The Defense Agreement signed by India and the US on 28 June 2005 is of historic significance. Known as the New Framework for US-India Defense Relationship (NFDR), it extends the Agreed Minute on Defense Relations signed between the two countries in 1995. The NFDR will continue for the next ten years; it envisages that both countries will cooperate in fighting terrorism, curbing the proliferation of Weapons of Mass Destruction, strengthening their respective militaries, enhancing defense related research and development, and collaboration in multinational operations.

The NFDR is a forward step in the strategic partnership between the two countries, and is a great recognition accorded to India by the sole superpower in the world. According to them, this has occurred because of the tectonic shifts that have taken place on the strategic horizon. In line with this thinking, the US will support India's aspirations to become a member of the UN Security Council. We can easily conclude that it is out of political compulsions that the US has entered into this agreement with India.

The present agreement conforms to the long-term strategic calculations of the US. The end of Cold War suddenly removed its 'other' from the scene. However, the American strategic planners needed the presence of an 'Other' to maintain its pre-eminent position in the world. This led to the invention of new enemies like 'Islamic fundamentalism' and China. In the US strategic framework, India is ideally placed to be an ally in its conflict with these new enemies.

There is considerable ideological convergence between the current neo-conservative strategic thinking in the US and the ultra-nationalist strategic discourse in India. Both are virulently anti-Muslim, and share the view that an emerging China would be a threat to their respective national interests. It is interesting that, despite a change in government, the mainstream Indian strategic thinking continues to follow the ultra-nationalist worldview.

India may not gain much from this agreement in the longer run. There is a stark contradiction between the unilateral approach of the US and India's multilateralism. It will be difficult to reconcile these two diametrically opposite principles in international politics. Pragmatism cannot obliterate such fundamental contradictions.

The impact of NFDR on India's neighbourhood will be negative. Both China and Pakistan have already expressed their concern and anxieties about this new development. The smaller countries in South Asia will also not feel comfortable with the new Indo-US camaraderie. The fragile peace in South Asia will certainly become a casualty. The current normalisation process between India and China will also be adversely affected by the new agreement. China will be suspicious of a major power like India drifting towards its strategic adversary. This could hamper the progress in the ongoing negotiations on the border dispute between India and China.

Unlike China, Pakistan will be greatly worried about the developing friendship between India and the US. Pakistan's position as the 'major non-NATO ally' of the US will not be of much solace. The insecurity complex that Pakistan suffers vis-a-vis India will automatically increase due to the NFDR. Pakistan's strategic experts have already pointed out that the NFDR will result in the undoing of the delicate strategic balance in South Asia. Hence, Pakistan will also be compelled to acquire more sophisticated state-of- the-art weapons to counter the strategic imbalance caused by the signing of the NFDR by India and the US. This could lead to a renewed arms race between India and Pakistan.

The NFDR has the potential to derail the present peace process between India and Pakistan. The major strides taken by both countries in their bilateral relations during the last two years might evaporate as a result of the Indo-US agreement. In other words, enlarging American intervention in South Asia is not good for the stability of the region.

As a regional power, India needs to understand its geo-strategic limitations. It is important that it reassures its nervous neighbours. This does not mean that India must sacrifice its national interests for peace and tranquility in its neighbourhood. However, India must not forget its potential and limitations in becoming a 'great power'. In this context, the NFDR will not be beneficial to India. It will make India a pawn in larger US strategic designs despite the rhetoric of common interests and values being shared by both countries. Furthermore, it will create suspicions and misunderstandings about India in South Asia.