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Oil report

UPDATE 1-FACTBOX-Five scenarios for the India-U.S. nuclear deal

(Recasts with meeting postponed)

NEW DELHI, June 18 (Reuters) - A meeting between the Indian government and its communist allies to break a deadlock over a controversial nuclear energy deal with the United States has been postponed, a senior communist leader said on Wednesday.

Analysts had expected little progress at the meeting, which television stations reported could be rescheduled for June 25.

Nilotpal Basu, a senior leader of the Communist Party of India (Marxist), said the left had been told that Foreign Minister Pranab Mukherjee, a key intermediary in talks on the deal, was unavailable due to a visit by the Syrian president.

The deal is now stalled because of opposition from the communists who say it is detrimental to India’s security.

At this stage, a few possible scenarios have emerged, according to Western diplomats and analysts. For a story see: [ID:nDEL61218]

* Having invested heavily in the deal, India’s government defies its communists allies and goes ahead with it, while also calling early elections. The government has ruled this out, and early elections are seen as very unlikely in the face of soaring inflation. * Indian communists allow the government to negotiate an India-specific safeguards agreement with the International Atomic Energy Agency (IAEA), but not let the deal go any further.

This would mean the pact would have to be taken up after elections in the U.S. this year and India next year, but at least some progress would have been made. So far, the communists oppose this option.

* The deal remains stalled and is taken up in its present form by new governments in India and the United States after elections in the two countries. This is a possibility given the business, diplomatic and energy compulsions behind the deal in the first place.

* New governments in both countries decide to renegotiate the deal. This is also a realistic possibility, but renegotiation could be a long and painful process, with no guarantee a new agreement would be reached palatable to both sides.

* The deal is dropped entirely. So far, the two governments have been unwilling to admit failure, but it is possible the agreement could die a slow death out of the public eye. (Compiled by Krittivas Mukherjee; Editing by Simon Denyer and Jerry Norton)

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