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UPDATE 2-US proposes India nuclear waiver, approval in doubt

(Recasts with diplomats’ comments)

VIENNA, Aug 14 (Reuters) - The United States has proposed to waive a ban on nuclear trade with India without conditions such as compliance with a nuclear test ban or U.N. inspections, but diplomats said on Thursday the draft was unlikely to pass.

The draft, circulated among members of the Nuclear Suppliers Group (NSG) and unveiled late on Wednesday by an arms control advocacy, will be discussed by the NSG next week in Vienna.

A green light by the 45-nation NSG, which operates by consensus, is necessary for the 2005 U.S.-India deal on nuclear trade to proceed to U.S. Congress for final ratification.

It would lift a 34-year embargo on nuclear trade for civilian purposes with the Asian atomic power, which has not signed the Non-Proliferation Treaty and has tested atomic bombs.

But diplomats from several NSG member states said the draft fell behind earlier U.S. proposals, had unacceptable clauses and omissions, and went against existing U.S. laws on the deal.

“I would be very surprised if that would happen,” said a diplomat, who like the others, spoke on condition of anonymity.

“There are no conditions. Obviously what is missing is that (the waiver) is void if there is another atomic test.”

A second diplomat said: “I think a majority of countries feel that the current draft is very weak and there is no conditionality at all... I don’t really think that the U.S. expect that they are able to pass this draft.”

If the waiver does not get NSG approval next week or at a second meeting likely early next month, it may not get ratified by the end of September, when U.S. Congress adjourns for November elections, and could face indefinite limbo.

The draft was published by the U.S.-based Arms Control Association ( late on Wednesday. A spokeswoman for the U.S. mission in Vienna declined to comment.

A senior Indian foreign ministry official said they were happy with the draft. “We are hopeful the deal will make it to U.S. Congress by Sept. 8,” the official said.


Several NSG nations are unlikely to approve an exemption unless it makes clear certain events -- such as India testing a nuclear bomb or not allowing inspections at its nuclear facilities -- would trigger a review.

Such demands are also stipulated in U.S. legislation regarding the U.S.-India deal -- known as the Hyde Act -- which requires permanent, unconditional inspections in India and says trade must stop if it tests another atom bomb.

A powerful congressional leader wrote to Secretary of State Condoleezza Rice last week saying if the waiver does not spell out such minimum conditions, the Bush administration should not bother seeking NSG approval before it leaves office in January.

But the draft states only that NSG members “have taken note of steps that India has taken voluntarily,” including its unilateral moratorium on nuclear tests and its commitment to allow inspections by the U.N. nuclear watchdog. It mentions no consequences in case India does not adhere to the measures.

Indian media reported last week that Washington, under pressure from India, had removed a paragraph from an earlier draft that would have given NSG member states a right to suspend the deal if they felt India had reneged on its promises.

Diplomats said the overall weakness of the draft might be a tactical U.S. move to overcome India’s aim to win a “clean and unconditional” waiver by prompting resistance from NSG states.

India’s government almost collapsed last month when the Communists left the coalition, saying the nuclear deal would make India dependent on the United States.

“The Indian left is opposed to any demands coming from the Americans, but if they come from other countries, that may go down better domestically,” a third diplomat said. (Additional reporting by Krittivas Mukherjee in New Delhi) (Reporting by Boris Groendahl; Editing by Michael Winfrey)