President Bush and India's Prime Minister Manmohan Singh will continue their meeting today, after beginning important summit talks yesterday. Although the American media were more interested in hectoring the President over a domestic political issue than in exploring the talks during yesterday's joint press conference, they have a lot to talk about. The emerging AmerInd Alliance is of great importance to both of them.

The two nations are rapidly deepening their security, economic, political, and human ties, to great mutual benefit. There is still a lot left to gain.

The two countries should consider a list of ambitious steps to take their multifaceted alliance to a new level. India is a necessary democratic ally in Asia, an invaluable asset in addressing China, which sees itself as righting historic slights and once again dominating that part of the world.

The two largest democracies in the world are natural allies.  Both of us share common civilizational values today, deriving from our different ancient origins.  There is substantial foundational good will on both sides. From the days when FDR insisted on supporting Indian independence in World War II Lend Lease negotiations with Britain, the U.S has been India's friend in many ways. 

Trade relations

We should work toward free trade with India, as part of a free trade area among societies committed to the rule of law and the triumph of advanced civilization. The term Anglosphere is sometimes used to describe them, even though they have roots in different ancient civilizations: India, Israel, Taiwan, the UK, Australia, and America, most prominently.

Within this framework, we can go one step further, by establishing AmeriInd trade zones in each country, to revitalize U.S. manufacturing while helping India's economy. Each AmeriInd zone will have one part in the U.S. and the other part in India to create a seamless economic, political, and legal framework for the value—added chain. These zones would operate under U.S. laws.

Compared to operating facilities in China, AmerInd zone operations would be far simpler, cheaper, and more efficient to operate. Management would consist of English—speaking, highly educated professionals operating in a common management system — on two sides of the globe, in opposite time zones.

Domestic American groups fearing the loss of jobs should note that AmerInd zones can help maintain local American manufacturing and other facilities, letting them work hand—in—glove with Indian colleagues playing on the same team. By applying global talent to making the firm competitive, and doing labor—intensive work in India, American companies can keep their viable home country operations in the game. The alternative is usually shipping the whole manufacturing  function to China or losing share to global competitors from Japan, Korea, the EU, or China.

Action Items

There are other areas in which significant smaller and more immediate improvements can be made. U.S. firms should receive the same treatment as domestic firms in India's privatization program. Let them bid on any companies or assets they like. The competition will improve India.

Both countries share an interest in energy policy. With its need for additional electrical generating capacity, India is a natural market for nuclear power plants, an option the United States is actively exploring. Huge gains in engineering over the past three decades mean that new generation nuclear power plants are often safer, cheaper, and more reliable than other energy sources, and produce no greenhouse gases to boot.

Our two countries have proven their ability to work together seamlessly in the world of engineering. Developing the next generation of nuclear power plants together, taking them out of the transistor age and into the twenty—first century, makes great sense. A large effort in developing low cost nuclear power would help free both nations from their current degree of dependence on the tyranny of oil markets.

People to people contacts are as vital as trade and business ties.  An expanded Indo—U.S. higher education exchange program, to include universities and defense academies, would cost relatively little and pay off big in our future ability to work together. Visas for highly skilled Indian immigrants in fields where the U.S. has shortage of qualified university graduates should be a priority. The Indian—American community is a powerhouse of entrepreneurship and prosperity, and has made tremendous contributions to America's high tech sector.

Geo—strategy

The U.S. should support India for permanent membership on the UN Security Council, with non—veto status. The entire Security Council makeup no longer reflects the realities of world power and needs reform on this and other grounds.

India could play a more active role in maintaining peace in the eastern half of the Middle East. India has a longstanding historical role in the Trucial Gulf states. The U.S. could help establish an Indian naval base in Oman to facilitate joint Indo—U.S. naval patrolling of the Arabian Sea and Persian Gulf by India's growing blue water navy. 

India, as a mature strategic partner, needs to step up to the plate in Iraq. India has a natural role to play in a crucial task right now: training Iraqi troops. The Indian Army has more than 15 years experience with improvised explosive devices (I.E.D.) and counter—insurgency operations in Jammu and Kashmir.

The Indian government also needs to remove restrictions on its private sector freely participating in Iraq's security.  A veritable army of ex—five year Indian short service commission officers and soldiers are available for peacekeeping duties in Iraq. Contracting them for work in Iraq through private firms could help address the Coalition's need for additional manpower in Iraq without formally sending Indian troops.

India has on previous occasions offered to send peacekeeping troops to Afghanistan. Keeping in mind Pakistan's sensitivities, Indian peacekeeping troops participating in Afghanistan's provinces that do not border Pakistan might be an immediate possibility.

In these and other ways, the two largest democracies in the world can work together.

Arun Khanna is a Visiting Professor of Finance at the Butler University College of Business Administration.