India has welcomed the lifting of U.S. sanctions imposed after the country's 1998 nuclear tests, but says this will not make a significant impact on the country's economy.
Foreign ministry officials say the lifting of sanctions will enable New Delhi to strengthen a broad-based and mutually beneficial relationship with the United States.
But Finance Minister Yashwant Sinha calls it a "minor issue" as far as the Indian economy is concerned.
The minister echoed what analysts maintain, that the Indian economy is hurting due to a global downturn. They say it has not been affected by the sanctions, because the country has healthy foreign exchange reserves and is not significantly dependent on foreign aid.
The sanctions had restricted military sales, financial, and economic assistance.
The lifting of sanctions on India is not an unexpected development, although it has come sooner than most had thought.
Even before the terrorist attacks on the United States, senior American officials visiting New Delhi had indicated that the Bush administration was working to remove the sanctions. Analysts say it will remove an irritant in the Indo-American relationship, a relationship that has become warmer in recent years.
Indian industry is also enthusiastic about the waiving of the sanctions. Some of India's biggest companies had been barred from importing technology that could have nuclear applications; they will now be free to access this technology from American companies.
Some analysts say the lifting of sanctions may also give a psychological boost to the Indian stock markets, which have fallen by nearly 20 percent since the September 11 terrorist strikes in the United States. The markets crashed to an eight-year low on Friday as jittery investors dumped shares due to fears of an imminent strike against Afghanistan.
Market analysts have warned that a conflict in the region will adversely affect the Indian economy, which is already facing a slowdown.