Numerous economic, security, and global initiatives, including unprecedented plans for civilian nuclear cooperation, are underway. The two countries inked a ten-year defense framework agreement in 2005 to facilitate expanded bilateral security cooperation. Unprecedented major U.S. arms sales to India are underway; more are anticipated. The influence of a geographically dispersed and relatively wealthy Indian-American community of some 2.7 million is reflected in Congress's largest country-specific caucus. More than 100,000 Indian students are attending American universities. Further U.S. interest in South Asia focuses on ongoing tensions between India and Pakistan rooted largely in competing claims to the Kashmir region and in "cross-border terrorism" in both Kashmir and major Indian cities. In the interests of regional stability, in particular as a means of forwarding U.S. interests in nearby Afghanistan, the United States strongly endorses an existing, but until recently 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. However, in May 2011, the lead U.S. diplomat for the region helpfully summarized U.S.-India relations under the rubric of four major "agendas":
an innovation agenda that includes collaboration on energy security, civil nuclear cooperation, agriculture, space, climate, and other sciences; a security agenda that includes military-to-military relations, arms sales, and nonproliferation; a people-to-people agenda that encourages civic engagement, and open governance and democracy initiatives; and a growth agenda focused on increasing bilateral trade and investment by removing barriers to both. Notable Developments in 2011

U.S.-India cooperation in the area of nuclear energy—an initiative launched in 2005 and approved by Congress in 2008—continues to be delayed by the lack of both a liability arrangement and an agreement on monitoring arrangements for U.S. nuclear exports to certain Indian entities (see the "U.S.-India Civil Nuclear Cooperation" section below). June 2010 Strategic Dialogue

The United States and India formally reengaged the U.S.-India Strategic Dialogue initiated under President G.W. President Obama's November 2010 Visit to India

As the U.S. President planned his November 2010 visit to India, an array of prickly bilateral issues confronted him, including differences over the proper regional roles to be played by China and Pakistan; the status of conflict in Afghanistan; international efforts to address Iran's controversial nuclear program; restrictions on high-technology exports to India, outsourcing, and sticking points on the conclusion of arrangements for both civil nuclear and defense cooperation, among others. This last reflects a pervasive view in Washington that New Delhi is too hesitant to exercise India's growing power and influence. The effects of this bilateral conflict are seen to negatively affect U.S.-led efforts to stabilize Afghanistan. Despite the anxieties elicited by the now simultaneous rise of Asia's two largest countries, New Delhi calls its relationship with Beijing a "priority" and asserts that the two countries have "stepped up functional cooperation in all areas, including efforts to build military-to-military trust and confidence through bilateral defense interactions" that are "growing." The value of bilateral trade was about $3.5 billion in 2009/2010, up more than 12% over the previous fiscal year. Yet, as India has grown closer to the United States and other Western countries in the new century, New Delhi's policy has slowly shifted—perhaps most notably when India voted with the United States (and the majority) at key International Atomic Energy Agency sessions in 2005 and 2006—leaving most aspects of the envisaged India-Iran partnership unrealized. India's Domestic Policy Setting

		National Political System, Elections, and Parties

India is the world's most populous democracy and remains firmly committed to representative government and rule of law. India's Economy

			Overview

India has been in the midst of a major and rapid economic expansion, with an economy projected to soon be the world's third largest. Rain has become more erratic in recent years as ground water is being depleted. As a reversal of three decades of U.S. nonproliferation policy, such proposed cooperation stirred controversy and required changes in both U.S. law and in NSG guidelines.
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 geographically dispersed Indian-American community is reflected in Congress's largest country-specific 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.