Indo- us relations

History
The United States and India have had good diplomatic relations only since recently. In the past, the relationship between the two nations have often been thorny. During 1961–1963 there was a promise to help set up a large steel mill in Bokaro that was withdrawn by the US. The 1965 and 1971 Indo-Pakistani wars did not help their relations. During the Cold War, the US asked for Pakistan’s help because India was seen to lean towards the Soviet Union. Later, when India disagreed to support the anti-Soviet operation in Afghanistan, it was left with few allies. Not until 1997 was there any effort to improve relations with the United States.
Soon after Atal Bihari Vajpayee became Prime Minister, he authorized a nuclear weapons test in Pokhran, which got the immediate attention of the US. The Clinton administration and Vajpayee exchanged representatives to help build relations. Clinton sent foreign policy expert Strobe Talbot, and Vajpayee sent his foreign minister, Jaswant Singh.
Over the course of improved diplomatic relations with the Bush administration, India has agreed to allow close international monitoring of its nuclear weapons development while refusing to give up its current nuclear arsenal. India and the US have also greatly enhanced their economic ties. Finally, the US has partially accepted India’s strategic role in South Asia and the Indian Ocean.
During the 9-11 terrorist attacks on the US, President Bush chose India as the country to control and police the Indian Ocean sea-lanes from the Suez to Singapore. The tsunami that occurred in December 2004 saw the US and Indian navies to work together in search and rescue operations and to reconstruct the damaged lives and land. An Open Skies Agreement was made in April 2005. This helped enhance trade, tourism, and business by the increased number of flights. Air India purchased 68 US Boeing aircraft, which cost $8 billion.
Former Secretary of Defense Donald Rumsfeld and Secretary of State Condoleezza Rice have made recent visits to India as well. After Hurricane Katrina, India donated $5 million to the American Red Cross and sent 2 plane loads of relief supplies and materials to help. And on 1 March 2006, President Bush made another diplomatic visit to expand relations between India and the United States.

Economic relations
Economic assistance is also an important factor in the Indo-U.S. relationship. It started as a post-World War II event. At first, the aid was confined to defense assistance that began after the Lend-Lease Act in March 1941. The United States sent $700 million to India while they were fighting off the British. After the War ended, the West European countries were attempting to rebuild, but they needed outside help. On 5 June 1947, George C. Marshall introduced a plan for the United States government to help rebuild the countries of Western Europe. This plan became known as the Marshall Plan and was put into practice in 1948. During the Cold War, the U.S. feared that communism would spread to the under developed countries of Asia. This fact motivated the creation of the Truman Doctrine of 1949, which pledged to assist these countries to fight hunger, poverty, desperation, and political instability. It also allowed the United States to form relationships with these countries and keep the Soviet Union from doing the same. There are several other motives behind the United States’ aid to India. The first motive is economic expansion. The United States is always looking for a way to expand the market for their exports. India serves as a way of disposing of U.S. surplus products, which prevents the growth of a possible recession in the economy. Also, if India buys its products, it requires larger production that leads to larger employment and income. The second motive of the United States’ aid is its need for raw materials from foreign countries, to strengthen the national defense, and its need to import foreign products. Many products that an average American uses everyday are not made in the United States and are usually cheaply imported from other countries.
The United States continues to be largest trading partner for India. India’s exports to the United States during 2003 totalled nearly $13.1 billion, led by export of apparel and household goods, diamonds, and jewellery. American exports to India were valued at $5 billion.[3]
The United States is also one of India’s largest direct investors. From the year 1991 to 2004, the stock of FDI inflow has increased from $11.3 million to $344.4 million, totaling $4132.8 million. This is a compound rate increase of 57.5% annually. Indian direct investments abroad were started in 1992. Indian corporations and registered partnership firms are allowed to invest in businesses up to 100% of their net worth. India’s largest outgoing investments are manufacturing, which account for 54.8% of the country’s foreign investments. The second largest are non-financial services (software development), which accounts for 35.4% of investments.

U.S. – India military relations
The U.S.-India defense relationship derives from a common belief in freedom, democracy, and the rule of law, and seeks to advance shared security interests. These interests include maintaining security and stability, defeating terrorism and violent religious extremism, preventing the spread of weapons of mass destruction and associated materials, data, and technologies and protecting the free flow of commerce via land, air and sea lanes.

Security concerns
“India’s national security concerns are based on its location, history and complex domestic economic, social and political situations.” Surrounded by nations with undemocratic governments, India views these countries as potential threats. Pleas from America have done nothing but reassure India that self defense is at its utmost importance. China, regional neighbor to India, has had nuclear capabilities since 1962. This puts a burden on India to protect itself and its integrity with other elitist nations, particularly the U.S. During the 1980s, Pakistan and China traded, reviewed, and previewed each other’s nuclear plans. Meanwhile, India was transitioning to a democratic powerhouse, like the U.S. Boosting India’s Economy vs. Boosting National Defense.
The defense relations between the U.S. and India extend out as far as India’s unlimited want to enhance their economy and become a global player. However, something has to give. Either security concerns or economic concerns must be appointed. Since India is taking such an extreme approach in their effort to improve the national security, large dividends could be lost with powerful nations because India will lose its status as owning a superior economy. There is only so much money to go around. The World Bank has named India as one of its ten “big emerging markets”. India doesn’t want to lose their already stellar gross domestic product but technology, defense, and political ties are also the U.S.’s worries. Due to this, India fears that an unbalanced budget will occur.
India is the United States primary trading partner. They are both the world’s biggest democracies. India exports a large majority of its resources to the U.S. “India is South Asia’ key player and the U.S. basically controls the global arena.” Both nations share similar interests and nationwide goals. This makes for the perfect ‘team’.

U.S. – India Trade Policies
In July 2005, President George W. Bush and Indian Prime Minister Dr. Manmohan Singh created a new program called the Trade Policy Forum. It is run by a representative from each nation. The United States Trade Representative is Rob Portman and the Indian Commerce Secretary is Kamal Nath. The goal of the program is to increase bilateral trade which is a two-way trade deal and the flow of investments.
There are five main sub-divisions of the Trade Policy Forum which include: Agricultural Trade group- This group has three main objectives: agreeing on terms that will allow India to export mangoes to the United States, permitting India’s APEDA (Agricultural and Process Food Products Export Development Authority) to certify Indian products to the standards of the USDA, and executing regulation procedures for approving edible wax on fruit. Tariff and Non-Tariff Barriers group- Goals of the group include: agreeing that insecticides that are manufactures by United States companies can be sold throughout India. India had agreed to cut special regulations on trading carbonated drinks, many medicinal drugs, and lowering regulations on many imports that are not of agricultural nature. Both nations have agreed to discuss improved facets on the trade of Indian regulation requirements, jewelry, computer parts, motorcycles, fertilizer, and those tariffs that affect the American process of exporting boric acid.
The two nations have discussed matters such as those who wish to break into the accounting market, Indian companies gaining licenses for the telecommunications industry, and setting polices by the interaction of companies from both countries regarding new policies related to Indian media and broadcasting. This group has strived to exchange valuable information on recognizing different professional services offered by the two countries, discussing the movement and positioning of people in developing industries and assigning jobs to those people, continuation of talks in how India’s citizens can gain access into the market for financial servicing, and discussing the limitation of equities.
The two countries have had talks about the restriction of investments in industries such as financial services, insurance, and retail. Also, to take advantage of any initiatives in joint investments such as agricultural processing and the transportation industries. Both countries have decided to promote small business initiatives in both countries by allowing trade between them.
The majority of exports from the United States to India include: aviation equipment, engineering materials and machinery, instruments used in optical and medical sectors, fertilizers, and stones and metals.
Below are the percentages of traded items India to US increased by 21.12% to $6.94 billion.
Diamonds & precious stones (25%)
Textiles (29.01%)
Iron & Steel (5.81%)
Organic Chemicals (4.3%)
Machinery (4.6%)
Electrical Machinery (4.28%)
Major items of export from US to India: For the year 2006, figures are available up to the month of April. Merchandise exports from US to India increased by 20.09.26% to US $2.95 billion. Select major items with their percentage shares are given below
Engineering goods & machinery (including electrical) (31.2%)
Precious stones & metals (8.01%)
Organic chemicals (4.98%)
Optical instruments & equipment (7.33%)
Aviation & aircraft ( 16.8%)