"Long considered a 'strategic backwater' from Washington's perspective, South Asia has emerged in the 21st century as increasingly vital to core U.S. foreign policy interests. India, the region's dominant actor with more than one billion citizens, is now recognized as a nascent major power and 'natural partner' of the United States, one that many analysts view as a potential counterweight to China's growing clout. Washington and New Delhi have since 2004 been pursuing a 'strategic partnership' based on shared values such as democracy, pluralism, and rule of law. Numerous economic, security, and global initiatives, including plans for 'full civilian nuclear energy cooperation,' are underway. This latter initiative, launched by President Bush in July 2005 and provisionally endorsed by the 109th Congress in 2006 (P.L. 109-401, the 'Hyde Act'), reverses three decades of U.S. nonproliferation policy. It requires, among other steps, conclusion of a peaceful nuclear agreement between the United States and India, which would itself enter into force only after a Joint Resolution of Approval by Congress. Also in 2005, the United States and India signed a ten-year defense framework agreement that calls for expanding bilateral security cooperation. Since 2002, the two countries have engaged in numerous and unprecedented combined military exercises. The issue of major U.S. arms sales to India may come before the 110th Congress. The influence of a growing and relatively wealthy Indian- American community of more than two million is reflected in Congress's largest country-specific caucus. Further U.S. interest in South Asia focuses on ongoing tensions between India and Pakistan rooted in unfinished business from the 1947 Partition, competing claims to the Kashmir region, and, in more recent years, 'cross-border terrorism' in both Kashmir and major Indian cities."
CRS Report for Congress, RL33529