India is changing like never before. The Indo-US Nuclear deal, part of a larger bilateral cooperation agreement, was signed on March 2, 2006. In International politics there are no favors done, and no favor has been done to India either. This nuclear deal will have a multiplier effect on the US economy and its foreign policy. President's Bush visit to the Indian School of Business and interaction with farmers and scientists at an Agricultural University in Hyderabad underscores the role of economics in the 'historic relationship' between the two countries.

According to the National Council of Applied Economic Research (NCAER) India is among the fastest developing economies in the world. This trend is expected to accelerate in the coming years. The Indian middle class, which numbered around 57 million in 2001-02, is expected to swell to 92 million by 2005-06 and cross the 153 million mark by 2009-10. The fast moving consumer goods sector witnessed a growth of 3.4 per cent in 2004 and is expected to grow at 5-6 per cent in 2004-2005; the highest in the last five years. The industrial sector registered an impressive growth of 8.4 per cent in the first three quarters of 2004-05, the highest after 1995-96, and the services sector recorded an 8.9 per cent growth. Foreign Institutional Investment (FII) in the Indian stock market in 2005 crossed US $ 10m billion. The fast growing Indian economy offers good investment opportunities in agriculture, health, food processing and biotechnology. The US has realized the immense potential of the Indian economy and fast growing market. This makes India an attractive destination for US companies.

With its fast growing economy, India could emerge as a competitor to the US for a share in the global reserves of oil and gas. The ever-increasing demand for oil in US, India and China, coupled with uncertainty in West Asia, has been pushing up oil prices. The present nuclear energy agreement will moderate India's demand for oil and gas.

There are other strategic benefits for US, arising from the deal. After Afghanistan, Pakistan (AQ Khan), Iraq and now Iran, US has realized the weakness in taking unilateral actions and decisions. The US is willing now to make a paradigm shift from 'unilateral action' to 'collective decisions', in which India, with one fifth of humanity and a vibrant democracy, could be a major partner. India, too, has its ambitions of rising from the status of a regional player to a global player, but may get trapped into a collective decision making process. The US is looking for India to become one of its partners in some new venture, if not in Iraq.

Attempts by the US to establish a constitutional government in Afghanistan have not been very successful. Pakistan is still meddling in its affairs by providing its territory as a base to the Taliban and Al Queda. It was reported that in his recent visit to Afghanistan and Bush's meeting with Hamid Karzai, the Pakistani involvement with the Taliban and Al Qaeda remnants operating in Afghan territory from Pakistan, was highlighted. India, on the other hand, has been trying to help Afghanistan so that the country does not return to fundamentalist control, hoping that democracy takes firm roots in that country. Despite security threats, after a gap of twenty-nine years, Prime Minister Manmohan Singh visited Afghanistan in August 2005, and has been making large donations to support its democratic government. Pakistan has still not delivered the on closing down Jihadi Madrassas after 9/11 or the London bombings. It has neither arrested any notable leader of the Al Queda or Taliban. The Pakistan-China cooperation may not be conducive to US security in the long run. To deal with China, an economically powerful and technologically competent India would fit better into US grand strategy. Thus, this synergy of interest with India, gels with the larger strategic interest of US in the region.

Recognizing India's emerging power Condeleeza Rice stated in her article on December 12, 2005 in the Washington Post that India is going to take its place as one of the six major world powers. Nicholas Burns, Under Secretary for Political Affairs, mentioned that strategically no region in the world is more vital to America's long-term military, economic and political interests than Asia. President's Bush historic visit to India fits well into the grand strategy of the US which was being crafted over the last few years, which has matured and is now being implemented.