India, US rally for their nuclear
deal By Siddharth Srivastava
NEW DELHI - Following up on US President
George W Bush's visit to India last month, both
Washington and Delhi are trying to ensure that
their agreement to share civilian nuclear
technology will reach fruition, as many millions
of dollars are at stake.
Under a
plan formally agreed when Bush met with Indian
Prime Minister Manmohan Singh, the United States
would help India build nuclear power plants. India
would permit inspections
of its
civilian reactors, but there would be no oversight
of its nuclear-weapons program.
The Bush
administration has now asked the US Congress -
where there are strong pockets of opposition - to
exempt India from provisions of the Atomic Energy
Act that curb trade with nations not party to
nuclear treaties, as India is not a signatory of
the nuclear Non-Proliferation Treaty.
US
companies believe that India will be in the market
for more than US$100 billion in nuclear supplies,
and Washington is also eyeing India's immediate
$15 billion agenda of upgrading its armed forces,
contracts that Washington does not want to lose to
Russia, Israel and France.
India will soon
implement changes in its laws to attract larger
foreign and private investments in the
nuclear-power sector. This will require an
amendment to its Atomic Energy Act, which
stipulates that all nuclear development must be
handled by the government.
Initial
indicators are that the government is likely to
allow foreign direct investment of up to 49% in
the nuclear-power sector. Leading Indian power
companies such as Reliance Energy, Tata Power and
National Thermal Power Corp (NTPC) have already
chalked out investment plans once nuclear power is
opened up.
"We have been working on
possible amendments to the Indian Atomic Energy
Act 1962 for the last five years and now we are
trying to speed up the process," Anil Kakodkar,
chairman of the Atomic Energy Commission and
secretary of the Department of Atomic Energy, has
been quoted by news agency Press Trust of India.
India is not relying only on diplomatic
efforts for the deal to win the endorsement of the
US Congress. The Indian Embassy in Washington has
signed on two lobbying firms to "sell the deal".
It has a $700,000 contract with Barbour,
Griffith and Rogers, an outfit led by Robert
Blackwill, US ambassador to India from 2001-03 and
an advocate of closer India-US ties. In addition,
the embassy is paying $600,000 to Venable, with
former Democratic senator Birch Bayh of Indiana as
its point man. This will translate into an annual
cost of $1.3 million to Indian taxpayers.
India's needs are pressing, as it imports
70% of its crude-oil requirements. Nuclear energy
accounts for an abysmal 2.5% of electricity needs,
with a host of safety problems. India aims to
increase this ratio to 25% by 2050.
On its
side, the Bush administration this week began an
intense effort to persuade Congress to support the
agreement. Nicholas Burns, an under secretary of
state, said that as a friendly democracy with no
record of proliferating nuclear weapons, "India
can be trusted".
The argument that to work
with India's civilian nuclear program would weaken
efforts to limit Iranian nuclear ambitions, he
said, "carries no water, it has no weight, and
it's not accurate".
The case for the
nuclear deal could also be buttressed by the
decision of Russia to supply nuclear fuel to India
in the wake of the India-US pact. Russia sees
India as a major market and has been keen on
expanding nuclear links with it. To the chagrin of
Washington, which has to grapple with clearance of
the pact with Congress, Moscow has announced the
supply about 60 tons of nuclear fuel to strapped
reactors Tarapur Atomic Power Stations I and II,
near Mumbai.
Moscow has sent a notice of
its intent to the 45-nation Nuclear Suppliers
Group (NSG). The decision comes at a critical time
when the Tarapur reactors might have had to shut
down because of fuel shortages. Washington has
reason to feel cheated and has expressed its
displeasure at the move. After doing all the hard
work to bend world opinion toward accepting India
as the "nuclear exception", it will be concerned
that Moscow is walking away with nuclear
contracts. Moscow's move, however, could push the
deal in the US Congress. The NSG is scheduled to
look at India's nuclear status in May.
In
this context, an intense and costly business
lobbying effort is in place to persuade Congress
to ratify the deal. It is being emphasized that
the deal promises a "bounty of opportunity". The
lobbying drive (estimated at more than $100
million) is the most expensive ever mounted by
business, Ron Somers, president of the US-India
Business Council of the US Chamber of Commerce
(USCC), has said. What is more, the US will
benefit despite not having built any new plants
for more than 30 years.
Somers told
Reuters news agency that retired US Army
Lieutenant-General Daniel Christman, a former
superintendent of the US Military Academy at West
Point, New York, now working for the USCC, would
coordinate a broad effort as the Coalition for
Partnership with India that groups businesses,
think-tanks and academics supporting the deal.
This will complement the US-India Business
Council (USIBC), which has engaged the politically
well-connected Patton Boggs law firm to lobby
lawmakers. Boggs is one of the leading and most
expensive lobbying firms in Washington, with a
billing rate of $495 an hour.
While
announcing the hiring of Patton Boggs, the USIBC,
which has nearly 100 Fortune 500 companies among
its members that do business in India, said: "We
strongly feel that the fate of the strategic
partnership between the United States and India,
as embodied in the Joint Statement signed by
President Bush and Prime Minister Singh on July
18, is key to the overall US-India relationship
and thereby our respective business interests.
This is a debate in which the USIBC must be
engaged."
The Indian Express has reported
that Washington has invited India to appoint
military officers to liaison posts in the US
Strategic Command (Stratcom), its largest and most
critical defense setup authorized to control
strategic nuclear assets, space and missile
defense and global deterrence against weapons of
mass destruction.
Stratcom's area of
operation spans the globe, controls all US
nuclear-delivery platforms, including
ballistic-missile submarines, B-52 strategic
bombers, Minuteman III intercontinental ballistic
missiles and Tomahawk land-attack systems. "Having
an Indian liaison officer on board will allow a
more efficient link between Stratcom centers and
India's relatively new Strategic Forces Command
that controls Indian military nuclear assets," the
newspaper commented.
There are other
aspects of business in which the US has marked out
India. There is a bid to double trade to $40
billion in three years. The Pentagon expects India
to start purchasing as much as $5 billion worth of
conventional military equipment.
In
keeping with the new-found bonhomie, last April
US-based Boeing won a $6.9 billion order for 50
aircraft from Air India, the country's
public-sector airline. Boeing faced stiff
competition from France's Airbus, but personal
intervention by Bush sealed the deal. US firms are
eyeing India's huge retail market, which is valued
at more than $250 billion, with several foreign
players urging New Delhi to open the sector.
Telecom giant Bharti recently announced
that it plans to enter the retail segment and is
in talks with top international chains, including
the world's largest retailer, Wal-Mart.
Outsourcing from the US remains the money-spinner
for India. A McKinsey report on the
information-technology-enabled sector has revised
India's outsourcing share from $17 billion to
between $21 billion and $24 billion by 2008, the
bulk from the US.
Siddharth
Srivastava is a New Delhi-based
journalist.
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