By Peter Wonacott and Eric Bellman
Wall Street Journal, 18 October 2007
Even if the U.S. and India end up abandoning their landmark nuclear deal, the talks have created strong links between the two countries, whose intertwined political fortunes and burgeoning trade will continue to grow, executives and officials say.
The deal, proposed by President Bush and Indian Prime Minister Manmohan Singh in 2005, appears headed for a delay in implementation, and possibly for the dustbin, because of opposition from leftist politicians in India who support Mr. Singh's government and have threatened to bring down the government if the deal goes ahead. The accord aims to give India access to much-needed, but long-denied, U.S. nuclear technology and fuel. India in return would separate its military and civilian nuclear facilities, and subject the civilian reactors to international inspections.
Mr. Singh suggested last week that he wants to see out the full term of office, which can last an additional 18 months -- remarks widely interpreted to mean he isn't willing to override his allies' opposition and risk an early election. He later told Mr. Bush that the deal was facing "certain difficulties," according to a statement from the Indian Embassy in Washington reporting a phone call between the two leaders on Monday.
U.S. companies could lose out on billions of dollars in potential orders to help build India's energy infrastructure and military. Some U.S. companies are hoping to sell sensitive civilian and military technology to India, a market the pact would have opened.
Bob Pearce, director of global business development at Westinghouse Electric Co. in Pittsburgh, says that as recently as three weeks ago officials at Nuclear Power Corp. of India were talking with Westinghouse and other U.S. suppliers of nuclear-power technology about how they could get involved with the expansion of power capacity in the subcontinent. If final approval of the nuclear deal is delayed for six months or more, it will be tough to move forward with project planning, he said.
"When Prime Minister Singh calls President Bush and says, 'We are having trouble,' that is a concern, of course," Mr. Pearce said. "If this gets too far into next year it will get caught up in Indian and U.S. elections cycle and then could get delayed even further," Mr. Pearce said.
The U.S. government has long barred some defense sales to India through export restrictions on certain technologies. The nuclear deal was supposed to help create momentum to dismantle those barriers, too, as U.S. defense suppliers try to win more Indian business. Boeing Co., Lockheed Martin Corp. and other U.S. equipment suppliers, for instance, have been hoping to win bids for a deal for 126 fighter jets valued at an estimated $6 billion to $8 billion.
The deal was part of a broader recent courting of India by the U.S. to help fight global terrorism and counter China's rising influence in Asia. The U.S. also is hoping for neater alignment on other strategic issues, such as how to deal with a nuclear-armed Iran -- a country that has long enjoyed friendly ties with India.
If the U.S.-India nuclear deal falls apart, it is unlikely to reverse the warming trend that the negotiations have brought or stem the broadening of ties in other areas. Merchandise trade between the two countries has grown. And after a long lull during the Cold War years, India and the U.S. now regularly conduct military exercises together.
"The security relationship has its own momentum, and we are hoping that momentum continues no matter what happens to the [nuclear] agreement," says James Clad, U.S. deputy assistant secretary of defense for South Asia security policy.
Write to Peter Wonacott at peter.wonacott@wsj.com and Eric Bellman at eric.bellman@awsj.com
Citation: Peter Wonacott and Eric Bellman. "U.S.-India Links Go Beyond Faltering Nuclear Deal," Wall Street Journal, 18 October 2007.
Original URL: http://online.wsj.com/article/SB119264464215062194.html?mod=googlenews_wsj