Fresh crisis brews over India-U.S. nuclear deal

NEW DELHI (Reuters) - India’s government and its communist allies are eyeing ways out of their face-off over a nuclear pact with the United States, but failure to grasp these straws will spark a fresh crisis next month, officials said.

India's Prime Minister Manmohan Singh attends an event to dedicate two new nuclear power reactors at Tarapur Atomic Power Station (TAPS), north of Mumbai, August 31, 2007. India's government and its communist allies are eyeing ways out of their face-off over a nuclear pact with the United States, but failure to grasp these straws will spark a fresh crisis next month, officials said. REUTERS/Punit Paranjpe

Prime Minister Manmohan Singh’s coalition faces an informal end-October deadline to start working on the next steps needed to clinch the deal, and if the row with left parties opposed to it is not resolved by then early polls may be called, they said.

“There are one or two options being considered. But either way, we have to decide by the end of October,” said a government minister. “The Americans want the deal to be approved by their Congress before it goes for its summer break around June.”

Working backwards from that deadline, India would need to start the process of securing a safeguards agreement with the International Atomic Energy Agency -- something that the communists have warned against -- in late October, said the minister, who spoke on condition of anonymity.

“If the left does not agree then we need to take a call on seeking a fresh mandate while pursuing the approvals, hoping that we can come back to power and complete the process,” he said.

The civilian nuclear cooperation pact, first agreed in principle in 2005, aims to end India’s nuclear isolation and give it access to U.S. fuel and reactors even though it has tested nuclear weapons and not signed the Non-Proliferation Treaty.

While it has been hailed as historic by the two governments and seen as a symbol of their growing strategic ties, communist parties who shore up the Indian coalition have rejected it and threatened to end support if New Delhi pursues the deal.

The communists, known for their traditional anti-Americanism, say U.S. laws governing the deal threaten India’s sovereignty and that the pact would also pull New Delhi into Washington’s strategic embrace, a contention the government rejects.


Last month, as the crisis escalated, the two sides formed a panel to study the deal and address communist concerns in what was largely seen as an exercise to buy time. The panel has met twice so far and reported little progress.

A senior communist leader, however, confirmed the minister’s comments that the panel was working on ideas that offered hope.

“There are some points, there are legal loopholes,” the leader, who did not want to be identified due to the sensitive nature of the negotiations, told Reuters. “Ultimately it depends on what we make of them.”

Both leaders also refused to discuss details of the options before the panel saying that could jeopardize the talks, the next round of which is due on October 5.

Besides the safeguards agreement with the IAEA, India also needs the approval of the 45-nation Nuclear Suppliers Group that governs global nuclear trade before the pact can seek the backing of the U.S. Congress.

It also needs to wait for 90 business days in Congress before legislators can vote on it.

Washington’s urgency to conclude this process before the summer break of the legislature is largely due to a fear that Congress would find it tough to transact important business later as it gets preoccupied with a presidential election in November.

The summer deadline may not be sacrosanct, and technically the process could continue until the end of the current Congress in late 2008, said Teresita Schaffer, South Asia director at Washington’s Center for Strategic and International Studies.

“But with a presidential election on the horizon, both the election atmosphere and the press of obligatory business like the budget makes it very risky to defer important issues into the latter part of the year,” she said.

An Indian election during this process would also complicate matters.

“If the Indian government moved ahead, the administration would start the process with the U.S. Congress, recognizing that your election process is completed more quickly than ours,” Schaffer, a former U.S. diplomat, said.

“But the U.S. Congress would certainly need to see some indication that the new Indian government was on board, before they took final action.”