Business Leads Diplomacy In Warming US-India Ties

IN recent months the relationship between India and the United States has been a sour one. Indians have smarted from Clinton administration charges that they lack respect for human rights, and from a 16-month delay in naming a US ambassador to New Delhi. The US, for its part, worries about the regional implications of India's long-standing nuclear-weapons program.

But while diplomats from the world's two largest democracies have eyed each other coolly, their business counterparts have been pumping hands, slapping backs, and forging new economic ties. The US has become India's largest trading partner - perhaps preparing the ground for a more positive political association.

Today ``we can in a clearer light look at the commonalities and complementarities that link us,'' said India's Prime Minister, P.V. Nara-simha Rao, in a toast at a Washington luncheon on May 18.

Mr. Rao is the first Indian prime minister to visit the US since 1987. Officials from both nations said they hoped his trip would be the occasion for wiping away bad feelings built up over the past year.

Rao and President Clinton should build ``a new Indo-US partnership,'' said Frank Wisner, who has been nominated to be the US ambassador to India, at his Senate confirmation hearing earlier this week.

In some respects it is surprising that relations between India and the US have gone through a period of strain. For one thing, the end of the cold war eliminated the Soviet-Indian friendship that had always put Washington off. For another, the US in 1990 cut off military aid and sales to India's neighboring adversary, Pakistan, because of Pakistan's continued pursuit of its own nuclear-weapons capability. India has traditionally seen Democrats as more amenable to its interests than Republicans seem to be, and so the election of a Democratic president should have ushered in an era of good feeling.

But for domestic political reasons, the Clinton team has taken some time in getting a Senate-approved envoy for New Delhi. The delay appears to have genuinely offended India.

At the same time, the new Democratic administration has been more vocal in its complaints about India's human rights abuses. The Indian government may be vulnerable on this score: This week the group Human Rights Watch issued a report accusing India of using torture and execution to fight insurgents in the restive state of Punjab. Indian troops have similarly been accused of using extra-legal means in their attempt to put down secessionist rebels in Kashmir.

``I don't think there's been a serious downturn in relations, but I think there has been a lot of serious ventilation,'' judges Paula Newburg, director of the South Asia program at the Carnegie Institute.

The Clinton team's major diplomatic initiative in South Asia to this point has been an attempt to cap the fast-running weapons race between India and Pakistan. Deputy Secretary of State Strobe Talbott flew to the region in April to propose a plan that called for Pakistan to cap its fissile-material production, in return for delivery of F-16 fighter aircraft originally ordered by Islamabad in the late 1980s.

The plan also called for India to end its production of fissile material in return for unspecified benifits, and proposed a flat ban on the deployment of ballistic missiles by both sides.

Neither country has reacted warmly to the plan, as public opinion in both nations is solidly behind their respective nuclear efforts. India, in addition, claims its weapons programs are to protect it from Beijing as well as Pakistan. ``The plan does not include China, so why should the Indians agree to it?'' says a Pentagon weapons consultant who has worked on the issue.

But against this background, private US investment has been steadily flowing into the Indian subcontinent. The Rao government in 1991 launched last-ditch economic reforms that have transformed the Indian business sector. With less taxation, more privatization, and lowered barriers to foreign money, US capital in India rose from less than $20 million in 1990 to more than $1.1 billion last year.

And India is one developing country where the US is the leading foreign business partner. Almost half the foreign investment deals approved by the Indian government last year involved US firms.

``The momentum of these reforms will carry India into the next century,'' Rao said in a speech to a joint session of Congress on Wednesday.

In his US visit Rao has given little indication of flexibility on the nuclear issue, however. He repeated India's long-standing rhetoric about non-proliferation, saying any attempt to curb nuclear weapons should be global, and not regional. Rao also called for further relaxation of US curbs on technology exports, saying that such controls ``now hinder developing countries.''