What do India and the US bring to the table and why do they both wish to form a strategic partnership? For the US, India's size, location, fast growing economy and being the world's largest democracy offers much potential. Especially when Europe is facing economic, political and monetary problems, the Middle East faces continual challenges of embracing democracy and a rising China's military and territorial claims are causing concern. The US views India as a huge market and a potential counterweight in Asia to an increasingly more assertive China. But the US has been frustrated with the slow pace of New Delhi's economic reforms, inability to slash bureaucracy and make doing business in India much easier and a reluctance to support Washington in international affairs. The US is keen to expand ties in business, defence, civil nuclear contracts and counter-terrorism. For India, as it moves away from Soviet legacy institutions under Modi, the US represents a huge business market, a major source of badly needed investments into India to lift economic growth and a global superpower that could help with a permanent seat on the UN Security Council.

Obama's visit ended on a very upbeat note for both countries. The markets should view the trip as being very fruitful. The two leaders announced plans to unlock billions of dollars in nuclear trade and to deepen defence and counter-terrorism ties and knowledge. Of particular importance was an agreement on two issues that has stopped US companies from setting up nuclear reactors in India and had become a major irritant in bilateral relations. A 10-year framework for defence ties and deals on co-operation for the production of drone aircraft and equipment for C-130 transport planes was agreed. A $4bn US investment to expand trade and business with India was announced. Other deals ranged from financing initiatives to help India use renewable energy to lower carbon intensity. An Obama-Modi hotline - India's first at leadership level- was agreed. Overall, a very positive path. The crucial part will be if the untapped potential of a US-India strategic partnership can be unlocked. If so, it will be a huge win-win for both countries.

David Fuller's view

Here is The India Report.

These are important points, with which I strongly agree.  No other country has the potential to contribute more to India’s future GDP growth than the USA.  America has a strong ally in Japan but another one would be very useful.  Technology projects between the US and India would be fruitful for both countries.  Additionally, if the US can hasten India’s economic development, it could be an increasingly powerful ally, with an unlimited and increasingly skilled labour force. 

Now if only the US played cricket…

India is currently the top forming stock market this year, with the CNX Nifty Index up 10.5 percent in USD terms.  My strategy is to increase long positions on pullbacks because India should have significant additional upside scope over the next several years.  Currently, it is a little overextended on a short-term basis and these technical conditions are often followed by temporary reactions and consolidations.