Find a Security Clearance Job!

Weapons of Mass Destruction (WMD)

[CRS Issue Brief for Congress]

93093: India-U.S. Relations

Updated April 21, 1995

Barbara Leitch LePoer
Foreign Affairs and National Defense Division
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
     Context of the Relationship
          U.S. and Congressional Interest
          India's Post-Cold War Adjustments
               Foreign Policy Reassessment
               Economic Reform
          Baggage from the Past
               Strategic Rivalries
               Regional Dissidence
               Social Tensions and Problems
          Political Setting
               Rao-led Congress Government
               Challenges to Rao Government
     India-U.S. Relations and Bilateral Issues
          Security
               Nuclear Weapons and Missile Proliferation
               Issue of Tarapur Reactor Spent Fuel
               Brokering an End to the India-Pakistan Rivalry
               U.S.-India Military Cooperation
          Regional Dissidence and Human Rights
               Punjab
               Kashmir
               Human Rights
          India's Economic Reforms and Market Opening
          Trade Issues
               Market Access Barriers
               Intellectual Property Rights
          U.S. Aid
          Narcotics
          Environment
FOR ADDITIONAL READING
----------
                           India-U.S. Relations
SUMMARY
     Although the end of the Cold War has freed U.S.-India
relations from the constraints of a bipolar world, relations
continue to be affected by the burden of history, most notably
the longstanding India-Pakistan regional rivalry. The main areas
of U.S. and congressional interest in India include nuclear
weapons and missile proliferation, regional stability, human
rights, and economic policy issues. 
     The major U.S. concern in South Asia is the prevention of
nuclear and ballistic missile proliferation and the reduction of
tensions between India and Pakistan, which center on their
competing claims to the former princely state of Kashmir. India
and Pakistan, both of which are believed to have nuclear weapons
capability, have so far ignored U.S. and international pressure
to sign the Nuclear Nonproliferation Treaty. Neither sanctions
applied to India nor a cutoff of aid to Pakistan appear to have
dampened the drive by both countries to acquire weapons of mass
destruction and the means to deploy them. Partly through U.S.
encouragement, India and Pakistan have adopted some
confidence-building measures, such as periodic meetings of senior
military commanders and a pledge not to attack each other's
nuclear facilities. Despite these steps, India-Pakistan relations
continued to deteriorate in 1994. 
     Congress has been particularly concerned with human rights
issues related to regional dissidence and separatist movements in
Punjab, Kashmir, and India's Northeast. Strife in these areas
over the past several years has resulted in the deaths of
thousands of civilians, militants, and security forces.
International human rights groups, as well as Congress and the
U.S. State Department, have criticized India for alleged human
rights abuses by its security forces, including mass arrests,
indiscriminate firing on civilian crowds, rape, burning of
business and residential neighborhoods, and torture and execution
of prisoners in custody. In recent years, Congress has expressed
its concern over human rights violations in Kashmir and Punjab in
numerous resolutions, amendments, and committee reports. 
     The United States has been highly supportive of India's
efforts to steer its moribund, quasi-socialist economy in the
direction of fiscal reform and market opening. Since coming to
power in 1991, the Narasimha Rao government, under the guidance
of Finance Minister Manmohan Singh, has reduced inflation and the
fiscal deficit, begun privatizing state-owned industries, reduced
tariffs and industrial licensing controls, and instituted
incentives to attract foreign trade and investment. Rapidly
expanding U.S.-India economic relations were a major focus of the
May 1994 visit of Rao to the United States. Congress remains
concerned, however, with India's continuing market access
barriers, in some sectors, as well as its inadequate intellectual
property rights protection for such items as pharmaceuticals,
books, tapes, and videos.
----------
MOST RECENT DEVELOPMENTS
     First Lady Hillary Clinton visited India in late March as
part of a five-nation tour of South Asian projects in support of
women's economic and social development. The First Lady announced
that India would receive the first grant, for $500,000, of a new
U.S. Agency for International Development initiative for
educating girls and women. 
BACKGROUND AND ANALYSIS
                        Context of the Relationship
U.S. and Congressional Interest
     U.S. and congressional interest in India includes a wide
spectrum of issues, ranging from nuclear and missile
proliferation concerns through human rights, trade, and economic
policy questions. In recent years these interests have been
particularly affected by three developments: 1) the end of the
Cold War and India's subsequent need to diversify its
international relationships; 2) the adoption by the current
Indian government, headed by Narasimha Rao, of sweeping economic
policy reforms; and 3) deepening bitterness in ties between India
and Pakistan over the Kashmir dispute and ongoing Indian
preoccupation with China as a long-term source of strategic
threat. Congress has been particularly focused on nuclear
proliferation, human rights, and trade issues. A number of
Members have backed measures that would seek cuts in U.S. aid to
India as a means of expressing dissatisfaction with India's human
rights policies. 
India's Post-Cold War Adjustments
     Foreign Policy Reassessment. Caught off guard by the
precipitous end of the Cold War, India has sought over the past
several years to adapt to new global realities that have
antiquated many of its former policies, roles, and alliances.
With the demise of the Soviet Union, India lost a reliable source
of economic assistance and military equipment, a key trading
partner, and the promise of political support in its adversarial
relationships with neighboring China and Pakistan. Moreover, the
end of a bipolar world has made India's traditional, though often
symbolic, role as a leader of the nonaligned world essentially
obsolete. 
     Both India and the United States are actively exploring the
opportunity presented by the end of the Cold War for a more
normal relationship between the world's two largest democracies.
The withering of the formerly close U.S.-Pakistan alliance -- as
a result of the Soviet departure from Afghanistan and Pakistan's
nuclear weapons program -- has also been a contributing factor. 
     Economic Reform. New Delhi's fixation with quasi-socialist
economic planning - the results of which had, for more than a
decade, compared badly with the spectacular growth of the
market-oriented East Asian countries -- suffered a further blow
in the rejection of that model by the former USSR and its
successor states. On taking power in 1991, the Narasimha Rao
government inherited a desperate financial situation. India's
budget deficit exceeded 10% of its Gross Domestic Product (GDP),
and inflation was running above 15%. With only a few weeks' worth
of foreign exchange reserves on hand, the country was thought by
some analysts to be on the brink of defaulting on its $80 billion
foreign debt. All of these factors, however, were symptomatic of
deeper economic problems created by decades of central planning
and bureaucratic regulation that had stunted economic growth. 
----------
page 2
     Rao's appointed finance minister, Manmohan Singh,
immediately embarked on a bold strategy of reforms to address
India's economic problems. Since mid-1991, the government has
substantially reduced inflation and the fiscal deficit, begun
privatizing or cutting subsidies to inefficient state-owned
industries, made the rupee convertible in international trade,
and reduced tariffs and industrial licensing controls in order to
attract foreign investment. The United States has been very
supportive of India's economic reforms, which have been helped
along by International Monetary Fund (IMF) assistance and
prodding. 
Baggage from the Past
     Despite the lifting of Cold War constraints, in many policy
spheres India remains shackled to the past. Rivalries with
neighbors, separatist tendencies, and sectarian tensions continue
to divert attention and resources from basic needs of economic
and social development. Moreover, fallout from these unresolved
problems -- particularly nuclear arms proliferation and human
rights issues -- presents serious irritants in U.S.Indian
relations. 
     Strategic Rivalries. Three wars and a constant state of
military preparedness on both sides of the border have marked the
half-century of bitter rivalry between India and Pakistan. The
acrimonious nature of the partition of British India in 1947 and
the continuing dispute over Kashmir have been major sources of
tension, leading both countries to devote comparatively large
resources to building defense establishments that include a
nuclear weapons capability as well as programs for developing
ballistic missile delivery systems. The Kashmir problem is rooted
in claims by both countries to the former princely state, divided
by a military line of control, since 1948, into the Indian state
of Jammu and Kashmir and Pakistan-controlled Azad (Free) Kashmir.
India blames Pakistan for supporting a separatist movement raging
in the Muslim-dominated Kashmir Valley since 1990. Pakistan
claims only to lend moral and political support to the rebellion,
while accusing India of creating dissension in Pakistan's Sindh
province. 
     Adding to India's bitterness toward Pakistan is the latter's
historically close ties with China. India and China fought a
short border war in 1962, and China since then has occupied
territory claimed by India. Although Sino-Indian relations have
greatly improved in recent years, the two countries have yet to
reach a boundary agreement. Moreover, India remains suspicious of
China's nuclear weapons capability as well as its long-time
support for Pakistan. During a visit by Rao to China in September
1993, however, the Indian prime minister and Chinese Premier Li
Peng signed an agreement to reduce troops and maintain peace
along the line of actual control (LAC) that divides their forces.
Agreements on trade, environmental, and cultural cooperation were
also signed. Despite expanding border trade and meetings of the
India-China expert group tasked with providing technical advice
for the implementation of the agreement, by early 1995 little
progress was apparent on troop reduction or boundary demarcation.
     Regional Dissidence. A vastly diverse country in terms of
ethnicity, language, culture, and religion, India can be a
problematic country in terms of governance. Internal instability
resulting from such diversity is further complicated by colonial
legacies; international borders in many instances divide ethnic
groups, creating flashpoints for regional dissidence and
separatism. India's methods of managing such problems and crises,
which do not always meet with internationally accepted human
rights standards, have further alienated dissident groups. 
----------
page 3
     Kashmir and Punjab are India's two major areas of separatist
struggle. In the case of Punjab, Sikh separatists have sought for
the past decade to establish an independent Khalistan (land of
the pure community of Sikh believers). In the case of Kashmir,
some militant groups, such as the Jammu and Kashmir Liberation
Front (JKLF), seek an independent or autonomous Kashmir. Other
groups, the largest of which is the Hizbullah Mujahadin (HM),
seek union with Pakistan. There have been more than 20,000
casualties in Punjab in the past decade, including civilians,
militants, and security forces. In Kashmir, more than 16,000
civilians, militants, and security forces have been killed since
1990. 
     On a lesser scale, there are similar problems of incomplete
national integration in other parts of India, particularly the
Northeast, where a number of smaller dissident groups are
fighting either for separate statehood, autonomy, or
independence. The geographically remote and economically backward
Northeast is populated by a mosaic of ethnic and religious
groups, both tribal and non-tribal. Migration of nontribal
peoples into less populated tribal areas is at the root of many
problems in the region. Fighting in Manipur state between
government forces and the separatist National Socialist Council
for Nagaland (NSCN), which has bases in neighboring Burma, has
worsened since 1993. The NSCN has sought for 40 years to
establish a separate Naga nation encompassing Nagaland and parts
of Manipur and Assam. More than 600 people have been killed in
Manipur in the past two years as a result of clashes between
mainly separatists and security forces and between Christian Naga
and Kuki tribespeoples in Manipur. The Congress Party won control
of the Manipur state assembly in the February 1995 elections,
despite winning only 21 of 59 seats. Meanwhile, a six-year
uprising in Assam state by tribal Bodo separatists, which had
left several hundred people dead and disrupted tea and oil
production, was halted temporarily in early 1993, when the
central and state governments agreed to give the Bodos control
over local administration in 2,500 villages. By mid-1994,
however, the agreement appeared to have broken down. Promised
elections had not been held, tribal leadership was divided, and
Bodo extremists had begun launching attacks on Muslim settlers.
The army was sent to Assam in July to quell ethnic violence,
which had killed more than 100 people, mostly Muslims, and driven
50,000 others from their homes. 
     Social Tensions and Problems. In recent years, a rising tide
of Hindu nationalism has posed a serious problem for the Indian
government. Although India is more than 80% Hindu, its
Westernized independence leaders, led by Jawaharlal Nehru and
M.K. ("Mahatma") Gandhi, sought to establish a secular government
with protection for India's many religious minorities, including
the 100 million Muslims who comprise 10% of the current
population. 
     The Hindu-led Bharatiya Janata Party (BJP), which has been
both a driving force and a beneficiary of increasing Hindu
militancy, claims there is broad support for establishment of a
Hindu state. Currently the largest opposition party, the well-
disciplined BJP mushroomed from just two Parliamentary seats
following the 1984 election to winning 119 seats in the 1991
election. In December 1992, a BJP-led march to build a temple
dedicated to the Hindu god Ram on the site of the Babri mosque at
Ayodhya resulted in the illegal destruction of the 400-year-old
mosque. State government forces failed to control the situation
and rioting ensued, leaving about 1,200 people, mostly Muslims,
dead nationwide. In January 1993, some 600 more people were
killed in anti-Muslim riots in Bombay. India's commercial center,
Bombay previously had been relatively free of communal violence.
Bombay also was the scene of ten synchronized terrorist bombings
on Mar. 12, 1993 that targeted the city's stock exchange and
major hotels, killing more than 300 and injuring 1,400. Although
Indian
----------
page 4
government officials have accused Pakistan of complicity, the
bombings have been linked, in part, to criminal elements, a
growing problem throughout India. 
     In December 1994, the second anniversary of the Ayodhya
incident was marked by calm and a sense that the country had put
the episode behind it. Bombay had also returned to its role as
the center of India's booming economy. 
Political Setting
     Rao-led Congress Government. The Congress Party, which led
the struggle for independence from the British in 1947, has been
the ruling party in India for most of the post-independence
period. The current Congress-led government of Prime Minister
Narasimha Rao came to power in the elections of May-June 1991,
which were held in the midst of the crisis resulting from the
assassination of former Prime Minister Rajiv Gandhi. The Congress
government initially a minority party government, has held a
majority of seats in the Parliament since 1993. Rao, at 71, was
considered by many analysts to be an interim Prime Minister
offered as a compromise between other Congress contenders.
Confounding both his critics and his supporters, Rao has provided
real leadership in addressing India's economic difficulties,
while appearing indecisive at times on such other problems as
communal violence between Hindus and Muslims, the continuing
decay of the Congress Party, and the ascent of the BJP. 
     Challenges to Rao Government. The neglect of grassroots
political organizations reportedly has been an important factor
in the decline of national support for the Congress Party and the
rise of communal politics and regional-based parties. Moreover,
corruption and alleged ties to organized crime have further
undermined popular confidence in government officials and
politicians of all political parties. 
     Both the Congress party and the BJP did poorly in the four
state elections held in December 1994. Congress reportedly was
shaken by its poor showing in six state elections held in
February and March 1995. Particularly worrisome were the loss of
the two industrialized states of Gujarat and Maharashtra -- the
former to the BJP and the latter to a coalition including the BJP
and a local Hindu party, the Shiv Sena. Although the state
election outcomes do not affect the Congress majority in
Parliament, they serve as a warning for Congress regarding
national elections, which are due in 1996. Rao so far has proven
resilient in the face of any serious challenge to his leadership,
and most analysts believe that India's economic reforms are
generally accepted and unlikely to be overturned. 
                 India-U.S. Relations and Bilateral Issues
Security
     Nuclear Weapons and Missile Proliferation. Heading the list
of U.S. objectives in South Asia is the prevention of nuclear and
ballistic missile proliferation along with the reduction of
regional tensions that could trigger the use of such weapons.
Both India and Pakistan are believed by analysts to have crossed
the nuclear weapons capability threshold, although most open
source information suggests that they have not thus far deployed
weapons. India conducted an underground test of a nuclear device
in 1974. In October 1990, the United States cut off aid to
Pakistan when President Bush was unable to certify that Pakistan
did not possess a "nuclear explosive device," as required under
Section 620E(e) of the Foreign Assistance Act (FAA), the
so-called "Pressler amendment." A Pakistani government official
acknowledged in February 1992 that the country has the capacity
for making at least 
----------
page 5
one nuclear weapon, and some analysts believe it has enough
enriched uranium for 1015 weapons. Statements in August 1994 by
former Prime Minister Nawaz Sharif that Pakistan has an atomic
bomb were denied by Prime Minister Bhutto. India is thought to
have the capability of producing 75 or more nuclear weapons. (For
further information on the cutoff of aid to Pakistan, see CRS
Issue Brief 90149, Pakistan Aid Cutoff: U.S. Nonproliferation and
Foreign Aid Considerations, by Richard P. Cronin. 
     To date, the cutoff of U.S. aid to Pakistan and sanctions
applied to an Indian space research company for the proposed
purchase of Russian booster rockets have done little to slow the
pace of either country's programs to acquire weapons of mass
destruction and the means to deliver them. Both India and
Pakistan have combat aircraft that, with modification, would be
capable of delivering nuclear weapons. Both countries are
believed to be seeking to develop or acquire ballistic missiles
with the capability of striking each other's major population
centers. India has tested both its short-range Prithvi
surface-to-surface missile and its Intermediate Range Ballistic
Missile (IRBM), Agni. Pakistan also has tested both short and
intermediate-range missiles, the technology for which was
reportedly obtained from China. Testing of India's Prithvi
missile, suspended during Prime Minister Rao's visit to the
United States, was resumed in early June 1994. The following
week, the State Department reiterated U.S. opposition to the
"deployment, testing, or acquisition of ballistic missile
capability" by India or Pakistan, stating it would destabilize
the region and undermine the security of both. Neither India nor
Pakistan are signatories to the multinational Missile Technology
Control Regime (MTCR), which is aimed at stopping the transfer of
technology for weapons of mass destruction. In late August, a
U.S.-led MTCR delegation visited both India and Pakistan for
talks on nonproliferation issues.
     Neither India nor Pakistan are a party to the Nuclear
Nonproliferation Treaty (NPT). Attempts to pressure the two
countries to sign the NPT so far have been met by India's
insistence on a nondiscriminatory global nuclear nonproliferation
regime, including the abandonment of nuclear arms by the Chinese,
and Pakistan's safe stance that it will sign the NPT when India
does. The U.S. goal of preventing nuclear and ballistic missile
proliferation in South Asia is widely supported by European
nations and Japan. Heads of state of Russia, Germany, and Britain
visiting New Delhi in 1993 all called upon India (and Pakistan)
to sign the NPT, as well as scale back their military spending.
Japan, which is the largest aid donor for both India and
Pakistan, in June 1992 announced stricter foreign aid guidelines,
particularly for countries that engage in excessive military
spending and questionable nuclear activities. In March 1995, the
leader of a high-level Japanese aid mission to India reportedly
linked Japan's development assistance with its concern over
India's ballistic missile program. 
     The United States, however, has usually played the role of
main whistle-blower on nonproliferation issues, including
problems of transfer of technology or nuclear fuels. In
retaliation for a proposed sale of Russian cryogenic rocket
engines and related technology to India for its satellite launch
program, the United States in 1992 imposed a two-year ban on
U.S.-licensed exports to the Indian Space Research Organization
and the Russian space agency, Glavkosmos. U.S. concern about the
sale centered on fears that the missile technology offered by the
Russians could be used for military missiles as well as for
commercial space ventures, which India maintains are its only
interest. In July 1993, the State Department announced that an
agreement on the proposed sale had been reached with Russia under
which some of the rocket engines would be transferred to India,
but technology transfer would be limited. Russia avoided further
economic sanctions by agreeing to abide by the terms of the MTCR.
In December, India and Russia reached an agreement by which
Moscow would supply seven rocket engines, 
----------
page 6
beginning in 1995, under the guidelines of the MTCR. U.S.
sanctions on Indian and Russian space organizations expired in
June 1994. 
     Issue of Tarapur Reactor Spent Fuel. The 30-year U.S.-India
agreement under which the United States supplied low-enriched
uranium nuclear fuel to India for its Tarapur electric power
station expired on Oct. 24, 1993. The United States supplied fuel
for the Tarapur reactor until Congress enacted the Nuclear
Non-Proliferation Act of 1978; beginning in 1983, France supplied
India with low enriched uranium, in lieu of the United States,
while India agreed to continue to honor the prescribed controls
on the reactor and the spent fuel. France, however, has now
signed the NPT and has indicated that as a consequence it will
not continue to supply fuel and spare parts to India. Currently
at issue is spent fuel from Tarapur, which India would like to
reprocess into plutonium oxide (MOX) to fuel the nuclear reactor.
However, the International Atomic Energy Agency (IAEA) safeguards
governing Tarapur expired in October 1993, and Washington was
concerned that, without international supervision, India could
too easily divert the reprocessed fuel to military use. U.S.
officials say a clause in the original bilateral agreement
stipulates that both parties must agree on the disposition of the
spent fuel. India maintains that with the lapse of the agreement
the clause does not apply. Under a February 1994 agreement, India
volunteered to keep the Tarapur plant under IAEA safeguards. 
     Brokering an End to the India-Pakistan Rivalry. The United
States responded to increasing friction between India and
Pakistan over Kashmir, beginning in early 1990, by strongly
encouraging both governments to continue to institute
confidence-building measures in order to reduce tensions.
Measures adopted so far include: agreement on advance notice of
military movements; establishment of a military commander
"hotline"; an exchange of lists of nuclear installations and
facilities; agreement not to attack each other's nuclear
facilities; a joint ban on use and production of chemical
weapons; and measures to prevent air space violations. Although
such measures have had some effect, the destruction of the Babri
Mosque at Ayodhya in December 1992, and accusations by India of
Pakistani links to the terrorist bombings in Bombay in March
1993, again raised tensions to high levels. 
     In January 1993, the United States warned Pakistan that it
was the subject of "active continuing review" for possible
inclusion on the State Department list of terrorist states for
its alleged support of terrorist activities in Kashmir and
Punjab. Pakistan was not listed as a terrorist state in the April
1993 report to Congress on terrorism, although State Department
officials noted at the time that it remained under continuing
review. In July 1993, India expressed surprise and dismay when
the State Department announced that Pakistan was being removed
from the informal terrorist watch list, although monitoring would
continue.
     The United States and India held several rounds of talks on
South Asian regional security and nonproliferation issues in 1992
and 1993. High-level talks were also held with Pakistan during
the same period. U.S. State Department officials have urged India
and Pakistan to adopt a number of new confidence-building
measures for the near-term, including an agreement not to conduct
nuclear detonations, a cutoff of fissile material production, and
the placement of safeguards on nuclear facilities. Recognizing
that real regional security is dependent on reduction of
underlying tensions, the United States in recent discussions with
India and Pakistan has made the following suggestions: the
opening of an Indo-Pakistani dialogue on Kashmir, leading
initially to the demilitarization of the Siachen Glacier area; a
mutual reduction of conventional 
----------
page 7
arms and defense expenditures; and an agreement by both countries
to stop involving themselves in each other's regional unrest. 
     Although the Pakistan government hailed the ending of the
Hazratbal mosque siege, it pressed India to reduce its troop
strength in Kashmir and release political prisoners in order to
create the right climate for talks between the two countries. In
October, Indian Prime Minister Narasimha Rao, in a congratulatory
message to newly elected Pakistan Prime Minister Benazir Bhutto,
had offered talks with Islamabad on all matters of mutual
concern, including Kashmir. Previous discussions between India
and Pakistan at the foreign secretary level were broken off in
August 1992, because of rising tensions between the two
countries. On Jan. 2-3, 1994, talks were held in Islamabad
between Indian Foreign Secretary J.N. Dixit and his Pakistani
counterpart, Shaharyar Khan, on a range of issues, with
discussions on Kashmir reportedly the major focal point. Although
no agreements were reached, both sides held out the possibility
of resuming the talks. Dixit stated furthermore that India was
ready to make new proposals regarding the Siachen Glacier and
other disputed border areas. 
     By early 1994, both the U.S. and the Indian press had
reported an apparent downturn in U.S.-Indian relations.
Statements by President Clinton, Assistant Secretary for South
Asia Robin Raphel, and other U.S. officials regarding sensitive
issues such as Punjab, Kashmir, and human rights had created a
storm of protest by Indian officials as well as anti-American
rhetoric in the Indian press. The Clinton Administration
reiterated the long-time U.S. policy of support for a bilateral
resolution of the Kashmir dispute. However, administration
statements that the process of bilateral negotiations should take
into account the wishes of the Kashmiri people were viewed as a
"tilt" toward Pakistan. As part of a U.S. fence-mending gesture,
Raphel visited New Delhi in late March 1994 to discuss bilateral
relations with Indian officials. 
     The Clinton administration maintains that its policy toward
South Asia has followed the same broad guidelines as the Bush
Administration: concern about nuclear and missile proliferation;
support for democratization and human rights; and interest in
economic reforms and trade expansion. A number of events over the
past year, however, have raised the profile of South Asia in U.S.
policy: 1) The congressionally mandated creation of the new South
Asia bureau, headed by Raphel, has given greater focus to
U.S.-South Asia policy. 2) Heightened tensions between India and
Pakistan throughout 1993 and 1994, as well as periods of
political instability in both countries, have increased U.S.
concern about the danger of hostilities between the two nuclear-
capable neighbors. As a result, the United States has
strengthened its support for resolving the Kashmir dispute and
other problems as well as increased pressure for progress on the
nuclear issue. 3) Frustration with the apparent failure of the
aid cutoff to force Pakistan to abandon its nuclear weapons
program and a desire for a more balanced and flexible approach to
the proliferation problem prompted new administration
initiatives. 4) Serious human rights problems continued to be
reported from many parts of the region, particularly Kashmir. 5)
India's economic reforms and new openness to trade and investment
increasingly attracted the attention of U.S. business interests. 
     U.S. Deputy Secretary of State Strobe Talbott visited New
Delhi in early April 1994, with the dual mission of assuring
India of U.S. intention to pursue an evenhanded policy in South
Asia and presenting the latest Clinton Administration proposals
for halting nuclear weapons proliferation in the region. The
Administration initiatives call for a one-time waiver of the
Pressler Amendment (under which arms sales to Pakistan are
currently barred) in order to release 38 F-16 fighter planes
already 
----------
page 8
purchased by Pakistan. In return, Pakistan would agree to a
verifiable cap on its production of fissile material. The second
part of the proposal calls for a 9-nation meeting on nuclear
nonproliferation, to include India, Pakistan, the United States,
Russia, China, Britain, France, Japan, and Germany. 
     The 6-day visit to the United States in late May by Indian
Prime Minister Narasimha Rao marked the beginning of a
significant improvement in U.S.-India relations. Rao addressed a
joint session of the Congress and met with President Clinton.
Although discussions were held on nuclear nonproliferation, human
rights, and other issues, the main focus of the visit was rapidly
expanding U.S.-India economic relations. Clinton and Rao
reportedly promised to intensify their efforts to achieve a
comprehensive nuclear test ban treaty and a verifiable global ban
on production of weapons-grade nuclear materials. Also during the
visit, the United States announced the appointment of career
diplomat Frank Wisner as ambassador to India, a post that had
remained vacant for more than a year. On presenting his
credentials in New Delhi in August, both Wisner and President
Shanker Dayal Sharma expressed their countries' interest in a
comprehensive nuclear test ban treaty and a global ban on
production of fissile material for weapons production. In
September, the United States and India cosponsored U.N. General
Assembly resolutions in support of those two goals. 
     By late 1994, however, there was no apparent progress on
Administration proposals for a verifiable cap on India and
Pakistan's production of fissile material. Moreover, relations
between India and Pakistan appeared to be in a constant state of
deterioration. The Pakistan parliament in July condemned India
for human rights violations in Kashmir. Indian government
officials in August renewed charges of Pakistan complicity in the
1993 Bombay bombings. Both Islamabad and New Delhi frequently
accused the other of harassing, intimidating, or manhandling its
diplomats and expelled members of the other's diplomatic corps on
charges of espionage. Foreign Secretary talks, last held in
January 1994, have yet to be rescheduled. Neither the Rao
government nor the Bhutto government, despite their reasonably
stable positions, have so far shown much interest or initiative
in solving the bilateral issues that have hindered their
countries' and the region's progress for the past half-century.
Both Islamabad and New Delhi appeared content to continue their
current pattern, ignoring new solutions to old problems being
devised in other parts of the world.    
     Recent Clinton Administration Initiatives. In a move to
strengthen U.S. security ties with India and Pakistan, U.S.
Secretary of Defense William J. Perry visited both Pakistan and
India in early January 1995, the first visit to the region by a
U.S. Defense Secretary since the waning days of the Cold War.
Prior to the visit, Perry stressed that, rather than contentious
issues such as the F-16 sales or the NPT, talks would focus on
ways to further peace and stability in the region, as well as
expand areas of closer defense cooperation, including
peacekeeping efforts. In Islamabad, Secretary Perry announced the
reestablishment of the U.S.-Pakistani Consultative Group for
discussing security measures. In New Delhi, Secretary Perry
called for an end to Cold War tensions and a new era in security
relations while signing a U.S.-India military accord. The pact
calls for closer security ties and increased cooperation in
defense production and research, joint military exercises, and
military training. 
     Secretary Perry asserted U.S. intentions to maintain an
even-handed approach in its relations with India and Pakistan. He
also underscored Washington's understanding of the security
concerns of both New Delhi and Islamabad. Rather than stressing
the U.S. preference for a rollback of both countries' nuclear
programs, Secretary Perry 
----------
page 9
urged India and Pakistan not to deploy short-range missiles
capable of carrying nuclear weapons. Both countries were urged to
adopt a commitment to greater transparency with each other by
exchanging defense budgets and planning, as a means of mutual
confidence-building. Noting that a solution to the Kashmir
problem is necessary before India and Pakistan can develop a
normal relationship, Perry restated the U.S. offer to provide
whatever help it can if requested by both parties. 
     U.S.-India Military Cooperation. Unlike U.S.-Pakistan
military ties, which date back to the 1950s, military cooperation
between the United States and India is in the early stages of
development. Joint Indo-U.S. steering committees have been
established to coordinate relations between the two countries'
naval and armed services. Army interaction has included an
agreement on increased exchange visits -- to include students,
U.S. medical officers studying the effects of high altitude on
troops, and, possibly, small training teams attending military
exercises. Naval cooperation so far has included a two-day
exercise in the Indian Ocean, in May 1992, and a 20-day special
operations joint exercise focused on marine counterterrorism and
peacekeeping operations at Ratnagiri in September 1994. An Indian
naval contingent supported the U.S.-led U.N. peacekeeping mission
in Somalia starting in December 1992. India's ground troops in
Somalia, which numbered 5,000 in mid-1994, received high praise
for their humanitarian as well as peacekeeping efforts. In March
1995, India had about 1,000 U.N. peacekeeping forces, serving
mainly in Rwanda and Haiti. 
Regional Dissidence and Human Rights
     U.S. concern over dissidence and human rights problems in
India results from its interest in human rights and
democratization issues worldwide as well as its concern for
regional stability in South Asia. Although there are generalized
human rights problems throughout India, such as police abuse,
child labor, and discrimination against women and minorities,
some of the most serious problems occur in Kashmir and Punjab.
International human rights organizations, such as Amnesty
International and Asiawatch, have documented abuses by Indian
security forces, including mass arrests, indiscriminate firing on
civilian crowds, burning of business and residential
neighborhoods, rape, and torture and execution of prisoners in
custody. The Indian government denies most such accusations and
points instead to terrorist acts of bombing, kidnaping, and
assassination allegedly committed by militant groups. A January
1995 Amnesty International report on torture and deaths in
custody in Kashmir, allegedly at the hands of Indian security
forces, also expresses grave concern over numerous reports of
human rights abuses by armed militant groups. A September 1994
Human Rights Watch report, on arms and abuses in Indian Punjab
and Kashmir, alleges a large flow of arms left over from the
Afghan conflict through Pakistan into Punjab and Kashmir. The
report also alleges continuing serious human rights abuses by
both militants and Indian government forces in Kashmir. 
     In dealing with the situation in Kashmir and Punjab, the
Indian government has employed a wide range of security
legislation, including laws that permit authorities to search and
arrest without warrant and detain persons for a year without
charge or bail. Other security laws prescribe sentences of not
less than five years for disruptive speech or actions. In some
cases, security forces are given permission to shoot to kill.
Also under these laws, special courts have been established that
meet in secret and are immune from the usual laws of evidence. 
     Punjab. In the past decade of separatist violence in Punjab,
reported 20,000 people -- civilians, militants, and security
forces -- have been killed. Over the last few 
----------
page 10
years, however, a security forces crackdown in the state has
virtually halted terrorist and separatist activity. Applying a
carrot-and-stick approach, the Indian government deployed some
150,000 army troops to pacify the countryside before state
assembly elections were held in November 1991. Probably more
effective was the beefing up -- in size and weaponry -- of the
Punjabi Sikh-dominated state police under police chief K.P.S.
Gill. By early 1993, Gill claimed that the separatist campaign
was nearly over; some 800 militants had surrendered and most of
the separatist groups were in serious disarray.
Separatist-related deaths dropped from nearly 5,000 per year in
1991 and 1992 to less than 100 for 1994. 
     Popular disillusionment with criminal elements among the
militants, and general war-weariness after a decade of violence,
reportedly contributed to the turning tide in Punjab. Although
voter participation in the 1991 elections was only about 20%,
some 70% voted in municipal elections in September 1992; and more
than 80% participated in local council elections held in January
1993. Supporters of the crackdown say that, for the first time in
many years, peace and freedom of movement have returned to the
state, night farming and transport have resumed, and real estate
values are up. Detractors, however, call the crackdown a reign of
police terror and human rights violations and say that the Indian
government has yet to address Sikh economic, political, and
social grievances. 
     Kashmir. Although a combination of firmness and the holding
of elections seems to have restarted the political process in
Punjab and some Northeastern states, the Kashmir situation
appears no closer to resolution. The human rights situation in
Kashmir worsened in 1993, despite Rao government efforts in
setting up a human rights commission and addressing some specific
violations. International human rights groups cited Indian
security forces for escalating the level of violence in 1993,
including firing on demonstrators, burning large sections of the
towns of Srinagar and Sopore, and allegedly killing several
prominent Kashmiri human rights activists. 
     In mid-October 1993, Indian army troops surrounded the
Hazratbal Mosque in Srinagar, alleging that militants taking
refuge inside the shrine had tampered with locks that protect a
sanctum where a sacred relic, a hair said to be from the beard of
the Prophet Mohammed, is housed. The 33-day siege ended
peacefully on November 16 when the 65 inmates of the mosque
reportedly reached an agreement with the Indian government to
surrender to the Kashmir Police for screening and release. During
the month-long siege, more than 50 persons were killed in other
parts of the Kashmir Valley as a result of Indian security forces
firing on crowds of demonstrators. 
     During the Hazratbal mosque siege, a new Kashmiri political
group came to the fore. The Hurriyat Conference (Kul
Jamaat-e-Hurriyat-e-Kashmir; All Kashmir Freedom Front), formed
in early 1993, is an umbrella organization for groups opposed to
Indian rule in Kashmir. The conference launched effective mass
strikes and demonstrations during the mosque siege, but has
spoken out against "errants" and "criminals" who have entered the
militant ranks. Hurriyat membership includes about 30 groups and
associations, including the JKLF, JKHM, Muslim Conference, and
People's League. The Hurriyat Conference, which states it is
committed to seeking dialogue with the Indian government on a
broad range of issues, proposes convening a tripartite conference
on Kashmir, including India, Pakistan, and representatives of the
Kashmiri people. Conference leaders have also demanded Kashmiri
representation at any talks between India and Pakistan on
Kashmir. 
----------
page 11
     At various times, the Rao government has shown interest in
restarting the political process in Kashmir, where state
elections were last held in 1987. President's rule (rule by the
central government) was established in July 1990 and has been
extended by Parliament every six months since then, most recently
in February 1995. In preparation for elections, the government
began a series of initiatives in 1994, including releasing some
prominent Kashmiri militants from prison. JKLF founder and leader
Yasin Malik was released in May 1994. In October, the government
released from detention three more militant leaders -- Abdul
Ghani Lone, Syed Ali Shah Geelani, and Shabir Shah -- whose
release had been championed by various human rights groups and
some Members of Congress. That same month, Prime Minister Rao
announced the establishment of a new Department of Jammu and
Kashmir Affairs in the Prime Minister's Office. Rao's plan
appears to call for restoring normalcy to the state through
reviving development activity, attracting industrial investment
through tax incentives, rebuilding the destroyed infrastructure,
and reestablishing social-economic programs in preparation for
the holding of state elections. 
     In March 1995, the Rao government announced that Jammu and
Kashmir state elections would likely be held by July 18, when
President's rule is set to expire. Kashmiri militant groups,
however, repeatedly have rejected the holding of any such poll
within the framework of the Indian constitution. Although
disagreeing on the various proposed options for Kashmir, there
was general agreement by the Kashmiri militant groups that
international oversight for any polls is necessary, and that
Kashmiris must be a party to any discussions on a resolution of
the issue. 
     Human Rights. India's human rights situation, particularly
in Kashmir and Punjab, increasingly has come under fire from
international human rights groups, the United Nations Human
Rights Committee, the U.S. Congress, and the State Department, in
its annual country reports to the Congress on human rights
practices. In recent years Congress has expressed its disapproval
of human rights abuses in India through various "sense of the
Congress" resolutions, amendments to aid bills, and committee
reports. In 1989 and 1991, bills were introduced that sought to
cut off most development assistance to India unless Amnesty
International was allowed to monitor the human rights situation
there. In 1992, $24 million (the amount of development assistance
to India) was cut from the Foreign Operations Appropriations bill
by the House, but was restored in the Conference Committee. In
June 1993, the House passed an amendment, 425-0, that would cut
$4.1 million from the general development account of the foreign
aid bill in order to censure India for alleged human rights
violations. Most recently, S.Res. 251 (Wallop), submitted in
August 1994, noted continued human rights abuses by security
forces in Kashmir and called for "a negotiated settlement to the
Kashmir conflict, including India, Pakistan, and the people of
Kashmir." 
     There is evidence of increasing Indian government
sensitivity to pressure on the issue of human rights. In July
1994, the government noted, in a reply to an Amnesty
International report on human rights violations in Punjab and
Kashmir since 1990, that it had taken action against 174 security
forces members for human rights violations. A National Human
Rights Commission, established by presidential ordinance in
September 1993, was given parliamentary approval in December. The
five-member panel, headed by former Supreme Court chief justice
Ranganath Mishra, by mid-1994 had investigated abuses in Punjab,
Kashmir, and the Northeast and begun issuing reports and
recommendations. In August, the Commission urged the government
to repeal the Terrorist and Disruptive Activities (Prevention)
Act (TADA), under which persons may be detained for years without
due process. Since 1985, an 
----------
page 12
estimated 67,000 people throughout India have been detained under
the TADA, often for offenses unrelated to terrorist activities.
The Rao government has promised to review the TADA when it comes
up for renewal in May 1995. The Supreme Court, under Chief
Justice M.N. Venkatachaliah, reportedly also has become more
active in combating the custodial excesses of the police. As a
result of 1994 Supreme Court rulings, stringent requirements have
been placed on arrest procedures, and compensation for police
abuse victims is being granted. 
     Until recently India has denied international human rights
groups official access to Kashmir, Punjab, and other sensitive
areas. India announced in July 1993 that it would allow human
rights organizations such as Amnesty and the International
Committee of the Red Cross (ICRC) to visit the country but added
that travel to insurgency-stricken regions would have to be
cleared on a case-by-case basis. In March 1994, the Indian
government allowed an ICRC team to visit Jammu and Kashmir and in
late September gave the ICRC permission to begin its humanitarian
programs, which reportedly include visiting jails and detention
centers, setting up medical outposts, and providing specialized
training for security forces in Kashmir. A reported 5,000
Kashmiris currently are in jail under anti-terrorist laws.
Although an Amnesty International team was allowed to visit
Bombay in 1994, in order to investigate the 1993 bombings there,
it has not yet been given permission to visit Kashmir or Punjab. 
India's Economic Reforms and Market Opening
     Under the guidance of Finance Minister Singh, the Rao
government instituted economic reforms beginning mid-1991. They
have had positive results, including: raising the GDP growth rate
from 1.2% to 5.3%; reducing the fiscal deficit from 8.4% to 6% of
GDP; reducing inflation from 16% to 10%; instituting trade and
industrial reforms; and privatizing some state-owned industries
and requiring others to seek commercial financing in lieu of
government subsidies. In these efforts India has received the
support and prodding of the IMF as well as various aid-donor
nations. In July 1994, the India Development Forum (IDF) meeting
in Paris pledged assistance of $6 billion for 1995. In extending
the assistance, however, the IDF urged India to persevere with
its reforms, with particular attention to budget deficit
reduction, state government involvement in liberalization
efforts, and social sector investment. 
     Observers note a number of factors that have favored the
government's unusual decisiveness in the economic arena,
including: pressure for reform from the International Monetary
Fund (IMF), which had granted a stopgap loan to the new
government; widespread respect for the capable and apolitical
Singh; a reported general agreement on economic policy between
Congress and the BJP; and a growing public consensus that it is
in the country's best interest to participate more fully in the
global economic community. 
     In March 1995, Singh presented his fifth budget, which
promised to increase government investment in the social sector,
as well as continue India on the path of economic reform. Past
Indian government policies severely restricted foreign trade and
investment in the country. Under the Rao government, however,
many market access barriers have been removed or reduced and a
more favorable climate for investment established. Major changes
since 1991 include: cutting tariffs on capital goods from 80% to
25% and the maximum tariff rate on most goods from 150% to 55%;
cutting the minimum lending rate for banks from 19% to 14%;
raising the foreign equity limit for investment projects from 40
to 51%, with 75-100% equity permitted in some high tech,
export-oriented, or tourism industries; ending of most industrial
licensing requirements; 
----------
page 13
making the rupee convertible on the trade and current accounts,
with steps toward convertibility on the capital account; and
instituting five-year tax holidays and other incentives for
certain types of investments, including power projects and
investments in the free trade zones. 
     As a result of these policy changes, annual foreign
investment approvals rose from $90 million in 1990 to $4 billion
in 1994. More than one-third of these investments were by U.S.
companies, including IBM, Motorola, Coca Cola, Pepsico, Morgan
Stanley, Merrill Lynch, AT&T, Raytheon, Kellogg, Procter &
Gamble, Ford, and Mobil. In the largest foreign investment
project approved to date, the Indian government in December 1993
signed an agreement for a liquified gas-fired power station in
Maharashtra state from a U.S. group that includes Enron, General
Electric, and Bechtel. In mid-January 1995, U.S. Commerce
Secretary Ronald H. Brown led the largest U.S. trade and
investment mission to India to date. Agreements were initialed on
more than $7 billion in power generation, transportation,
petrochemicals, financial services, telecommunications, and
health care projects. During a February visit by U.S. Energy
Secretary Hazel O'Leary and a delegation of U.S. business
leaders, energy agreements worth more than $1.4 billion were
signed. The Cabinet-level visits demonstrated Clinton
Administration support for the Indian economic reform process, as
well as U.S. interests in broadening ties with India.
     India's recent success in attracting foreign investment
remains overshadowed, however, by that of countries like China,
Malaysia, and Indonesia, where terms and conditions for
investment are still more favorable. Some analysts point out,
however, that East and Southeast Asian countries have a decade or
more head start, and India, keeping to its present reform path,
will one day rival current Asian economic powerhouses. Although
international investors clearly are intrigued by India, including
the market potential represented by its 100 million-strong middle
class, major concerns remain. Aside from problems related to
power, infrastructure, or bureaucratic red tape, investors need
assurance that India's reform efforts will continue apace no
matter who is heading the government. 
Trade Issues
     Market Access Barriers. Despite significant tariff
reductions and other measures taken by India to improve market
access, according to the 1994 report of the United States Trade
Representative (USTR), a number of foreign trade barriers remain.
U.S. exports that reportedly would benefit from lower Indian
tariffs include, fertilizers, wood products, medical equipment,
scrap metals, and agricultural products. The import of consumer
goods is restricted, and other items, such as agricultural
commodities and petroleum products, may only be imported by
government trading monopolies. 
     The USTR also cited barriers that continue to exist in
India's financial services sector. All insurance companies are
government owned, as are most banks. Largely dominated by the
state, India's banking industry has been widely criticized for
its inefficiency and poor service and regarded as a stumbling
block in India's efforts to open up the economy. Public sector
banks, which include 90% of India's bank branches, handle 85% of
the country's banking business. In a sign that India's banking
industry may be opening up, approval has been given for five new
private banks, and a decision has been made to allow more foreign
banks and bank branches to operate in India. 
     Intellectual Property Rights Protection. Inadequate
intellectual property rights protection, by means of patents,
trademarks and copyrights, has been a long
----------
page 14
standing issue between the United States and India. Major areas
of irritation have included pirating of U.S. pharmaceuticals,
books, tapes, and videos. In May 1991, the USTR cited India as a
"priority foreign country" under the Special 301 provision of the
1988 Trade Act for its lack of protection and enforcement of
intellectual property rights. After a 9-month investigation, the
USTR further determined that, although India had strengthened its
trademark and copyright laws, patent protection remained weak,
adversely affecting U.S. pharmaceutical companies. As a result,
the Bush Administration in 1992 suspended duty-free privileges
under the Generalized System of Preferences (GSP) for about $80
million in Indian exports of pharmaceuticals and related
products. In April 1993, the USTR again named India as a
"priority foreign country" under "special 301." The Indian
Parliament, in May 1994, passed amendments to the country's
copyright law designed to strengthen intellectual property rights
protection. The new laws are expected to benefit writers,
artists, and musicians, as well as both domestic and foreign
publishers and manufacturers of records, tapes, videos, and
computer software. Analysts predicted that, with the reduced
threat of piracy, both U.S. and Indian software producers will
greatly expand their Indian markets. In view of the new copyright
laws and proposed legislation on trademarks, the USTR in June
1994 moved India from the priority foreign country list to the
less stringent "priority watch list," while continuing to urge
India's adoption of patent protection legislation. 
U.S. Aid
     The relatively small U.S. aid program for India for FY1995
includes an estimated $36 million in development assistance, $87
million in P.L.480 funds, and $150,000 for International Military
Education and Training (IMET). For FY1995, the Clinton
Administration has requested $66 million for sustainable
development funds, $73 million in P.L 480 funds, and $150,000 for
IMET. The U.S. Agency for International Development (AID)
increasingly is focusing on sustainable development programs that
support India's efforts to restructure and privatize its economy.
Included are programs that promote private sector involvement in
energy production and distribution; U.S.-India commercial
technology joint ventures; a project to provide more urban land
with water, sewer, power, and road services; and assistance to
Indian enterprises seeking to restructure and become more
competitive. Other programs are targeted at family planning and
preventive health care, and P.L.480 funds go to providing food
assistance, largely through private voluntary agencies. The small
IMET program funds technical training and professional military
education for mid- and senior-level Indian officers. 
Narcotics
     India is the world's largest producer of opium for
pharmaceutical purposes, some of which reportedly is diverted
illegally to heroin production. The country has an estimated 1.2
million heroin addicts and 4.5 million who are addicted to opium.
India serves as a major transit route for drugs originating in
both Pakistan and Burma, and also is a major supplier to both
countries of the chemical used in manufacturing heroin. Thousands
of gallons of acetic anhydride reportedly are shipped by camel
through Rajasthan state to Pakistan, where some of it is passed
on to drug manufacturers in Afghanistan. Smaller amounts of the
chemical, which is produced in the New Delhi area, are also
smuggled through India's Northeast to heroin producers in Burma. 
     Counternarcotics efforts in both India and Pakistan are
hampered by lack of funds, lack of infrastructure in drug-
producing areas, and corruption among police, government
officials, and local politicians. U.S. counternarcotics
assistance to India consists mainly of funding training programs
for enforcement personnel and the Indian 
----------
page 15
Coast Guard. Major counternarcotics efforts by the Indian
government in 1993 include the establishment of a Special
Secretary for Narcotics within the Ministry of Finance to
coordinate licit opium production and drug enforcement activities
and the institution of a system to regulate the movement of
acetic anhydride. In September, the government announced new
policies aimed at reducing the diversion of legally produced
opium to the illegal market. Although the Indian government is
becoming more concerned about the drug problem, observers note
there needs to be an increase in political support and resources
for counternarcotics efforts. During Prime Minister Rao's U.S.
visit in May 1994, India and the United States signed a
memorandum of understanding on cooperative efforts to stop the
illegal drug trade. 
Environment
     Population pressures and uncontrolled economic growth have
produced a range of environmental problems in India, including
deforestation, soil degradation, wildlife poaching, and air and
water pollution. Among world capitals, New Delhi reportedly has
one of the world's most serious air pollution problems. 
     Bhopal. Bhopal, the capital of Madhya Pradesh state, is the
site of one of the world's worst industrial disasters. More than
4,000 persons reportedly were killed and thousands injured by
toxic fumes that leaked out of the now-closed Union Carbide India
Limited (UCIL) pesticide plant there in 1984. In 1991, the Indian
Supreme Court upheld a 1989 settlement requiring Union Carbide
Corporation, the U.S. company parent company of UCIL, to pay $470
million (currently, with interest, $700 million) in compensation
to the victims. By early 1995, Indian courts in charge of
processing the claims had only decided about 25% of the cases and
dispersed only a small portion of the compensation money. Under
an Indian Supreme Court order, Union Carbide Corporation sold its
Indian assets to a local company in September 1994. 
     Narmada River Project. One of the most controversial
environmental issues in recent years has been the Narmada River
power and irrigation project, which involves the construction of
30 major, 135 medium-sized, and 3,000 small dams at an estimated
cost of $5.4 billion, partially funded by the World Bank.
Proponents of the project say it will irrigate large areas of
semi-desert, control flooding and bring drinking water to 30
million people. Opponents point out that the entire project also
will flood a vast area, displacing some 150,000 people in the
states of Madhya Pradesh, Maharashtra, and Gujarat. The U.S.
Congress held hearings in 1989 on the environmental impact of the
Sardar Sarovar, the largest dam in the project. An independent
review of the project, commissioned by the World Bank and
released in late 1992, concluded that the project was faulty in
terms of the human and environmental impact as well as the
project design. The study urged the Bank to "step back" from the
project for further analysis. In March 1993, the Indian
government canceled the remaining $170 million of a $450 million
World Bank loan for the project in anticipation of environmental
and resettlement conditions that might be levied on the project
by the Bank. Saying it would complete the project on its own, the
government continued work on the half-built Sardar Sarovar dam,
which had reached a height of 230 feet by mid-1994, despite
efforts of environmentalist groups to stop the project. Some
villages were submerged and a reported 8,000 people had been
resettled. Controversy continued over future resettlement efforts
and the proposed lowering of the prospective dam height from 455
feet to 436 feet. 
----------
page 16
FOR ADDITIONAL READING
U.S. Library of Congress. The Kashmir Dispute: Historical
Background to the Current Struggle, by Richard P. Cronin and
Barbara Leitch LePoer. [Washington] July 19, 1991.   
     CRS Report 91-563 F
Pakistan-U.S. Relations, by Barbara Leitch LePoer. [Washington]
Updated Regularly.
     CRS Issue Brief 94041
South Asia: Background and Recent Developments in U.S. Nuclear
Nonproliferation Efforts, by Barbara Leitch LePoer. [Washington]
Jan. 30, 1995.
     CRS Report 95-215 F
South Asia: U.S. Interests and Policy Issues, by Richard P.
Cronin and Barbara Leitch LePoer. [Washington] Feb. 12, 1993
     CRS Report 93-243 F



NEWSLETTER
Join the GlobalSecurity.org mailing list