Atomic trade high on India PM's U.S., France tour

NEW DELHI Fri Sep 19, 2008 6:00am EDT

India's Prime Minister Manmohan Singh speaks in New Delhi July 1, 2008. REUTERS/B Mathur

India's Prime Minister Manmohan Singh speaks in New Delhi July 1, 2008.

Credit: Reuters/B Mathur

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NEW DELHI (Reuters) - Armed with a permit for global nuclear trade, India's prime minister leaves next week for the United States and France hoping to seal atomic energy deals and discuss cooperation in defense and counter-terrorism.

Manmohan Singh will fly out on Monday for what will be India's first top-level diplomatic engagement since a global nuclear cartel allowed it access to nuclear fuel and technology, overturning a 34-year-long ban for testing nuclear devices.

Singh is also expected to use the visit to review with President George Bush the progress of an India-U.S. nuclear deal awaiting approval by the U.S. Congress, where it faces significant opposition from the non-proliferation lobby.

There has been talk the deal could be ratified by Congress and ready for signing before Singh ends his U.S. visit, but Indian officials and analysts remain cautious in their optimism.

"No one knows for sure when it will be ready," Naresh Chandra, former Indian ambassador to Washington, said of the deal, seen as a cornerstone of India's growing ties with the West.

"It is now a creature of circumstances and subject to the ebb and flow of Congressional opinion."

At present, just three percent of India's total power requirement in generated by nuclear plants, a proportion New Delhi aims to increase to around 25 percent by 2050, taking billions of dollars in investment.

Relations between India and the United States have come a long way from the days of the Cold War when the two countries were typically on opposite sides.

India's economic reform program, its huge market, a booming information technology industry, its growing military reach and its potential as a counterweight to China have combined to bring New Delhi closer to Washington.

NUCLEAR DOLLARS

Today, the two capitals are talking about India buying U.S. F-16 fighter jets and nuclear reactors, a far cry from the days when Washington imposed sanctions on New Delhi after it conducted nuclear tests in 1998.

Besides the nuclear deal, Singh, an eminent economist, will hold talks on issues ranging from defense to terrorism and the global financial crisis.

He will also address the U.N. General Assembly and could hold bilateral meetings with other heads of state, including a likely meeting with Pakistan President Asif Ali Zardari.

In France, Singh will meet French President Nicholas Sarkozy and is expected to sign a nuclear pact under which India could obtain, subject to fulfilling international safeguards, nuclear fuel from France for reactors purchased from it.

"The PM's France visit will be about posturing as well, telling the Americans ... look, we have other options if you don't clear the deal," columnist Kuldip Nayar told Reuters.

"Geo-political compulsions mean India needs to be seen equally friendly with independent European countries such as France."

Prospects for nuclear trade with India -- expected at about $27 billion in investment in 18-20 new nuclear power plants over the next 15 years -- have boosted the stock market value of nuclear equipment makers.

Local media says India's monopoly Nuclear Power Corp has tentatively picked four suppliers, including U.S.-based Westinghouse Electric and France's Areva, for planned new projects.

India also is negotiating with General Electric, Hitachi and Russia's atomic energy agency Rosatom.

India has forged strong defense ties with France in recent years, with deals for Mirage jets and Scorpene submarines to modernize its military, the world's fourth-largest.

France's Dassault Rafale is competing to provide India with combat aircraft in the world's biggest fighter jet contract in years, expected to top $10.2 billion for 126 planes. U.S. firm Lockheed Martin Corp is also interested in the deal.

Analysts say Singh will want to move from talk to action when it comes to nuclear energy, and will try to put bilateral mechanisms in place with the United States and France to ensure proposals move forward quickly once agreed upon.

(Editing by Jerry Norton)

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