Tuesday, October 11, 2011

[IWS] CRS: INDIA: Domestic Issues, Strategic Dynamics, and U.S. Relations [1 September 2011]

IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor----------------------
Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)

 

India: Domestic Issues, Strategic Dynamics, and U.S. Relations

K. Alan Kronstadt, Coordinator, Specialist in South Asian Affairs

Paul K. Kerr, Analyst in Nonproliferation

Michael F. Martin, Specialist in Asian Affairs

Bruce Vaughn, Specialist in Asian Affairs

September 1, 2011

http://fpc.state.gov/documents/organization/174187.pdf

[full-text, 99 pages]

 

 

Summary

South Asia emerged in the 21st century as increasingly vital to core U.S. foreign policy interests.

India, the region’s dominant actor with more than 1 billion citizens, is often characterized as a

nascent great power and “indispensable partner” of the United States, one that many analysts

view as a potential counterweight to China’s growing clout. Since 2004, Washington and New

Delhi have been pursuing a “strategic partnership” based on shared values and apparently

convergent geopolitical interests. Numerous economic, security, and global initiatives, including

plans for civilian nuclear cooperation, are underway. This latter initiative—first launched in 2005

and codified in U.S. law in 2008—reversed three decades of U.S. nonproliferation policy, but has

not been implemented to date. Also in 2005, the United States and India signed a ten-year defense

framework agreement to expanding bilateral security cooperation. The two countries now engage

in numerous and unprecedented combined military exercises, and major U.S. arms sales to India

are underway. The value of all bilateral trade tripled from 2004 to 2008 and continues to grow;

significant two-way investment also flourishes. The influence of a large, relatively wealthy, and

increasingly influential Indian-American community is reflected in Congress’s largest countryspecific

caucus. More than 100,000 Indian students are attending American universities.

 

Further U.S. attention on South Asia focuses on ongoing, historically rooted tensions between

India and Pakistan. In the interests of regional stability, in particular as a means of facilitating

U.S.-led efforts to stabilize nearby Afghanistan, the United States strongly endorses an existing,

but largely moribund India-Pakistan peace initiative, and remains concerned about the potential

for conflict over Kashmiri sovereignty to cause open hostilities between these two nuclear-armed

countries. The United States also seeks to curtail the proliferation of nuclear weapons and

missiles in South Asia.

 

President Barack Obama’s Administration has sought to build upon the deepened U.S.

engagement with India begun by President Bill Clinton in 2000 and expanded upon during much

of the past decade under President G.W. Bush. This “U.S.-India 3.0” diplomacy was most recently

on display in July 2011, when the second U.S.-India Strategic Dialogue session saw a large

delegation of senior U.S. officials visit New Delhi to discuss a broad range of global and bilateral

issues. Many analysts view the U.S.-India relationship as being among the world’s most

important in coming decades and see potentially large benefits to be accrued through engagement

on many convergent interests. Bilateral initiatives are underway in all areas, although independent

analysts in both countries worry that the partnership has lost momentum in recent years.

 

Outstanding areas of bilateral friction include obstacles to bilateral trade and investment,

including in the high-technology sector; outsourcing; the status of conflict in Afghanistan; climate

change; and stalled efforts to initiate civil nuclear cooperation.

 

India is the world’s most populous democracy and remains firmly committed to representative

government and rule of law. Its left-leaning Congress Party-led ruling national coalition has been

in power for more than seven years under the leadership of Prime Minister Manmohan Singh, an

Oxford-trained economist. New Delhi’s engagement with regional and other states is extensive

and reflects its rising geopolitical status. The national economy has been growing rapidly—

India’s is projected to be the world’s third-largest economy in the foreseeable future—yet poor

infrastructure, booming energy demand, and restrictive trade and investment practices are seen to

hamper full economic potential. Despite the growth of a large urban middle-class, India’s remains

a largely rural and agriculture-based society, and is home to some 500-600 million people living

in poverty. This report will be updated periodically.

 

Contents

Overview: U.S.-India Relations....................................................................................................... 1

Notable Developments in 2011 ................................................................................................. 4

Early Obama Administration Engagement ................................................................................ 5

June 2010 Strategic Dialogue .................................................................................................... 6

President Obama’s November 2010 Visit to India .................................................................... 7

A Permanent U.N. Security Council Seat for India?........................................................... 8

Reactions to the President’s Visit ........................................................................................ 8

July 2011 Strategic Dialogue..................................................................................................... 9

India’s Foreign Policy and Foreign Relations................................................................................ 10

Major Streams of Thought in Indian Foreign Policy............................................................... 12

Rivalry and Conflict With Pakistan......................................................................................... 13

The India-Pakistan Peace Process ..................................................................................... 14

Mumbai Terrorist Attacks and the LeT ............................................................................. 16

The Kashmir Dispute ........................................................................................................ 17

India and the Afghan Insurgency............................................................................................. 19

Partnership and Reconstruction Assistance....................................................................... 19

Afghan Reconciliation, Security Concerns, and the U.S. Drawdown............................... 19

India-China Relations: Asia’s Titanic Rivalry? ....................................................................... 21

Background and Context................................................................................................... 21

India-China Commercial Relations................................................................................... 24

Is There a Chinese “String of Pearls” Strategy in the Indian Ocean? ............................... 24

Recent Developments........................................................................................................ 25

India’s Other Regional Foreign Relations ............................................................................... 27

India-Sri Lanka.................................................................................................................. 27

India-Bangladesh............................................................................................................... 28

India-Nepal........................................................................................................................ 30

India-Burma ...................................................................................................................... 32

India-ASEAN.................................................................................................................... 33

India-Iran........................................................................................................................... 34

India-Russia....................................................................................................................... 36

India-Japan ........................................................................................................................ 37

India-Africa ....................................................................................................................... 38

India’s Domestic Policy Setting..................................................................................................... 38

National Political System, Elections, and Parties.................................................................... 38

National System and Elections.......................................................................................... 39

Major Political Parties....................................................................................................... 40

Corruption Scandals and Congress Party Woes ................................................................ 43

India’s Economy...................................................................................................................... 49

Overview........................................................................................................................... 49

Poverty .............................................................................................................................. 50

Poor Infrastructure............................................................................................................. 51

Corruption and Economic Freedoms................................................................................. 52

Inflationary Pressures........................................................................................................ 52

Foreign Investment............................................................................................................ 53

Other Economic Issues...................................................................................................... 53

India’s Energy, Environment, and Climate Change Policies ................................................... 54

Energy Issues..................................................................................................................... 54

The Environment and Climate Change Issues .................................................................. 55

Security-Related Issues ........................................................................................................... 58

The Indian Military ........................................................................................................... 58

Separatism in the Jammu and Kashmir State .................................................................... 60

Maoist Rebellion, Other Insurgencies, and Communalism............................................... 67

Nuclear Arms Control and Nonproliferation..................................................................... 72

U.S.-India Bilateral Issues ............................................................................................................. 74

U.S.-India Economic and Trade Relations .............................................................................. 74

U.S.-India Economic Issues and Engagement......................................................................... 75

Intellectual Property Rights Protection ............................................................................. 76

Trade in Dual-Use Technology.......................................................................................... 77

U.S Market Access in India............................................................................................... 77

India’s Participation in the GSP Program.......................................................................... 77

Bilateral Investment Treaty ............................................................................................... 78

U.S. Restrictions on Trade in Services.............................................................................. 78

U.S. Farm Subsidy Program.............................................................................................. 78

Multilateral Trade Negotiations ........................................................................................ 78

Space Cooperation............................................................................................................. 79

U.S.-India Civil Nuclear Cooperation ..................................................................................... 79

Background ....................................................................................................................... 79

Recent Developments........................................................................................................ 81

U.S.-India Security Cooperation ............................................................................................. 82

Intelligence and Counterterrorism..................................................................................... 83

Defense Cooperation and Trade ........................................................................................ 84

Human Rights Concerns.......................................................................................................... 88

Religious Freedom ............................................................................................................ 90

Caste-Based Discrimination.............................................................................................. 91

Human Trafficking ............................................................................................................ 91

Female Infanticide and Feticide ........................................................................................ 92

U.S. Foreign Assistance........................................................................................................... 92

Figures

Figure 1. Major Party Representation in India’s 15th Lok Sabha................................................... 40

Figure 2. Map of Kashmir.............................................................................................................. 63

Figure 3. Deaths Related to Kashmiri Separatist Conflict, 1988-2010.......................................... 64

Figure 4. Map of India ................................................................................................................... 94

Tables

Table 1. Direct U.S. Assistance to India, FY2001-FY2011........................................................... 93

Contacts

Author Contact Information........................................................................................................... 94



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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
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16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
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