The US ambassador to India met Thursday with Gujarat Chief Minister and Bharatiya Janata Party (BJP) Prime Ministerial candidate Narendra Modi.

Obama administration officials have tried to downplay the significance of the meeting, claiming it was part of a routine pre-election “outreach.” But it was widely and correctly interpreted in India as a demonstrable shift in US policy that was meant to signal Washington’s readiness to work with Modi—an arch-communalist and would-be autocrat—should he emerge as India’s Prime Minister following the national elections to be held this April and May.

Several Indian dailies titled their reports on Modi’s 75-minute meeting with US Ambassador Nancy Powell “US ready to do business with Modi.” The Times of India said the meeting had brought an end to a “nine-year cold war.”

India’s Official Opposition, the BJP, was quick to tout the meeting as evidence that the party is poised to form India’s next government. “In the next round of meetings, [Powell] might meet other candidates,” said Seshadri Chari, a member of the BJP national executive. “But she must have made an assessment that Mr. Modi is first among equals. If there are 10 candidates that qualify for prime minster, Mr. Modi comes first.”

Since 2005 Washington has refused to grant Modi a visa to visit the US and otherwise eschewed official contact with him, citing his government’s role in a 2002 anti-Muslim program in Gujarat that resulted in the deaths of more than a thousand people and rendered tens of thousands homeless.

There is incontrovertible evidence of Modi’s political and criminal responsibility for the 2002 Gujarat pogrom. He blamed the state’s Muslims for a train fire that killed a large number of Hindu fundamentalist activists, called for a statewide “day of protest,” and ordered police to stand down as riots erupted. One of his protégés and ministers, Maya Kodnani was convicted of murder after numerous witnesses identified her as leading anti-Muslim mobs and identifying Muslim homes and businesses for attack.

Nevertheless, Modi has escaped criminal prosecution and the state government he leads has been able to remain in office due to the cowardice and complicity of the courts, police, and Congress Party-led central government. In 2012 India’s Supreme Court ruled that there was insufficient evidence to lay charges against Modi.

The European Union joined the US in its diplomatic “boycott” of Modi for almost a decade. But this changed in late 2012 as powerful sections of Indian business began promoting Modi as their preferred candidate for national prime minister. In October of that year, Britain's High Commissioner to India met the Gujarat Chief Minster and three months later in January 2013, the EU boycott of Modi came well and truly to an end when Germany’s ambassador to India, Michael Steiner, hosted a meeting of EU envoys with Modi.

Modi’s stock among India’s corporate elite has risen sharply over the past two years as India has been battered by the world economic crisis. At under 5 percent, India’s growth rate has been almost halved since 2011 and the country is mired in stagflation with prices rising at close to a double-digit clip and the rupee depreciating sharply.

Big business is looking to Modi to push through a raft of socially regressive, “pro-market” reforms and to eliminate a massive budget deficit through social spending cuts. The Congress Party, the dominant partner in India’s current coalition government, supports most, if not all these reforms—including accelerated privatization and the gutting of restrictions on layoffs and factory closures. But it has been unable to implement them in the face of widespread popular opposition.

The Chief Minister of Gujarat since 2001, Modi has acted as a hireling for domestic and foreign big business, lavishing tax, land and other concessions on investors, breaking strikes, and forcing through speedy approval of corporate development projects in the face of environmental and other concerns.

At Thursday’s meeting, Powell and Modi reportedly discussed a wide range of issues including military-strategic and economic cooperation between India and the US, Afghanistan, and private sector investment in Gujarat.

Modi’s aides said he had pointed to the “strong foundations” of a US-Indian strategic partnership laid during the BJP-led government that ruled India from 1998-2004 and reiterated his party’s intention to further strengthen Indo-US ties.

Modi is also said to have pressed for “a single global yardstick on terrorism.” The BJP has long complained that the US has restrained India from taking action against Pakistan, including mounting cross-border raids, in retaliation for Islamabad’s support for the insurgency in Indian-held Kashmir.

Obama, like George W. Bush before him, has argued that a “global Indo-US strategic partnership” is vital to the maintenance of the US’s world strategic position and, toward that end, has offered India the US’s assistance in becoming a “world power.” Relations between New Delhi and Washington, however, have become strained as of late. New Delhi resents Washington’s relentless pressure for India to openly and permanently harness itself to a US-led anti-China alliance, embracing Japan, Australia and India. The US, for its part, does not believe India has sufficiently reciprocated for US efforts to boost India as a counterweight to China.

The New York Times, in an editorial posted Thursday, welcomed the Obama administration’s overtures to Modi, whom it termed a “controversial and troubling politician.” They were, said the Times, “a necessary step” in revitalizing Indo-US ties and ensuring the success of the US “pivot to Asia”—that is, the US drive to isolate, contain and prepare for war against China.

The BJP’s boasts notwithstanding, Modi’s victory in the coming elections is, to say the least, far from certain—even if the Congress-led government is widely hated for its pro-big business policies and rampant corruption. Masses of workers and toilers vehemently oppose the BJP’s rabid communalism and its pro-corporate agenda.

Nevertheless, the readiness of wide sections of big business to embrace Modi as India’s next prime minister underscores that under the impact of the capitalist crisis they are turning to reaction and authoritarian methods of rule. In addition to his promotion of communalism and the interests of big business, Modi is notorious for his vocal support for the military and the national security apparatus. He has vehemently defended security forces implicated in staged encounter killings, i.e. summary executions, and routinely denounces the Congress government for “appeasing” Pakistan and China.

While the US and EU are signaling their readiness to work with a Modi-led government with a view to intensifying their efforts to develop India as a cheap-labor platform and strategic ally against China, the more perceptive international bourgeois commentators and strategists are expressing alarm at the prospect of a Modi-led BJP. They fear such a government would unleash social opposition that it could not control and recognize that its coming to power would be viewed by Pakistan and China as a provocation.

The London-based Financial Times called it a “tragedy” that Indians have to choose between Modi and Rahul Gandhi, the Congress vice-president and heir of the Gandhi-Nehru family political dynasty, as India’s next prime minister. It described the Gujarat Chief Minister as the personification of “desperation” in the face of “desperate times.”

A recent issues of the Economist magazine had an editorial titled “Would Modi save India or wreck it?: India’s Muslims have reasons to fear Narendra Modi. He should reach out to them.” An editorial in a subsequent issue marking the centenary of World War One, pointed to the prospect of a “Hindu nationalist who refuses to atone for a program against Muslims” having his “finger on the button of a potential nuclear conflict with his Muslim neighbours in Pakistan.”