Dr Shah, 36, currently serves as Under Secretary for Research, Education and Economics and Chief Scientist at the United States Department of Agriculture.
In nominating Dr Shah, Obama said, 'The mission of USAID is to advance America's interests by strengthening our relationships abroad. Rajiv brings fresh ideas and the dedication and impressive background necessary to help guide USAID as it works to achieve this important goal. I look forward to working with Rajiv in the months and years ahead.'
Secretary of State Hillary Clinton, under whose jurisdiction USAID falls, hailed Dr Shah's nomination, saying, 'Dr Raj Shah is a leader in the development community, an innovative and results-oriented manager, and someone who understands the importance of providing people around the world with the tools they need to lift themselves out of poverty and chart their own destinies.'
'By nominating Raj to lead the United States Agency for International Development,' Clinton said, 'President Obama has reaffirmed that development must be a core pillar of American foreign policy.'
Clinton said that Dr Shah -- a trained medical doctor and health economist, who earned his MD from the University of Pennsylvania Medical School and his Master of Science in health economics at the Wharton School of Business -- 'has the skills and experience to lead a reinvigorated USAID in the 21st century.'
'He has a record of delivering results in both the private and public sectors, forging partnerships around the world, especially in Africa and Asia, and developing innovative solutions in global health, agriculture, and financial services for the poor,' she said.
Clinton pointed out that 'he has led and worked with many of the initiatives that are defining best practice in the field of development, including the Global Alliance for Vaccines and immunisation, the Global Fund for AIDS, TB, and Malaria, the Alliance for a Green Revolution for Africa, and the Bill and Melinda Gates Foundation.'
'His tireless efforts to immunise children around the world have helped save countless lives.'
In his current position at the USDA, Dr Shah manages the Agricultural Research Service, the Economic Research Service, the National Agricultural Statistical Service and the National Institute of Food and Agriculture, a portfolio where he manages more than 10,000 federal employees worldwide, including 2,200 federal scientists and a budget of more than $2.56 billion.
He also leads the department's participation in President Obama's global food security initiative. During his short tenure, Dr Shah has launched the National Institute of Food and Agriculture -- a new scientific institute created to elevate and enhance the capacity of agricultural research to address sustainable food production, climate change, bio-energy and human nutrition.
Dr Shah works closely with the US Congress, the State Department, the White House and the international development community on issues ranging from health and nutrition to bio-energy and climate change.
Before joining the administration, he served as the Director for Agricultural Development at the Bill and Melinda Gates Foundation, and was the catalyst behind launching the Foundation's Global Development Programme, overseeing an investment portfolio in excess of $1.3billion.
He also managed the Foundation's $1.5billion contribution to a global vaccination fund. Earlier, when he served as the Foundation's first Director for Financial Services to the Poor and led the Strategic Opportunities initiative, he liaised with the Foundation's co-chairs to identify, assess and recommend new areas of giving.
WhenObama appointed Dr Shah to the Under Secretary and Chief Scientist position at USDA, the Gates Foundation hailed the nomination, saying, 'Raj has been an instrumental leader since he joined the Foundation eight years ago. He helped develop and launch the global development programme in 2006 and since then has served as director of agricultural development.'
TheFoundation spoke of how 'Raj played an integral role in our early efforts with the Global Alliance for Vaccines and Immunisation as well as other innovative financing efforts in our global health programme.'
USAgriculture Secretary Tom Vilsack described Shah as 'a globally recognised leader in science, health and economics... disciplines that are critical to the mission of this department.'
BothObama administration and Congressional sources were in unison in predicting that Dr Shah's Senate confirmation would be a mere formality, considering "his impeccable credentials and superb track record."
Thesesources acknowledged that Dr Shah seemed "the ideal fit to take over the vacuum at USAID", which had been rudderless since Obama assumed office, operating only with an acting director.
BothObama and Clinton believed that USAID would be crucial to the administration's 'smart power' foreign policy strategy, where diplomacy acquires equal importance with the projection of military power, particularly in places like Afghanistan and Pakistan, where development was essential in areas previously held by the Taliban.
One source told rediff.com, "Raj is a perfect choice --young, resourceful, committed, and with an unbelievable and impeccable track record, and if he is given the autonomy and independence and a clear and defined portfolios of defined responsibilities, you bet he will deliver, as he did during his nearly ten years with the Gates Foundation."
DrShah's nomination, administration sources acknowledged, was also a relief to Clinton, who had been growing exceedingly frustrated over a protracted White House vetting process for the position, which had led to several top candidates withdrawing their names from consideration.
Before his eight years with the Gates Foundation, the Detroit-born Shah, whose parents Janardan and Rena still live in Michigan, worked on health care policy for the Gore 2000presidential campaign and then served as a member of Pennsylvania Governor Ed Rendell's transition committee on health.
He is co-founder of Health Systems Analytics and Project IMPACT for South Asian Americans -- a national, non-profitorganisation dedicated to increasing the civic awareness and community leadership of South Asian Americans.
Healso completed brief stints as a policy aide to the British parliament and consultant to the World Health Organisation.