Background, Political, Defense, Economy, Nuclear Deal, Counter Terrorism and Security

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Background

  • After Indian independence until the end of the cold war, the relationship between the two nations has often been thorny. Dwight Eisenhower was the first U.S. President to visit India in 1959. During John F. Kennedy’s period as President, he saw India as a strategic partner against the rise of communist China. During the Cold War, the U.S. asked for Pakistan’s help because India was seen to lean towards the Soviet Union. The 1965 and 1971 Indo-Pakistani wars did not help their relations.

  • After the dissolution of the Soviet Union, India began to review its foreign policy in a non-polar world following which, it took steps to develop closer ties with the European Union and the United States. Today, India and the U.S. share an extensive cultural, strategic, military and economic relationship.

  • Since 2004, Washington and New Delhi have been pursuing a “strategic partnership” based on shared values and apparently convergent geopolitical interests. Numerous economic, security, and global initiatives, are underway.

  • During the tenure of the Clinton and Bush administration, relations between India and the United States blossomed primarily over common concerns regarding growing Islamic extremism, energy security and climate change.

  • While in New Delhi, Hillary Clinton set forth five key “pillars” of the U.S.-India engagement: (1) strategic cooperation; (2) energy and climate change; (3) economics, trade, and agriculture; (4) education and development; and (5) science technology and innovation.

Political

  • A “Strategic Dialogue” was established in July 2009 during the visit of US

  • Secretary of State Hillary Clinton to India with the objective of strengthening

  • bilateral cooperation across diverse sectors.

  • President Obama’s visit to India from 6-9 November 2010, imparted

  • further momentum to bilateral cooperation and helped establish a long-term

  • framework for India-US global strategic partnership.

Defense

  • Also, in 2005, the United States and India signed a ten-year defense framework agreement to be expanding bilateral security cooperation. The two countries now engage in numerous and unprecedented combined military exercises, and major U.S. arms sales to India are underway.

  • The $4.1 billion contract for 10 C-17 Globemaster-III giant strategic airlift aircraft was cleared by defense Min. In March 2009, the Obama administration cleared the US$2.1 billion sale of eight P-8 Poseidon’s to India

  • The Malabar series of joint naval exercises are held off the coast of Okinawa

Economy

  • India-US total merchandise trade was US $ 48.75 billion in 2010.

  • The two-way services trade was US $ 38 billion in 2008.

  • US is the third largest source of foreign direct investments into India. In recent years, growing Indian investments into

  • the US, estimated by independent studies to be around US$ 26.5 billion

  • between 2004-2009, has been a novel feature of bilateral ties.

  • Financial and Economic Partnership to strengthen bilateral engagement on macroeconomic,

  • financial, and investment-related issues launched in April ,2010

  • The Agreement on Framework for Cooperation

  • on Trade and Investment was signed during the visit of Minister for Commerce

& Industry, Mr. Anand Sharma to USA in March 2010.

Nuclear Deal

  • In December 2006, Congress passed the historic Henry J. Hyde United States-India Peaceful Atomic Cooperation Act, which allows direct civilian nuclear commerce with India .

  • In July 2007, negotiations on the bilateral agreement for peaceful nuclear cooperation, also known as the “123 agreement” were completed.

  • Civil Nuke Liability Bill: The U.S, thinks Section 17(b) of the Indian law, which expands the scope of the operator’s right to compensation from nuclear suppliers in case of an accident due to faulty equipment, violates the CSC. US wants International Atomic Energy Agency to ensure that the Indian nuclear liability law “fully conforms” with the international Convention on Supplementary Compensation (CSC) for Nuclear Damage.

Counter Terrorism and Security

  • Stability in South Asia linked to tackling of terrorism

  • A new India-US Counter-Terrorism Cooperation Initiative was signed in 2010 to expand collaboration on counterterrorism, information sharing and capacity building.

  • A new Homeland Security Dialogue was also announced during President Obama’s visit to India in November 2010 to further deepen operational cooperation, counter-terrorism technology transfers and capacity building.

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