* Clinton presses India on nuclear deal, pledges security cooperation
* Clinton seeks to open $150 bln energy market to U.S. firms
* U.S. says pressing Pakistan on militants
* India expresses concern over U.S. Afghan plan (Adds comments, details)
NEW DELHI, July 19 U.S. Secretary of State Hillary Clinton urged India on Tuesday to amend a law that has put off U.S. companies from taking part in the $150 billion nuclear energy market and further open up Asia's third largest economy to foreign investment. Clinton opened high-level U.S.-Indian talks with a polite but firm push for New Delhi to get moving on key economic issues as both sides seek to firm up a relationship that thus far has promised more than it has delivered.
India's government has long pledged to open up the $1.6 billion economy but must also wrestle with local opposition fearing the loss of jobs to foreign companies. Clinton also pledged strong U.S. support for India's battle against extremism -- underscored by last week's deadly triple bomb attack on Mumbai -- and said she would press India's nuclear-armed neighbour Pakistan to do more to crack down on militants believed to be operating from its territory. Clinton's visit to India, her second as secretary of state, was aimed at building on progress made since U.S. President Barack Obama visited in November and declared the two giant democracies were natural partners. Since then, however, U.S. hopes for swift implementation of the civilian nuclear deal have run into politically complicated legislative and regulatory hurdles that major U.S. companies say block them from getting a piece of the action. "We need to resolve those issues that still remain so that we can reap the rewards of the extraordinary work that both of our governments have done," Clinton said during a news conference with Indian Foreign Minister S.M. Krishna. The United States wants India to "tighten up" legislation to protect equipment makers from liability in case of nuclear accidents, saying it is much more stringent than comparable laws in other countries. General Electric and Westinghouse, the U.S.-based arm of Japan's Toshiba Corp , are keen to take a slice of the market.
A landmark 2008 deal brought India out of the nuclear cold since facing global sanctions for its 1998 atomic tests, but also provided a central theme for its relations with the United States. WARMING TIES SHADOWED BY DOUBTS Clinton's visit covers a range of bilateral issues including counter-terrorism cooperation, which both sides say is a major priority as relations between the two countries continue to improve since end of the Cold War, when India was seen as closer to the old Soviet Union.
"From the American side the focus (of the visit) was on economic partnership. They want to use the strategic platform to get greater market access to India and encourage India to move towards the second generation of economic reforms," said Kanwal Sibal, a former Indian foreign secretary. Clinton briefed Indian leaders on U.S. plans to draw down troops in Afghanistan as well as on Pakistan, where the halting battle against militants has spurred questions about Islamabad's true intentions. Krishna, reflecting widespread concern in India that the U.S. plan for Afghanistan may leave the country as a base for Islamic militants, said Washington should take a close look at the risks involved. "It is necessary for the United States to factor Afghanistan's ground realities as they see it...so that they can appreciate that Afghanistan could be in a position to defend itself against the terrorists sponsored by the Taliban." U.S. officials are generally pleased with security cooperation with India, which range from intelligence sharing on terror networks to joint efforts against maritime piracy. But India has long been unhappy about what it perceives as Washington's resistance to sharing critical, real-time information on Islamic militants in Pakistan and Afghanistan that may be plotting to attack Indian targets. Clinton said she welcomed the dialogue between India and Pakistan, resumed earlier this year after they were frozen in the aftermath of the Mumbai attacks, which killed 166 people in 2008 and blamed on Pakistani-based militants. The Indian and Pakistani foreign ministers are due to meet in New Delhi later this month to push peace efforts forward. Clinton again urged Pakistan to do more to tackle terror groups operating from its territory, an issue which grabbed Washington's intention in May when al Qaeda leader Osama bin Laden was killed by U.S. forces in a hideout not far from he Pakistani capital of Islamabad. "We have made it clear to the Pakistan government that confronting violent extremism of all sorts is in its interest," she said. "We do not believe that there are any terrorists who should be given safe haven or a free pass by any government." Clinton also met Indian Finance Minister Pranab Mukherjee, to press him on promises to open domestic financial and insurance markets, as well as to give greater access to retail companies, such as U.S. sales giant Wal-Mart . Clinton made clear that arms sales, too, are part of the equation, saying India, seen as one of the world's biggest defence buyers in coming years, could further improve U.S. military cooperation by buying more U.S. weaponry. (Additional reporting by C.J. Kuncheria and James Pomfret in New Delhi; Writing by Paul de Bendern; Editing by Nick Macfie and Yoko Nishikawa)