Superpower: US and India agree to major weapons deal

US Secretary of State Clinton and Indian Foreign Minister Krishna announced a huge treaty deal today, between the largest and second largest democracies in the world. India has historically been wary of aligning itself too closely with the US in defense issues, famously starting the Non-Aligned Movement during the Cold War, which rejected Soviet and American influence. However, in the post-Cold War era, India has since decided it needed its own nuclear umbrella to protect itself from neighbors like China and Pakistan, both of which it has fought wars with since the Indian Republic's founding in 1950. With one of the largest armed forces in the world (around 3.8 million military and paramilitary), and an underdeveloped defense industry, it's a big weapons market that the US, Russia, France, and Britain have been fighting over.

The US attempted to take the high road against nuclear weapons proliferation, and it's "peaceful nuclear explosion" test in 1974 soured relations, and ensuing nuclear arms race with Pakistan brought a lot of concern. Yet, it's "no first use" and "minimum credible deterrence" nuclear doctrines, and refraining from using the weapons during the 1999 Kargil War with Pakistan over Kashmir has made India seem less antagonistic. It's democratic institutions, detente with Pakistan, and geostrategic counterweight to other less liberally democratic Asian nations have made it a natural partner for the US, leading to improving relations since 2000.

US-Indian trade is around $61 billion in 2007 (out of $3.96 trillion in trade for the US, and $381 billion for India), before the Great Recession hit, according to the Office of the US Trade Representative. Foreign direct investment from the US into India was $13.6 billion, and "outsourcing" to Indian companies has been a politically dangerous issue in the US.

The deal includes removing restrictions from nuclear power production equipment and services from the US, which will benefit companies like General Electric who pioneered nuclear power in the 1940's, but has been unable to do much with the technology in the US due to nuclear paranoid NIMBYism here. French and Russian nuclear power companies already have deals to start developing in India.

The Indian Air Force is also looking to expand, so this deal gives Boeing and Lockheed Martin a chance to bid on contracts for the fighter fleet. Military aircraft are heavily dependent on a supply of parts and expert service, which makes long term military contracts necessary, making long term defense agreements necessary. Bell Helicopters also is bidding on a large helicopter contract coming up.

The Indian Army relies on lots of Soviet era vehicles, including T-72s and T-90s, primarily Kalashnikov variants, BMP-1s and BMP-2s, and so on. If India were to transfer its ground vehicles contracts to a NATO country, it could have a devastating impact on the Russian weapons industry.

The Indian Navy is one of the top five fleets in the world, with 155 ships and even a aircraft carrier purchased from the UK. Her destroyers, frigates, and corvettes are primarily indigenously produced of from Russia. But the US did manage to make a deal with her in 2006 to sell an LPD amphibious transport dock (a modern type of ship which acts as a dock in the ocean for landing craft, like hovercraft and boats). This is an old fleet, but so far no money has been appropriated to really modernize it.

India's "liberal" and "democratic" credentials have been rough to acquire, liberalizing from being a government really run by bureaucrats. The so called "license raj" has seriously hurt India's economic prospects, as the red tape throughout the country has been a disincentive to entrepreneurship. Corruption is still a part of Indian business and politics, but the decentralized nature of so many linguistic, religious, ethnic, social, and economic groups has kept limited constitutional government in place despite the poverty of the country.