India-U.S. Relations:
General Overview

HE visit to India in March 2000 by US. Presi-

dent Bill Clinton provided an opportunity for
both countries to open a new and qualitatively dif-
ferent chapter in their bilateral relations. Prime Min-
ister Atal Bihari Vajpayee will be visiting the United
States in mid-September, 2000. The visit is expected
to build upon and consolidate the gains of President
Clinton's visit to India.

Evolution of the relationship

India and U.S. are the world’s two largest democra-
cies. Natural affinities between the two countries
have always existed, characterized by shared demo-
cratic values and common commitment to rule of
law and basic freedoms, common language and
longstanding cooperation in the economic, commer-
cial and agricultural fields.

The end of the Cold War in 1990s, coinciding with
the liberalization of the Indian economy, saw a steady
improvement in India-US. relations with the Clinton
Administration identifying India as one of the 10
major emerging markets.

President Clinton was warmly and enthusiastically
received wherever he went in India. The visit was
covered extensively in the Indian audiovisual and
print media. The general impression he left behind
was of a genuine desire on his part to set in motion
a new, forward-looking and productive partnership
between the two countries.

Outcome of President Clinton’s visit

The Vision Statement signed by Prime Minister
Vajpayee and President Clinton provides a blueprint
and sets out the direction for the new partnership in
the coming years. Among the objectives to which
both countries are committed are the fight against
terrorism, prevention of proliferation of nuclear
weapons and their means of delivery, the preserva-
tion of stability and growth in the global economy,
the protection of the environment, combating infec-
tious diseases and expanding trade especially in the
emerging knowledge-based industries and high tech-
nology areas.

India and the United States have agreed on a wide
ranging institutional dialogue which includes regular

summit meetings between the U.S. President and the
Indian Prime Minister, annual foreign policy dia-
logue at the level of Secretary of State and External
Affairs Minister, Foreign Office consultations at se-
nior officials level, a bilateral economic dialogue which
would be coordinated by the Prime Minister’s Office
and Ministry of External Affairs on the Indian side
and White House and State Department on the U.S.
side, the establishment of a U.S.-India Financial and
Economic Forum, a U.S.-India Commercial Dialogue
and a U.S.-India Joint Working Group on terrorism.

Implementation of the institutional dialogue has al-
ready commenced. Prime Minister Vajpayee would
be visiting Washington in September 2000. External
Affairs Minister Jaswant Singh and Secretary of State
Madeleine Albright held a structured bilateral dia-
logue during the Conference “Towards a Community
of Democracies” in Warsaw on June 26, 2000. Under
Secretary of State Thomas Pickering visited Delhi on
May 24-25, 2000 for consultations with the Indian
Foreign Secretary Lalit Mansingh.

During his visit to Washington for the World Bank/
IMF meetings in April, Finance Minister Yashwant
Sinha and Treasury Secretary Larry Summers signed
an agreement setting up an India-U.S. Financial
Forum. During President Clinton's visit, the Com-
merce Minister Murasoli Maran and U.S. Commerce
Secretary William Daley signed an Agreement estab-
lishing a new commercial dialogue. A Science and
Technology Forum and Joint Consultative Group on
Energy and Environment have also been established.

Economic and Trade Relations

Bilateral trade between the two countries exceeded
U.S. $12 billion in 1999. There was a decline in FDI
inflows from the U.S. in 1998 (U.S. $349 million as
against U.S. $719 million in 1997). There was an
upward trend in 1999, with FDI inflows in the first
four months of the year itself amounting to U.S. $186
million. The waiver of sanctions and the opening up
of the insurance sector in India are likely to further
increase FDI inflows into India in the near future.
During a visit to Washington in April 2000, Finance
Minister Yashwant Sinha and Treasury Secretary
Mr. Lawrence Summers agreed on the terms of ref-
erence of an India-U.S. Financial and Economic

Forum. Continued on next page

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