[Excerpt] 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
