US races to approve nuclear deal with India

  • 08/09/2008

  • Financial Times (London)

The Bush administration is beginning a race against time to win congressional backing for a landmark deal with India after convincing more than 40 other countries to allow international nuclear trade with Delhi. India's multibillion dollar civil nuclear sector will be opened to foreign energy companies following Saturday's decision in Vienna by the 45-nation nuclear suppliers group, which sets the rules for international nuclear co-operation. The breakthrough comes after efforts by President George W. Bush and Manmohan Singh, India's prime minister, to push through the 2006 Indian-US civil nuclear agreement to begin nuclear co-operation between the two countries. Both men describe the agreement, at the heart of a push to bolster US-Indian ties, as one of their main foreign policy achievements. The only remaining substantial obstacle is the US Congress, which is set to consider the agreement at the legislative session that begins today. But with only a few weeks before Congress breaks up for elections, there is little time for the Bush administration to overcome resistance on Capitol Hill. "We understand that the time is very short," said Condoleezza Rice, US secretary of state, at the weekend. "But I think we have demonstrated the commitment of the administration to this agreement . . . I don't think most people thought that we were going to be able to get this through the NSG [the Nuclear Suppliers Group] this weekend." Earlier this year, some US officials and legislators had regarded the deal as virtually dead - until Mr Singh reshaped his government to overcome opposition to the agreement from the country's left. The Indian prime minister hailed the decision as "momentous". India has until now been barred from nuclear trade because it has not signed the nuclear non-proliferation treaty, the international agreement that seeks to prevent more countries from developing nuclear weapons. The US and India argued that, by taking steps such as placing some but not all of its reactors under United Nations safeguards, India deserved an exemption from the normal rules. A group of small countries - including Austria, the Netherlands, Norway and Ireland - resisted giving India a blanket exemption because of fears it would weaken the global nonproliferation regime. In particular, they sought language making clear that co-operation with India would cease if Delhi resumed nuclear testing. However, the meeting reached consensus after mounting pressure from the US and a last-minute statement by India reaffirming its voluntary moratorium on nuclear testing. The move sparked congratulations in India for the government, particularly from industry. The Confederation of Indian Industry described it as a boost for "hightechnology trade", while the US-India Business Council said it would unlock investment in nuclear energy in India of up to $100bn. But the deal's fate in the US Congress, which needs to pass implementing legislation, is still not assured. "This agreement effectively blows a hole in the global non-proliferation regime, setting a dangerous precedent," said Edward Markey, a Democratic congressman. However, the Bush administration argues it would be perverse for Congress not to authorise US nuclear trade with India, since other countries, notably France and Russia, can now enter the Indian nuclear market. Ms Rice confirmed that another high-profile nuclear deal - with Russia - was on hold in the wake of last month's Georgian-Russian conflict. Copyright The Financial Times Limited 2008