But the prospective relaxation of the sanctions, in the wake of the decision by the US Senate and House of Representatives to give president Bill Clinton authority to decide on waiving it for a year, has hardly evoked jubilation in the country.

The principal reason for this is political. The perception is that the US president will use his authority to press India (and Pakistan) to toe the US line on nuclear-test ban. This contrasts with the response to the announcement of the sanctions; their impact, it was feared, would hurt the economy.

The muted reaction now to the likely dilution of sanctions is surprising. Opinion in India today is far more willing to accept CTBT than it was before the tests. So, the economic benefits that could flow from the prospective dilution should have been in strong focus. But there is little evidence ofthis.

It may be that over the months, the country has got used to denial of economic accommodation by the US. India's rating has been brought down severely; but given the continuing crisis in East Asia, a rating upgradation is not now considered to be on the cards. The country accepts contrariness. Unlike Pakistan, India is not dependent on IMF lending. It has been repaying the loan it had taken from the IMF according to schedule, and outstanding repayment to it is small.

Besides, India's forex reserve position is comfortable, and short-term borrowings are a small proportion of external debt. In the absence of a crisis phobia, the likely relaxation in US sanctions is not considered worth crowing about. In a significant sense, this underscores US political opinion that sanctions do not quite achieve the impact American policy has in mind.

Even so, if Clinton does put sanctions on hold, this could benefit India. It will be able to get net inflows from multilateral institutions. American businessinitiative to invest will be freed from inhibition. The start-up of US investment in India should crowd in foreign direct investment from the OECD countries.

The government has been trying to dispel the swadeshi bogey, and has promised to hasten FDI clearance. Indeed, it is now ready to woo foreign investment, as reflected by current promises to quickly open up the insurance sector to foreign capital. The government wants to break the investment stagnation that has set in. Growth expectations will change dramatically if Clinton decides to be positive.