, only about 5,000 have meaningful counterterrorism training.
Defense cooperation between the United States and India is in the early stages of development
(unlike U.S.-Pakistan military ties, which date back to the 1950s). Since September 2001, and
despite a concurrent U.S. rapprochement with Pakistan, U.S.-India security cooperation has
flourished; U.S. diplomats rate military cooperation among the most important aspects of
transformed bilateral relations. The India-U.S. Defense Policy Group (DPG)—moribund since
India’s 1998 nuclear tests and ensuing U.S. sanctions—was revived in late 2001 and meets
In June 2005, the United States and India signed a ten-year defense pact outlining planned
collaboration in multilateral operations, expanded two-way defense trade, increasing
opportunities for technology transfers and co-production, expanded collaboration related to
missile defense, and establishment of a bilateral Defense Procurement and Production Group. The
agreement may be the most ambitious such security pact ever engaged by New Delhi. A Maritime
Security Cooperation Agreement, inked in 2006, commits both countries to “comprehensive
cooperation” in protecting the free flow of commerce and addressing a wide array of threats to
maritime security, including piracy and the illicit trafficking of weapons of mass destruction and
related materials. In April 2007, the Commander of the U.S. Pacific Command, Adm. Tim
Keating, told a Senate panel that the Pentagon intends to “aggressively” pursue expanding
military-to-military relations with India. During his August 2007 visit to New Delhi, Adm. 159
Keating lauded U.S.-India defense relations as “solid, good, and improving steadily.” The
sentiment was echoed by Secretary of Defense Gates during his February 2008 visit to the Indian
The United States views defense cooperation with India in the context of “common principles and
shared national interests” such as defeating terrorism, preventing weapons proliferation, and
maintaining regional stability. Many analysts view increased U.S.-India security ties as providing
an alleged “hedge” against or “counterbalance” to growing Chinese influence in Asia, though
both Washington and New Delhi repeatedly downplay such probable motives. Still, while a
congruence of U.S. and Indian national security objectives is unlikely in the foreseeable future,
convergences are being identified in areas such as shared values, the emergence of a new balance-
of-power arrangement in the region, and on distinct challenges such as WMD proliferation,
Islamist extremism, and energy security. There also remain indications that the perceptions and
expectations of top U.S. and Indian strategic planners are divergent on several key issues,
157 See CRS Report RL34187, Conventional Arms Transfers to Developing Nations, 1999-2006, by Richard F.
158 Ajai Sukla, “Dysfunctional Defense” (op-ed), Wall Street Journal Asia, July 19, 2007.
159 Senate Armed Services Committee Hearing on U.S. Military Command Budgets, April 24, 2007; “US Admiral Says
Military Cooperation With India Improving Steadily,” Associated Press, August 23, 2007.
including the role of Pakistan, approaches to conflict resolution in Iraq and in Palestine, and
Indian’s relations with Iran, as well as with repressive governments in places such as Burma and 160
Since early 2002, the United States and India have held a series of unprecedented and
increasingly substantive combined exercises involving all military services. “Cope India” air
exercises have provided the U.S. military with its first look at advanced Russian-built Su-
30MKIs; in 2004, mock air combat saw Indian pilots in late-model Russian-built fighters hold off
American pilots flying older F-15Cs, and Indian successes were repeated versus U.S. F-16s in
2005. Indian pilots joined military aviators from South Korea and France to participate in August
2008 U.S. Air Force training exercises over Nevada. U.S. and Indian special forces soldiers have
held at least five “Vajra Prahar” joint exercises, and at least 133 U.S. Special Forces soldiers have
attended India’s Counter-Insurgency Jungle Warfare School. Moreover, major annual “Malabar”
joint naval exercises are held off the Indian coast. The seventh and most recent of these came in
September 2007, when India hosted a total of 27 warships from five countries—including the
United States, Japan, Australia, and Singapore—for maneuvers in the Bay of Bengal. It was the
first time such exercises were conducted off India’s east coast. U.S. and Indian officials tout
ongoing joint maneuvers as improving interoperability and as evidence of an overall deepening of 161
the bilateral defense relationship.
162 Along with increasing military-to-military ties, the issue of U.S. arms sales to India has taken a
higher profile, with some analysts anticipating that New Delhi will spend as much as $40 billion 163
on weapons procurement over the next five years. The first-ever major U.S. arms sale to India
came in 2002, when the Pentagon negotiated delivery of 12 counter-battery radar sets (or
“Firefinder” radars) worth a total of $190 million. India also purchased $29 million worth of
counterterrorism equipment for its special forces and has received sophisticated U.S.-made
electronic ground sensors to help stem the tide of militant infiltration in the Kashmir region. In
protection systems for mounting on the Boeing 737s that carry India’s head of government.
Moreover, the State Department has authorized Israel to sell to India the jointly developed U.S.-
Israeli Phalcon airborne early warning system, an expensive asset that some analysts believe may
tilt the regional strategic balance even further in India’s favor.
In 2006, Congress authorized and New Delhi approved the $44 million purchase of the USS
Trenton, a decommissioned American amphibious transport dock. The ship, which became the
160 See also Vibhuti Hate and Teresita Schaffer, “U.S.-India Defense Relations: Strategic Perspectives,” CSIS South
Asia Monitor, April 4, 2007.
161 “US-India Joint Exercises Growing in Sophistication, Scope,” Inside the Pentagon, January 31, 2008.
162 See also CRS Report RL33515, Combat Aircraft Sales to South Asia: Potential Implications, by Christopher
Bolkcom, Richard F. Grimmett, and K. Alan Kronstadt.
163 “Building a Modern Arsenal in India,” New York Times, August 31, 2007; US Aims to Edge Out Russia in big Arms
Sales to India,” Reuters, December 26, 2007. In December 2007, Boeing agreed in principle to send up to $1 billion in
aerospace manufacturing work to India’s state-owned Hindustan Aeronautics over the next decade. In January 2008,
Lockheed Martin announced the opening of a subsidiary in New Delhi.
second largest in the Indian navy when it was commissioned as the INS Jalashwa in June 2007,
set sail for India carrying six surplus Sikorsky UH-3H Sea King helicopters purchased for another 164
$39 million. In May 2007, the Pentagon notified Congress of a possible sale to India of six C-
130J Hercules military transport aircraft (along with related equipment, training, and services) in
a deal that could be worth more than $1 billion to the manufacturer, Maryland-based Lockheed
Martin. In January 2008, Washington and New Delhi signed an agreement to finalize the deal,
which represents the largest-ever U.S. defense sale to India.
The Indian government reportedly possesses an extensive list of desired U.S.-made weapons,
including PAC-3 anti-missile systems, electronic warfare systems, and possibly even combat
aircraft. The March 2005 unveiling of the Bush Administration’s “new strategy for South Asia”
included assertions that the United States welcomed Indian requests for information on the
possible purchase of F-16 or F/A-18 fighters, and indicated that Washington is “ready to discuss
the sale of transformative systems in areas such as command and control, early warning, and 165
missile defense.” India in August 2007 invited foreign tenders for the sale of 126 new multi-
role combat aircraft in a deal that could be worth more than $10 billion. Lockheed Martin’s F-16
and Illinois-based Boeing’s F/A-18 are competing with aircraft built in Russia, France, Sweden,
and by a European consortium. Lockheed’s pitch reportedly includes offering a “super-cruise”
version of the F-16 that saves large amounts of fuel by achieving supersonic speeds without the
use of afterburners. Boeing, for its part, has sought to establish multiple joint ventures that could 166
better position the company to become India’s preferred aerospace and defense partner.
Some top Indian officials express concern that the United States is a “fickle” partner that may not
always be relied upon to provide the reciprocity, sensitivity, and high-technology transfers sought 167
by New Delhi. In 2006, the Indian Navy declined an offer to lease two U.S. P-3C maritime
reconnaissance aircraft, calling the arrangements too costly. Moreover, India’s offset policy states
that any defense purchases worth more that $76 million must include offset clauses amounting to
at least 30% of the deal’s total value. This policy, already described as “narrow” and “fairly
restrictive” by the U.S. Ambassador to India, was altered to require that fully half of the value of
any multi-role combat aircraft import be attached to offsets. U.S. laws requiring on-site
verifications of exported defense equipment may represent a further irritant, as Indian officials 168
reportedly have expressed discomfort with such physical inspections.
Joint U.S.-India military exercises and arms sales negotiations can cause disquiet in Pakistan,
where there is concern that induction of advanced weapons systems into the region could disrupt
the “strategic balance” there. Islamabad worries that its already disadvantageous conventional
military status vis-à-vis New Delhi will be further eroded by India’s acquisition of sophisticated
“force multipliers.” In fact, numerous observers identify a pro-India drift in the U.S.
164 India’s comptroller later issued a report critical of the government for purchasing an “ageing ship” in a “hasty
manner” without proper assessment of the ship’s sea-worthiness, prompting communists in Parliament to demand an
investigation. Indian navy officials reject the criticism and say the inexpensive ship will provide significant sea-lift
capabilities (“US-Made Jalashwa a Lemon: CAG,” Times of India (Delhi), Marc h 15, 2008).
165 See http://www.state.gov/r/pa/prs/ps/2005/43853.htm.
166 “US Contenders Enhance Their MRCA Offerings to India,” Jane’s Defense Weekly, January 30, 2008; “Boeing
Seeks Leverage on Indian Fighter Order,” Aviation International News, February 19, 2008; “Boeing Keen to Develop
India’s Aerospace Industry,” Reuters, July 16, 2008.
167 “Defense Firms Seek Sales in India,” Chicago Tribune, December 21, 2006.
168 “India Realigns Its Offset Policy,” Jane’s Defense Weekly, February 6, 2008; “Delhi to US: No Arms-Site Scan,”
Telegraph (Kolkata), February 28, 2008.
government’s strategic orientation in South Asia. Yet Washington regularly lauds Islamabad’s role
as a key ally in the U.S.-led counterterrorism coalition and assures Pakistan that it will take no
actions to disrupt strategic balance on the subcontinent.
One facet of the emerging “strategic partnership” between the United States and India is greatly
increased counterterrorism cooperation. The U.S. State Department’s Country Reports on
Terrorism 2007 identified India as being “among the world’s most terror-afflicted countries” and
counted more than 2,300 Indian deaths due to terrorism in 2007 alone. State finds numerous
problems with New Delhi’s capacity to combat terrorism:
The Indian government’s counterterrorism efforts remained hampered by outdated and
overburdened law enforcement and legal systems. The Indian court system was slow,
laborious, and prone to corruption; terrorism trials can take years to complete. Many of
India’s local police forces were poorly staffed, lacked training, and were ill-equipped to 169
combat terrorism effectively.
Some Indian analysts complain that the intelligence gathering capabilities of India’s security
forces remain woefully inadequate and preclude effective law enforcement and preventive 170
In November 2001, President Bush and then-Indian Prime Minster Vajpayee agreed that
“terrorism threatens not only the security of the United States and India, but also our efforts to 171
build freedom, democracy and international security and stability around the world.” In 2002,
India and the United States launched the Indo-U.S. Cyber Security Forum to safeguard critical
infrastructures from cyber attack. The June 2005 “New Framework for the U.S.-India Defense
Relationship” lists “defeating terrorism and violent religious extremism” as one of four key
shared security interests, and it calls for a bolstering of mutual defense capabilities required for 172
such a goal. A 2006 session of the U.S.-India Joint Working Group on Counterterrorism ended
with a statement of determination from both countries to further advance bilateral cooperation
and information sharing on such areas of common concern as bioterrorism, aviation security, 173
advances in biometrics, cyber-security and terrorism, WMD terrorism, and terrorist financing.
The Working Group has met a total of nine times since its 2000 creation, most recently in August
training of army units.
In October 2005, the United States and India concluded a treaty on criminal matters that would
institutionalize law enforcement cooperation and create a regularized channel for mutual 175
assistance. Among the hoped-for benefits has been more effective counterterrorism efforts. It
169 See http://www.state.gov/s/ct/rls/crt/2007/103709.htm.
170 See, for example, Ajai Sahni, “Get to the Basics,” Outlook (Delhi), May 21, 2008.
171 “Joint Statement of U.S., India on Terrorism, Bilateral Ties,” U.S. Department of State Washington File, November
172 See http://www.indianembassy.org/press_release/2005/June/31.htm.
173 See http://usinfo.state.gov/is/Archive/2006/Apr/24-821244.html.
174 “U.S. Troops on Front Line of Expanding India Ties,” Washington Post, January 25, 2006.
175 “U.S.-India Treaty on Mutual Legal Assistance in Criminal Matters Ratified,” U.S. Embassy New Delhi Press
was reported in May 2006 that the United States had offered demining assistance,
counterinsurgency training for police forces, and humanitarian relief for persons internally 176
displaced by conflict related to the Maoist rebellion. Moreover, three months after the July
2006 Bombay terrorist bombings, senior CIA officials reportedly traveled to New Delhi to discuss
improving counterterrorism cooperation with Indian leaders, and an FBI official later called for
closer law enforcement and intelligence coordination with India in light of terrorist attacks in that 177
country’s interior. There have been signs that U.S. government agencies have taken greater
notice of links apparent between Pakistan-based terrorist groups and wanted Indian criminal boss
Dawood Ibrahim, who is suspected of residing in Karachi, Pakistan. In 2003, the U.S. Department
of the Treasury formally designated Ibrahim as a terrorist supporter and accused him of 178
collaborating with Al Qaeda in South Asia.
Many policy analysts consider the apparent arms race between India and Pakistan as posing
perhaps the most likely prospect for the future use of nuclear weapons by states. In May 1998,
India conducted five underground nuclear tests, breaking a self-imposed, 24-year moratorium on
such testing. Despite international efforts to dissuade it, Pakistan quickly followed. The tests
created a global storm of criticism and represented a serious setback for two decades of U.S.
nuclear nonproliferation efforts in South Asia. Following the tests, President Clinton imposed full
restrictions on non-humanitarian aid to both India and Pakistan as mandated under Section 102 of
the Arms Export Control Act. India currently is believed to have enough fissile material, mainly
plutonium, for 55-115 nuclear weapons; Pakistan, with a program focused on enriched uranium,
may be capable of building a similar number. Both countries have aircraft capable of delivering
nuclear bombs. India’s military has inducted short- and intermediate-range ballistic missiles,
while Pakistan itself possesses short- and medium-range missiles (allegedly acquired from China
and North Korea). All are assumed to be capable of delivering nuclear warheads over significant
Proliferation in South Asia is part of a chain of rivalries—India seeking to achieve deterrence
against China, and Pakistan seeking to gain an “equalizer” against a conventionally stronger
India. In 1999, a quasi-governmental Indian body released a Draft Nuclear Doctrine for India
calling for a “minimum credible deterrent” (MCD) based upon a triad of delivery systems and
pledging that India will not be the first to use nuclear weapons in a conflict. In 2003, New Delhi
announced creation of a Nuclear Command Authority. After the body’s first session in September
of that year, participants vowed to “consolidate India’s nuclear deterrent.” India thus appears to
be taking the next steps toward operationalizing its nuclear weapons capability. According to the
director of the U.S. Defense Intelligence Agency in a 2007 statement to a Senate panel, India is
Release, October 3, 2005.
176 “US Offers India Help to Fight Maoists: Official,” Reuters, May 26, 2006.
177 “CIA Big Guns in Huddle,” Telegraph (Calcutta), October 24, 2006; “FBI Looks to Boost Intelligence Ties With
India,” Reuters, November 27, 2006.
178 “Hunting for India’s ‘Most Wanted,’” Jane’s Intelligence Digest, December 9, 2005; Treasury notification at
179 See also CRS Report RL32115, Missile Proliferation and the Strategic Balance in South Asia, by Andrew Feickert
and K. Alan Kronstadt, and CRS Report RS21237, Indian and Pakistani Nuclear Weapons, by Sharon Squassoni.
building its stockpile of fission weapons and is likely to continue work on advanced warhead and 180
Soon after the May 1998 nuclear tests in South Asia, Congress acted to ease aid sanctions through 181
a series of legislative measures. In September 2001, President Bush waived remaining
sanctions on India pursuant to P.L. 106-79. During the 1990s, the U.S. security focus in South
Asia sought to minimize damage to the nonproliferation regime, prevent escalation of an arms
race, and promote Indo-Pakistani bilateral dialogue. In light of these goals, the Clinton
Administration set out “benchmarks” for India and Pakistan based on the contents of U.N.
Security Council Resolution 1172, which condemned the two countries’ nuclear tests. These
included signing and ratifying the Comprehensive Nuclear Test Ban Treaty (CTBT); halting all
further production of fissile material and participating in Fissile Material Cutoff Treaty
negotiations; limiting development and deployment of WMD delivery vehicles; and
implementing strict export controls on sensitive WMD materials and technologies.
Progress in each of these areas has been limited, at best, and the Bush Administration quickly set
aside the benchmark framework. Along with security concerns, the governments of both India
and Pakistan face the prestige factor attached to their nuclear programs and domestic resistance to
relinquishing what are perceived to be potent symbols of national power. Neither has signed the
CTBT, and both appear to be producing weapons-grade fissile materials. (India has consistently
rejected the CTBT, as well as the Nuclear Nonproliferation Treaty, as discriminatory, calling
instead for a global nuclear disarmament regime. Although both India and Pakistan currently
observe self-imposed moratoria on nuclear testing, they continue to resist signing the CTBT—a
position made more tenable by U.S. Senate’s rejection of the treaty in 1999.) The status of
weaponization and deployment is unclear, though there are indications that this is occurring at a
slow but steady pace. Section 1601 of P.L. 107-228 outlined U.S. nonproliferation objectives for
South Asia. Some in Congress identify “contradictions” in U.S. nonproliferation policy toward
South Asia, particularly as related to the Senate’s rejection of the CTBT and U.S. plans to build
new nuclear weapons. In May 2006, the United States presented in Geneva a draft global treaty to
ban future production of fissile material (a Fissile Material Cutoff Treaty) that it hopes will be
supported by India. Some analysts speculated that the move was meant to bolster U.S.
congressional support for proposed U.S.-India civil nuclear cooperation.
180 Statement of Lt. Gen. Michael Maples before the Senate Select Committee on Intelligence, January 11, 2007, at
181 The India-Pakistan Relief Act of 1998 (in P.L. 105-277) authorized a one-year sanctions waiver exercised by
President Clinton in November 1998. The Department of Defense Appropriations Act, 2000 (P.L. 106-79) gave the
President permanent authority after October 1999 to waive nuclear test-related sanctions applied against India and
Pakistan. On October 27, 1999, President Clinton waived economic sanctions on India (Pakistan remained under
sanctions as a result of an October 1999 military coup). (See CRS Report RS20995, India and Pakistan: U.S. Economic
Sanctions, by Dianne E. Rennack.)
India is in the midst of a major and rapid economic expansion, with an economy projected to soon
be the world’s third largest. Although there is widespread and serious poverty in the country,
observers believe long-term economic potential is tremendous, and recent strides in the
technology sector have brought international attention to such new global high-tech centers as
Bangalore and Hyderabad. However, many analysts and business leaders, along with U.S.
government officials, point to excessive regulatory and bureaucratic structures as a hindrance to
the realization of India’s full economic potential. The high cost of capital (rooted in large
government budget deficits) and an “abysmal” infrastructure also draw negative appraisals as
obstacles to growth. Constant comparisons with the progress of the Chinese economy show India
lagging in rates of growth and foreign investment, and in the removal of trade barriers. Just prior
to his March 2006 visit to New Delhi, President Bush noted India’s “dramatic progress” in
economic reform while insisting “there’s more work to be done,” especially in lifting caps on 183
foreign investment, making regulations more transparent, and continuing to lower tariffs.
According to the Economist Intelligence Unit, India’s per capita GDP was only about $824 in
2007. The highly-touted information technology and business processing industries employ only
about one-third of one percent of India’s work force and, while optimists vaunt an Indian “middle 184
class” of some 300 million people, a larger number of Indians subsists on less than $1 per day.
Yet, even with the existence of ongoing problems, the current growth rate of India’s increasingly
service-driven economy is among the highest in the world and has brought the benefits of th
development to many millions of citizens. The U.N. Development Program ranked India 128 out
of 177 countries on its 2007/2008 human development index (between Morocco and Laos), down th185
from 126 in 2006.
After enjoying an average growth rate above 6% for the 1990s, India’s economy cooled with the
global economic downturn after 2000. Yet sluggish, Cold War-era “Hindu rates of growth” had
become a thing of the past. For the fiscal year ending March 2006, real change in GDP was 8.5%,
the second-fastest rate of growth among the world’s 20 largest economies. During FY2006/2007,
India’s economy expanded by a blistering 9.2% and nearly matched this rate again in
FY2007/2008 with a 9% expansion. Robust growth in the services, manufacturing, and industry
sectors continues, but is moderated by a weak agricultural sector (low productivity levels in this
182 See also CRS Report RL34161, India-U.S. Economic and Trade Relations, by Michael F. Martin and K. Alan
Kronstadt. Most of the economic data in these sections come from the Economist Intelligence Unit and Global Insight,
as well as from U.S. and Indian government sources.
183 See http://www.whitehouse.gov/news/releases/2006/02/20060222-2.html.
184 India’s official poverty line for 2004-2005 was an income of 356 rupees (about $9) per person per month. By this
measure, the national poverty rate was about 28%. Yet estimates indicate that some 400 million Indians subsist on less
than 40 rupees per day. One British medical study found that more than half of all Indian children under the age of five
are “stunted” by lack of proper nutrition. More than two million Indian children died in 2006—more than in any other
country—and studies indicate that better delivery of healthcare for India’s poorest children is necessary for meeting
international millennium development goals (“Economic Boom Fails to Generate Optimism in India,” New York Times,
August 16, 2007; “51% of Indian Children Stunted by Under nutrition,” Hindu (Chennai), May 15, 2008; “UN
Warning on India Child Health,” BBC News, August 5, 2008).
185 See http://hdr.undp.org/en/reports/global/hdr2007-2008.
sector, which accounts for nearly one-fifth of the country’s GDP, are a drag on overall growth).186
Short-term estimates are encouraging, predicting expansion well above 7% for the next two years.
A major upswing in services is expected to lead; this sector now accounts for more than half of
India’s central bank warned in early 2007 that rising inflation and surging stock and property
markets were “signs of overheating” in the country’s economy. Some analysts criticize the bank 187
for being too timid in reining in domestic demand. Consumer price inflation rose somewhat in
mid-2007, then appeared to level off at a lower rate toward year’s end (with a year-on-year rate of
5.5% in January), but may rise again in 2008. The soaring Bombay Stock Exchange tripled in
value from 2001-2006, then apparently overheated with the worst-ever daily decline of its
benchmark Sensex index on May 22, 2006, when almost 11% of its total value was lost (related
also to political developments). The market subsequently stabilized and then recovered mightily,
reaching new highs in the closing months of 2006. More new record highs became even more
frequent in the latter half of 2007 and the Sensex was up nearly 40% for the year. India now
boasts more billionaires than any other Asian country and has the fourth most in the world,
trailing only the United States, Germany, and Russia. The bounty of India’s newly-super-wealthy
is traced largely to phenomenal gains in the country’s stock market, but, in a further indicator of
serious income disparity, only about 2% of the country’s working-age population hold any stock 188
A major U.S. concern with regard to India is the scope and pace of reforms in what has been that
country’s quasi-socialist economy. Reforms begun in 1991, under the Congress-led government
of Prime Minister Rao and his finance minister, current Prime Minister Singh, boosted growth
and led to major new inbound foreign investment in the mid-1990s. Reform efforts stagnated,
however, under weak coalition governments later in the decade, and combined with the 1997
Asian financial crisis and international sanctions on India (as a result of its 1998 nuclear tests) to
further dampen the economic outlook. Following the 1999 parliamentary elections, the BJP-led
government launched second-generation economic reforms, including major deregulation,
privatization, and tariff-reducing measures.
Once seen as favoring domestic business and diffident about foreign involvement, New Delhi
appears to gradually be embracing globalization and has sought to reassure foreign investors with
promises of transparent and nondiscriminatory policies. A January 2007 report from global
investment banking and securities firm Goldman Sachs called India’s recent high growth rates a
result of structural rather than cyclical increases and projected a sustainable growth rate of about
side restraints, including business climate, education, and labor market reforms; and 189
environmental degradation—as representing major risks to future growth. An October 2007
country survey from the Paris-based Organization for Economic Cooperation and Development
(OECD) traced India’s economic successes to reforms that reduced the role of the state in
economic affairs and claimed that New Delhi’s pursuit of further “ambitious and wide-ranging
186 Despite a series of expensive programs meant to bring relief to India’s beleaguered farmers, the government has
failed to stem the incidence of farmer suicides, which are estimated to number some 10,000 each year (“No Let Up in
India Farm Suicides,” BBC News, May 5, 2008).
187 “India Overheats,” Economist (London), February 3, 2007.
188 “India’s Superrich Get Even Richer,” Christian Science Monitor, December 18, 2007.
reforms” could push India’s growth rate to a sustainable 10% annually.190 Other analyses identify 191
water shortages, urban woes, and pollution as further potential threats to Indian prosperity.
As India’s largest trade and investment partner, the United States strongly supports New Delhi’s
continuing economic reform policies. A U.S.-India Trade Policy Forum was created in November
2005 to expand bilateral economic engagement and provide a venue for discussing multilateral
trade issues. The United States currently accounts for about one-sixth of all Indian exports. India thst
was the 16 largest export market for U.S. goods in 2007 (up from 21 the previous year). Levels
of U.S.-India trade, while relatively low, are blossoming; the total value of bilateral trade has
doubled since 2001 and the two governments intend to see it doubled again by 2009. U.S. imports
from India in 2007 were valued at $24 billion (up 10% over 2006). Leading imports included
cotton apparel; textiles; and pearls, gemstones, and jewelry. Exports to India in 2007 totaled $17.6
billion (up 75% over 2006), with civilian aircraft; telecommunications equipment; finished pearls,
gemstones, and jewelry; and chemical fertilizers as leading categories. Bilateral trade in private
commercial services was worth more than $13 billion more, split evenly between imports and 192
Annual foreign direct investment to India from all countries rose from about $100 million in 1990
to nearly $6 billion for 2005 and more than $11 billion in 2006. According to Indian officials,
about one-seventh of foreign direct investment in India since 1991 has come from U.S. firms; in
recent years, the major U.S.-based companies Microsoft, Dell, Oracle, and IBM have made multi-
billion-dollar investments in India (U.S. firms invested about $2 billion in India in 2006; Indian
companies invested roughly the same amount in the United States). The stock of U.S. foreign
direct investment in India was just below $9 billion for 2006. As of August 2007, India’s foreign
exchange reserves were at a record $229 billion, up 38% in just one year. India has moved to raise
limits on foreign investment in several key sectors, although U.S. officials prod New Delhi to
make more rapid and more substantial changes to foreign investment ceilings, especially in the
retail, financial services, and banking sectors. In March 2006, the U.S.-India CEO Forum—
composed of ten chief executives from each country representing a cross-section of key industrial
sectors—issued a report identifying India’s poor infrastructure and dense bureaucracy as key 193
impediments to increased bilateral trade and investment relations.
In a May 2007 speech on U.S.-India relations, Under Secretary of State Burns captured all the
major U.S. concerns (and advice) with regard to bilateral economic issues with India, saying New
Delhi must insure that
190 See http://www.oecd.org/eco/surveys/India.
191 Pramit Mitra, “Running on Empty,” CSIS South Asia Monitor 103, February 3, 2007, at http://www.csis.org/media/
csis/pubs/sam103.pdf; World Bank, “Urban Challenges in India,” February 5, 2007. One study found that 70% of
Kolkata’s population suffers from respiratory disorders caused by air pollution (“Air Pollution Suffocates Calcutta,”
BBC News, May 3, 2007).
192 See http://www.census.gov/foreign-trade/statistics/country/index.html.
193 See “U.S.-India Strategic Economic Partnership,” U.S.-India CEO Forum, March 2006 at
http://planningcommission.nic.in/reports/genrep/USIndia.pdf. One 2008 news report criticized “India’s astonishing
inability to plan for its future and fix its sagging infrastructure” (“An Indian Airport Hurries to Make the First Flight,”
New York Times, May 22, 2008).
new regulations or old red tape don’t impeded growth, and that foreign companies have a
clear path to settling commercial disputes when they arise. The Indian government should
also continue economic reforms and liberalizations that have been the basis of India’s
economic boom so far. ... In order to achieve higher growth rates as well as broad rural
development, India requires world-class airports, irrigation, and communications networks.
It needs modern power grids, ports, and highways, and many other infrastructural
improvements that could be vastly accelerated by greater investment, both public and
private. ... Our focus is on facilitating and promoting foreign direct investment, enhancing
bilateral consultations on reducing tariff and non-tariff barriers to trade in industrial goods,
services, and agriculture, preventing the illicit use of the financial system, and strengthening 194
India’s regime for intellectual property rights.
In September 2007, U.S. Ambassador Mulford opined that, “Continued reform and liberalization
will help further boost ... and spread the benefits of rapid economic growth to more recipients 195
across India.” During his October 2007 visit to India, U.S. Treasury Secretary Paulson told a
In the long term, India can take a number of steps to become even more competitive, such as
reducing requirements that financial institutions hold large amounts of government debt,
reducing requirements for banks to provide credit to certain priority sectors, and removing
various restrictions and caps on foreign investment. Limits on debt and equity financing, and
asset allocation restrictions on financial institutions, are impediments to putting resources to 196
their most productive use.
Despite significant tariff reductions and other measures taken by India to improve market access,
according to the 2008 report of the United States Trade Representative (USTR), a number of
foreign trade barriers remain, including high tariffs, especially in the agricultural sector. The
USTR asserts that “continued reduction of the bilateral trade deficit will depend on significant 197
additional Indian liberalization of the trade and investment regime.” The Commerce
Department likewise encourages New Delhi to continue lowering tariffs as a means of fostering
trade and development. Indian Finance Minister Chidambaram agrees that high rates of
investment must be maintained to sustain the country’s economic growth. In 2007, India regained
full investment-grade status after a 15-year hiatus when Standard & Poor’s upgraded India’s
sovereign rating, but the country’s public finances remain much weaker than comparable states:
India has a public debt-to-GDP ratio (85%) more than three times higher than China’s, and 198
interest consumes nearly one-third of total revenue.
India’s extensive trade and investment barriers have been criticized by U.S. government officials
and business leaders as an impediment to its own economic development, as well as to stronger
U.S.-India ties. For example, in 2004, then-U.S. Under Secretary of State Alan Larson opined that
“trade and investment flows between the U.S. and India are far below where they should and can
be,” adding that “the picture for U.S. investment is also lackluster.” He identified the primary
194 See http://www.state.gov/p/us/rm/2007/85424.htm.
195 See http://newdelhi.usembassy.gov/pr91907.html.
196 See http://www.ustreas.gov/press/releases/hp648.htm.
197 See http://www.ustr.gov/Document_Library/Reports_Publications/Section_Index.html.
198 “India’s Sovereign Credit Rating Upgraded,” Financial Times (London), January 30, 2007.
reason for the suboptimal situation as “the slow pace of economic reform in India.” In 2007,
Under Secretary of the Treasury Tim Adams urged India to further reduce trade and investment
barriers, liberalize its financial sector, and improve its business climate as key means to “compete 199
effectively in the global economy.”
Inadequate intellectual property rights protection is another long-standing issue between the
United States and India. The USTR places India on its Special 301 Priority Watch List for
“inadequate laws and ineffective enforcement” in this area. The International Intellectual Property
Alliance (IIPA), a coalition of U.S. copyright-based industries, estimated U.S. losses of $913
million due to copyright piracy in India in 2007, with some 95% of this in the categories of
business and entertainment software (estimated loss amounts do not include motion picture
piracy, which in 2004 was estimated to have cost some $80 million). The IIPA expresses
frustration that “little significant progress” is being made in more effectively enforcing copyright 200
protection in India. In December 2006, Under Secretary of Commerce and Director of the U.S.
Patent and Trademark Office Jon Dudas told a New Delhi audience that “further modifications
are necessary” in India’s intellectual property rights protection regime and that India’s copyright
laws are “insufficient in many aspects.” He also warned that “piracy and counterfeiting rates will 201
continue to rise without effective enforcement.”
While the past two decades have seen a major transformation of the Indian economy, it remains
relatively closed in many aspects. The Heritage Foundation’s 2008 Index of Economic Freedom—
which some say may overemphasize the value of absolute growth and downplay broader quality-th
of-life measurements—rated India’s economy as being “54% free” and ranked it 115 out of 162
countries. The index highlights restrictive trade policies, heavy government involvement in the
banking and finance sectors, rigorous investment caps, demanding regulatory structures, and a 202nd
high incidence of corruption. Berlin-based Transparency International placed India 72 out of
India to be the worst offender among the world’s top 30 exporting countries. The Vancouver-
based Fraser Institute provides a more positive assessment of economic freedom in India, while 204
also faulting excessive restrictions on capital markets.
In 2005, New Delhi announced plans to allow Indian states to establish Chinese-style special
economic zones that would encourage foreign investment and boost employment by bypassing
the country’s strict labor and tax laws. Parliament soon approved implementation and, in early
2006, the SEZ Act went into effect. With well over 200 such zones approved and hundreds more
planned, SEZs became a matter of significant controversy. Proponents view them as sensible
means of growing the economy through greatly increased investment, as well as improving
infrastructure. Yet the policy has elicited energetic opposition from interest groups representing
199 See http://www.state.gov/e/rls/rm/2004/36345.htm and http://newdelhi.usembassy.gov/pr022007.html.
200 See http://www.iipa.com/rbc/2008/2008SPEC301INDIA.pdf.
201 See http://newdelhi.usembassy.gov/pr120706.html. Bush Administration policy is at http://mumbai.usconsulate.gov/
202 See http://www.heritage.org/research/features/index/country.cfm?id=India.
203 See http://www.transparency.org. According to Transparency’s findings , one in three Indian families living below
the poverty line paid a bribe in 2007 for basic public services.
204 See http://www.fraserinstitute.ca/admin/books/chapterfiles/3aEFW2006ch3A-K.pdf#.
the political left and right, alike. Some critics say building SEZs on fertile agricultural land will
impoverish farmers without adequate compensation. Even Congress Party chief Sonia Gandhi
openly opposed exposing farmers to “unscrupulous developers.” Other detractors, including
India’s finance minister, warn that the government will be denied billions of dollars in tax
revenues lost due to special concessions offered to participating firms. In early 2007, after Left
Front parties demanded extensive curbs on the initiative, New Delhi suspended approval of 304 205
more SEZs pending decisions on issues including compensation for displaced farmers. In
March of that year, police in Nandigram, West Bengal, opened fire on a group of protesters who
were demonstrating against state land appropriations for a planned SEZ. At least 14 people were
killed and the incident led to days of violent protests against the state government’s action. Soon
after, the West Bengal government dropped its plans and the federal government vowed to 206
“refine” its SEZ policy to make it more equitable.
In 2006, the World Trade Organization’s “Doha Round” of multilateral trade negotiations were
suspended due to disagreement among the WTO’s six core group members—which include the
United States and India—over methods to reduce trade-distorting domestic subsidies, eliminate
export subsidies, and increase market access for agricultural products. The United States and
other developed countries seek substantial tariff reductions in the developing world. India, like
other members of the “G-20” group of developing states, has sought more market access for its
goods and services in the developed countries, while claiming that developing countries should be
given additional time to liberalize their own markets. In particular, India is resistant to opening its
markets to subsidized agricultural products from developed countries, claiming this would be
detrimental to tens of millions of Indian farmers and result in further depopulation of the
countryside. According to Indian officials, the WTO’s narrow focus on economic issues excludes
political and social variables which are equally sensitive for New Delhi and which constrain the
options available to the Indian government. They seek greater U.S. understanding of this
dynamic. The Indian economy could benefit significantly from lowered farm subsidies in
developed countries and expanded trade in services, but indigenous industries could also be
harmed if New Delhi were to reduce tariffs that currently protect India’s exporting sectors, 208
especially in textiles and garments.
Indian Commerce Minister Nath has blamed U.S. intransigence for the Doha Round’s collapse. In
mid-2007, Indian officials rejoined the negotiations, then claimed the talks had again “collapsed”
due to lack of convergence among the major actors. U.S. Trade Representative Schwab later
expressed surprise at how “rigid and inflexible” India (and Brazil) were during the negotiations,
and she suggested that “some countries ... really don’t want a Doha round outcome.” In
205 “India Puts Brakes on Tax-Break Zones,” Financial Times (London), January 23, 2007; “India’s Farmers Grumbling
as SEZs Eat Up Land,” Financial Times (London), March 12, 2007; “India to ‘Refine’ Economic Zone Policy After
Shooting Deaths,” Agence France Presse, March 19, 2007.
206 SEZ-related troubles continued in late 2007 with an upsurge in political violence in West Bengal and reports that
state officials may have been complicit in attacks on farmers.
207 See also CRS Report RL32060, World Trade Organization Negotiations: The Doha Development Agenda, by Ian F.
Fergusson, and CRS Report RL33144, WTO Doha Round: The Agricultural Negotiations, by Charles E. Hanrahan and
208 “India Sees Gains in WTO Deal, But Has Reservations,” Reuters, July 16, 2008.
September, however, Nath again expressed optimism in identifying a new and “greater 209
comprehension of India’s sensitivities” on the effects of U.S. farm subsidies.
Indian leaders were reported to be especially dissatisfied with draft documents they believe are
too restrictive of their domestic policies meant to protect Indian farmers from a flood of foreign
imports. The U.S. government, for its part, continues to insist that it can only cut its own domestic
farm subsidies if advanced developing states such as India (and China and Brazil) do more to
open their own markets to foreign goods. In June 2008, a Commerce Department official called
India a “roadblock to success” in the negotiations by treating them as a “donor’s conference” and
resisting all reasonable liberalization proposals, even those being offered by other developing 210
countries. When dialogue was rejoined in July, Commerce Minister Nath assumed the mantle
of unofficial spokesman for the world’s developing economies, frustrating many Western
negotiators by creating what seemed an intractable obstacle to progress. The potentially final
collapse of talks came when U.S. negotiators could not agree with their Indian and Chinese
counterparts on levels for a “safeguard clause” meant to protect developing states from
unrestricted imports, which the Americans believed were being set too low. Some commentators
said the Doha Round’s failure marked a conclusive end to an era in which free trade was 211
organized around rules set in the West.
India’s continued economic growth and security are intimately linked to the supply of energy
resources. Indeed, Indian leaders insist that energy security is an essential component of the
country’s development agenda, calling for an integrated national energy policy, diversification of
energy supplies, greater energy efficiency, and rationalization of pricing mechanisms. The
country’s relatively poor natural energy resource endowment and poorly functioning energy
market are widely viewed as major constraints on continued economic growth. Estimates indicate
that maintaining recent rates of growth will require that India increase its commercial energy 212
supplies by 4%-6% annually in coming years. The U.S. government has committed to assist
India in promoting the development of stable and efficient energy markets there; a U.S.-India
Energy Dialogue was launched in July 2005 to provide a forum for bolstering bilateral energy 213
cooperation, meeting most recently in New Delhi in April 2008.
209 “India Blames U.S. for Failure of WTO Talks,” Hindu (Chennai), July 26, 2006; “U.S. Says Doha Risks Being
Delayed for Several Years,” Reuters, July 5, 2007; “World Leaders Express New Optimism on Doha Deal,” Reuters,
September 25, 2007. American business interests also have been critical of the New Delhi government for failing to
offer positive proposals for broaching the Doha impasse (“U.S. Business Presses India for More WTO Concessions,”
New York Times, May 6, 2008).
210 “India Unhappy With Fresh WTO Negotiating Texts,” Hindu (Chennai), May 21, 2008; “U.S. Concerned About
Direction of Doha Talks,” New York Times, May 28, 2008; “US Accuses India of Trying to Wreck WTO Talks,”
Agence France Presse, June 9, 2008.
211 “Indian Minister Frustrates West at Trade Talks,” Wall Street Journal, July 25, 2008; “Dismay at Collapse of Trade
Talks,” BBC News, July 30, 2008; “Beyond the Trade Pact Collapse,” New York Times, August 3, 2008.
212 See Vibhuti Hate, “India’s Energy Dilemma,” Center for Strategic and International Studies, September 7, 2006, at
213 See U.S. Department of State fact sheet at http://www.state.gov/p/sca/rls/fs/2005/49724.htm. In May 2006, the
Senate Foreign Relations Committee passed S. 1950, to promote global energy security through increased cooperation
between the United States and India on non-nuclear energy-related issues, but the full Senate took no action on the bill.
India is the world’s fifth largest energy consumer and may become third by the middle of this 214
century. Overall power generation in the country more than doubled from 1991 to 2005. Coal is
the country’s leading commercial energy source, accounting for more than half of national
demand. India is the world’s third most productive coal producer, and domestic supplies satisfy
most demand (however, most of India’s coal is an inefficient low-grade, high-ash variety). Oil
consumption accounts for some one-third of India’s total energy consumption; about 70% of this
oil is imported (at a rate of 1.7 million barrels per day in 2006), mostly from the West
Asia/Middle East region. India’s domestic natural gas supply is not likely to keep pace with
demand, and the country will have to import much of its natural gas, either via pipeline or as
liquefied natural gas. Hydropower, especially abundant in the country’s northeast and near the
border with Nepal, supplies about 5% of energy needs. Nuclear power, which Indian government
officials and some experts say is a sector in dire need of expansion, currently accounts for only 215
1% of the country’s energy supplies and less than 3% of total electricity generation. Even
optimistic projections suggest that nuclear power will provide less than 10% of India’s generation
capacity in 25 years and there are doubts about New Delhi’s projected goal of generating 20 216
gigawatts of nuclear power by 2020.
Roughly one-fifth of the India’s power is consumed by farmers’ irrigation systems, making the
farm lobby a powerful obstacle to curtailing subsidies provided by State Electricity Boards, which
collectively lose billions of dollars annually. Moreover, from one-quarter to one-half of India’s
electricity is said to disappear though “transmission losses,” i.e., theft. In the summer of 2007,
worsening shortfalls were causing electrical outages of up to nine hours per day in the industrial
and agricultural belts of Punjab, Gujarat, and Maharashtra; the capital of Delhi often has power
for only 14 hours each day. A burgeoning electricity crisis may be severely hampering India’s 217
continued economic security and growth.
During a March 2007 visit to New Delhi, U.S. Energy Secretary Sam Bodman held wide-ranging
talks with numerous Indian officials and business leaders to discuss India’s energy needs and
strategies for relevant bilateral cooperation. Secretary Bodman stressed “the absolute necessity of
substantial and sustained investment in innovation on a global scale” and listed five major global
goals for all countries, including the United States and India: (1) diversifying the available supply
of conventional fuels and expanding their production; (2) diversifying energy portfolios through
expanded use of alternative and renewable sources, including nuclear energy; (3) promoting
increased energy efficiency and conservation; (4) reducing pollution and energy intensity in the 218
global economy; and (5) protecting critical energy infrastructure.
214 See a Ministry of Power report at http://powermin.nic.in/reports/pdf/ar05_06.pdf.
215 Energy data from U.S. Department of Energy, Energy Information Administration, January 2007, at
http://www.eia.doe.gov/emeu/cabs/india.html; Tanvi Madan, “India,” Brookings Institution Energy Security Series
Report, November 2006 at http://www.brookings.edu/fp/research/energy/2006india.pdf.
216 John Stephenson and Peter Tynan, “Will the U.S.-India Civil Nuclear Cooperation Initiative Light India?,”
November 13, 2006, at http://www.npec-web.org; “Top Scientist Questions India’s N-Energy Dream,” Times of India
(Delhi), September 9, 2007.
217 “India Struggles With Power Theft,” BBC News, March 15, 2006; “Electricity Crisis Hobbles an India Eager to
Ascend,” New York Times, May 21, 2007; “Power Outages disrupt Life in India,” Associated Press, March 10, 2008.
218 See http://newdelhi.usembassy.gov/pr032007a.html.
With emissions of more than 500 million tons of carbon dioxide per year, India is the world’s
fourth-largest producer of greenhouse gases (GHGs) (after the United States, China, and Russia).
Per capita emissions are, however, only about one-sixteenth those of the United States. The
negative impact of climate change likely will be seen across India’s broad range of ecosystems,
with agriculture, infrastructure, and water resources most affected. Indian officials, who note that
India accounts for 17% of the earth’s population but only 4% of its GHG emissions, thus far
reject any policies or international agreements that would set limits on their own national
emissions while calling it “imperative” that developed countries commit themselves to reducing
their own emissions. New Delhi criticizes Washington for failing to take “historical responsibility
for cumulative emissions” and for bringing “extraneous considerations of industrial
competitiveness and employment” to bear on the debate. India asserts that its own continued
economic development and poverty reduction efforts preclude capping its GHG emissions and
claim there has been a “persistent attempt” by some developed countries to “avoid their legal 219
obligations” under international treaties.
In June 2008, the New Delhi government unveiled India’s first-ever “national action plan” to
address climate change, with Prime Minister Singh acknowledging that the country faced a
“dangerous problem” and vowing to devote greater attention to renewable energy, water
conservation, and preserving natural resources. The plan sets forth eight “national missions” for
sustainable development: (1) solar energy; (2) enhanced energy efficiency; (3) sustainable habitat;
(4) conserving water; (5) sustaining the Himalayan ecosystem; (6) a “Green India;” (7) 220
sustainable agriculture; and (8) a Strategic Knowledge Platform for Climate Change.”
India is a party to both the U.N. Framework Convention on Climate Change and the Kyoto
protocol. According to the principles in both these treaties of “common but differentiated
responsibility,” India is a developing country not required to set legally binding emissions limits
under these agreements. In July 2005, the United States joined with India, China, Japan,
Australia, and South Korea in the Asia-Pacific Partnership (APP) on Clean Development and
Climate, a U.S.-led effort to accelerate the development and deployment of clean energy
technologies through a voluntary public-private partnership among six major Asia-Pacific
nations. Sydney, Australia, hosted the inaugural meeting in January 2006 and the body’s second
ministerial meeting was held in October 2007 in New Delhi, where the United States announced 221
providing grant funds for 23 clean technology projects in India under the Partnership’s aegis.
However, funding shortfalls have hampered the APP initiative since its inception. India also
participates in the Major Economies Meeting (MEM) on Energy Security and Climate Change,
initiated by President Bush in 2007. The process involves 16 nations (plus the EU) that are major 222
greenhouse gas emitters. Its third session was held in Paris in April 2008.
219 “Talk by Special Envoy of Prime Minister, Shri Shyam Saran in Mumbai on Climate Change,” Indian Ministry of
External Affairs, April 21, 2008.
220 June 30, 2008 press release at http://pmindia.gov.in/pressrel.htm; “India Offers 8 Ideals on a Climate Change Policy,
but Few Details,” New York Times, July 1, 2008.
221 See remarks by James Connaughton, Chairman of President Bush’s Council on Environmental Quality, at
http://newdelhi.usembassy.gov/pr101507a.html. See also http://www.asiapacificpartnership.org.
222 See http://www.state.gov/g/oes/climate/mem and http://www.whitehouse.gov/news/releases/2008/04/20080418-
Some in Congress have sought to increase international cooperation on energy-related matters,
including with India. The Energy Diplomacy and Security Act of 2007 (S. 193) was reported out
of the Senate Foreign Relations Committee in April 2007. The bill includes provisions for
establishing energy crisis response mechanisms in cooperation with the governments of India and
China. In February, H.R. 1186, to promote global energy security through increased U.S.-India
cooperation, was introduced in the House. The International Climate Cooperation Re-engagement
Act of 2007 (H.R. 2420) was reported out of the House Foreign Affairs Committee in June. The
bill contains provisions for expanding efforts to promote U.S. exports in clean and efficient
energy technologies to India and China. The Clean Energy Partnership With India Act of 2008
(H.R. 5705), referred to House committee in April 2008, would establish a commission for
improving and promoting bilateral renewable energy cooperation with India.
Although India suffers from several militant regional separatist movements, the Kashmir issue
has proven the most lethal and intractable. Gun battles and bomb blasts in India’s Jammu and
Kashmir state reportedly killed an average of 5 or 6 people every day over the period 1989-223
2006. Conflict over Kashmiri sovereignty also has brought global attention to a potential
“flashpoint” for interstate war between nuclear-armed powers. The problem is rooted in
competing claims to the former princely state, divided since 1948 by a military Line of Control
(LOC) separating India’s Muslim-majority Jammu and Kashmir state and Pakistan-controlled
Azad [Free] Kashmir. The dispute relates to the national identities of both countries: India has
long sought to maintain its secular, multi-religious credentials, in part by successfully
incorporating a Muslim-majority region, while Pakistan has since independence been conceived
as a homeland for the subcontinent’s Muslims. India and Pakistan fought full-scale wars over
Kashmir in 1947-1948 and 1965. Some Kashmiris seek independence from both countries.
Spurred by a perception of rigged state elections in 1989, an ongoing separatist war between
Islamic militants (and their supporters) and Indian security forces in Indian-held Kashmir is 224
ongoing and has claimed tens of thousands of lives.
India blames Pakistan for supporting “cross-border terrorism” and for fueling a separatist
rebellion in the Muslim-majority Kashmir Valley with arms, training, and militants. Islamabad,
for its part, claims to provide only diplomatic and moral support to what it calls “freedom
fighters” who resist Indian rule and suffer alleged human rights abuses in the region. New Delhi
insists that the dispute should not be “internationalized” through involvement by third-party
mediators and India is widely believed to be content with the territorial status quo. In 1999, a
bloody, six-week-long battle in the mountains near the LOC at Kargil cost more than one
thousand lives and included Pakistani army troops crossing into Indian-controlled territory.
Islamabad has sought to bring external major power persuasion to bear on India, especially from
the United States. The longstanding U.S. position on Kashmir is that the issue must be resolved
through negotiations between India and Pakistan while taking into account the wishes of the
223 “India Says Kashmir Toll Over 41,000, Others Differ,” Reuters, December 7, 2006.
224 Most estimates list from 41,000 to 77,000 related deaths. The Pakistan-based Kashmir Media Service claims that
more than 92,000 Kashmiris have been “martyred” in the fighting.
During the early years of the Kashmir insurgency, hundreds of thousands of indigenous Hindu
“Pandits” were driven from the region in what amounted to a form of “ethnic cleansing.” Up to
half a million Kashmiri Pandits, accounting for the vast majority of Hindus then living in the area
around Srinagar, fled their homes after coming under threat from Muslim militants. For many
Indians, the Kashmir dispute cannot be resolved without arrangements for the return of these
refugees, more than 100,000 of whom continue to live in camps with government support. th
Resolutions in the 110 Congress (H.Con.Res. 55 and S.Con.Res. 38) call for the safeguarding
of the physical, political, and economic security of the Kashmiri pandits.
Some separatist groups, such as the Jammu and Kashmir Liberation Front (JKLF), continue to
seek an independent or autonomous Kashmir. Others, including the militant Hizbul Mujahideen 225
(HuM), seek union with Pakistan. In 1993, the All Parties Hurriyat [Freedom] Conference was
formed as an umbrella organization for groups opposed to Indian rule in Kashmir. The Hurriyat
membership of more than 20 political and religious groups has included the JKLF (originally a
leading militant force, now a political group) and Jamaat-e-Islami (the political wing of the
HuM). The Hurriyat Conference, which states that it is committed to seeking dialogue with the
Indian government on a broad range of issues, calls for a tripartite conference on Kashmir,
including Pakistan, India, and representatives of the Kashmiri people. Hurriyat leaders demand
Kashmiri representation at any talks between India and Pakistan on Kashmir. The Hurriyat
formally split in 2003 after a dispute between hardliners allied with Islamabad and moderates
favoring negotiation with New Delhi. Subsequent efforts to reunify the group failed. In 2005, the
Congress Party-led government renewed high-level contact with moderate Hurriyat leaders begun
by the previous BJP-led coalition. Two years later, however, Hurriyat leader and noted Kashmiri
cleric Mirwaiz Umar Farooq said talks between the Indian government and moderate Kashmiri
separatists had suffered a “complete breakdown of communication,” and he accused New Delhi 226
of lacking the will needed to find a political solution to the problem.
In December 2006, Pakistani President Musharraf issued a newly-modified version of his “out-of-
the-box” thinking on resolution to the Kashmir problem, saying Pakistan is “against
independence” for Kashmir, and offering instead a four-point proposal that would lead to “self-
governance,” defined as “falling between autonomy and independence.” Many analysts saw the
proposal as being roughly in line with New Delhi’s Kashmir position. Some Kashmiri separatist
groups rejected the proposal as an abandonment of Islamabad’s long-held policy, but Indian
leaders welcomed Musharraf’s statements; in February 2007, Prime Minister Singh said the
Pakistani government was “saying the right thing” in rejecting armed militancy as a solution to
the Kashmir problem. Still, a lack of consensus among Kashmiri leaders and political parties has
hampered progress. Even Kashmiri political figures who accept the principle of a solution within
the framework of the Indian Constitution cannot agree on what such a solution may look like, and
the Hurriyat Conference—which may have contributed to its own marginalization by boycotting
the state’s 2002 elections—remains rife with its own divisions. Some analysts urge greater U.S.
efforts to prod the New Delhi and Islamabad governments along in the ongoing search for a final 227
225 An August 2007 opinion survey found nearly 90% of the residents of Srinagar, Kashmir’s most populous and
Muslim-majority city, desiring Kashmiri independence from both India and Pakistan. In the largely Hindu city of
Jammu, however, 95% of respondents said Kashmir should be part of India (see http://www.indianexpress.com/story/
226 “Kashmiri Separatist Says India Talks Break Down,” Reuters, August 30, 2007.
227 See, for example, Lisa Curtis, “India and Pakistan Poised to Make Progress on Kashmir,” Heritage Backgrounder
At least 8,000 Kashmiris have “disappeared” during the conflict; some of these may occupy the 228
nearly 1,000 unmarked graves discovered near the LOC in early 2008. When measured in
terms of human deaths, levels of violence in Kashmir were high and steady through the mid- and
late 1990s, peaked in 2001, and have been in decline since. Despite waning rates of infiltration
and separatist-related violence, the issue continues to rankle leaders in New Delhi and remains a
serious impediment to progress in the current India-Pakistan peace initiative. Even as the
normalization of India-Pakistan relations moves forward—and to some extent in reaction to their
apparent marginalization in the face of this development—separatist militants continue their
attacks on both civilians and Indian security forces, and many observers in both India and the
United States believe that active support for Kashmiri militants remains Pakistani policy. The
militants, seeing their relevance and goals threatened by movement toward peaceful resolution,
regularly lash out with bloody attacks meant to derail the process.
Figure 1 indicates that levels of violence in Kashmir were high and steady through the mid- and
late 1990s, peaked in 2001, and have been in decline since. The long-term reduction in violence 229
has allowed for a rebirth of the region’s major tourist industry. Yet, despite waning rates of
infiltration and separatist-related violence, the issue continues to rankle leaders in New Delhi and
remains a serious impediment to progress in the current India-Pakistan peace initiative. Even as
the normalization of India-Pakistan relations moves forward—and to some extent in reaction to
their apparent marginalization in the face of this development—separatist militants continue their
attacks on both civilians and Indian security forces, and many observers in both India and the
United States believe that active support for Kashmiri militants remains Pakistani policy. The
militants, seeing their relevance and goals threatened by movement toward peaceful resolution,
still lash out with bloody attacks likely meant to derail the process.
No. 1997, January 12, 2007, at http://www.heritage.org/Research/AsiaandthePacific/bg1997.cfm.
228 “Clinging to Hope in Kashmir,” Chicago Tribune, June 1, 2008.
229 “Tourists Flock Back to Kashmir,” BBC News, June 24, 2008.
Figure 1. Deaths Related to Kashmiri Separatism, 1988-2006
5000 M ili t ant s
4500Civilians Security Force Personnel
2500 of f
19 88 1989 19 90 1 991 1992 1 993 1994 199 5 1996 1997 1 998 1999 2 000 2001 200 2 2003 2004 20 05 2006
Source: Adapted by CRS. Data from the Institute for Conflict Management, New Delhi, India.
Despite some ongoing violence, many indicators point to positive long-term trends. The steadily
reduced rates of infiltration may be attributed to the endurance of India-Pakistan dialogue and,
with a flurry of diplomatic exchanges in late 2006, many analysts saw prospects for a meeting of
minds between New Delhi and Islamabad as being better than ever before (determining and 230
incorporating the desires of the Kashmiri people remain highly problematic). In 2006, India’s
army chief credited much of a 20% drop in levels of violence in the region to the surrender of
more and more “disillusioned” militants. At the same time, the state’s political leadership has
lauded a major decline in reported human rights abuses by security forces, attributing the
improvement to policies of restraint launched by the Peoples Democratic Party-Congress Party 231
coalition which took power in 2002. New Delhi has more recently vowed to pull troops out of
Kashmir if militant infiltrations and violence there cease, but to date only nominal troop
withdrawals have come in response to a somewhat improved security situation in the region. In
late 2007, India’s Home Ministry stated that the “overall stable security situation in the [Jammu 232
and Kashmir] State is indicative of transition to normalcy.” There appears to be widespread
public support among Kashmir Valley citizens for demilitarization of the region and a major 233
reduction in the number of India troops stationed there.
While those responsible for Kashmir’s security remain vigilant and convinced that the Islamabad
government still “controls the tap” of cross-LOC infiltration, the people of the Muslim-majority
230 “Army Chief Confirms Reduced Infiltration in Kashmir,” Hindustan Times (Delhi), October 7, 2005; “A Step
Closer to Consensus,” Frontline (Chennai), December 15, 2006.
231 “India’s Army Says Tide Turning in Restive Kashmir,” Reuters, October 1, 2006; “Kashmiri Leader Lauds Drop in
Custodial Killings, Disappearances,” Agence France Presse, October 30, 2006.
232 See http://mha.nic.in/internal%20security/ISS(E)-050208.pdf. See also “After Brutal Years, Kashmiris Embrace
New Calm,” Christian Science Monitor, March 20, 2008.
233 “Kashmir’s Demilitarization Debate,” Jane’s Intelligence Digest, June 23, 2008.
Kashmir Valley have been widely approving of the “flexibility” exhibited by Pakistan’s president
and hopeful that such flexibility will be mirrored in New Delhi so as to create a resolution that 234
works for all stakeholders.
The United States maintains an ongoing interest in India’s domestic stability and the respect for
internationally recognized human rights there. The U.S. Congress has held hearings in which such
issues are discussed. As a vast mosaic of ethnicities, languages, cultures, and religions, India can
be difficult to govern. Internal instability resulting from diversity is further complicated by
colonial legacies such as international borders that separate members of the same ethnic groups,
creating flashpoints for regional dissidence and separatism. Beyond the Kashmir problem,
separatist insurgents in remote and underdeveloped northeast regions confound New Delhi and
create international tensions by operating out of neighboring Bangladesh, Burma, Bhutan, and
Nepal. New Delhi has at times blamed the governments of those countries for “sheltering”
separatist groups beyond the reach of Indian security forces, and New Delhi has launched joint
counter-insurgency operations with some of these neighbors. At the same time, Maoist rebels
continue to operate in numerous states and represent a growing threat to internal sovereignty.
India also has suffered outbreaks of serious communal violence between Hindus and Muslims,
especially in the western Gujarat state.
Since the time of India’s foundation, numerous militant groups have fought for greater ethnic
autonomy, tribal rights, or independence in the country’s northeast region. Some of the tribal
struggles in the small states known as the Seven Sisters are centuries old. It is estimated that more
than 50,000 people have been killed in such fighting since 1948, including about 20,000 killed in
a 28-year-old Naga insurgency and another 10,000 deaths in 15 years of fighting in the Assam
state. In the small state of Manipur alone there are said to be more than 20 separatists groups
fighting the Indian army at a cost of more than 8,000 lives over two decades, and the writ of the 235
central government there is tenuous, at best. As militant groups are seen to benefit from highly
profitable criminal activities such as informal taxation, kidnapping, and smuggling, many
observers conclude that only more effective economic development and integration of India’s 236
northeast will allow for the resolution of myriad ethnic conflicts there.
The United Liberation Front of Assam (ULFA), the National Liberation Front of Tripura, the
National Democratic Front of Bodoland (NDFB), and the United National Liberation Front
(seeking an independent Manipur) are among the approximately 40 militant groups at war with
the central government. These groups reportedly field a total of no more than 20,000 trained
cadres. ULFA, like other groups, accuses New Delhi of exploiting their state’s resources while
234 Author interviews, Srinagar, Kashmir, September 2006.
235 In 2008, the Manipur government reportedly launched an initiative to arm and outfight villagers to facilitate the
fight against separatist rebels there, a policy opposed by human rights groups (“India’s Manipur Arms Civilians to
Fight Rebels,” Reuters, May 6, 2008).
236 “India’s Forgotten War,” BBC News, August 8, 2007; “Militants’ Hold Over Manipur Total,” Hindustan Times
(Delhi), September 9, 2007; “Militant Mire - Battling Insurgency in Northeast India,” Jane’s Intelligence Review,
February 1, 2008.
doing little to forward development and allowing thousands of non-indigenous people (often
Hindi-speakers from Bihar) to flood the local job markets. In 2005, the U.S. State Department’s
Counterterrorism Office listed ULFA among its “other groups of concern,” the first time an Indian 237
separatist group outside Kashmir was so named. In June 2008, six ULFA field commanders
abjured violence and vowed to seek peaceful resolution through negotiation.
Also operating in India are “Naxalites”—Maoist insurgents ostensibly engaged in violent struggle
on behalf of landless laborers and tribals. These groups, most active in inland areas of east-central
India, claim to be battling oppression and exploitation in order to create a classless society. Their
opponents call them terrorists and extortionists. The groups get their name from Naxalbari, a West
Bengal village and site of a militant peasant uprising in 1967. In 2006, Prime Minister Singh
identified a worsening Maoist insurgency as “the single biggest internal security challenge” ever 238
faced by India, saying it threatened India’s democracy and “way of life.” Some of these groups
may be growing poppy and extorting farmers and opium traders to fund their activities. Further
reports indicate the rebels are placing new emphasis on recruiting child soldiers. Some analysts
warn that, by blocking access to raw materials vital to India’s manufacturing sector, the Naxalite 239
movement could deter investors and so thwart India’s long-term economic success. Naxalites
now operate in about half of India’s 28 states; related violence has killed more than 6,000 people
over the past two decades, including some 650 deaths in 2007. Indian government officials seek
to downplay the threat by pointing out that only 2% of the country’s 650,000 villages are affected 240
and only 2% of the country’s 14,000 police stations report Naxalite activity.
The most notable of India’s Maoist militant outfits are the People’s War Group (PWG), mainly
active in the southern Andhra Pradesh state, and the Maoist Communist Center of West Bengal
and Bihar. In 2004, the two groups merged to form the Communist Party of India (Maoist). Both
appear on the U.S. State Department Counterterrorism Office’s list of “groups of concern” and
both are designated as terrorist groups by New Delhi, which claims there are nearly 10,000
Maoist militants active in the country. Other estimates see some 20,000 such fighters in India,
including up to 5,000 in the central Chhattisgarh state alone. Such militants possess sophisticated
weapons and communications equipment. PWG cadres were behind a 2003 landmine attack that
nearly killed the chief minster of Andhra Pradesh. In 2004, that state’s government lifted an 11-
year-old ban on the PWG, but the Maoists soon withdrew from ensuing peace talks, accusing the
state government of breaking a cease-fire agreement. Violent attacks on government forces then
escalated in 2005 and have continued with even greater frequency since.
The Chhattisgarh state government has since 2005 sponsored a grassroots anti-Maoist effort. This
“Salwa Judum” (“Campaign for Peace” or, literally, “collective hunt”) militia—comprised of
about 5,000 lightly-armed tribal people who are paid about $1 per day—is viewed by some as an
237 See http://www.state.gov/s/ct/rls/crt/2005/65275.htm.
238 “Indian PM Says Maoist Rebellion Gravest Threat,” Reuters, April 13, 2006.
239 “Indian Maoists Step Up Recruitment of Child Soldiers,” Reuters, May 22, 2008; “In India, Death to Global
Business,” Business Week, May 7, 2008.
240 See http://www.satp.org/satporgtp/countries/india/database/fatalitiesnaxal.htm; “Naxal Problem Should Not Be
Exaggerated: Govt,” Indian Express (Mumbai), March 19, 2008. According to India’s Home Ministry, the states of
Chhattisgarh and Jharkhand account for two-thirds of the country’s Naxalite incidents and three-quarters of related
effective countervailing people’s movement. Others label it a vigilante group that has engaged in
its own coercive and violent tactics against innocent tribals, one that only serves to accentuate the 241
conflict as “a cure that is worse than the disease.” Following a March 2007 raid on a
Chhattisgarh police camp by up to 600 armed rebels in which 55 people, including 19 policemen,
were killed, Maoist leaders threatened further attacks if the Salwa Jundum was not dismantled. A
May 2008 report for India’s Planning Commission recommended that the Salwa Jundum 242
campaign represented “an abdication of the state itself” and should immediately be ended. New
York-based Human Rights Watch later called on the New Delhi and Chhattisgarh governments to
end all official support for the campaign, including provision of weapons, and to launch” serious 243
and independent investigations” of related human rights abuses.
Analysts warn that Naxalite activity—including swarming attacks on government facilities and
coordinated, multi-state economic blockades—is spreading and becoming more audacious in the
face of incoherent and insufficient Indian government policies to halt it. A shortage of police
personnel appears to be a key problem. In late 2007, Prime Minister Singh asked India’s states to
establish specialized, dedicated forces to address Maoist militancy. In mid-2008, the federal
government announced plans to create a new 10,000-strong force trained specifically to fight the
rebels. However, these efforts do not address the “intellectual appeal” of the Maoists, which 244
India’s national security advisor says remains a key problem.
Some elements of India’s Hindu majority have at times engaged in violent communal conflict
with the country’s Muslim minority. In 1992, a huge mob of Hindu activists in the western city of th
Ayodhya demolished a 16 century mosque said to have been built at the birth site of the Hindu
god Rama. Ensuing communal riots in cities across India left many hundreds dead. Bombay was
especially hard hit and was the site of coordinated 1993 terrorist bombings believed to have been
a retaliatory strike by Muslims. In 2002, another group of Hindu activists returning by train to the
western state of Gujarat after a visit to the Ayodhya site of the now razed Babri Mosque (and a
proposed Hindu temple) were attacked by a Muslim mob in the town of Godhra; 58 were killed.
Up to 2,000 people died in the fearsome communal rioting that followed, most of them Muslims.
The BJP-led state and national governments came under fire for inaction; some observers saw
evidence of state government complicity in anti-Muslim attacks.
The U.S. State Department and human rights groups have been critical of New Delhi’s largely
ineffectual efforts to bring those responsible to justice; some of these criticisms were echoed by
the Indian Supreme Court in 2003. In 2005, the State Department made a controversial decision
to deny a U.S. visa to Gujarat Chief Minster Narendra Modi under a U.S. law barring entry for
241 Asian Center for Human Rights press release at http://www.achrweb.org/press/2007/IND0307.htm. See also
“Strategy Gone Awry,” Frontline (Chennai), September 21, 2007.
242 “Scrap Sulwa Jundum: Planning Commission Panel,” Hindu (Chennai), May 21, 2008.
243 See http://hrw.org/reports/2008/india0708.
244 Ajai Sahni, “Fighting the Maoists With Mantras,” Outlook (Delhi), July 25, 2008; “In Heart of India, a Little-
Known Civil War,” Christian Science Monitor, May 1, 2007; “Orissa Losing War Against Naxalite Violence,” Hindu
(Chennai), February 18, 2008; “Manmohan Wants Naxal Forces Crippled,” Hindu (Chennai), December 20, 2007;
“Center to Raise Anti-Naxalite Force,” Hindu (Chenai), July 1, 2008; “Q&A With Indian National Security Advisor
MK Narayanan,” Straits Times (Singapore), August 12, 2008.
foreign government officials found to be complicit in severe violations of religious freedom.245
The decision was strongly criticized in India. More than five years after the Gujarat riots,
international human rights groups express serious concerns about obstacles faced by victims
seeking justice, the continuing internal displacement of thousands of families who lack basic
necessities, and large numbers of uninvestigated related criminal cases (despite the Indian
Supreme Court’s 2004 order to reopen nearly 1,600 such cases). A 2006 central government
report found deep communal divisions continuing to haunt Gujarat, concretely expressed through
ghettoization and religious segregation. In 2008, a U.N. envoy said such divisions combine with a 246
culture of impunity to raise the risk of future violence. Sporadic communal violence continues
to affect several Indian states.
Many of India’s more than one billion citizens suffer from numerous and oftentimes serious
human rights abuses. Some analysts are concerned that, as Washington pursues a new “strategic
partnership” with New Delhi, U.S. government attention to such abuses has waned. According to
the U.S. State Department’s Country Report on Human Rights Practices, 2007, the Indian
government “generally respected the human rights of its citizens; however, numerous serious
problems remained.” These included extensive societal violence against women; extrajudicial
killings, including faked encounter killings; excessive use of force by security forces, arbitrary
arrests, and incommunicado detentions in Kashmir and several northeastern states; torture and
rape by agents of the government; “harsh, life-threatening” prison conditions and lengthy pretrial
detentions without charge; “pervasive” police corruption; forced prostitution; child prostitution
and female infanticide; forced child labor; human trafficking; and “ubiquitous” caste-based
discrimination and violence, among others. Terrorist attacks and kidnappings also remained
grievous problems, especially in Kashmir and the northeastern states. Indian law provides for 247
extensive human rights protections, but enforcement is “lax” and convictions rare.
The 2007 annual report from New York-based Human Rights Watch noted that India has a vibrant
press and civil society, but also suffers from a number of chronic human rights problems. It called
impunity a “critical issue” involving officials and members of the security services abusing their
power and who are “rarely if ever brought to justice for torture, arbitrary detentions and
extrajudicial killings.... ” Listed among other human rights concerns in India is the alleged
“failure to implement policies that protect the rights of children, religious minorities, those living
with HIV/AIDS or those belonging to vulnerable communities such as tribal groups, Dalits and
other ‘backward’ castes.” London-based Amnesty International’s 2007 annual report also claims
that perpetrators of human rights violations in India, in particular those related to 2002 communal
rioting in Gujarat, continued to enjoy impunity, and it asserts that concerns over protection of
245 In November 2007, Human Rights Watch called on the Indian government to launch an investigation of Modi after
he made statements apparently endorsing the extrajudicial execution of a terrorism suspect by police. In July 2008, 27
Members of Congress joined the U.S. Commission on International Religious Freedom in urging the State Department
to reaffirm its past decision to block Modi’s entry to the United States (see http://hrw.org/english/docs/2007/12/07/
india17510.htm and http://www.uscirf.gov/index.php?option=com_content&task=view&id=2219&Itemid=46).
246 See http://web.amnesty.org/library/Index/ENGASA200072007?open&of=ENG-IND; “Hindu, Muslim Ghettos
Arise in Gujarat,” Christian Science Monitor, July 5, 2007; “UN Envoy Says India Risks Religious Violence,” Reuters,
247 See http://www.state.gov/g/drl/rls/hrrpt/2007/100614.htm.
economic, social, and cultural rights of already marginalized communities grew in 2006.248 The
State Department itself recognizes impunity as a major human rights problem in India, asserting
in its most recent (April 2007) report on Supporting Human Rights and Democracy that “A
widespread culture of impunity among police and security forces and pervasive corruption 249
continued to be the principal obstacles to improving human rights” there.
The State Department’s Bureau of Democracy, Human Rights, and Labor has claimed that India’s
human right abuses “are generated by a traditionally hierarchical social structure, deeply rooted
tensions among the country’s many ethnic and religious communities, violent secessionist
movements and the authorities’ attempts to repress them, and deficient police methods and 250
training.” India’s 1958 Armed Forces Special Powers Act, which gives security forces wide
leeway to act with impunity in conflict zones, has been called a facilitator of “grave human rights
abuses” in several Indian states (in December 2006, Prime Minister Singh said he would seek to
amend the controversial Act). In 2007, the problem of “staged encounters” in which police 251
officers kill suspects in faked shootouts came to the fore. India generally denies international
human rights groups official access to Kashmir and other sensitive areas.
The State Department’s latest annual report on trafficking in persons (issued June 2008) said,
“India is a source, destination, and transit country for men, women, and children trafficked for the
purposes of forced labor and commercial sexual exploitation.” It placed India on the “Tier 2
Watch List” for the fifth consecutive year for “failure to provide evidence of increasing efforts to
combat trafficking in persons” and for “making no progress” in efforts to address the problem of
bonded labor, which affects an estimated 20-65 million Indians. Moreover, State criticized the
India’s federal and state governments for largely ignoring “the pervasive problem of government
complicity in trafficking.” Upon the report’s release, the head of State’s trafficking office,
Ambassador Mark Lagan, said “India still doesn’t recognize the degree to which bonded labor is
a substantial human trafficking problem in its country. It has weak anti-corruption efforts and 252
prosecutions are too few.”
An officially secular nation, India has a long tradition of religious tolerance (with periodic
lapses), which is protected under its constitution. The population includes a Hindu majority of
Jains, and others total less than 4%. Although freedom of religion is protected by the Indian
government, human rights groups have noted that India’s religious tolerance is susceptible to
attack by religious extremists. In its annual report on international religious freedom released in
248 See http://hrw.org/englishwr2k7/docs/2007/01/10/global15039.htm and http://report2007.amnesty.org/eng/
249 See http://www.state.gov/g/drl/rls/shrd/2006/80590.htm.
250 Supporting Human Rights and Democracy: The U.S. Record 2002 -2003,” U.S. Department of State, at
251 See “Faked Deaths Show Ills of India’s Police,” Associated Press, June 7, 2007.
252 See http://www.state.gov/g/tip/rls/tiprpt/2008/105388.htm and http://www.state.gov/g/tip/rls/rm/2008/105572.htm.
September 2007, the State Department found “no change in the status of respect for religious
freedom” by India’s national government:
[G]overnment policy continued to contribute to the generally free practice of religion;
however, problems remained in some areas. Some state governments enacted and amended
“anti-conversion” laws and police and enforcement agencies often did not act swiftly enough
to effectively counter societal attacks, including attacks against religious minorities. Despite
Government efforts to foster communal harmony, some extremists continued to view
ineffective investigation and prosecution of attacks on religious minorities, particularly at the
state and local level, as a signal that they could commit such violence with impunity,
although numerous cases were in the courts at the end of the reporting period. The National
Government, led by the United Progressive Alliance (UPA), continued to implement an
inclusive and secular platform that included respect for the right to religious freedom.
The report added that a “Hindutva”—or Hindu nationalist—ideology continued to influence some 253
government policies and actions at the state and local levels over the previous year.
A May 2008 report of the U.S. Commission on International Religious Freedom noted continued
improvements since the 2004 election of the Congress-led coalition, but warned that concerns
about religious freedom in India remain. These include ongoing attacks against religious
minorities, perpetrated mainly by Hindu activists and most often in states with BJP-led
governments. The Commission also continued to criticize allegedly insufficient state efforts to
pursue justice in cases related to 2002 communal rioting in Gujarat. More than five years after
those riots, the victims are said to still face serious challenges and obstacles in securing justice, 254
and a large number of related criminal cases remain uninvestigated and unresolved.
The millennia-old Hindu caste system reflects Indian occupational and socially-defined
hierarchies. Sanskrit sources refer to four social categories: priests (Brahmin), warriors
(Kshatriya), traders (Vayisha) and farmers (Shudra). Tribals and lower castes were long known as 255
“untouchables”—a term now officially banned but still widely used—or Dalits. Although these
categories are understood throughout India, they describe reality only in the most general terms.
National-level legislation exists to protect India’s lower castes, yet, according to the U.S. State
Department, “The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act lists
offenses against disadvantaged persons and prescribes stiff penalties for offenders; however, this 256
act had only a modest effect in curbing abuse and there were very few convictions.” In July
2007, H.Con.Res. 139, expressing the sense of Congress that the United States should address
the ongoing problem of untouchability in India, was passed by the full House.
Given traditional societal discrimination against females, uneven female-to-male ratios are a
matter of concern for India. The incidence of female infanticide and gender-selective abortions is
253 See http://www.state.gov/g/drl/rls/irf/2007/90228.htm.
254 See http://www.uscirf.gov.
255 See http://www.state.gov/r/pa/ei/bgn/3454.htm.
256 See http://www.state.gov/g/drl/rls/hrrpt/2006/78871.htm.
identified as a growing human rights problem in India. The diffusion of enabling medical
technology and the existence of unethical doctors have made sex-selective abortions more
common there. Prime Minister Singh has called female feticide in India a “national shame” and
said the government has a responsibility to curtail the widespread practice. The country’s most
recent census (in 2001) found only 927 girls aged 0-6 for every 1,000 boys nationwide. Wealthier
states, such as Delhi, Punjab, and Gujarat, have the lowest ratios (Punjab’s was the lowest at 257
798). A 2006 study in the British medical journal Lancet estimated that up to 10 million Indian
females are “missing” due to sex-selective abortions and infanticide over the past two decades, 258
and that some 500,000 girls are being “lost” annually. According to a June 2008 259
nongovernmental report, the incidence of female feticide is only increasing. The most recent
U.S. State Department Country Report on Human Rights for India (released March 2008), claims
that, in many Indian states,
Baby girls were either aborted or, after birth, left in the cold to contract pneumonia and
perish. NGOs alleged that medical practitioners and government workers often were
complicit in pushing or persuading women to abort their girl children. Sex determination
tests are illegal under the 1994 Pre-Natal Diagnostic Techniques Act. However, NGOs
reported that some family planning centers continued to reveal the sex of fetuses. According 260
to the NGO IFES, feticide is a $116 million industry.
In 2007, the New Delhi announced the establishment of a series of orphanages to raise unwanted 261
baby girls in an effort to reduce the incidence of female infanticide.
The United Nations has estimated that 5.7 million Indians are infected with HIV/AIDS, giving
India the largest such population worldwide (India overtook South Africa in this category in
2.5 million and the U.S. government estimate rises only to 3.1 million. Due to the country’s
large population, prevalence rates among adults remain below 1%. India’s AIDS epidemic has
become generalized in four states in the country’s south (Andhra Pradesh, Tamil Nadu,
Karnataka, and Maharashtra) and two in the northeast (Manipur and Nagaland). According to 263
USAID, these six states account for 80% of the country’s reported AIDS cases. India first
launched its AIDS control program in 1992; New Delhi boosted related funding to about $120
million in the most recent fiscal year and in July 2007 launched a new $2.8-billion National AIDS
Control Program that will expand free treatment for HIV-positive persons, as well as boost the
number of awareness and prevention campaigns. Stigma, gender inequalities, and discrimination
257 “Indian Prime Minister Denounces Abortion of Females,” New York Times, April 29, 2008; census data at
http://www.censusindia.net/t_00_004.html. See also “Missing Girl Child,” India Today (Delhi), November 11, 2003.
258 Cited in “India Loses 10m Female Births,” BBC News, Jan. 9, 2006. A 2006 report from the U.N. Children’s Fund
found that about 7,000 fewer girls than expected are born each day in India due to female feticide (“Feticide Means
7,000 fewer Girls a Day in India,” Reuters, December 12, 2006).
259 “India Baby Girl Deaths ‘Increase,’” BBC News, June 21, 2008.
260 See http://www.state.gov/g/drl/rls/hrrpt/2007/100614.htm.
261 “Indian Govt to Raise Abandoned Girls,” Associated Press, February 18, 2007.
262 “India’s HIV Cases Highly Overestimated, Survey Shows,” Reuters, July 6, 2007; U.S. Embassy Fact Sheet on
Indo-US Cooperation in Public Health, April 2, 2008.
263 See http://www.usaid.gov/our_work/global_health/aids/Countries/ane/india_05.pdf.
present major obstacles to controlling India’s HIV/AIDS epidemic. In the country’s traditional
society, open discussion of sexuality and risk of infection is rare, making education difficult: one
Indian government survey found that nearly half of Indian women had not even heard of the
disease. Analysts opine that substantially greater resources are needed to address HIV/AIDS in 264
India than are currently available.
As part of its foreign assistance program in India, the U.S. government supports integrated
HIV/AIDS prevention, treatment, and support services in high prevalence states. India received
nearly $30 million in direct U.S. assistance for such programs in FY2007 under the President’s
Plan for AIDS Relief (PEPFAR), for a projected total of some $136 million for FY2004-265
FY2008. In January 2007, H.R. 175, to provide assistance to combat HIV/AIDS in India, and
for other purposes, was introduced in the House, but has not moved out of committee to date.
A total of more than $15 billion in direct U.S. aid went to India from 1947 through 2007, nearly
all of it in the form of economic grants and loans, more than half as food aid. In February 2007, in
response to several years of rapid Indian economic expansion and New Delhi’s new status as a
donor government, the State Department announced a 35% reduction in assistance programs for
India. The bulk of the cuts are to come from development assistance and food aid programs.
Another smaller decrease came in 2008 “in recognition of the continuing growth of the Indian 266
economy and the ability of the government to fund more” development programs.
According to the U.S. Agency for International Development (USAID), India has more people
living in abject poverty (some 385 million) than do Latin America and Africa combined. USAID
programs in India, budgeted at about $69 million in FY2008, concentrate on six areas: (1) health
(improved overall health with a greater integration of food assistance, reproductive services, and
the prevention of HIV/AIDS and other infectious diseases); (2) environment (improved access to
clean energy and water); (3) education (improved literacy and teacher capacity); (4) economic
opportunity (agricultural reform and improved financial markets); (5) disaster response; and (6) 267
The United States has provided about $169 million in military assistance to India since 1947,
more than 90% of this distributed from 1962-1966. In recent years, modest security-related
assistance has emphasized export control enhancements, counterterrorism and counternarcotics
programs, and military training. Early Bush Administration requests for Foreign Military
Financing were later withdrawn, with the two countries agreeing to pursue commercial sales
264 See, for example, Pramit Mitra and Teresita Schaffer, “Public Health and International Security: The Case of India,”
July 2006, at http://www.csis.org/media/csis/pubs/060731_aids_india.pdf.
265 See http://www.pepfar.gov/pepfar/press/81851.htm.
266 See http://www.state.gov/p/sca/rls/2008/104699.htm.
267 See http://www.usaid.gov/locations/asia/countries/india/india.html.
programs. The Pentagon reports military sales agreements with India worth $429 million in
• The Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of
• The Clean Energy Partnership With India Act of 2008 (H.R. 5705), was referred
to House committee in April 2008.
• H.Res. 928, expressing the sense of the House that the United States should
initiate negotiations to enter into a free trade agreement with India, was referred
to House committee in January 2008.
• The Clean Energy Act of 2007 became P.L. 110-140 in December 2007. The bill
contains provisions for promoting U.S. exports in clean and efficient energy
technologies to India and China.
• H.Res. 711, expressing the sense of the House concerning the U.S.-India nuclear
cooperation agreement, was referred to House committee in October 2007.
• H.R. 3730, to establish a U.S.-India interparliamentary exchange group, was
referred to House committee in October 2007.
• S.Res. 339, expressing the sense of the Senate on the situation in Burma, was
passed by the full Senate in October 2007.
• H.Res. 638, expressing the sense of the House that the U.N. Charter should be
amended to establish India as a permanent member of the U.N. Security Council,
was referred to House committee in September 2007.
• H.Con.Res. 139, expressing the sense of Congress that the United States should
address the ongoing problem of untouchability in India, was passed by the full
House and referred to Senate committee in July 2007.
• S.Con.Res. 38, calling for the safeguarding of the physical, political, and
economic security of the Kashmiri pandits, was referred to Senate committee in
June 2007 (a House version, H.Con.Res. 55, was referred to House
subcommittee in April).
• H.R. 1186, to promote global energy security through increased U.S.-India
cooperation, was referred to House committee in February 2007.
• H.R. 175, to provide assistance to combat HIV/AIDS in India and for other
purposes was referred to House committee in January 2007.
Table 1. Direct U.S. Assistance to India, FY2001-FY2009
(in millions of dollars)
Program FY FY FY FY FY FY FY FY 2008 FY 2009
or Account 2001 2002 2003 2004 2005 2006 2007 (est.) (req.)
CSH 24.641.7 47.447.853.252.853.458.960.1
DA 28.829.2 34.522.524.919.715.710.50.9
ESF 5.07.0 10.514.914.95.04.9— —
IMET 0.51.0 1.01.41.51.18.104.22.168
INCLE — — — — — — — — 0.4
NADR 0.90.9 1.00.74.22.22.214.171.124
PEPFAR — — — 20.426.629.629.929.8a
Subtotal 59.879.8 94.4126.6125.3111.1106.5103.164.3
Food Aidb 50.477.5 35.730.826.130.731.013.513.5
Total 110.2157.3 130.1157.4151.4141.8137.5116.677.8
Sources: U.S. Departments of State and Agriculture; U.S. Agency for International Development. FY2008
amounts are estimates; FY2009 amounts are requested. Columns may not add up due to rounding.
CSH: Child Survival and Health
DA: Development Assistance
ESF: Economic Support Fund
IMET: International Military Education and Training
INCLE: International Narcotics Control and Law Enforcement
NADR: Nonproliferation, Anti-Terrorism, Demining, and Related (mainly export control assistance, but includes
anti-terrorism assistance for FY2007)
PEPFAR: President’s Emergency Plan for AIDS Relief
a. Country sub-allocations for PEPFAR are released later in the fiscal year.
b. P.L. 480 Title II (grants), Section 416(b) of the Agricultural Act of 1949, as amended (surplus donations), and
Food for Progress. Food aid totals do not include freight costs.
Figure 2. Map of India
Source: Map Resources. Adapted by CRS. (2/2007)
K. Alan Kronstadt
Specialist in South Asian Affairs