Order Code IB93097
Issue Brief for Congress
Received through the CRS Web
India-U.S. Relations
Updated December 19, 2002
K. Alan Kronstadt
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Context of the Relationship
U.S. and Congressional Interest
Regional Rivalries with Pakistan and China
Political Setting
National Elections and Prospects for Political Stability
The Bharatiya Janata Party (BJP)
The Congress Party
India-U.S. Relations and Bilateral Issues
Security Issues
The Militarized India-Pakistan Dispute Over Kashmir
Nuclear Weapons and Missile Proliferation
U.S.-India Security Cooperation
Regional Dissidence and Human Rights
Punjab
Gujarat
Human Rights
India’s Economic Reforms
U.S. Aid
Narcotics

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India-U.S. Relations
SUMMARY
Although the end of the cold war freed
dence and separatist movements in Kashmir,
India-U.S. relations from the constraints of
Punjab, and India’s Northeast region. Strife in
global bipolarity, New Delhi-Washington
these areas has resulted in the deaths of tens of
relations continued for a decade to be affected
thousands of civilians, militants, and security
by the burden of history, most notably the
forces over the past decade. Communalism
longstanding India-Pakistan rivalry. Recent
has also been a matter of concern, with spring
years, however, have witnessed a sea change
2002 rioting in the Gujarat state resulting in
in bilateral relations, with more positive inter-
more than 1,000, mostly Muslim, deaths.
actions becoming the norm. India’s swift
International human rights groups, as well as
offer of full support for U.S.-led anti-terrorism
Congress and the U.S. State Department, have
operations after the September 2001 attacks
criticized India for perceived human rights
on the United States is widely viewed as
abuses by its security forces in these regions.
reflective of such change.
The United States has been supportive of
Continuing U.S. concern in South Asia
India’s efforts to transform its formerly
focuses especially on the historic and ongoing
quasi-socialist economy through fiscal reform
tensions between nuclear-armed India and
and market opening. Beginning in 1991, India
Pakistan, tensions rooted in unfinished busi-
has been taking steps to reduce inflation and
ness from the 1947 Partition, and competing
the budget deficit, privatize state-owned
claims to the former princely state of Kashmir.
industries, reduce tariffs and industrial licens-
The United States also seeks to prevent the
ing controls, and institute incentives to attract
regional proliferation of nuclear weapons and
foreign trade and investment. Successive
ballistic missiles. Both India and Pakistan
coalition governments have kept India on a
have so far resisted U.S. and international
general path of economic reform and market
pressure to sign the major international
opening, though there continues to be U.S.
nonproliferation treaties.
concern that such movement has been slow
and inconsistent.
In May 1998, India conducted a series of
unannounced nuclear tests that evoked inter-
The current Bharatiya Janata Party (BJP)-
national condemnation. Pakistan reported
led coalition government is headed by Prime
conducting its own nuclear tests less than
Minister Atal Behari Vajpayee. The coalition
three weeks later. As a result of these tests,
has been in power since October 1999 na-
President Clinton imposed wide-ranging
tional elections decisively ended the historic
sanctions on both countries, as mandated
dominance of the Nehru-Gandhi-led Congress
under the Arms Export Control Act. Many of
Party. The BJP has close ties to Hindu-
these sanctions gradually were lifted through
nationalist groups in India and has suffered
Congress-Executive branch cooperation from
some recent electoral setbacks at the state
1998 to 2000. The remaining nuclear sanc-
level, most recently in Jammu and Kashmir
tions on India and Pakistan were removed by
where the BJP-allied National Conference was
President Bush on September 22, 2001.
ousted. Recent state elections in Gujarat
resulted in a decisive win for the BJP and are
Congress also has been concerned with
viewed as being a key gauge of the national
human rights issues related to regional dissi-
coalition government’s continued strength.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
In December, U.S. Deputy National Security Advisor Hadley met with top Indian
officials in New Delhi and reiterated the U.S. position that India should resume a bilateral
dialogue with Pakistan despite the ongoing infiltration of separatist militants into Indian
Kashmir. While a tense, 10-month-long India-Pakistan military face-off appears to have
subsided, hostile rhetoric still emanates from both New Delhi and Islamabad. The U.S.
envoy to India recently asserted that “the problem obviously in Kashmir is cross border
terrorism” that is “almost completely externally driven.”
Following state elections in Jammu and Kashmir, a new and seemingly more moderate
coalition government initiated a “common minimum program” that contains controversial
policies, including the release of jailed political prisoners. These policies have been
criticized by top New Delhi officials. Separatist guerillas have vowed to continue their
violent campaign in the region and numerous November attacks killed dozens.
At a November meeting in New Delhi of the U.S.-India Security Cooperation Group,
top U.S. defense officials discussed the sale of U.S. arms to India. Representatives of leading
American weapons makers also met Indian officials in an effort to gain entry to an Indian
market currently dominated by Russia. In December, U.S. Pacific Commander Adm. Fargo
made his first visit to India, while Indian National Security Advisor Mishra met in
Washington, D.C. with his U.S. counterpart Rice and Secretary of State Powell, among
others.
In November, then-U.S. Treasury Secretary O’Neill traveled to New Delhi, where he
urged India’s leadership to provide good governance, economic freedom, and investment in
people as a means to achieving greater prosperity. In the same month in Mumbai, U.S.
Under Secretary of State Larson urged the improvement of India’s intellectual property
rights protections, while U.S. Under Secretary of Commerce Juster visited New Delhi to
oversee creation of a new India-U.S. High Technology Cooperation Group.
December elections in the state of Gujarat, the site of massive communal violence
earlier this year, resulted in an unexpectedly decisive victory for the incumbent Hindu-
nationalist BJP party and a major defeat for the more secular Congress Party. The poll has
been cast as an important index of the future course of Indian politics at the national level.
BACKGROUND AND ANALYSIS
Context of the Relationship
U.S. and Congressional Interest
In the wake of the September 2001 terrorist attacks on the United States, India took the
immediate and unprecedented step of offering to the United States full cooperation and the
use of India’s bases for counterterrorism operations. The offer reflected the sea change that
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has occurred in recent years in the U.S.-India relationship, which for decades was mired in
the politics of the Cold War. The marked improvement of relations that began in the latter
days of the Clinton Administration was accelerated after a November 2001 meeting between
President Bush and Indian Prime Minister Vajpayee at the White House, when the two
leaders agreed to greatly expand U.S.-India cooperation on a wide range of issues, including
counterterrorism, regional security, space and scientific collaboration, civilian nuclear safety,
and broadened economic ties. Notable progress has come in the area of security cooperation,
with an increasingly strong focus on counterterrorism, joint military exercises, and arms
sales. In July 2002, the fifth and most recent meeting of the U.S.-India Joint Working Group
on Counterterrorism was held in Washington, D.C. In early December 2001, the U.S.
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.
U.S. and congressional interests in India cover a wide spectrum of issues, ranging from
the face-off with Pakistan over Kashmir and nuclear and missile proliferation to concerns
related to human rights and trade and investment opportunities. In the 1990s, India-U.S.
relations were most affected by three key developments: 1) the demise of the Soviet Union
– India’s main trading partner and most reliable source of economic assistance and military
equipment – and New Delhi’s resulting need to diversify its international relationships; 2)
India’s adoption of sweeping economic policy reforms, beginning in 1991; and 3) a
deepening bitterness between India and Pakistan over Kashmir, along with India’s
preoccupation with China as a potential long-term strategic threat.
With the fading of cold war constraints, the United States and India began exploring the
possibilities of a more normalized relationship between the world’s two largest democracies.
A 6-day visit to the United States by Indian Prime Minister Narasimha Rao, in May 1994,
marked the onset of significantly improved U.S.-India relations. Rao addressed a joint
session of Congress and met with President Clinton. Although discussions were held on
nuclear nonproliferation, human rights, and other issues, the main focus of the visit was
rapidly expanding U.S.-India economic relations. 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 serious
irritants in bilateral relations.
President Clinton’s March 2000 visit to South Asia represented a major U.S. initiative
to improve cooperation across a broad spectrum, including economic ties, regional stability,
nuclear proliferation concerns, security and counterterrorism, environmental protection, clean
energy production, and disease control. President Clinton and Prime Minister Vajpayee
agreed in a vision statement to institutionalize dialogue between the two countries through
a range of high-level meetings and working groups on the various areas of cooperation,
capped by regular bilateral summits between the leaders of the two countries. Economic ties
were a major focus of the President’s visit. At the time, the United States and India agreed
to establish working groups on trade, clean energy and the environment, and science and
technology. U.S.-India agreements also were signed on environmental protection, clean
energy production, and combating global warming. The then-U.S. President lifted sanctions
on some small U.S. assistance programs, and cooperation agreements were signed on efforts
to combat polio, tuberculosis, malaria, and HIV/AIDS, as well as the trafficking of women
and children in South Asia.
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During his 10-day visit to the United States in September 2000, Indian PM Vajpayee
addressed a joint session of Congress and was received for a state dinner at the White House.
During Vajpayee’s visit, U.S. officials announced $900 million in Export-Import Bank
financing to help Indian businesses purchase U.S. goods and services. U.S. companies also
signed agreements to construct three large power projects in India, valued at $6 billion, as
part of increased energy cooperation between the two countries. On September 15, 2000,
President Clinton and Prime Minister Vajpayee signed a joint statement agreeing to
cooperate on arms control, terrorism, and AIDS. When Vajpayee again visited the United
States in November 2001, he came at a time of heightened tensions in South Asia, but also
during a time of warming India-U.S. relations despite U.S.-Pakistan cooperation during the
war in Afghanistan.
Regional Rivalries with Pakistan and China
Three wars – in1947-48, 1965, and 1971 – and a constant state of military preparedness
on both sides of the border have marked the half-century of bitter rivalry between India and
Pakistan. The acrimonious nature of the partition of British India in 1947 and the continuing
dispute over Kashmir remain major sources of interstate tension. 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 Kashmir problem itself is rooted in half-century-old 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. India blames Pakistan
for supporting “cross-border terrorism” and a separatist rebellion in the Muslim-majority
Kashmir Valley that has claimed up to 60,000 lives since 1990. Pakistan admits only to
lending moral and political support to what it calls “freedom fighters” operating mostly in
and near the valley region around the city of Srinagar. Normal relations between New Delhi
were severed in December 2001 after a terrorist attack on the Indian Parliament was blamed
on Pakistan-supported Islamic militants. Though the two countries have since ended a tense,
10-month military standoff at their shared border, there has been no diplomatic dialogue
between India and Pakistan since a summit meeting in the city of Agra in July 2001 failed
to produce movement toward a settlement of the bilateral dispute.
India and China fought a brief but intense border war in 1962, and China has since
occupied a large swath of territory still claimed by India. Although Sino-Indian relations
have improved in recent years, the two countries have yet to reach a final boundary
agreement. During the last visit to China by an Indian leader in September 1993, then-Indian
Prime Minister Rao signed an agreement to reduce troops and maintain peace along the line
of actual control (LAC) that divides the two countries’ forces (along with pacts on trade,
environmental, and cultural cooperation). Periodic working group meetings aimed at
reaching a final settlement continue; the 14th of these was held in November 2002. In
January 2002, Chinese Premier Zhu Rongji became the first Chinese premier to visit India
in 11 years. The Indian Prime Minister is slated to visit Beijing in 2003.
Adding to New Delhi’s sense of insecurity are suspicions regarding China’s long-term
nuclear weapons capabilities and strategic intentions in South Asia. In fact, a strategic
orientation focused on China reportedly has affected the course and scope of New Delhi’s
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own nuclear weapons and ballistic missile programs. Beijing’s long-time military and
economic support for Pakistan – support that is widely believed to have included WMD-
related transfers – is a major and ongoing source of friction; expressed Chinese support for
Pakistan’s Kashmir position adds to the discomfort of Indian leaders. Despite these issues,
high-level exchanges between New Delhi and Beijing regularly include statements from
officials on both sides that there exists “no fundamental conflict of interest” between the
world’s two most populous countries.
Political Setting
National Elections and Prospects for Political Stability. India’s most recent
national elections in October 1999 brought to power a Bharatiya Janata Party (BJP)-led
coalition government headed by Prime Minister Atal Bihari Vajpayee. This outcome
decisively ended the historic dominance of the Nehru-Gandhi-led Congress Party, which now
sits in opposition at the national level, though its members lead numerous state governments.
This is Vajpayee’s third tenure as Prime Minister – his previous governments lasted 13 days
in 1996 and 13 months in 1998-99.
As a nation-state, India presents a vast mosaic of hundreds of different ethnic groups,
languages, religious sects, and social castes (there are 18 official languages). Until the last
decade or so, many of these groups found representation within the diversity of the Congress
Party, which ruled India for 45 of its 55 years since independence in 1947. Factors in the
decline of support for the Congress included neglect of its grassroots political organizations
by the leadership, a perceived lack of responsiveness to such major constituent groups as
Muslims and lower castes, the rise of regional parties and issue-based parties such as the
BJP, and allegations of widespread corruption involving a number of party leaders. At the
same time, there has been a shift in power from upper caste Indians to the far more numerous
lower caste Indians, many of whom have switched their allegiance from Congress and
smaller national parties to oftentimes influential regional and caste-based parties.
The Indian political system is viewed by some analysts as being in a transition period
from its years of dominance by the Congress Party to a two-party system, perhaps centered
on the BJP and the Congress. Many observers believe, however, that coalition politics will
be the order of the day for some time to come. In the 1999 elections, there was little apparent
progress toward a two-party system, with the Congress losing ground and the BJP gaining
only about five seats over its previous total. The BJP alone won only 183 seats to 113 for
the Congress – both far short of the 273 needed for a majority in the 545-seat Parliament (no
other party holds more than 33 seats).
December 2002 elections in the state of Gujarat were viewed by many as a key gauge
of continued public support for the BJP. Gujarat was the site of horrific communal conflict
earlier in 2002 when the torching of a train car filled with pro-Hindu activists killed 58 in
Ghodra and led to widespread rioting that killed more than 1,000, mostly Muslims, along
with the displacement of thousands more from Ahmedabad, Gujarat’s largest city, and
elsewhere. Gujarat Chief Minister and BJP leader Narendra Modi called for early elections
– in an effort to take advantage of the polarized political setting, some say – and ran a
campaign that emphasized a perceived Islamic/Pakistani threat to the country’s and state’s
Hindu majority. The BJP party was rewarded with an unexpectedly decisive victory over the
rival Congress Party. Many analysts predict that the success in Gujarat of a strongly Hindu-
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nationalist political platform will be translated into similarly strident tacks elsewhere in
India, along with a more hardline stance from the BJP-led coalition at the national level. The
next national elections are scheduled to be held some time in 2004.
The Bharatiya Janata Party (BJP). Riding a crest of rising Hindu nationalism, the
BJP increased its strength in Parliament from only two seats in 1984 to 119 seats in 1991 to
181 seats at the time of this writing. In 1992-93, the party’s image was tarnished by its
alleged complicity in serious outbreaks of communal violence in which a mosque was
destroyed at Ayodha and 2,500 people were killed in anti-Muslim rioting in Bombay and
elsewhere. Some observers view the BJP as the political arm of the extremist Hindu
nationalist organization Rashtriya Swayamsevak Sangh (RSS or National Volunteer Force),
allegedly responsible for the incidents. Since then, the BJP has worked – with only limited
success – to change its image from right-wing Hindu fundamentalist to conservative, secular,
and moderate, although February 2002 riots in Gujarat hurt the party’s national and
international credentials as a secular and moderate organization.
Following the March 1998 elections, the BJP managed to cobble together a fragile, 13-
member National Democratic Alliance (NDA) coalition, headed by Vajpayee, and survive
a confidence vote. Factors that kept the BJP government in power for a year included
Vajpayee’s widespread personal popularity, early popular euphoria over India’s May 1998
nuclear tests, and the feeling that, after lackluster performances by Congress and United
Front governments, the BJP should be given its chance to lead the country. Vajpayee soon
found himself caught in a continuing round of internal bickering and favor-seeking by
coalition members. Such distractions delayed efforts at focusing on more urgent matters,
including the economy. An April 1999 no-confidence vote was precipitated by the
withdrawal of support for the BJP government by its largest coalition partner, a regional
party based in the southern state of Tamil Nadu.
The BJP advocates “Hindutva,” or an India based on Hindu culture. Although the BJP
claims to accept all forms of belief and worship, it views Hindutva as key to nation-building.
Much of its support comes from professionals and upper caste groups. It continues to be
looked upon with suspicion by lower caste Indians, India’s 140 million Muslims, and non-
Hindi-speaking Hindus in southern India, who together comprise a majority of India’s voters.
The more controversial long-term goals of the BJP reportedly include building a Hindu
temple on the site of a 16th century mosque in Ayodhya that was destroyed by Hindu mobs
in 1992, establishing a uniform code of law that would abolish special status for Muslims,
and abolishing the special status granted to Jammu and Kashmir state under Article 370 of
the Indian Constitution. None of these stands are taken by the NDA 1999 election manifesto
and likely would be opposed by most NDA coalition members. The BJP leadership has
sought to put these goals on the back-burner, but current tensions – continuing conflict
between India and Pakistan and a flare-up of Hindu-Muslim communal violence in the
western state of Gujarat – have put the party in an awkward position.
In February 2002, just days before a rioting between Muslims and Hindus began in
Gujarat, the BJP was rejected by a majority of voters in the crucial state elections of Uttar
Pradesh. This defeat, as well as setbacks in Punjab and Uttaranchal, appeared to show voters
to be less interested in the BJP’s “tough on Pakistan” platform and more interested in bread
and butter issues. However, the BJP has more recently regained traction with its decisive
December 2002 win in Gujarat.
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The Congress Party. The post-election weakness of the opposition is a major factor
in the BJP coalition government hopes for completing its 5-year term. With just 110
parliamentary seats, the Congress Party today is at its lowest national representation ever.
Observers attribute the party’s poor showing to a number of factors, including the perception
that current party leader Sonia Gandhi lacked the experience to lead the country, the failure
of Congress to make strong pre-election alliances (as had the BJP), and the splintering of
Congress in Maharashtra state. In May 1999, when three Maharashtra Congress leaders
suggested that Gandhi’s foreign (Italian) origins making her unsuitable for the prime
ministership, they were expelled from the party by Gandhi supporters and went on to form
the breakaway Nationalist Congress Party (NCP).
Support for the Congress Party began to decline following the 1984 assassination of
then-Prime Minister Indira Gandhi (daughter of India’s first prime minister, Jawaharlal
Nehru) and the 1991 assassination of her son, then-Prime Minister Rajiv Gandhi. Sonia
Gandhi, Rajiv’s widow, refused to be drawn into active politics until the 1998 elections.
Gandhi has since made efforts to revitalize the organization by phasing out older leaders and
attracting more women and lower castes. In November 1998, signs of a resurgent Congress
Party were apparent in a series of state elections. By landslide margins, the Congress
defeated BJP governments in Rajasthan and Delhi and maintained its control of Madhya
Pradesh. However, the inability of the Congress to form a new government after the fall of
the BJP coalition in April 1999, along with defections led by Maharashtran politicians,
weakened the party in the parliamentary elections. The December 2002 elections in Gujarat
were a major defeat for Congress and marked a failure of the “soft Hindutva” position taken
by Gujarati party members in an effort to erode BJP support in the state.
India-U.S. Relations and Bilateral Issues
Security Issues
The Militarized India-Pakistan Dispute Over Kashmir. The Kashmir problem
is rooted in claims by both India and Pakistan to the former princely state, divided since 1948
by a military line of control separating the Indian state of Jammu and Kashmir and Pakistan-
controlled Azad (Free) Kashmir. Spurred by what were perceived as being rigged state
elections that unfairly favored pro-New Delhi candidates in 1989, an ongoing separatist war
between Islamic militants and their supporters and Indian security forces in the Indian-held
Kashmir Valley has claimed at least 30,000 lives and possibly many more. India blames
Pakistan for fomenting the rebellion, as well as supplying arms, training, and fighters.
Pakistan claims only to provide diplomatic and moral support to what it calls “freedom
fighters” who resist Indian rule. The longstanding U.S. position on Kashmir is that the whole
of the former princely state is disputed territory, and that the issue must be resolved through
negotiations between India and Pakistan, taking into account the wishes of the Kashmiri
people.
A series of kidnapings and general strikes in the Kashmir Valley, beginning after the
controversial elections of 1989, led India to impose President’s rule (rule by the central
government) on the state in 1990 and to send in troops to establish order. Following a
number of incidents in which Indian troops fired on demonstrators, Kashmiris flocked to
support a proliferating number of militant separatist groups. Some groups, such as the
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Jammu and Kashmir Liberation Front (JKLF), continue to seek an independent or
autonomous Kashmir. Other local groups, including the Hizbul Mujahideen (HM), 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 about 23 political and religious groups includes the JKLF (now a political
group) and Jamaat-e-Islami (the political wing of the HM). The Hurriyat Conference, which
states that it is committed to seeking dialogue with the Indian government on a broad range
of issues, proposes convening a tripartite conference on Kashmir, including India, Pakistan,
and representatives of the Kashmiri people. Hurriyat leaders also have demanded Kashmiri
representation at any talks between India and Pakistan on Kashmir.
In 1995, the government of then-Prime Minister Narasimha Rao began efforts to restart
the political process in Kashmir. In May 1996, elections to fill the six seats for Jammu and
Kashmir State were held as part of the general parliamentary elections called by the Rao
government. Voter turnout in the state was about 40%, with some reports of voters being
herded to polling stations by security forces. The elections served as a rehearsal for Jammu
and Kashmir state assembly elections, which were held in September 1996. The National
Conference (NC), the longstanding establishment Kashmiri party led by Farooq Abdullah,
won 57 of 87 seats, and Abdullah became chief minister of the state. In March-April 1998,
Jammu and Kashmir again took part in national parliamentary elections. Pre-election
violence and a boycott by the Hurriyat kept voter turnout in the state at an estimated 35%-
40%. Voter turnout in the state declined even further in the 1999 parliamentary elections.
In 2001 and 2002, a series of violent incidents worsened the region’s security climate
and brought India and Pakistan to the brink of full-scale war. In October 2001, Islamic
militants attacked the state assembly building in Srinagar, killing 38. In December 2001, a
brazen attack on the Indian Parliament complex in New Delhi left 12 dead, including the five
attackers. Indian government officials blamed Pakistan-based militant groups for both
attacks and initiated a massive military mobilization that brought hundreds of thousands of
Indian troops to the border with Pakistan. In May 2002, in the midst of this military
showdown, militants attacked an Indian army base in the Jammu town of Kaluchak, leaving
34 people dead, many of them women and children. New Delhi leveled further accusations
that Islamabad was sponsoring Kashmiri terrorism and Indian leaders talked of making “pre-
emptive” military incursions against separatists’ training bases on Pakistani territory. Indian
Prime Minister Vajpayee then told Indian troops to prepare for a “decisive war” against
Pakistan so as to stop “cross-border terrorism.” The situation was further exacerbated when
moderate Kashmiri separatist leader Abdul Ghani Lone – noted for seeking a nonviolent
resolution to the dispute – was assassinated at a political rally. (For a detailed review of the
Kashmir dispute, see CRS Report RL31587, Kashmiri Separatists: Origins, Competing
Ideologies, and Prospects for Resolution of the Conflict, by Kaia Leather.)
Growing international pressure included numerous visits to the region by top U.S.
diplomats and led Pakistani President Musharraf to publically state that no infiltration was
taking place at the Line of Control. On receiving assurances from Secretary of State Powell
and Deputy Secretary of Defense Armitage that Pakistan would terminate support for
infiltration and dismantle militant training camps, India began the slow process of reducing
tensions with Pakistan. It recalled naval vessels that were patrolling near Pakistan’s coastal
waters, agreed in principle to allow Pakistan to use its air space, and named an ambassador
to Islamabad. In October 2002, New Delhi announced that a months-long process of
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redeploying troops to their peacetime barracks had begun. Islamabad responded with a
stand-down order of its own, although the Indian and Pakistani armies continue to exchange
sporadic small arms, mortar, and even artillery fire along the LOC.
In Indian Kashmir, the situation remains volatile. Elections to the state assembly
concluded in October 2002, resulting in the ouster of the National Conference and the
establishment of a coalition government of the Congress Party and the People’s Democratic
Party. While the seating of this new and seemingly more moderate state government
renewed hopes for peace in the troubled region, continued and deadly separatist violence has
dampened early optimism. The United States welcomed the election process as a necessary
first step toward the initiation of a meaningful dialogue between India and Pakistan to
peacefully resolve their dispute. Secretary of State Powell has asserted that, “We are looking
to both India and Pakistan to take steps that begin to bring peace to the region and to ensure
a better future for the Kashmiri people. The problems with Kashmir cannot be resolved
through violence, but only through a healthy political process and a vibrant dialogue.” (See
CRS Report RS21300, Elections in Kashmir, by Alan Kronstadt.)
The United States and Britain have proposed that a multinational force patrol the
Kashmir LOC to monitor infiltration. India turned down the proposal, instead suggesting
that India and Pakistan jointly patrol the border. The Indian argument was that both
countries were familiar with the lay of the land and, therefore, their efforts would be more
effective than those of a foreign force. India has accepted a U.S. proposal to deploy sensors
and monitors on its side of the LOC to monitor infiltration. Reports indicate that an Indian
technical team is to visit the Sandia National Laboratories to be trained in using monitoring
and surveillance technologies.
Nuclear Weapons and Missile Proliferation. U.S. policy analysts consider the
bilateral conflict between India and Pakistan as posing perhaps the most likely prospect for
the future use of nuclear weapons. On May 11 and 13, 1998, India conducted a total of five
underground nuclear tests, breaking a self-imposed, 24-year moratorium on nuclear testing.
Pakistan followed, claiming five tests on May 28, 1998, and an additional test on May 30.
The unannounced tests created a global storm of criticism and represented a serious setback
for decades of U.S. nuclear nonproliferation efforts in South Asia. President Clinton
immediately imposed economic and military sanctions on both countries as mandated under
Section 102 of the Arms Export Control Act (AECA). Humanitarian assistance, food, or
other agricultural commodities are excepted from sanctions under the law.
India had conducted its first, and only, previous nuclear test in May 1974, after which
it maintained ambiguity about the status of its nuclear program. Pakistan probably gained
a nuclear weapons capability sometime in the 1980s. India is believed to have enough
plutonium for at least 30, but possibly as many as 100 nuclear warheads. Pakistan may have
enough enriched uranium (and a small amount of plutonium) for 25-35 warheads (although
some reports suggest that Pakistan may have an arsenal that is larger than India’s). Both
countries have aircraft and missiles capable of delivering the weapons, and both also
continue to conduct ballistic missile tests. New Delhi recently has inducted the intermediate-
range Agni missile into its arsenal. India’s short-range Prithvi missiles have been labeled
“Pakistan-specific,” while many analysts believe that its longer-range missile programs are
oriented toward China (see CRS Report RS21237, India and Pakistan Nuclear Weapons
Status, by Sharon Squassoni).
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In August 1999, a quasi-governmental Indian body released a Draft Nuclear Doctrine
for India. This document calls for a “minimum credible deterrent” (MCD) based upon a triad
of delivery systems and pledges that India will not be the first to use nuclear weapons in a
conflict. It has been neither accepted nor rejected by New Delhi. (Islamabad has made no
comparable public declaration, but it also seeks to maintain an MCD while rejecting a no-
first-use pledge.) In April 2002, the Indian Cabinet approved the establishment of a Strategic
Nuclear Command (SNC) that would control the country’s nuclear arsenal, and four months
later the Indian Defense Minister stated that “a nuclear doctrine is in place” and a command
and control structure is being developed. The SNC is to function under the Integrated
Defense Staff headed by an air force officer, with final authority on decisions regarding use
of nuclear weapons resting with the Prime Minister. In creating such an authority, India
appears to be taking the next step toward operationalizing its nuclear weapons capability.
(In 2000, Pakistan created a Nuclear Command Authority to oversee its nuclear arsenal.)
Proliferation in South Asia is conceived as being part of a chain of rivalries – India
seeking to balance against Chinese capabilities, and Pakistan seeking to gain an “equalizer”
against a larger and conventionally stronger India. New Delhi initiated its nuclear program
soon after its 1962 defeat in a short border war with China and China’s first nuclear test in
1964. Pakistan’s nuclear program likely was prompted by India’s 1974 nuclear test and by
Pakistan’s defeat by India in the 1971 war and consequent loss of East Pakistan, now
independent Bangladesh. (For details and a discussion of possible deterrence models for
South Asia, see CRS Report RL30623, Nuclear Weapons and Ballistic Missile Proliferation
in India and Pakistan: Issues for Congress, by Alan Kronstadt.)
U.S. Nonproliferation Efforts. During the 1990s, the United States security focus
in South Asia sought to minimize damage to the nonproliferation regime, prevent escalation
of an arms and/or missile race, and promote Indo-Pakistani bilateral dialogue. In light of
these goals, the Clinton Administration set forward five key “benchmarks” for India and
Pakistan based on the contents of U.N. Security Council Resolution 1172 (June 1998) which
condemned the two countries’ nuclear tests. These were:
! 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 weapons of mass destruction
(WMD) delivery vehicles,
! implementing strict export controls on sensitive WMD materials and
technologies, and
! establishing bilateral dialogue between India and Pakistan to discuss their
mutual differences.
Progress in each of these areas has been limited, and the Bush Administration no longer
refers to the benchmark framework. Neither India nor Pakistan has signed the CTBT, and
both appear to be continuing their production of weapons-grade fissile materials. (India has
consistently rejected this treaty, as well as the NPT, 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
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weaponization and deployment is unclear, though there are indications that this is occurring
at a slow, but more or less steady pace. Aside from security concerns, the governments of
both countries are faced with the prestige factor attached to their nuclear programs and the
domestic unpopularity of relinquishing what are perceived to be potent symbols of national
power. Early optimism in the area of export controls has waned somewhat as fears that these
countries, especially Pakistan, might seek to export WMD materials and/or technologies have
gained some credence: Pakistan’s possible transfers of uranium enrichment materials to
North Korea are receiving renewed attention, and a 2002 report by the British government
named an Indian trading company as being complicit in aiding Iraq’s chemical weapons and
missile propellant programs. Finally, although there has been no repeat of the intense
military clashes of May-June 1999, and a recent ten-month-long military standoff has eased,
tensions in Kashmir remain high, and bilateral dialogue is not occurring.
With Pakistan and, especially, India making improvements in both their conventional
and nonconventional military forces – and given the danger of conflict escalation in the
region – the United States has for many years focused on restraining the outbreak of a dyadic
military conflict on the Asian subcontinent. In 2002, India and Pakistan have become
important members of the U.S.-led counterterror coalition, and – although the White House
stated in its December 2002 National Strategy to Combat Weapons of Mass Destruction that
the United States must induce proliferant states to end their WMD and missile programs –
it is unlikely that future U.S. diplomatic efforts will be as vigorous as they were following
the 1998 nuclear weapons tests. In fact, some observers have called for a new approach,
based on the potential threat of terrorist access to WMD, that would provide technical
assistance in enhancing the security of any WMD materials in South Asia. A provision in
the defense authorization bill to expand Cooperative Threat Reduction programs to nations
outside of the former Soviet Union did not appear in the final version, but the issue may arise
again in the 108th Congress (see CRS Report RL31589, Nuclear Threat Reduction Measures
for India and Pakistan, by Sharon Squassoni).
Congressional Action. Through a series of legislative measures, Congress has lifted
nuclear-related sanctions both on India and Pakistan. In October 1999, Congress passed H.R.
2561, the Department of Defense Appropriations Act, 2000, and it was signed by the
President as P.L. 106-79 on October 29. Title IX of the act gives the President authority to
waive sanctions applied against India and Pakistan in response to the nuclear tests. In a
presidential determination on India and Pakistan issued on October 27, 1999, the President
waived economic sanctions on India. On September 22, 2001, President Bush issued a final
determination removing remaining sanctions on Pakistan and India resulting from their 1998
nuclear tests. Currently, the last effects of the nuclear sanctions are four Indian entities (and
their subsidiaries) that remain on the Department of Commerce list of entities for which
export licenses are required. (For details, see CRS Report RS20995, India and Pakistan:
Current U.S. Economic Sanctions, by Dianne E. Rennack.)
Title XVI, Section 1601 of P.L. 107-228 outlines nonproliferation objectives to be
achieved in South Asia with respect to nuclear testing, nuclear weapons and ballistic missile
deployments and developments, export controls and confidence-building measures. In
addition, the section states that it shall be the policy of the United States consistent with its
NPT obligations, to encourage, and where appropriate, work with the governments of India
and Pakistan to achieve not later than September 30, 2003, the establishment of “modern,
effective systems to protect and secure nuclear devices and materiel from unauthorized use,
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accidental employment, or theft.” The conferees noted that “any such dialogue with India
or Pakistan would not be represented or considered, nor would it be intended, as granting any
recognition to India or Pakistan, as appropriate, as a nuclear weapon state.” The section
requires the President to submit a report to Congress no later than March 1, 2003, on U.S.
efforts to achieve the objectives and likelihood of success by September 2003 (see CRS
Report RL31589, Nuclear Threat Reduction Measures for India and Pakistan, by Sharon
Squassoni).
U.S.-India Security Cooperation. Unlike U.S.-Pakistan military ties, which date
back to the 1950s, security cooperation between the United States and India is in the early
stages of development. Joint Indo-U.S. steering committees – established in 1995 to
coordinate relations between the two countries’ armed services, including exchange visits,
technical assistance, and military exercises – were put on hold following India’s 1998 nuclear
tests, but have since resumed meeting. In 1997, the United States and India signed a bilateral
treaty for the extradition of fugitive offenders, an important step in joint efforts to combat
the problems of international terrorism and narcotics trafficking. In January 2000, a U.S.-
India Joint Working Group on Counterterrorism was established. India is also an
enthusiastic participant in United Nations security operations (New Delhi has long sought
a permanent seat on the U.N. Security Council), particularly as a leading contributor of
peacekeeping troops and observers. As of October 2002, India was contributing nearly 3,000
personnel to such efforts, with most serving in Sierra Leone, Lebanon, Kosovo, or Bosnia.

Since September 2001, and despite a concurrent U.S. rapprochement with Pakistan,
India-U.S. security cooperation has flourished. Both countries have acknowledged a desire
for greater bilateral security cooperation and a series of measures have been taken to achieve
this. The India-U.S. Defense Policy Group – moribund since India’s 1998 nuclear tests and
ensuing U.S. sanctions – was revived in late-2001. Between 2001 and 2002, funding for
cooperation in military training projects more than doubled (to $1 million) under the
International Military Education and Training (IMET) Program. For FY2003, the
Administration has requested $1 million for IMET and $50 million for Foreign Military
Financing (for fighting terrorism).
Joint Executive Steering Groups between the U.S. and Indian armed services hold
regular meetings. The two countries are planning to hold joint military training exercises in
Alaska in 2003. In May 2002, U.S. and Indian Special Forces conducted a joint exercise,
“Balance Iroquois,” in the Indian city of Agra to exchange mutual expertise in the areas of
special operations and airborne assault. In late-September 2002, the two countries’ navies
began the “Malabar IV” series of exercises off the Indian west coast, working on the cross-
decking of helicopters, formation steaming, coordinated gun shoots, and anti-submarine
warfare. The exercises were concluded during October 2002, with vessels of the U.S.
Seventh Fleet making a port visit to Cochin on India’s southwest coast. The two navies have
made preliminary plans to cooperate in securing maritime trade routes in and near the Straits
of Malacca. Further India-U.S. military exercises came later in the same month, with joint
airlift operations marking the first-ever air force-to-air force exercises; numerous other joint
air exercises are slated for coming months. The flurry of military-to-military interactions in
2002 has in this relatively brief period made India-U.S. joint exercises appear to be fairly
routine events.
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Along with this increasingly frequent type of interaction, the issue of U.S. arms sales
to India has taken a higher profile. In February 2002, Congress was notified of the negotiated
sale to India of 8 counter-battery radar sets (or “Firefinder” weapon locating radars) valued
at more than $100 million (the following September, arrangements were made for the sale
of four additional sets). The Indian government reportedly possesses an extensive “wish-list”
of desired U.S.-made weapons, including P-3 Orion maritime patrol aircraft, Patriot anti-
missile systems, and electronic warfare systems. The United States reportedly is prepared
to provide Indian security forces with sophisticated electronic ground sensors that may help
stem the tide of militant infiltration in the Kashmir region. U.S. Ambassador Blackwill
stated in November 2002 that “the Pentagon is expeditiously processing the Indian army’s
request for significant Special Forces equipment and border sensors.”
In a controversial turn, the Indian government reportedly is seeking to purchase a
sophisticated missile-defense system – the Arrow Weapon System – from Israel. However,
because the United States took the lead in the system’s development, the U.S. government
has veto power over any Israeli exports of the Arrow. Although numerous U.S. Defense
Department officials are seen to support the sale as meshing with President Bush’s policy of
cooperating with friendly countries on missile defense, State Department officials are
reported to opposed the Arrow sale, believing that it would send the wrong signal to other
weapons-exporting states at a time when the U.S. is seeking to discourage weapons
proliferation in the international system.
Joint India-U.S. military exercises and arms sales negotiations have caused disquiet in
Pakistan, where there reportedly is concern that these developments will strengthen India’s
position in the current military standoff and beyond through an appearance that the United
States is siding with India. Islamabad is concerned that its already disadvantageous
conventional military status vis-a-vis New Delhi will be further eroded by India’s acquisition
of additional modern weapons platforms. In fact, numerous observers have noted what
appears to be a pro-India drift in the U.S. government’s strategic orientation in South Asia,
along with signs that the United States has been frustrated by the continued flow of separatist
militants across the Kashmiri Line of Control and into Indian Kashmir (despite numerous
promises by the Pakistani government that such movements would cease). At the same time,
the United States regularly lauds Pakistan’s participation as a key ally in the U.S.-led
counterterrorism coalition. (For a detailed discussion, see CRS Report RL31644, U.S.-India
Security Relations, by Amit Gupta.)
Regional Dissidence and Human Rights
A vastly diverse country in terms of ethnicity, language, culture, and religion, India can
be a problematic country to govern. Internal instability resulting from such diversity is
further complicated by colonial legacies – for example, international borders separating
members of the same ethnic groups, creating flashpoints for regional dissidence and
separatism. Kashmir and Punjab are two areas that have witnessed separatist struggles in the
past decade. On a lesser scale, there are similar problems of incomplete national integration
in other parts of India, particularly the Northeast, where a number of smaller dissident groups
are fighting either for separate statehood, autonomy, or independence. The remote and
underdeveloped Northeast is populated by a complex mosaic of ethnic and religious groups,
both tribal and non-tribal. Migration of non-tribal peoples into less populated tribal areas is
at the root of many problems in that region. India-Bangladesh relations have been disrupted
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in recent months by New Delhi’s accusations that Dhaka is taking insufficient action against
separatist militants who find sanctuary on Bangladeshi territory.
Punjab. Between 1984 and 1994, a reported 20,000 people – civilians, militants, and
security forces – were killed in Punjab state as Sikh separatists sought to establish an
independent Khalistan (or Sikh state). By the mid-1990s, however, a security force
crackdown in the state had virtually halted terrorist and separatist activity. Applying a
carrot-and-stick approach, the Indian government deployed some 150,000 army troops to
pacify the countryside before state assembly elections were held in November 1991.
Probably more effective was the beefing up – in size and weaponry – of the Punjabi
Sikh-dominated state police. Supporters of the crackdown say that peace and freedom of
movement have returned to the state. Detractors, however, call the crackdown a reign of
police terror and human rights violations and say that the Indian government has yet to
address Sikh economic, political, and social grievances.
Gujarat. In February 2002, a group of Hindu Karsevaks (religious volunteers)
returning by train from the city of Ayodha – the site of the razed 16th century Babri Mosque
and the proposed Ram Janmabhoomi Temple – were attacked by a Muslim mob in the town
of Godhra, Gujarat, and 58 people were incinerated. In the communal violence that
followed, at least 1,000 people were killed, most of them Muslim. The inability of the state
government to restore law and order led to the insertion of the Indian military into the state.
Many observers criticized the BJP-led state and national governments for inaction; some
even saw evidence of state government complicity in anti-Muslim attacks. The seemingly
poor response by the government led to a motion to censure it in the Indian parliament.
While the Bharatiya Janata Party survived the censure, some key coalition partners, such as
the Telugu Desam Party, expressed their displeasure against the government’s policies by
abstaining from voting. The government’s inability to successfully quell violence in Gujarat
has led to rifts within India’s National Democratic Alliance – a coalition led by the BJP. In
December 2002, in what many analysts see as a vindication of the BJP government in
Gujarat and its Hindu-nationalist tack, state elections resulted in a decisive BJP victory.
Human Rights. According to the U.S. State Department India Country Report on
Human Rights Practices for 2001 (March 2002), there continued to be significant human
rights abuses in India, despite extensive constitutional and statutory safeguards. Much of the
blame for such problems is assigned to India’s “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 training.” These problems are acute in Jammu and Kashmir, where judicial
tolerance of New Delhi’s heavy-handed anti-insurgency tactics, the refusal of security forces
to obey court orders, and terrorist threats have disrupted the judicial system.

In dealing with regional dissidence, the Indian government has employed a wide range
of security legislation, including laws that permit authorities to search and arrest without
warrant and detain persons for a year without charge or bail. Other security laws prescribe
sentences of not less than 5 years for disruptive speech or actions. Special courts have been
established that meet in secret and are immune from the usual laws of evidence. In some
cases, security forces are given permission to shoot to kill. A reported 5,000 Kashmiris
currently are in jail under anti-terrorist laws. In general, India has denied international human
rights groups, including Amnesty International and Human Rights Watch, official access to
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Kashmir, Punjab, and other sensitive areas. In 1995, however, the Indian government
allowed the International Committee of the Red Cross (ICRC) permission to begin a program
of prison visits in Jammu and Kashmir. Both Amnesty International and Human Rights
Watch have expressed grave concern over serious human rights abuses by militant groups
in Kashmir, Punjab, and Gujarat, including kidnaping, extortion, and killing of civilians.
In order to combat terrorism, the Indian parliament passed the Prevention of Terrorism
Act (POTA, March 26, 2002) in a rare joint session. POTA allows suspected terrorists to be
held for up to 180 days without charges being filed against them. The law gives the police
broad powers to detain terror suspects, intercept their telephone and internet
communications, and cut their funding sources. It also permits withholding the identity of
witnesses, making confessions made to police officers admissible evidence, and giving the
public prosecutor the power to deny bail. Little discretion is given to judges regarding the
severity of sentences.
Both Indian and international human rights groups – along with the new state
government of Jammu and Kashmir – have come out against the law. They argue that POTA
is a throwback to India’s Terrorist and Disruptive Activities (Prevention) Act of 1987
(TADA) – a draconian law that was used to detain those suspected of carrying out “anti-
national” activities. TADA’s implementation led to widespread human rights violations –
particularly the lengthy detention without charges of innocent people. In 1995, following a
sustained campaign by domestic human rights organizations, the National Human Rights
Commission (NHRC), politicians, and international organizations, TADA was allowed to
lapse (i.e., Parliament did not review the Act). By order of the Supreme Court, the majority
of those detained under TADA were released on bail, and Review Committees examined
their cases. Cases against almost 24,000 people were dropped as a result of such reviews.
A secular nation, India has a long tradition of religious tolerance (with occasional
lapses), which is protected under its constitution. India’s population includes a Hindu
majority of 82% as well as a large Muslim minority of more than 130 million (14%).
Christians, Sikhs, Buddhists, Jains, and others each total less than 3%. Although freedom
of religion is protected by the Indian government, human rights observers have noted that
India’s religious tolerance is susceptible to attack by religious extremists. Government
policy does not favor any group, but some fears have been raised by the coming to power of
the Hindu nationalist Bharatiya Janata Party (BJP) since 1998. In 1999-2000, the BJP
government came under increasing criticism, both domestically and internationally, as a
result of a number of incidents in which Indian Christians were attacked or killed and their
places of worship destroyed, particularly in Gujarat, Orissa, and Tamil Nadu states.
According to Indian press reports, most of the attacks allegedly were carried out by Hindu
nationalist organizations associated with the BJP. Other incidents of violence and intolerance
toward religious groups – Muslim, Sikh, Christian, and Hindu – continue to occur in many
parts of the country, including Jammu and Kashmir, Punjab, Bihar, and the Northeast.
The rights of Indian women and children are not always well protected. The aborting
of female fetuses and murder of female babies has occurred at such high levels that scores
of millions of women are said to be “missing” from India. Child labor is another serious
human rights problem for India. According to the State Department’s Human Rights Report,
enforcement of child labor laws in India is weak and the number of child laborers could be
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as high as 55 million. A major factor is India’s lack of a compulsory education law requiring
even primary education.
A National Human Rights Commission (established in 1993) has investigated abuses
in Punjab, Kashmir, and the Northeast; supported training programs for security forces; and
made recommendations to the central and state governments. Seriously understaffed, the
NHRC received an estimated 40,700 complaints in 1998-99. The Supreme Court also has
become more active in combating the custodial excesses of the police by placing stringent
requirements on arrest procedures and granting compensation for police abuse victims. In
1997, the Supreme Court ordered prison reforms addressing overcrowding, torture, and
neglect of health and hygiene of prisoners. In 1997, India signed the U.N. Convention
Against Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment.
India’s Economic Reforms
Economic reforms begun in 1991, under the Congress-led government of then-Prime
Minister Rao, brought a growth spurt and flood of foreign investment to India in the mid-
1990s. Annual direct foreign investment rose from about $100 million in 1990 to $2.4
billion by 1996. More than one-third of these investments were made by major U.S.
companies. Reform efforts stagnated, however, under the weak coalition governments of the
mid-1990s. The Asian financial crisis, and economic sanctions on India (as a result of its
May 1998 nuclear tests), further dampened the economic outlook.
Following the 1999 parliamentary election, the Vajpayee government kicked off a
second-generation of economic reforms – including removing foreign exchange controls,
opening the insurance industry to foreign investment, privatizing internet services, and
cutting tariffs – with the goal of attracting $10 billion annually in foreign direct investment.
Once seen as favoring domestic business and diffident about foreign involvement, the
government appears to be gradually embracing globalization and has sought to reassure
foreign investors with promises of transparent and nondiscriminatory policies.
As India’s largest trading and investment partner, the United States strongly supports
New Delhi’s continuing economic reform policies. U.S. exports to India for 2000 were $3.7
billion, while U.S. imports from India for 2000 totaled $10.7 billion. Despite significant
tariff reductions and other measures taken by India to improve market access, according to
the report of the United States Trade Representative (USTR) for 2001, a number of foreign
trade barriers remain and, in November 2002, then-U.S. Treasury Secretary O’Neill noted
that India’s average tariff rates are among the highest in Asia. U.S. exports that reportedly
would benefit from lower Indian tariffs include fertilizers, wood products, computers,
medical equipment, scrap metals, and agricultural products. The import of consumer goods
is restricted, and other items, such as agricultural commodities and petroleum products, may
only be imported by government trading monopolies. In December 1999, Parliament passed
the long-awaited Insurance Regulatory and Development Authority Bill, which will open
India’s insurance industry to domestic and foreign private insurers (participation restricted
to ownership of 26% in joint ventures). State-owned banks account for 85% of the banking
business and have widely been criticized for their inefficiency and poor service. Since 1999,
foreign banks have been allowed to open 12 new branches annually.
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Inadequate intellectual property rights protection, by means of patents, trademarks and
copyrights, has been a long-standing issue between the United States and India. In a
November 2002 speech in Mumbai, U.S. Under Secretary of State Larson made an explicit
link between the improvement of India’s intellectual property rights protections and India’s
further economic growth. Major areas of irritation have included pirating of U.S.
pharmaceuticals, books, tapes, and videos. U.S. motion picture industry representatives
estimated their annual losses due to audiovisual piracy at $66 million. In April 2002, the
USTR again named India to the Special 301 Priority Watch List for its lack of protection and
enforcement of intellectual property rights.
U.S. Aid
In 1999, the population of India exceeded one billion and is projected to be larger than
that of China by 2035. One-third of India’s people live below the poverty line – India has
more poor people than Africa and Latin America combined – and half its children are
malnourished. India has more HIV-infected people (4 million) than any other country. The
already low country-wide female literacy rate of 39% dips to 30% in some regions and rural
areas. Nearly 40% of India’s urban population live in slums with no access to clean water
and sanitation services.
The U.S. foreign aid appropriation for India for FY2002 devoted $70.9 million in
Development Assistance/Child Survival and Health Programs (DA/CSH); $7 million in
Economic Support Funds (ESF); $86.4 million in P.L. 480 food assistance; $1 million in
IMET; and $900,000 in Nonproliferation, Anti-terrorism, De-mining, and Related Programs
(NADR-ECA). The major USAID goals in India for FY2002 included encouraging
broad-based economic growth, stabilizing population growth, enhancing food security and
nutrition, protecting the environment, reducing transmission of AIDS/HIV and other
infectious diseases, and expanding the role and participation of women in decision-making.
P.L. 480 funds go to providing food assistance, largely through private voluntary agencies.
For FY2003, USAID is requesting $75.2 million in Development Assistance, $25 million in
ESF, and $91.3 million in P.L. 480 funds for India. The United States is the third largest
bilateral aid donor to India, after Japan and Britain.
Narcotics
India is the world’s largest producer of legal opium for pharmaceutical purposes – some
of which reportedly is diverted illegally to heroin production – and the country serves as a
major transit route for drugs originating in Afghanistan, Pakistan, and Burma. It also is a
major supplier to those countries of the chemical used in manufacturing heroin. Most of the
heroin transiting India is bound for Europe. India itself has an estimated 1.2 million heroin
addicts and 4.5 million who are addicted to opium. Needle-sharing by heroin users has
contributed to the spread of the AIDS virus throughout the country.
India’s counter-narcotics efforts are hampered by lack of political and budgetary
support, lack of infrastructure in drug-producing areas, and corruption among police,
government officials, and local politicians. U.S. counter-narcotics assistance to India funds
training programs for enforcement personnel and the Indian Coast Guard. In March 2001,
India was again included on the annual list of major illicit drug producing and transiting
countries eligible to receive U.S. foreign aid and other economic and trade benefits.
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