Geography of India
Area: 3.29 million sq. km. (1.27 million sq. mi.); about one-third the size of the U.S.
Cities: Capital--New Delhi (pop. 12.8 million, 2001 census). Other major cities--Mumbai, formerly Bombay (16.4 million); Kolkata, formerly Calcutta (13.2 million); Chennai, formerly Madras (6.4 million); Bangalore (5.7 million); Hyderabad (5.5 million); Ahmedabad (5 million); Pune (4 million).
Terrain: Varies from Himalayas to flat river valleys.
Climate: Alpine to temperate to subtropical monsoon.

People of India
Nationality: Noun and adjective--Indian(s).
Population (2004): 1.1 billion; urban 27.8%.
Annual growth rate: 1.3%
Density: 324/sq. km.
Ethnic groups: Indo-Aryan 72%, Dravidian 25%, Mongoloid 2%, others.
Religions: Hindu 82.41%, Muslim 12%, Christian 2.3%, Sikh 1.9%, other groups including Buddhist, Jain, Parsi 2.5%.
Languages: Hindi, English, and 16 other official languages.
Education: Years compulsory-- None. Literacy--65.42%.
Health: Infant mortality rate--54.6/1,000. Life expectancy--64.7 years.
Work force (est.): 450 million. Agriculture--62%; industry and commerce--22%; services and government--12%; transport and communications--4%.

Government of India
Type: Federal republic.
Independence: August 15, 1947.
Constitution: January 26, 1950.
Branches: Executive--president (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--bicameral parliament (Rajya Sabha or Council of States, and Lok Sabha or House of the People). Judicial --Supreme Court.
Political parties: Bharatiya Janata Party, Indian National Congress (INC), Janata Dal (United), Communist Party of India, Communist Party of India-Marxist, and numerous regional and small national parties.
Political subdivisions: 28 states,* 7 union territories.
Suffrage: Universal over 18.

Economy of India
GDP (FY2005-06): $797 billion.
Real growth rate (FY2005-06): 8.4%.
Per capita GDP (FY2005-06): $761.
Natural resources: Coal, iron ore, manganese, mica, bauxite, chromite, thorium, limestone, barite, titanium ore, diamonds, crude oil.
Agriculture: 21% of GDP. Products--wheat, rice, coarse grains, oilseeds, sugar, cotton, jute, tea
Industry: 28% of GDP. Products--textiles, jute, processed food, steel, machinery, transport equipment, cement, aluminum, fertilizers, mining, petroleum, chemicals, and computer software.
Services and transportation: 51% of GDP.
Trade: Exports (FY2005-06)--$105 billion; agricultural products, engineering goods, precious stones, cotton apparel and fabrics, gems and jewelry, handicrafts, tea. Software exports--$22 billion. Imports (FY2005-06) 156 billion; petroleum, machinery and transport equipment, electronic goods, edible oils, fertilizers, chemicals, gold, textiles, iron and steel. Major trade partners--U.S., China, EU, Russia, Japan.

PEOPLE of India
Although India occupies only 2.4% of the world's land area, it supports over 15% of the world's population. Only China has a larger population. Almost 33% of Indians are younger than 15 years of age. About 70% live in more than 550,000 villages, and the remainder in more than 200 towns and cities. Over the thousands of years of its history, India has been invaded from the Iranian plateau, Central Asia, Arabia, Afghanistan, and the West; Indian people and culture have absorbed and modified these influences to produce a remarkable racial and cultural synthesis.

Religion, caste, and language are major determinants of social and political organization in India today. The government has recognized 18 official languages; Hindi, the national language, is the most widely spoken, although English is a national lingua franca. Although 82% of its people are Hindu, India also is the home of more than 138 million Muslims--one of the world's largest Muslim populations. The population also includes Christians, Sikhs, Jains, Buddhists, and Parsis.

The Hindu caste system reflects Indian occupational and socially defined hierarchies. Ancient Sanskrit sources divide society into four major categories, priests (Brahmin), warriors (Kshatriya), traders (Vaishya) and farmers/laborers (Shudra). Although these categories are understood throughout India, they describe reality only in the most general terms. They omit, for example, the tribes and those once known as "untouchables." In reality, Indian society is divided into thousands of jatis--local, endogamous groups based on occupation--and organized hierarchically according to complex ideas of purity and pollution. Despite economic modernization and laws countering discrimination against the lower end of the caste structure and outlawing "untouchability," the caste system remains an important source of social identification and a potent factor in the political life of the country. Nevertheless, the government has made strong efforts to minimize the importance of caste through active affirmative action and social policies. Moreover, caste has been diluted if not subsumed in the economically prosperous and heterogeneous cities, where an increasing percentage of India's population lives. In the countryside, expanding education, land reform and economic opportunity through access to information, communication, transport, and credit have lessened the harshest elements of the caste system.

The Taj-Mahal of India

HISTORY of India
The people of India have had a continuous civilization since 2500 B.C., when the inhabitants of the Indus River valley developed an urban culture based on commerce and sustained by agricultural trade. This civilization declined around 1500 B.C., probably due to ecological changes.

During the second millennium B.C., pastoral, Aryan-speaking tribes migrated from the northwest into the subcontinent, settled in the middle Ganges River valley, and adapted to antecedent cultures.

The political map of ancient and medieval India was made up of myriad kingdoms with fluctuating boundaries. In the 4th and 5th centuries A.D., northern India was unified under the Gupta Dynasty. During this period, known as India's Golden Age, Hindu culture and political administration reached new heights.

Islam spread across the subcontinent over a period of 700 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established sultanates in Delhi. In the early 16th century, Babur, a Turkish adventurer and distant relative of Timurlang, established the Mughal Dynasty, which lasted for 200 years. South India followed an independent path, but by the 17th century large areas of South India came under the direct rule or influence of the expanding Mughal Empire. While most of Indian society in its thousands of villages remained untouched by the political struggles going on around them, Indian courtly culture evolved into a unique blend of Hindu and Muslim traditions.

The first British outpost in South Asia was established by the English East India Company in 1619 at Surat on the northwestern coast. Later in the century, the Company opened permanent trading stations at Madras (now Chennai), Bombay (now Mumbai), and Calcutta (now Kolkata), each under the protection of native rulers.

The British expanded their influence from these footholds until, by the 1850s, they controlled most of present-day India, Pakistan, Sri Lanka, and Bangladesh. In 1857, an unsuccessful rebellion in north India led by Indian soldiers seeking the restoration of the Mughal Emperor caused the British Parliament to transfer political power from the East India Company to the Crown. Great Britain began administering most of India directly, while controlling the rest through treaties with local rulers.

In the late 1800s, the first steps were taken toward self-government in British India with the appointment of Indian councilors to advise the British Viceroy and the establishment of Provincial Councils with Indian members; the British subsequently widened participation in Legislative Councils. Beginning in 1920, Indian leader Mohandas K. Gandhi transformed the Indian National Congress political party into a mass movement to campaign against British colonial rule. The party used both parliamentary and nonviolent resistance and non-cooperation to agitate for independence. During this period, however, millions of Indians served with honor and distinction in the British armed forces, including service in both World Wars and countless other overseas actions in service of the Empire.

With Indians increasingly united in their quest for independence, a war-weary Britain led by Labor Prime Minister Clement Attlee began in earnest to plan for the end of its suzerainty in India. On August 15, 1947, India became a dominion within the Commonwealth, with Jawaharlal Nehru as Prime Minister. Strategic considerations, as well as political tensions between Hindus and Muslims, led the British to partition British India into two separate states: India, with a Hindu majority; and Pakistan, which consisted of two "wings," East and West Pakistan--currently Bangladesh and Pakistan--with Muslim majorities. India became a republic within the Commonwealth after promulgating its Constitution on January 26, 1950.

After independence, the Indian National Congress, the party of Mohandas K. Gandhi and Jawaharlal Nehru, ruled India under the leadership first of Nehru and then his daughter (Indira Gandhi) and grandson (Rajiv Gandhi), with the exception of brief periods in the 1970s and 1980s, during a short period in 1996, and the period from 1998-2004, when a coalition led by the Bharatiya Janata Party governed.

Prime Minister Nehru governed the nation until his death in 1964. Nehru was succeeded by Lal Bahadur Shastri, who also died in office. In 1966, power passed to Nehru's daughter, Indira Gandhi, Prime Minister from 1966 to 1977. In 1975, beset with deepening political and economic problems, Mrs. Gandhi declared a state of emergency and suspended many civil liberties. Seeking a mandate at the polls for her policies, she called for elections in 1977, only to be defeated by Morarji Desai, who headed the Janata Party, an amalgam of five opposition parties.

In 1979, Desai's Government crumbled. Charan Singh formed an interim government, which was followed by Mrs. Gandhi's return to power in January 1980. On October 31, 1984, Mrs. Gandhi was assassinated, and her son, Rajiv, was chosen by the Congress (I)--for "Indira"--Party to take her place. His Congress government was plagued with allegations of corruption resulting in an early call for national elections in 1989.

Although Rajiv Gandhi's Congress Party won more seats than any other single party in the 1989 elections, he was unable to form a government with a clear majority. The Janata Dal, a union of opposition parties, then joined with the Hindu-nationalist Bharatiya Janata Party (BJP) on the right and the Communists on the left to form the government. This loose coalition collapsed in November 1990, and the Janata Dal, supported by the Congress (I), came to power for a short period, with Chandra Shekhar as Prime Minister. That alliance also collapsed, resulting in national elections in June 1991.

While campaigning in Tamil Nadu on behalf of Congress (I), Rajiv Gandhi was assassinated on May 27, 1991, apparently by Tamil extremists from Sri Lanka, unhappy with India's armed intervention to try to stop the civil war there. In the elections, Congress (I) won 213 parliamentary seats and returned to power at the head of a coalition, under the leadership of P.V. Narasimha Rao. This Congress-led government, which served a full 5-year term, initiated a gradual process of economic liberalization and reform, which opened the Indian economy to global trade and investment. India's domestic politics also took new shape, as the nationalist appeal of the Congress Party gave way to traditional caste, creed, and ethnic alignments, leading to the founding of a plethora of small, regionally based political parties.

The final months of the Rao-led government in the spring of 1996 were marred by several major corruption scandals, which contributed to the worst electoral performance by the Congress Party in its history. The Hindu-nationalist BJP emerged from the May 1996 national elections as the single-largest party in the Lok Sabha but without a parliamentary majority. Under Prime Minister Atal Bihari Vajpayee, the subsequent BJP coalition lasted only 13 days. With all political parties wishing to avoid another round of elections, a 14-party coalition led by the Janata Dal formed a government known as the United Front, under the former Chief Minister of Karnataka, H.D. Deve Gowda. His government collapsed after less than a year, when the Congress Party withdrew its support in March 1997. Inder Kumar Gujral replaced Deve Gowda as the consensus choice for Prime Minister at the head of a 16-party United Front coalition.

In November 1997, the Congress Party again withdrew support from the United Front. In new elections in February 1998, the BJP won the largest number of seats in Parliament--182--but fell far short of a majority. On March 20, 1998, the President approved a BJP-led coalition government with Vajpayee again serving as Prime Minister. On May 11 and 13, 1998, this government conducted a series of underground nuclear tests, spurring U.S. President Clinton to impose economic sanctions on India pursuant to the 1994 Nuclear Proliferation Prevention Act.

In April 1999, the BJP-led coalition government fell apart, leading to fresh elections in September. The National Democratic Alliance--a new coalition led by the BJP--won a majority to form the government with Vajpayee as Prime Minister in October 1999. The NDA government was the first in many years to serve a full five year term, providing much-needed political stability.

The Kargil conflict in 1999 and an attack by terrorists on the Indian Parliament in December 2001 led to increased tensions with Pakistan.

Hindu nationalists supportive of the BJP agitated to build a temple on a disputed site in Ayodhya, destroying a 17th century mosque there in December 1992, and sparking widespread religious riots in which thousands, mostly Muslims, were killed. In February 2002, 57 Hindu volunteers returning from Ayodhya were burnt alive when their train caught fire. Alleging that the fire was caused by Muslim attackers, anti-Muslim rioters throughout the state killed over 900 people and left 100,000 homeless. This led to accusations that the BJP-led state government had not done enough to contain the riots, or arrest and prosecute the rioters.

The ruling BJP-led coalition was defeated in a five-stage election held in April and May of 2004, and a Congress-led coalition, known as the United Progressive Alliance (UPA), took power on May 22 with Manmohan Singh as Prime Minister. The UPA's victory was attributed to dissatisfaction among poorer rural voters that the prosperity of the cities had not filtered down to them, and rejection of the BJP's Hindu nationalist agenda.

The Congress-led UPA government has continued many of the BJP's foreign policies, particularly improving relations with the U.S. Prime Minister Singh and President Bush concluded a landmark U.S.-India strategic partnership framework agreement on July 18, 2005. In March 2006, President Bush visited India to further the many initiatives that underlie the new agreement. The strategic partnership is anchored by a historic civil nuclear cooperation initiative and includes cooperation in the fields of space, high-technology commerce, health issues, democracy promotion, agriculture, and trade and investment.

GOVERNMENT of India
According to its Constitution, India is a "sovereign, socialist, secular, democratic republic." Like the United States, India has a federal form of government. However, the central government in India has greater power in relation to its states, and has adopted a British-style parliamentary system.

The government exercises its broad administrative powers in the name of the president, whose duties are largely ceremonial. A special electoral college elects the president and vice president indirectly for 5-year terms. Their terms are staggered, and the vice president does not automatically become president following the death or removal from office of the president.

Real national executive power is centered in the Council of Ministers (Cabinet), led by the prime minister. The president appoints the prime minister, who is designated by legislators of the political party or coalition commanding a parliamentary majority in the Lok Sabha (lower house). The president then appoints subordinate ministers on the advice of the prime minister.

India's bicameral Parliament consists of the Rajya Sabha (Council of States) and the Lok Sabha (House of the People). The Council of Ministers is responsible to the Lok Sabha.

The legislatures of the states and union territories elect 233 members to the Rajya Sabha, and the president appoints another 12. The members of the Rajya Sabha serve 6-year terms, with one-third up for election every 2 years. The Lok Sabha consists of 545 members, who serve 5-year terms; 543 are directly elected, and two are appointed.

India's independent judicial system began under the British, and its concepts and procedures resemble those of Anglo-Saxon countries. The Supreme Court consists of a chief justice and 25 other justices, all appointed by the president on the advice of the prime minister.

India has 28 states* and 7 union territories. At the state level, some legislatures are bicameral, patterned after the two houses of the national parliament. The states' chief ministers are responsible to the legislatures in the same way the prime minister is responsible to Parliament.

Each state also has a presidentially appointed governor, who may assume certain broad powers when directed by the central government. The central government exerts greater control over the union territories than over the states, although some territories have gained more power to administer their own affairs. Local governments in India have less autonomy than their counterparts in the United States. Some states are trying to revitalize the traditional village councils, or panchayats, to promote popular democratic participation at the village level, where much of the population still lives. Over half a million panchayats exist throughout India.

Principal Government Officials of India
President--A.P.J. Abdul Kalam
Vice President--Bhairon Singh Shekhawat
Prime Minister--Dr. Manmohan Singh
Home Minister--Shivraj Patil
Minister of External Affairs--Pranab Mukherjee
Ambassador to the U.S.--Ronen Sen
Ambassador to the UN--Nirupam Sen

India maintains an embassy in the United States at 2107 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-939-7000, fax 202-265-4351, email indembwash@indiagov.org and consulates general in New York, Chicago, Houston, and San Francisco. The embassy's web site is http://www.indianembassy.org/.

POLITICAL CONDITIONS of India
Emerging as the nation's single largest party in the April/May 2004 Lok Sabha election, Congress currently leads a coalition government under Prime Minister Manmohan Singh. Party President Sonia Gandhi was re-elected by the Party National Executive in May 2005. Also a Member of Parliament, she heads the Congress Lok Sabha delegation. Congress prides itself as a secular, left of center party, with a long history of political dominance. Although its performance in national elections had steadily declined during the last 12 years, its surprise victory in 2004 was a result of recruiting strong allies into the UPA, the anti-incumbency factor among voters, and its courtship of India's many poor, rural and Muslim voters. Congress political fortunes suffered badly in the 1990s, as many traditional supporters were lost to emerging regional and caste-based parties, such as the Bahujan Samaj Party and the Samajwadi Party, but have rebounded since its May 2004 ascension to power. It currently rules either directly or in coalition with its allies in 9 states. In November 2005, the Congress regained the Chief Ministership of Jammu and Kashmir state, under a power-sharing agreement.

The Bharatiya Janata Party (BJP), led by Rajnath Singh, holds the second-largest number of seats in the Lok Sabha. Former Prime Minister Atal Bihari Vajpayee serves as Chairman of the BJP Parliamentary Party, and former Deputy Prime Minister L.K. Advani is Leader of the Opposition. The Hindu-nationalist BJP draws its political strength mainly from the "Hindi Belt" in the northern and western regions of India.

The party holds power in the states of Gujarat, Madhya Pradesh, Rajasthan, Chhattisgarh, and Orissa--in coalition with the Biju Janata Dal. Popularly viewed as the party of the northern upper caste and trading communities, the BJP made strong inroads into lower castes in recent national and state assembly elections. The party must balance the competing interests of Hindu nationalists, (who advocate construction of a temple on a disputed site in Ayodhya, and other primarily religious issues), and center-right modernizers who see the BJP as a party of economic and political reform.

Four Communist and Marxist parties are united in a bloc called the "Left Front," which controls 57 parliamentary seats. The Left Front rules the states of West Bengal and Kerala. Although it has not joined the government, Left Front support provides the crucial seats necessary for the UPA to retain power in New Delhi; without its support, the UPA government would fall. It advocates a secular and Communist ideology and opposes many aspects of economic liberalization and globalization, resulting in dissonance with Prime Minister Singh's liberal economic approach.

The next general election is scheduled for 2009.

ECONOMY of India
India's population is estimated at nearly 1.1 billion and is growing at 1.3% a year. It has the world's 12th largest economy--and the third largest in Asia behind Japan and China--with total GDP of around $797 billion. Services, industry and agriculture account for 51%, 28%, and 21% of GDP respectively. Nearly two-thirds of the population depends on agriculture for its livelihood. About 28% of the population lives below the poverty line, but there is a large and growing middle class of 325-350 million with disposable income for consumer goods.

India is continuing to move forward with market-oriented economic reforms that began in 1991. Recent reforms include liberalized foreign investment and exchange regimes, industrial decontrol, significant reductions in tariffs and other trade barriers, reform and modernization of the financial sector, significant adjustments in government monetary and fiscal policies, and safeguarding intellectual property rights.

Real GDP growth for the fiscal year ending March 31, 2006 was 8.4%, up from 7.7% growth in the previous year. Growth for the year ending March 31, 2007 is expected to be between 7.8-8.3%. Foreign portfolio and direct investment inflows have risen significantly in recent years. They have contributed to the $166 billion in foreign exchange reserves by mid-September 2006. Government receipts from privatization were about $3 billion in fiscal year 2003-04.

However, economic growth is constrained by inadequate infrastructure, a cumbersome bureaucracy, corruption, labor market rigidities, regulatory and foreign investment controls, the "reservation" of key products for small-scale industries, and high fiscal deficits. The outlook for further trade liberalization is mixed. India eliminated quotas on 1,420 consumer imports in 2002 and has announced its intention to continue to lower customs duties. However, the tax structure is complex, with compounding effects of various taxes.

The United States is India's largest trading partner. Bilateral trade in 2005 was $26.8 billion. Principal U.S. exports are diagnostic or lab reagents, aircraft and parts, advanced machinery, cotton, fertilizers, ferrous waste/scrap metal, and computer hardware. Major U.S. imports from India include textiles and ready-made garments, Internet-enabled services, agricultural and related products, gems and jewelry, leather products, and chemicals.

The rapidly growing software sector is boosting service exports and modernizing India's economy. Revenues from the information technology (IT) industry reached a turnover of $23.6 billion in 2005-06. Software exports crossed $22 billion in FY2005-06. IT and business process outsourcing (BPO) exports are projected to grow at nearly 27-30% during 2006-07. Personal computer penetration is 14 per 1,000 persons. The cellular/mobile market surged to 140 million subscribers by November 2006. The country has 54 million cable TV customers.

The United States is India's largest investment partner, with a 13% share. India's total inflow of U.S. direct investment is estimated at more than $5 billion through 2005-06. Proposals for direct foreign investment are considered by the Foreign Investment Promotion Board and generally receive government approval. Automatic approvals are available for investments involving up to 100% foreign equity, depending on the kind of industry. Foreign investment is particularly sought after in power generation, telecommunications, ports, roads, petroleum exploration/processing, and mining.

India's external debt was $125 billion in 2005-06, up from $123 billion in 2004-05. Foreign assistance was approximately $3.8 billion in 2005-06, with the United States providing about $126 million in development assistance. The World Bank plans to double aid to India to almost $3 billion a year, with focus on infrastructure, education, health, and rural livelihoods.

DEFENSE of India
The supreme command of the Indian armed forces is vested in the President of India. Policies concerning India's defense, and the armed forces as a whole, are formulated and confirmed by the Cabinet.

The Indian Army numbers over 1.1 million strong and fields 34 divisions. Its primary task is to safeguard the territorial integrity of the country against external threats. The Army has been heavily committed in the recent past to counterterrorism operations in Jammu and Kashmir, as well as the in the Northeast. Its current modernization program focuses on obtaining equipment to be used in combating terror. The Army often provides aid to civil authorities and assists the government in organizing relief operations.

The Indian Navy is by far the most capable navy in the region. The Navy's primary missions are the defense of India and of India's vital sea lines of communication. India relies on the sea for 90% of its oil and natural gas and over 90% of its foreign trade. The Navy currently operates one aircraft carrier with two on order, 14 submarines, and 15 major surface combatants. It is capable of projecting power within the Indian Ocean basin and occasionally operates in the South China Sea, the Mediterranean Sea and the Arabian Gulf. Fleet introduction of the Brahmos cruise missile and the possible lease of nuclear submarines from Russia will add significantly to the Indian Navy's flexibility and striking power.

Although small, the Indian Coast Guard has been expanding rapidly in recent years. Indian Navy officers typically fill top Coast Guard positions to ensure coordination between the two services. India's Coast Guard is responsible for control of India's huge exclusive economic zone.

The Indian Air Force is becoming a 21^st century force through modernization, new tactics and the acquisition of modern aircraft, such as the SU-30MKI, a new advanced jet trainer (BAE Hawk) and the indigenously produced advanced light helicopter (Dhruv).

FOREIGN RELATIONS of India
India's size, population, and strategic location give it a prominent voice in international affairs, and its growing industrial base, military strength, and scientific and technical capacity give it added weight. The end of the Cold War dramatically affected Indian foreign policy. India remains a leader of the developing world and the Non-Aligned Movement (NAM), and hosted the NAM Heads of State Summit in 1997. India is now also seeking to strengthen its political and commercial ties with the United States, Japan, the European Union, Iran, China, and the Association of Southeast Asian Nations. India is an active member of the South Asian Association for Regional Cooperation (SAARC).

Always an active member of the United Nations, India now seeks a permanent seat on the UN Security Council. India has a long tradition of participating in UN peacekeeping operations and most recently contributed personnel to UN operations in Somalia, Cambodia, Mozambique, Kuwait, Bosnia, Angola, El Salvador, and Lebanon.

Bilateral and Regional Relations
Pakistan. India and Pakistan have been locked in a tense rivalry since the partition of the subcontinent upon achieving independence from Great Britain in 1947. The principal source of contention has been Kashmir, whose Hindu Maharaja at that time chose to join India, although a majority of his subjects were Muslim. India maintains that his decision and subsequent elections in Kashmir have made it an integral part of India. This dispute triggered wars between the two countries in 1947 and 1965 and provoked the Kargil conflict in 1999.

Pakistan and India fought a war in December 1971 following a political crisis in what was then East Pakistan and the flight of millions of Bengali refugees to India. The brief conflict left the situation largely unchanged in the west, where the two armies reached an impasse, but a decisive Indian victory in the east resulted in the creation of Bangladesh.

Since the 1971 war, Pakistan and India have made slow progress toward normalization of relations. In July 1972, Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto met in the Indian hill station of Simla. They signed an agreement by which India would return all personnel and captured territory in the west and the two countries would "settle their differences by peaceful means through bilateral negotiations." Diplomatic and trade relations were re-established in 1976.

The 1979 Soviet invasion of Afghanistan caused new strains between India and Pakistan. Pakistan supported the Afghan resistance, while India implicitly supported the Soviet occupation. In the following eight years, India voiced increasing concern over Pakistani arms purchases, U.S. military aid to Pakistan, and Pakistan's nuclear weapons program. In an effort to curtail tensions, the two countries formed a joint commission. In December 1988, Prime Ministers Rajiv Gandhi and Benazir Bhutto concluded a pact not to attack each other's nuclear facilities and initiated agreements on cultural exchanges and civil aviation.

In 1997, high-level Indo-Pakistani talks resumed after a three-year pause. The Prime Ministers of India and Pakistan met twice, and the foreign secretaries conducted three rounds of talks. In June 1997 at Lahore, the foreign secretaries identified eight "outstanding issues" around which continuing talks would be focused. The dispute over the status of Jammu and Kashmir, an issue since partition, remains the major stumbling block in their dialogue. India maintains that the entire former princely state is an integral part of the Indian union, while Pakistan insists upon the implementation of UN resolutions calling for self-determination for the people of the state.

In September 1997, the talks broke down over the structure of how to deal with the issues of Kashmir and peace and security. Pakistan advocated that separate working groups treat each issue. India responded that the two issues be taken up along with six others on a simultaneous basis. In May 1998 India, and then Pakistan, conducted nuclear tests. Attempts to restart dialogue between the two nations were given a major boost by the February 1999 meeting of both Prime Ministers in Lahore and their signing of three agreements. These efforts were stalled by the intrusion of Pakistani-backed forces into Indian-held territory near Kargil in May 1999 (that nearly turned into full scale war), and by the military coup in Pakistan that overturned the Nawaz Sharif government in October the same year. In July 2001, Mr. Vajpayee and General Pervez Musharraf, leader of Pakistan after the coup, met in Agra, but talks ended after two days without result.

After an attack on the Indian Parliament in December 2001, India-Pakistan relations cooled further as India accused Pakistan of involvement. Tensions increased, fueled by killings in Jammu and Kashmir, peaking in a troop buildup by both sides in early 2002.

Prime Minister Vajpayee's April 18, 2003 speech in Srinagar (Kashmir) revived bilateral efforts to normalize relations. In November 2003, Prime Minister Vajpayee and President Musharraf agreed to a ceasefire, which still holds, along the Line-of-Control in Jammu and Kashmir. After a series of confidence building measures, Prime Minister Vajpayee and President Musharraf met on the sidelines of the January 2004 SAARC summit in Islamabad and agreed to commence a Composite Dialogue addressing outstanding issues between India and Pakistan, including Kashmir. The UPA government has continued the Composite Dialogue with Pakistan.

In February 2004, India and Pakistan agreed to restart the "2+6" Composite Dialogue formula, which provides for talks on Peace and Security and Jammu and Kashmir, followed by technical and Secretary-level discussions on six other bilateral disputes: Siachen Glacier, Wuller Barrage/Tulbul Navigation Project, Sir Creek estuary, Terrorism and Drug Trafficking, Economic and Commercial cooperation, and the Promotion of Friendly Exchanges in various fields. The Foreign Secretary talks resumed in November 2006, after a three-month delay following the July 11, 2006 terrorist bombings in Mumbai. The meeting generated modest progress, with the two sides agreeing to establish a joint mechanism on counter-terrorism and agreeing to a follow-on meeting in February 2007. The restart of the Composite Dialogue process is especially significant, given the almost six years that transpired since the two sides agreed to this formula in 1997-98.

Following the October 2005 earthquake in Kashmir, the two governments coordinated relief efforts and opened access points along the Line-of-Control to allow relief supplies to flow from India to Pakistan and to allow Kashmiris from both sides to visit one another.

SAARC. Certain aspects of India's relations within the subcontinent are conducted through the South Asian Association for Regional Cooperation (SAARC). Its members are Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Established in 1985, SAARC encourages cooperation in agriculture, rural development, science and technology, culture, health, population control, narcotics, and terrorism.

SAARC has intentionally stressed these "core issues" and avoided those which could prove divisive, although political dialogue is often conducted on the margins of SAARC meetings. In 1993, India and its SAARC partners signed an agreement gradually to lower tariffs within the region. Forward movement in SAARC had slowed because of tension between India and Pakistan, and the SAARC summit scheduled for 1999 was not held until January 2002. In addition, to boost the process of normalizing India's relationship with Pakistan, the January 2004 SAARC summit in Islamabad produced an agreement to establish a South Asia Free Trade Area (SAFTA). All the member governments have ratified SAFTA, which was slated to come into force on January 1, 2006, with a series of graduated tariff cuts through 2015. As of December 2006, however, the FTA partners were still negotiating sensitive product lists, rules of origin, and technical assistance.

China. Despite suspicions remaining from a 1962 border conflict between India and China and continuing territorial/boundary disputes, Sino-Indian relations have improved gradually since 1988. Both countries have sought to reduce tensions along the frontier, expand trade and cultural ties, and normalize relations. Their bilateral trade reached $19 billion in 2005. China is India's second-largest trading partner behind the U.S.

A series of high-level visits between the two nations has improved relations. In December 1996, Chinese President Jiang Zemin visited India on a tour of South Asia. While in New Delhi, he and the Indian Prime Minister signed a series of confidence-building measures along the disputed border, including troop reductions and weapons limitations.

Chinese Premier Wen Jiabao invited Prime Minister Vajpayee to visit China in June 2003. They recognized the common goals of both countries and made the commitment to build a "long-term constructive and cooperative partnership" to peacefully promote their mutual political and economic goals without encroaching upon their good relations with other countries. In Beijing, Prime Minister Vajpayee proposed the designation of special representatives to discuss the border dispute at the political level, a process that is still under way.

In November 2006, President Hu Jintao made an official state visit to India, further cementing Sino-Indian relations. India and China are building on growing economic ties to improve other aspects of their relationship such as counter-terrorism, energy, and trade. In another symbol of improved ties, the two countries opened the Nathu La Pass to bilateral trade in July 2006 for the first time in 40 years. Though it is the first direct land trade route in decades, trade is expected to be local and small since the pass is open only four months a year.

Former Soviet Union. The collapse of the Soviet Union in 1991 and the emergence of the Commonwealth of Independent States (CIS) had major repercussions for Indian foreign policy. India's substantial trade with the region plummeted after the Soviet collapse and has yet to recover. Longstanding military supply relationships were similarly disrupted due to questions over financing. Russia nonetheless remains India's largest supplier of military systems and spare parts.

Russia and India have not renewed the 1971 Indo-Soviet Peace and Friendship Treaty and follow what both describe as a more pragmatic, less ideological relationship. The visit of Russian President Boris Yeltsin to India in January 1993 helped cement this new relationship. The pace of high-level visits has since increased, as has discussion of major defense purchases. UPA leader Sonia Gandhi and Prime Minister Singh visited Russia in July 2005. President Vladimir Putin will travel to India in January 2007 to attend an Indo-Russia Summit and will be the guest of honor at India's Republic Day celebrations.

U.S.-INDIA RELATIONS
Recognizing India as a key to strategic U.S. interests, the United States has sought to strengthen its relationship with India. The two countries are the world's largest democracies, both committed to political freedom protected by representative government. India is also moving gradually toward greater economic freedom. The U.S. and India have a common interest in the free flow of commerce and resources, including through the vital sea lanes of the Indian Ocean. They also share an interest in fighting terrorism and in creating a strategically stable Asia.

Differences remain, however, including over India's nuclear weapons programs and the pace of India's economic reforms. In the past, these concerns may have dominated U.S. thinking about India, but today the U.S. views India as a growing world power with which it shares common strategic interests. A strong partnership between the two countries will continue to address differences and shape a dynamic and collaborative future.

In late September 2001, President Bush lifted sanctions imposed under the terms of the 1994 Nuclear Proliferation Prevention Act following India's nuclear tests in May 1998. The nonproliferation dialogue initiated after the 1998 nuclear tests has bridged many of the gaps in understanding between the countries. In a meeting between President Bush and Prime Minister Vajpayee in November 2001, the two leaders expressed a strong interest in transforming the U.S.-India bilateral relationship. High-level meetings and concrete cooperation between the two countries increased during 2002 and 2003. In January 2004, the U.S. and India launched the Next Steps in Strategic Partnership (NSSP), which was both a milestone in the transformation of the bilateral relationship and a blueprint for its further progress.

In July 2005, President Bush hosted Prime Minister Singh in Washington, DC. The two leaders announced the successful completion of the NSSP, as well as other agreements which further enhance cooperation in the areas of civil nuclear, civil space, and high-technology commerce. Other initiatives announced at this meeting include: an U.S.-India Economic Dialogue, Fight Against HIV/AIDS, Disaster Relief, Technology Cooperation, Democracy Initiative, an Agriculture Knowledge Initiative, a Trade Policy Forum, Energy Dialogue and CEO Forum. President Bush made a reciprocal visit to India in March 2006, during which the progress of these initiatives were reviewed, and new initiatives were launched.

In December 2006, Congress passed the historic Henry J. Hyde United States-India Peaceful Atomic Cooperation Act, which allows direct civilian nuclear commerce with India for the first time in 30 years. U.S. policy had opposed nuclear cooperation with India because the country had developed nuclear weapons in contravention of international conventions and never signed the Nuclear Non-Proliferation Treaty. The legislation clears the way for India to buy U.S. nuclear reactors and fuel for civilian use.

The U.S. and India are seeking to elevate the strategic partnership further in 2007 to include cooperation in counter-terrorism, defense cooperation, education, and joint democracy promotion.