The related issues of H1B visas and outsourcing have once again come to the fore and could prove to be a troublesome issue in India-US relations. In his address to the Joint Houses of Congress on February 24, 2009, President Obama declared that he would nullify tax benefits for American companies that outsourced their services. The same day, the US Citizenship & Immigration Service (USCIS) released data showing that four Indian outsourcing companies, Infosys, Wipro, Satyam, and TCS, accounted for more than 10,000 of the 65,000 H-1B visas issued by the US in 2008.

In early January 2009, the Financial Times reported “preliminary talks” between US and India on possible sale of systems for an Indian ballistic missile defence (BMD) shield. The daily quoted US embassy officials in New Delhi as saying that technical talks had taken place and that US defence officials had conducted computer simulations with Indian counterparts to demonstrate the capabilities of this technology. The Indian media, and some foreign ones, picked up the story and projected the report as an impending US-India deal on missile defence cooperation.

Now that the IAEA Draft Agreement is on the World Wide Web and the Communists have withdrawn their support to the UPA, it is reasonable to assume that the next few steps will also follow in good time. The alacrity with which the Americans have drafted their letter to the 45 members of the Nuclear Suppliers Group is remarkable and shows that the Bush administration is indeed very keen to see the deal through before its term ends at the end of the year. What we are not so sure of, however, is the future of the UPA and the Congress.

With elections looming large in both countries and the Indo-US nuclear deal facing its moment of truth, the inevitable question will arise as to who has gained how much from the Strategic Partnership that was signed with great fanfare in July 2005. This is not withstanding the fact that the failure of the nuclear deal would undoubtedly be a setback for both countries and besmirch the reputations of those leaders who had put their personal prestige on the line. It would also reflect poorly on the political parties and the governments involved in various ways.

Although it is nearly two years since the July 18, 2005 Joint Statement between President George Bush and Prime Minister Manmohan Singh announced their intention to facilitate civil nuclear commerce between India and the members of the Nuclear Suppliers Group, the process is still to be completed with even the first step towards that goal, an Indo-US agreement for peaceful nuclear cooperation, still under negotiations with apparently strong differences between the two countries on a number of issues. Expectations are that the agreement may be finalised by the end of this year.

With the passage of a year since the visit of President George W. Bush to India, it is the business communities of the two countries that have benefited the most from the momentum created by the upsurge in Indo-US relations. While two-way trade and investment had been growing at a steady clip, the announcement and subsequent passage of the Bill on Co-operation in Civil Nuclear Energy, intended to remove the last vestiges of the adversarial relations between the two countries, have taken business relations to a new level.