Order Code IB93097 CRS Issue Brief for Congress Received through the CRS Web India-U.S. Relations Updated February 25, 2004 K. Alan Kronstadt Foreign Affairs, Defense, and Trade Division Congressional Research Service ˜ The Library of Congress CONTENTS SUMMARY MOST RECENT DEVELOPMENTS BACKGROUND AND ANALYSIS Context of the U.S.-India Relationship Regional Rivalries Pakistan 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 Dispute Over Kashmir Nuclear Weapons and Missile Proliferation U.S. Nonproliferation Efforts and Congressional Action U.S.-India Security Cooperation Regional Dissidence and Human Rights Gujarat The Northeast Human Rights India’s Economy and U.S. Concerns Overview Trade “Trinity” or “Quartet” Issues U.S. Assistance Economic Security IB93097 02-25-04 India-U.S. Relations SUMMARY The end of the Cold War freed India-U.S. relations from the constraints of global bipolarity, but New Delhi-Washington relations continued for a decade to be affected by the burden of history, most notably the longstanding India-Pakistan rivalry. Recent years, however, have witnessed a sea change in bilateral relations, with more positive interactions becoming the norm. India’s swift offer of full support for U.S.-led anti-terrorism operations after September 2001 is widely viewed as reflective of such change. Continuing U.S. interest in South Asia focuses especially on the historic and ongoing tensions between nuclear-armed India and Pakistan, tensions rooted in unfinished business from the 1947 Partition, and competing claims to the former princely state of Kashmir. The United States strongly encourages maintenance of a cease-fire along the Line of Control and continued, substantive dialogue between India and Pakistan. The United States seeks to prevent the proliferation of nuclear weapons and ballistic missiles in South Asia. Both India and Pakistan have resisted U.S. and international pressure to sign the major nonproliferation treaties. In May 1998, India and Pakistan conducted unannounced nuclear tests that evoked international condemnation. Wideranging sanctions were imposed on both countries as mandated under the Arms Export Control Act. Many of these sanctions gradually were lifted through congressionalexecutive cooperation from 1998-2000. The remaining nuclear sanctions on India (and Pakistan) were removed by President Bush in autumn 2001. During 2003, the United States and India engaged in numerous and unprecedented joint military exercises. Congressional Research Service The United States also has been concerned with human rights issues related to regional dissidence and separatistism in Kashmir, Punjab, and India’s Northeast region. Strife in these areas has resulted in the deaths of tens of thousands of civilians, militants, and security forces over the two past decades. Communalism has been another matter of concern, with early 2002 rioting in the Gujarat state resulting in more than 2,000, mostly Muslim, deaths. International human rights groups, as well as Congress and the U.S. State Department, have criticized India for perceived human rights abuses in these areas. The United States supports India’s efforts to transform its once quasi-socialist economy through fiscal reform and market opening. Since 1991, India has been taking steps to reduce inflation and the budget deficit, privatize state-owned industries, and reduce tariffs and licensing controls. Coalition governments have kept India on a general path of economic reform and market opening, although there continues to be U.S. concern that such movement has been slow and inconsistent. Plans to expand U.S.-India high-technology trade and civilian space and nuclear cooperation have become key bilateral issues in recent years. The current Bharatiya Janata Party (BJP)led coalition government is headed by Prime Minister Atal Behari Vajpayee. The coalition has been in power since October 1999 national elections decisively ended the historic dominance of the Nehru-Gandhi-led Congress Party. The BJP has close ties to Hindunationalist parties and organizations in India. National elections in April/May 2004 could pit these increasingly influential groups against those who wish to retain India’s secular traditions. See also CRS Report RS21589, India: Chronology of Recent Events. ˜ The Library of Congress IB93097 02-25-04 MOST RECENT DEVELOPMENTS A “historic development” in India-Pakistan relations came at the January 6 close of a summit meeting of the South Asian Association for Regional Cooperation in Islamabad. After a bilateral meeting between PM Vajpayee and Pakistani President Musharraf — their first since July 2001 — the two countries issued a joint statement in which they agreed to launch a “composite dialogue” to bring about “peaceful settlement of all bilateral issues, including Jammu and Kashmir, to the satisfaction of both sides.” In mid-February, Indian and Pakistani officials met and produced a “road map” of planned high-level meetings to discuss Kashmir, terrorism, and nuclear weapons, among other issues. The meetings are scheduled to culminate with an August 2004 summit of foreign ministers. The United States expressed being “very pleased” with the “vision and determination” of the Indian and Pakistani governments. Separatist militants in the disputed Kashmir region responded to the agreement by vowing to continue their armed struggle with India. However, top Indian government officials have noted that rates of “terrorist” infiltration in Kashmir appear to have declined significantly since a November cease-fire went into effect. Numerous leaders of the Hurriyat Conference of Kashmiri separatists welcomed the planned India-Pakistan dialogue, but warned that Kashmiris “will have to be included in the process at some stage.” On January 12, President Bush issued a statement indicating that the U.S.-India “strategic partnership includes expanding cooperation in the areas of civilian nuclear activities, civilian space programs, and high-technology trade, and expanding dialogue on missile defense.” U.S. Under Secretary of Commerce for Industry and Security Juster later called the agreement a “major milestone in the U.S.-India relationship.” A February 4 House International Relations Committee hearing on L Visas included extensive discussion of the problem of “off-shoring.” One Indian press report called the hearing “something of an Indiabashing session.” On February 16, U.S. Trade Representative Zoellick held talks with Indian trade officials in New Delhi, where he urged India to increase market access for goods, services, and agriculture, especially if India wants to continue to “have outsourcing.” On February 6, the lower house of India’s parliament was dissolved ahead of general elections expected to take place in April or May. Many observers believe that the national coalition-leading BJP sought early elections to take advantage of perceived momentum rising from positive economic news and improved relations with Pakistan. For more information, see CRS Report RS21589, India: Chronology of Recent Events. BACKGROUND AND ANALYSIS Context of the U.S.-India Relationship In the wake of the September 2001 terrorist attacks on the United States, India took the immediate and unprecedented step of offering to the United States full cooperation and the use of India’s bases for counterterrorism operations. The offer reflected the sea change that has occurred in recent years in the U.S.-India relationship, which for decades was mired in CRS-1 IB93097 02-25-04 the politics of the Cold War. The INDIA IN BRIEF marked improvement of relations that Population: 1,050 million; growth rate: 1.47% (2003 began in the latter months of the est.) Clinton Administration was Area: 3,287,590 sq. km. (slightly more than one-third accelerated after a November 2001 the size of the United States) Capital: New Delhi meeting between President Bush and Ethnic Groups: Indo-Aryan 72%; Dravidian 25%; Indian Prime Minister Vajpayee, other 3% when the two leaders agreed to greatly Languages: 15 official, 13 of which are the primary expand U.S.-India cooperation on a tongue of at least 10 million people; Hindi is wide range of issues, including primary tongue of about 30%; English widely used Religions: Hindu 81%; Muslim 12%; Christian 2%; counterterrorism, regional security, Sikh 2% (2000 est.) space and scientific collaboration, Life Expectancy at Birth: female 64.4 years; male civilian nuclear safety, and broadened 62.9 years (2003 est.) economic ties. Notable progress has Literacy: female 48%; male 70% (2003 est.) come in the area of security Gross Domestic Product (at PPP): $2.66 trillion; per capita: $2,540; growth rate 4.3% (2002 est.) cooperation, with an increasingly Inflation: 4.3% (2002) strong focus on counterterrorism, joint U.S. Trade: exports to U.S. $13.1 billion; imports from military exercises, and arms sales. In U.S. $5.0 billion (2003) December 2001, the U.S. Defense Sources: CIA World Factbook; U.S. Department of Commerce 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. 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. (U.S. Department of State Washington File, July 18, 2002). 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 human rights 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 assistance and military equipment for most of the Cold War — and New Delhi’s resulting need to diversify its international relationships. Also significant were India’s adoption of sweeping economic policy reforms beginning in 1991, a deepening bitterness between India and Pakistan over Kashmir, and India’s growing 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 for a more normalized relationship between the world’s two largest democracies. A visit to the United States by Indian PM Narasimha Rao in 1994 marked the onset of 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 2000 visit to South Asia seemed a major U.S. initiative to improve cooperation with India in the areas of economic ties, regional stability, nuclear proliferation CRS-2 IB93097 02-25-04 concerns, security and counterterrorism, environmental protection, clean energy production, and disease control. President Clinton and Indian PM Vajpayee agreed to institutionalize dialogue between the two countries through a range of high-level exchanges, and the two countries established working groups and agreements on numerous issues of mutual concern, from increasing bilateral trade to combating global warming. President Clinton also lifted sanctions on some small U.S. assistance programs. During his subsequent visit to the United States later in 2000, Vajpayee addressed a joint session of Congress and was received for a state dinner at the White House. In September 2000, President Clinton and PM Vajpayee signed a joint statement agreeing to cooperate on arms control, terrorism, and AIDS/HIV (Weekly Compilation of Presidential Documents, September 25, 2000). During the Bush Administration, high-level visits have continued: Vajpayee again visited the United States in November 2001; Home Minister Advani and Defense Minister Fernandes in January 2002; and Foreign Minister Sinha in September 2002. The U.S. Secretaries of State and Defense, along with other top U.S. officials, made visits to New Delhi in 2002. Numerous high-level exchanges have taken place in 2003. Regional Rivalries Pakistan. 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 bloody and acrimonious nature of the partition of British India in 1947, and the continuing dispute over Kashmir remain major sources of interstate tension and violence. 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 nuclear weapons capabilities of the two countries became overt in May 1998, magnifying greatly the potential dangers of a fourth India-Pakistan war. 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. India blames Pakistan for supporting “cross-border terrorism” and a separatist rebellion in the Muslim-majority Kashmir Valley that has claimed at least 38,000 and perhaps as many as 80,000 lives since 1989. 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 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 have been blamed on Pakistan-sponsored groups, including a May 2002 attack on an army base killed 34, most of them women and children. This event 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, apparently persuaded India to refrain from attacking. In October 2002, the two countries ended a tense, 10-month military standoff at their shared border, but there has been no high-level diplomatic dialogue between India and Pakistan since a July 2001 summit meeting in the city of Agra failed to produce any movement toward a settlement of the bilateral dispute. In April 2003, the Indian prime minister extended a symbolic “hand of friendship” to Pakistan. The initiative resulted in slow, but perceptible progress in confidence-building, and by July full diplomatic relations between the two countries were restored after a 19CRS-3 IB93097 02-25-04 month hiatus. A summer upsurge in separatist violence in Kashmir cast renewed doubts on regional entente, and caused Vajpayee to again insist that New Delhi will have no direct talks with Islamabad until violence ends in the disputed region. September 2003 witnessed an even more marked increase in separatist-related violence, with hundreds of civilians, militants, and Indian security troops killed in the first two weeks alone. An exchange of heated rhetoric by the Indian prime minister and the Pakistani president at the U.N. General Assembly later in the month was the worst in some time, spurring some analysts to conclude that the latest initiative was moribund. Yet, in October 2003, New Delhi reinvigorated the process by setting out a 12-point proposal list emphasizing confidence-building through people-to-people contacts. Islamabad responded positively and, in November, took its own initiatives, most significantly the offer of a cease-fire along the Kashmir Line of Control. By early January 2004, a formal cease-fire agreement was holding. A major breakthrough in bilateral relations came at the close of a January summit meeting of the South Asian Association for Regional Cooperation in Islamabad. After a meeting between PM Vajpayee and Pakistani President Musharraf — their first since July 2001 — the two countries agreed to launch a “composite dialogue” in February 2004 to bring about “peaceful settlement of all bilateral issues, including Jammu and Kashmir, to the satisfaction of both sides.” China. India and China fought a brief but intense border war in 1962 that left China in control of large swaths of territory still claimed by India. The clash ended a previously friendly relationship between the two leaders of the nonaligned movement. Although Sino-Indian relations warmed in recent years, the two countries have yet to reach a final boundary agreement. During a visit to China by an Indian leader in September 1993, thenIndian 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. Periodic working group meetings aimed at reaching a final settlement continue; 15 have been held to date. Adding to New Delhi’s sense of insecurity are suspicions regarding China’s long-term nuclear weapons capabilities and strategic intentions in South and Southeast Asia. In fact, a strategic orientation focused on China reportedly has affected the course and scope of New Delhi’s own nuclear weapons and ballistic missile programs. Beijing’s military and economic support for Pakistan — support that is widely believed to have included WMDrelated transfers — is a major and ongoing source of friction; expressed Chinese support for Pakistan’s Kashmir position has added to the discomfort of Indian leaders. New Delhi also has taken note of Beijing’s security relations with neighboring Burma and the construction of military facilities on the Indian Ocean. 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 two countries, and a June 2003 visit to Beijing by Vajpayee was widely viewed as marking a period of much improved relations. A modest, but unprecedented November 2003 joint India-China naval exercise off the coast of Shanghai bolstered the perception of a positive new trajectory for bilateral relations between the world’s two most populous countries. Political Setting National Elections and Prospects for Political Stability. India is widely considered to have a robust and working democratic system. In 2003, and for the fifth consecutive year, the nonpartisan Freedom House rated India as “free” in the areas of political rights and civil liberties (Freedom in the World 2003). The most recent national CRS-4 IB93097 02-25-04 elections in 1998 brought to power a Bharatiya Janata Party (BJP)-led coalition government headed by Atal Bihari Vajpayee. The outcome of October 1999 elections 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 many state governments). As a nation-state, India presents a vast mosaic of hundreds of different ethnic groups, religious sects, and social castes. Until the early 1990s, many of these groups found representation within the diversity of the Congress Party, which ruled India for 45 of its 57 years since independence. 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 and/or issuebased parties, and allegations of widespread corruption involving party leaders. 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 more than 2,000, mostly Muslims, were killed. 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. Some analysts predicted that the success in Gujarat of a strongly Hindu-nationalist political platform would be translated into similarly strident campaigns elsewhere in India, along with a more hardline stance from the BJP-led coalition at the national level. The next national elections are expected to be held in April or May 2004, but nine state elections took place in 2003. State elections in February 2003 included a surprisingly strong win for the Congress Party in Himachal Pradesh, a populous and overwhelmingly Hindu northern state where a BJP chief minister was incumbent. This outcome has dampened expectations that Hindu nationalism would determine the future course of India’s national politics. Eleven of India’s 28 states have Congress-led governments. Four of these — Rajasthan, Chattisgarh, Madhya Pradesh, and Delhi — had elections in December 2003 in what may have been an important preview of national political trends. Surprise BJP victories in all but New Delhi were seen as a major setback to the Congress Party, and BJP leaders may be seeking to capitalize on perceived momentum by staging early national elections. 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 present. In 1992-93, the party’s image was tarnished among some, burnished for others, 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 hold elements of the BJP, as the political arm of the extremist Hindu nationalist organization Rashtriya Swayamsevak Sangh (RSS or National Volunteer Force), responsible for the incidents. Since then, the BJP has worked — with limited success — to change its image from right-wing Hindu fundamentalist to conservative, secular, and moderate, although early 2002 riots in Gujarat again damaged the party’s national and international credentials as a secular and moderate organization. Following the March 1998 elections, the BJP cobbled together a fragile, 13-member National Democratic Alliance (NDA) coalition, headed by Vajpayee. Vajpayee’s widespread personal popularity and widespread disenchantment with previous Congress-led governments CRS-5 IB93097 02-25-04 has helped to keep the BJP in power. 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. Popular among upper caste groups, the party 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 under Article 370 of the Indian Constitution. None of these stands were taken in the NDA 1999 election manifesto as they likely would be opposed by many 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. The Congress Party. The post-election weakness of the opposition is seen as a major factor in the BJP coalition government’s continued rule. 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. Support for the Congress Party began to decline following the 1984 assassination of then-Prime Minister Indira Gandhi 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. She 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. October 2002 elections in Jammu and Kashmir saw the Congress Party successfully oust the BJP-allied National Conference to form a coalition government with the regional People’s Democratic Party. 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, Congress was again buoyed by an upset win over BJP incumbents in Himachal Pradesh in February 2003. India-U.S. Relations and Bilateral Issues Security Issues Dispute Over Kashmir. Although India suffers from several militant regional separatist movements, the Kashmir dispute has proven the most lethal and intractable. The problem is rooted in claims by both India and Pakistan to the former princely state, divided since 1948 by a military Line of Control (LOC) separating the Indian state of Jammu and Kashmir and Pakistan-controlled Azad (Free) Kashmir. Spurred by what were perceived as CRS-6 IB93097 02-25-04 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 up to 80,000 lives. India blames Pakistan for fomenting the rebellion, as well as supplying arms, training, and fighters. It insists that the dispute should not be “internationalized” through the involvement of thirdparty mediators. Pakistan, for its part, claims only to provide diplomatic and moral support to what it calls “freedom fighters” who resist Indian rule. Islamabad has long 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 whole of the former princely state is disputed territory, and that the issue must be resolved through negotiations between India and Pakistan while 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 rule by the central government in 1990 and to send in troops to establish order. Many Kashmiris moved to support newly established militant separatist groups after several incidents in which Indian troops fired on demonstrators. Some groups, such as the Jammu and Kashmir Liberation Front (JKLF), continue to seek an independent or autonomous Kashmir. Others, 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 some 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, seeks 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 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, and a brazen December attack on the Indian Parliament complex in New Delhi left 14 dead. 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 armed showdown, militants attacked an Indian army base in the Jammu town of Kaluchak, leaving 34 dead, many of them women and children. New Delhi leveled accusations that Islamabad was sponsoring Kashmiri terrorism; Indian leaders talked of making “pre-emptive” military incursions against separatists’ training bases on Pakistani territory. The situation was further exacerbated with the assassinations of two moderate Kashmiri separatist leaders in late-2002 and early-2003. (For a review, see CRS Report RL31587, Kashmiri Separatists.) 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 LOC. On receiving assurances from Secretary of State Powell and others that Pakistan would terminate support for infiltration and dismantle militant training camps, India began the slow process of reducing tensions with Pakistan. In October 2002, after completion of state elections in Jammu and Kashmir, New Delhi announced that a months-long process of redeploying troops to their peacetime barracks had begun. Islamabad responded with a CRS-7 IB93097 02-25-04 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. Indian Kashmir remains volatile. October 2002 elections to the state assembly resulted 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 separatist violence 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 asserted that, “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). Nuclear Weapons and Missile Proliferation. 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. In May 1998, India conducted five underground nuclear tests, breaking a 24-year, self-imposed 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. Almost immediately, Congress acted to ease restrictions in some areas. In September 2001, President Bush waived remaining sanctions on India pursuant to P.L. 106-79. Proliferation in South Asia may be 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. India currently is believed to have enough fissile material for 75-100 nuclear weapons; Pakistan is thought to have approximately half that 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 small nuclear warheads over significant distances. In August 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. (Islamabad has made no comparable public declaration, but it also seeks to maintain an MCD while rejecting a no-first-use pledge.) In January 2003, New Delhi announced creation of a Nuclear Command Authority. After the body’s first session in September 2003, participants vowed to “consolidate India’s nuclear deterrent” and review the readiness of its strategic forces. As such, India appears to be taking the next step toward operationalizing its nuclear weapons capability. (Pakistan created its own National Command Authority for its nuclear forces in 2000.) (See also CRS Reports RL32115, Missile Proliferation and the Strategic Balance in South Asia, and RS21237, India and Pakistan Nuclear Weapons Status.) U.S. Nonproliferation Efforts and Congressional Action. During the 1990s, the United States security focus in South Asia sought to minimize damage to the CRS-8 IB93097 02-25-04 nonproliferation regime, prevent escalation of an arms and/or missile race, and promote IndoPakistani 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: 1) signing and ratifying the Comprehensive Nuclear Test Ban Treaty (CTBT); 2) halting all further production of fissile material and participating in Fissile Material Cutoff Treaty negotiations; 3) limiting development and deployment of weapons of mass destruction (WMD) delivery vehicles; 4) implementing strict export controls on sensitive WMD materials and technologies; and 5) establishing bilateral dialogue between India and Pakistan to resolve their mutual differences. Progress in each of these areas has been limited, and the Bush Administration makes no reference 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 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 waned and then nearly vanished as it became apparent in late-2003 that Pakistanis were involved in the export of WMD materials and/or technologies. Finally, although there has been no repeat of the intense military clashes of May-June 1999, and a ten-month-long military standoff in 2002 ended without war, tensions in Kashmir remain high, and bilateral dialogue is not occurring. Some observers have lately called for a new U.S. approach that would provide technical assistance in enhancing the security of any WMD materials in South Asia (see CRS Report RL31589, Nuclear Threat Reduction Measures for India and Pakistan). Through a series of legislative measures, Congress lifted nuclear-related sanctions both on India and Pakistan.* Section 1601 of P.L.107-228 outlined nonproliferation objectives for South Asia. Among the concerns voiced by some Members of Congress in March 2003 was that there continue to be “contradictions” in U.S. nonproliferation policy toward South Asia, particularly as related to the U.S. Senate’s 1999 rejection of the Comprehensive Test Ban Treaty and indications that the Defense Department may continue to develop low-yield nuclear weapons. 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. Since September 2001, and despite a concurrent U.S. rapprochement * 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 the October 1999 coup). (See CRS Report RS20995, India and Pakistan: Current U.S. Economic Sanctions.) CRS-9 IB93097 02-25-04 with Pakistan, India-U.S. security cooperation has flourished. Both countries acknowledge a desire for greater bilateral security cooperation and a series of measures have been taken to achieve this. Joint Steering Groups between the U.S. and Indian armed services hold regular meetings. 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. An August 2003 session of the DPG reviewed accomplishments since the previous such meeting in May 2002 and set plans for a missile defense workshop in India, among other activities. Some analysts have lauded increased U.S.-India security ties as providing potential counterbalance to growing Chinese influence in the region. Beginning in 2002 and continuing into 2003 and 2004, the United States and India held numerous joint exercises involving all military branches. Unprecedented advanced air combat exercises took place in June 2003 and provided the U.S. military with its first look at the Russian-built Su-30MKI, among the most capable fighter aircraft in its class. In September 2003, U.S. and Indian special forces soldiers held a two-week joint exercise near the India-China border, and the largest-ever “Malabar 2003” joint naval exercises off the southern coast of India included an American nuclear submarine. Despite these developments, there remain indications that the perceptions and expectations of top U.S. and Indian military leaders are divergent on several key issues, including India’s role in the Persian Gulf and Central Asia, approaches to countering terrorism, and a potential U.S. role in resolving the India-Pakistan dispute. Moreover, the existence of a nonproliferation constituency in the United States is seen as a further hindrance to more fully developed military-to-military relations. Along with increasingly visible military-to-military ties, 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” radars) valued at more than $100 million (the following September, arrangements were made for the sale of four additional sets). Two of these were delivered in July 2003. The State Department has authorized Israel to sell to India the jointly developed U.S.-Israeli Phalcon airborne early warning system, a $1 billion-plus asset that some analysts believe may tilt the regional strategic balance even further in India’s favor. The Indian government reportedly possesses an extensive list of desired U.S.-made weapons, including P-3 Orion maritime patrol aircraft, Patriot (PAC-3) anti-missile systems, and electronic warfare systems. The United States appears prepared to provide Indian security forces with sophisticated electronic ground sensors that may help stem the tide of militant infiltration in the Kashmir region. Still, some in India consider the United States to be a “fickle” partner that may not always be relied upon to provide the kinds of reciprocity, sensitivity, and high-technology transfers sought by New Delhi. In a controversial turn, the Indian government has sought to purchase a sophisticated anti-missile platform — 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 transfer, believing that it would send the wrong signal to other weapons-exporting states at a time when the U.S. is seeking to discourage international weapons proliferation. Indications are that a U.S. interest in maintaining a strategic balance on the subcontinent may preclude any approval of the Arrow sale for many years. CRS-10 IB93097 02-25-04 Joint U.S.-India military exercises and arms sales negotiations have caused disquiet in Pakistan, where there is concern that the developments will strengthen India’s position through an appearance that Washington 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 such as the Phalcon and Arrow. 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. Yet the United States regularly lauds Pakistan’s role as a key ally in the U.S.-led counterterrorism coalition and assures Islamabad that it will take no actions that disrupt strategic balance on the subcontinent. (For further discussion, see CRS Report RL31644, U.S.-India Security Relations.) Regional Dissidence and Human Rights 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. Kashmir and Assam are two regions that continue to suffer from violent separatist campaigns; Punjab saw significant struggle in the 1980s. The remote and underdeveloped northeast of India is populated by numerous 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. Insurgents also have created international tensions by operating out of neighboring Bangladesh, Burma, Bhutan, and Nepal. Gujarat. Gujarat is a relatively prosperous western state on the Arabian Sea. In February 2002, a group of Hindu activists returning by train from the city of Ayodha — site of the razed 16th century Babri Mosque and a proposed Hindu temple — were attacked by a Muslim mob in the town of Godhra and 58 people were killed. In the communal rioting that followed, some 2,000 people died, most of them Muslim. Many observers criticized the BJP-led state and national governments for inaction; some even saw evidence of state government complicity in anti-Muslim attacks. Leading human rights groups have been harshly critical of the central government’s alleged inaction in bringing those responsible to justice. The government’s inability to successfully quell violence in Gujarat led to rifts within India’s BJP-led National Democratic Alliance, with secular coalition members condemning the BJP role. Some of the criticisms leveled by rights groups were echoed by the Indian Supreme Court in September 2003, when justices strongly admonished Gujarati authorities for their mishandling of attempts to prosecute some of those charged with riotrelated crimes. In June 2003, a lower court acquitted 21 Hindus accused of burning alive 12 Muslims at the Best Bakery, and the Gujarat High Court later rejected a motion for a retrial. The Northeast. The Kashmir region is home to India’s most widely known separatist movement, but other significant and lethal internal conflicts are ongoing. Since the time of India’s foundation, numerous separatist groups have fought for ethnic autonomy or independence in the country’s northeast region; some of the tribal struggles are centuries old. It is estimated that more than 25,000 people have been killed in such fighting since 1948. The United Liberation Front of Asom (ULFA), the National Liberation Front of Tripura, the National Democratic Front of Bodoland (NDFB), and the National Socialist Council of Nagaland are among the groups at war with the New Delhi government (though the decadesold Naga campaign may be ending). In addition, the Maoist People’s War Group is CRS-11 IB93097 02-25-04 continuing to wreak havoc in the southern state of Andhra Pradesh. Indian government officials have at times blamed Bangladesh, Burma, Nepal, and Bhutan for “sheltering” one or more of these groups beyond the reach of Indian security forces, and accuse Pakistan’s intelligence agency of training and providing them with material support. Bhutan responded with major December 2003 military operations against suspected rebel camps on Bhutanese territory, operations that appear to have routed the ULFA and NDFB. Human Rights. According to the U.S. State Department’s India Country Report on Human Rights Practices for 2003 (issued February 2004), 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; poor prison conditions and lengthy pretrial detentions without charge; forced prostitution; child prostitution and female infanticide; human trafficking; and caste-based discrimination and violence, among others. Terrorist attacks and kidnapings also remained grievous problems, especially in Kashmir and the northeastern states. All of these same “serious problems” were noted in the previous year’s report, as well. The State Department notes that, “These 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 training.” Amnesty International, Human Rights Watch, and other human rights groups have been harshly critical of India’s human rights record on these issues, especially with regard to sectarian violence in Gujarat in the spring of 2002. Also, the March 2002 enactment of a new Prevention of Terrorism Act (POTA) has come under fire as providing the government a powerful tool with which to arbitrarily target minorities and political opponents. In one example, in February 2003, the Gujarat government charged 131 Muslims under POTA for allegedly attacking Hindus in Godhra one year earlier. Although ensuing rioting caused up to 2,000 Muslim deaths, the Hindu-nationalist BJP that heads the state government has not charged any Hindus under POTA for violence against Muslims. Elsewhere, a reported 5,000 Kashmiris currently are in jail under anti-terrorist laws. In general, India has denied international human rights groups official access to Kashmir, Punjab, and other sensitive areas. 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 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 December 2003, the U.S. State Department found that the Indian government “sometimes did not act effectively to counter societal attacks against religious minorities and attempts by state and local governments to limit religious freedom.” It also noted a “gradual but continual institutionalization of ‘Hindutva’” that “excludes other religious beliefs and fosters religious intolerance.” In February 2004, the U.S. Commission on International Religious Freedom again recommended that Secretary Powell designate India as a “country of particular concern” for “systematic, ongoing, and egregious violations of religious freedom.” CRS-12 IB93097 02-25-04 India’s Economy and U.S. Concerns Overview. Despite the existence of widespread and serious poverty, many observers believe that India’s long-term economic potential is tremendous, and recent strides in the technology sector have brought international attention to such high-tech centers as Bangalore and Hyderabad. Yet analysts — along with some 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. After enjoying an average growth rate above 6% for the 1990s, the Indian economy cooled somewhat with the global economic downturn after 2000. For FY2002 (ending in March 2003), real change in GDP was 4.3%. Robust growth in services and industry was countered by drought-induced contraction in the agricultural sector. Analysts at first concluded that New Delhi’s target of 8% growth for FY2003 was overly optimistic; the Indian government apparently agreed, lowering its projection to 6%. Yet, as of early 2004, most independent observers are predicting growth of around 8%, with monsoon rains driving strong recovery in the agricultural sector. Longer-term estimates are equally encouraging, predicting FY2004 and FY2005 growth near or above 7%. A major upswing in the services sector is expected to lead; this sector now accounts for more than half of India’s gross domestic product. Inflation rates have been fairly low (4.4% for 2002), but were pushed up in 2003 by higher fuel prices and increased industrial output. The benchmark Bombay Stock Exchange performed well in 2003 and, by the end of the year, the Sensex stock index was setting records and India’s foreign exchange reserves crossed the $100 billion mark, adding to economic optimism. 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. Economic reforms begun in 1991, under the Congress-led government of then-Prime Minister Rao, boosted economic growth and led to huge foreign investment to India in the mid-1990s. (Annual foreign direct investment (FDI) rose from about $100 million in 1990 to $2.4 billion by 1996. Net FDI in 2002 was an estimated $5.2 billion, with projections for 2003 topping $7 billion. More than one-third of these investments was made by U.S. companies.) Reform efforts stagnated, however, under the weak coalition governments of the mid-1990s. The Asian financial crisis and 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 launched secondgeneration economic reforms, including major deregulation, privatization, and tariff-reducing measures. Once seen as favoring domestic business and diffident about foreign involvement, the government appears to gradually be embracing globalization and has sought to reassure foreign investors with promises of transparent and nondiscriminatory policies. Most recently, the debate over privatization focuses on the proposed sale of India’s two large stateowned oil companies, a sale supported by the BJP but opposed by other politically powerful groups. However, the budget unveiled by Indian Finance Minister Singh in February 2003 was criticized by analysts as doing too little to curb India’s growing fiscal deficit or to raise the country’s low tax revenues. In July 2003, the head of research for the International Monetary Fund warned that India’s high and growing public debt ratio could reduce the country’s annual economic growth rate to below 5%, and a report of the World Bank lauded CRS-13 IB93097 02-25-04 India’s progress in increasing incomes and living standards, but warned that the trend cannot be sustained unless there are further reforms. Trade. 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 in 2003 were valued at $5 billion (up 22% over 2002), while imports from India in that year totaled about $13.1 billion (up 10% over 2002). 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 2002, 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 were 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. India’s extensive array of trade and investment barriers has 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, the Deputy U.S. Trade Representative asserted in February 2003 that progress in transforming the U.S.-Indian economic relationship has been “slow.” Among the reasons for a lack of progress, he identified India’s “grudging attitude” toward imports that produces “multiple, onion-like barriers” to potential exporters. He also noted that “India’s tariff and tax structure undermines its commitments in the WTO,” and that India’s high agricultural support prices have encouraged overproduction in that sector (“Remarks by Amb. Jon Huntsman,” February 5, 2003). In November 2003, U.S. Under Secretary of Commerce Juster lauded significant increases in bilateral trade with India, while also asserting that — from the U.S. perspective — India’s tariffs and taxes remain too high, its investment caps too restrictive, its customs procedures too complex, and its intellectual property rights protections less than full (“U.S.India Relations and High-Technology Trade,” November 20, 2003). The Heritage Foundation’s 2004 Index of Economic Freedom again rated India as being “mostly unfree,” highlighting an especially restrictive set of trade policies, heavy government involvement in the banking and finance sector, demanding regulatory structures, and a high level of black market activity. 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 Bombay, 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 and media. In May 2003, the USTR again named India to the Special 301 Priority Watch List for its “weak” protection and enforcement of intellectual property rights. The International Intellectual Property Alliance estimated U.S. losses of more than $468 million due to trade piracy in 2002, about three-quarters of this in the category of business software applications, and noted “very little progress in combating piracy” in 2003. (For further discussion, see CRS Report RS21502, India-U.S. Economic Relations.) “Trinity” or “Quartet” Issues Since 2001, the Indian government has pressed the United States to ease restrictions on the export to India of dual-use high-technology goods, as well as to increase civilian nuclear CRS-14 IB93097 02-25-04 and space cooperation. These three key issues have come to be known as the “Trinity,” and top Indian officials have stated that progress in these areas is necessary to “provide tangible evidence of a changed [U.S.-India] relationship.” There also are references to a “quartet” when the issue of missile defense is included. In October 2003, Secretary of State Powell asserted that progress is being made on the “glide path” toward agreement on the “Trinity” issues. In January 2004, President Bush issued a statement indicating that the U.S.-India “strategic partnership” includes expanding cooperation in the “Trinity” areas, as well as expanding dialogue on missile defense. U.S. Under Secretary of Commerce for Industry and Security Ken Juster, who has taken the lead in U.S.-India trade negotiations, called the agreement a “major milestone in the U.S.-India relationship.” In June 2003, Under Secretary Juster sought to dispel “trade-deterring myths” by noting that only about 1% of total U.S. trade with India in FY2002 was subject to licensing requirements, and that less than half of that amount involved license denials. In July 2003, some 150 representatives of private industries in both countries met in Washington to share their interests and concerns with governmental leaders. Panel topics included investment, information technology, defense trade, life sciences, and nanotechnology. July also 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, including market access, tariff and non-tariff barriers, and export controls. Some Members of Congress have expressed concern that dual-use technology trade with India might allow that country to advance its military nuclear projects, but the Commerce Department has stated that future civil nuclear and civil space cooperation with India will take place only within the limits set by multilateral nonproliferation regimes. In February 2003, the Chairman of the U.S. Nuclear Regulatory Commission (NRC) visited India for the first time since before the 1998 nuclear tests. He reportedly discussed issues of safety and emergency operating procedures for India’s civilian nuclear program. New Delhi has not requested U.S. assistance in building new nuclear power plants, but several safety-related initiatives are said to be underway (in September 2003, the NRC met with an Indian delegation in Washington to exchange safety information). Cooperative efforts in space technology reportedly include applications for sustainable development and weather research. A bilateral conference on space science and commerce is slated for June 2004 in Bangalore. U.S. Assistance The United States is the third largest bilateral aid donor to India, after Japan and Britain. Actual U.S. assistance to India in FY2002 totaled nearly $80 million (and an additional $105.7 million in food grants). The Bush Administration’s original request for FY2003 would have increased this amount by more than one-third, with the most notable boosts coming through Economic Support Funds (ESF) (from $7 million to $25 million) and Foreign Military Financing (FMF) (from zero to $50 million). However, the FMF request was removed and, in P.L. 108-7, Congress allocated $10.5 million in ESF, bringing the actual FY2003 assistance total to $94.4 million. The FY2004 estimate stands at about $91 million, plus another $20 million in food assistance (see Table 1, below). The Administration is requesting $86 million for FY2005. CRS-15 IB93097 02-25-04 Economic. According to the U.S. Agency for International Development, India has more people living in abject poverty — upwards of 300 million — than do Latin America and Africa combined. From 1947 through 2001, the United States provided nearly $14 billion in economic loans and grants to India. Current USAID programs in India concentrate on five areas: 1) economic growth (increased transparency and efficiency in the mobilization and allocation of resources); 2) health (improved overall health with a greater integration of food assistance, reproductive services, and the prevention of HIV/AIDS and other infectious diseases); 3) disaster management; 4) environmental protection (improved access to clean energy and water; the reduction of public subsidies through improved cost recovery; promoting more efficient technology and management); and 5) education (improved access to elementary education, and justice and other social and economic services for vulnerable groups, especially women and children). Security. From 1947 through 2001, the United States provided $153 million in military assistance to India (94% of this amount was distributed from 1962-1966). Securityrelated assistance for FY2003 military training and nonproliferation export control enhancements was $2 million, with greater emphasis on training in FY2004. An April 2002 request for a new $50 million FY2003 FMF program to promote cooperation and interoperability among the U.S. and Indian militaries was later removed, as was a $5 million FMF request for FY2004 that was to include high-tech surveillance equipment, ground sensors for use along the Kashmiri LOC, and nuclear/biological/chemical decontamination equipment. The United States also provides funds for Indian counter-narcotics efforts. Table 1. U.S. Assistance to India, FY2001-FY2005 (in millions of dollars) Program or Account FY2001 Actual FY2002 Actual FY2003 Actual FY2004 Estimate FY2005 Request CSH 24.6 41.7 47.4 48.3 43.4 DA 28.8 29.2 34.5 25.7 25.4 ESF 5.0 7.0 10.5 14.9 15.0 IMET 0.5 1.0 1.0 1.3 1.4 NADR-EXBS 0.9 0.9 1.0 0.7 0.7 Subtotal $59.8 $79.8 $94.4 $90.9 $85.9 P.L.480 Title II* 78.3 93.7 44.8 20.2 44.8 Section 416(b)* -.- 12.0 -.- -.- -.- $138.1 $185.5 $139.2 $111.1 Total $130.7 Sources: U.S. Departments of State and Agriculture; U.S. Agency for International Development. Abbreviations: CSH: Child Survival and Health DA: Development Assistance ESF: Economic Support Fund IMET: International Military Education and Training NADR-EXBS: Nonproliferation, Anti-Terrorism, Demining, and Related - Export Control and Related Border Security Assistance P.L.480 Title II: Emergency and Private Assistance food aid (grants) Section 416(b): The Agricultural Act of 1949, as amended (surplus agricultural commodity donations) *Food aid amounts do not include what can be significant transportation costs. CRS-16