New Delhi, Dec 29 (IANS) It was a defining year of risk taking for Indian diplomacy as India and Pakistan, despite a serious trust deficit between them, set up a pioneering joint anti-terror mechanism and Washington changed its decades-old law to reopen doors of nuclear commerce with New Delhi.

The year gone by could also be measured in India forging strategic ties with the other two pillars of an Asian 'strategic' architecture: China and Japan. These found expression in Chinese President Hu Jintao's visit to New Delhi in November and Prime Minister Manmohan Singh's trip to Tokyo in December.

In a significant step, Hu, during his visit, announced that Beijing and New Delhi were "partners, not rivals" in an emerging Asian century. They agreed to double their bilateral trade to $40 billion by 2010 and agreed to resolve the decades-old border row as the strategic objective of their relationship.

But it wasn't just the US and China that engaged energies of the foreign policy establishment in India: a volatile neighborhood goaded New Delhi's diplomacy to be innovative and relevant to evolving geopolitics of the region.

Despite some positive moves on their bilateral ties, New Delhi's suspicions over cross-border linkages to terrorism have not gone away. A fragile truce in Sri Lanka has given way to renewed violence. Bangladesh has seen a rise of religious right and political instability.

It wasn't a bleak landscape though.

Nepal, after years of living under the shadow of Maoist insurgency and an oppressive monarchy, scripted a new system to reflect popular aspirations, with some push from India. New Delhi abandoned its traditional two-pillar theory, which saw constitutional monarchy and multi-party democracy as both essential to the Himalayan state's stability. This was a critical turning point.

Clearly, civil nuclear cooperation with the US, first agreed in principle on July 18, 2005 and firmed up during a visit by US President George W. Bush here in March, dominated headlines and kept pundits busy for most of the year, with doubters making sure that the proponents of the deal were subjected to a most unsparing inquisition.

But in the end, the sheer political will on both sides to make this historic deal central to transformed relations between the hitherto estranged democracies won. After a dragging process in the US Congress swarming with non-nuclear proliferation hawks and critics in India decrying the deal as a sell out, the 18 months of intense negotiations culminated in Bush signing the deal into law Dec 18 at a White House ceremony.

In his speech, Bush underscored the historic significance of the law that overturns three decades of technology denial regimes and makes a one-time exception to India, a non-signatory to the Nuclear Non-Proliferation Treaty, to engage in civil nuclear commerce with the world in exchange for putting 14 of its 22 nuclear reactors under international inspections.

But the government's Left allies and the Bharatiya Janata Party (BJP) were not convinced. Prime Minister Manmohan Singh had to assure them that the deal will not compromise India's nuclear weapons programme.

He, however, made his displeasure known to his American interlocutors saying his government objected to certain "extraneous and prescriptive" aspects of the US law that links civil nuclear cooperation with New Delhi's stand on Iran and puts curbs on transfers of uranium enrichment and reprocessing technologies.

India's relations with Pakistan this year did not give much cheer. The peace process almost to a halt after the July 11 Mumbai bombings for which New Delhi blamed Pakistani intelligence, leading to postponement of foreign secretary-level talks.

Although the talks resumed after the September meeting in Havana of Manmohan Singh and President Pervez Musharraf, the trust deficit between the neighbors remained the defining motif of bilateral ties.

As the year ends there is guarded optimism with Musharraf telling NDTV that he is ready to give up Pakistani insistence on Kashmir's independence if India accepts his four-point proposal that includes a joint supervisory mechanism, self-governance, demilitarization and making the Line of Control irrelevant.

Manmohan Singh has given a guarded welcome to the "new ideas" and called for a treaty of peace, friendship and security between India and Pakistan. Speculation is rife about a possible deal on demilitarizing the Siachen glacier. This may form the highlight of Manmohan Singh's expected visit to Pakistan next year.

In the last 12 months, India also revitalized its relationship with Russia, the Middle East and East Asia. In the first visit by a Saudi monarch in 51 years, King Abdullah came to India early this year and was chief guest at the Republic Day function.

However India's candidate for the post of UN secretary general, Shashi Tharoor, lost out, withdrawing in favor of South Korea's Ban Ki Moon.

New Delhi showed its appetite for a global role and flair for working in regional groupings by re-energizing its ties with not only NAM but emerging groupings like IBSA, which is made up of India, South Africa and Brazil.