Factbox: Top issues during Obama's India visit

Mon Oct 25, 2010 8:02am EDT

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(Reuters) - President Barack Obama, who has described India-U.S. ties as "one of the defining relationships" of the 21st century, will visit the rising Asian power for the first time early next month.

Here are some of the major issues Obama will look to tackle:

REGIONAL TIES

India will seek assurances regarding U.S. support for arch rival Pakistan, especially over New Delhi's concerns that Washington's military aid packages to Islamabad could be used against India or to support militants.

It will look to hear Obama's thinking on U.S. Afghan policy and ask questions on Washington's exit from that country, where both Indian and Pakistan are jockeying for influence.

Washington will also be keen to renew New Delhi's support as a crucial strategic partner for the United States to monitor regional power China, India's biggest trading partner.

NUCLEAR, DUAL-USE TECHNOLOGY

One of the biggest prizes India wants from the visit is Obama to end sanctions on U.S. exports to India of technology that could also be used to build nuclear weapons, imposed after India exploded its latest nuclear devices in 1998.

A civil nuclear liability law passed by India this year is unappealing to U.S. firms looking to enter the $150 billion market as it makes suppliers liable for damages in case of any nuclear accident.

Reports have said Washington is lobbying for a watering down of the provisions or for an exception for U.S. suppliers, but India is unlikely to agree to this.

DEFENSE TIES

India is one of the world's largest arms importers. And with the government set to spend more than $30 billion in five years to upgrade its Soviet-supplied armory, it is a key market for U.S. defense firms like Boeing (BA.N) and Lockheed Martin (LMT.N)

They are competing with the Europeans and Russians to sell India 126 fighter jets in a deal worth $11 billion.

While Washington will call for closer military ties, India is wary of a sweeping defense relationship, as it is unsure the United States will not sacrifice Indian interests as it seeks to bolster rival Pakistan to combat Islamist militants.

OUTSOURCING

Obama's support for legislation designed to curb outsourcing by U.S. firms and retain jobs domestically was strongly criticized by officials and trade bodies in India, where the industry is worth $60 billion and employs 2 million.

The United States in August raised prices for certain visa fees for foreign companies that could cost India's IT industry $200 million a year. A proposed new tax code would end tax breaks for firms that create jobs and profits overseas.

India will hope for promises that no further action will be taken to limit outsourcing, but Obama may feel domestic pressure to stand by his previous defense of U.S. jobs.

(Compiled by Henry Foy in NEW DELHI; Editing by C.J. Kuncheria and Ron Popeski)

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