Y.P. Rajesh, Reuters
New Delhi: India is struggling to strike a compromise over a landmark nuclear deal with the United States amid fears in New Delhi that American business and political pressure could sink it, officials and analysts said on Friday.
The controversial deal, agreed in principle in 2005 as a symbol of the growing warmth between the two countries, is in limbo due to what Washington says is New Delhi’s refusal to accept conditions essential to clinch the pact.
However, Indian officials and experts close to the negotiations said those conditions were stifling to New Delhi politically and economically.
Representatives of the two countries were holding talks on the sidelines of a Nuclear Suppliers Group meeting in South Africa this week to seek a compromise but progress could be slow.
“We have to negotiate within a framework we have set ourselves,” a top Indian official, who did not want to be identified, told Reuters.
“It is an ongoing conversation and we aren’t finished yet. So it is not possible to say which side is being more flexible or less,” he said.
The deal aims to overturn a three-decade ban on nuclear trade between the countries and help India meet its soaring energy needs even though New Delhi has not signed the Non-Proliferation Treaty and has tested nuclear weapons.
The pact was approved by the U.S. Congress in December but the countries have since struggled to negotiate a bilateral agreement that lays down the terms of nuclear trade.
“The nuclear deal is certainly in limbo,” said Robinder Sachdev of lobby group U.S. Indian Political Action Committee.
Two key terms have held up signing of the agreement.
The first relates to Washington ending nuclear cooperation if New Delhi conducts another nuclear test.
India has declared a unilateral moratorium on further tests after conducting underground explosions in 1998 but has refused to join the Comprehensive Test Ban Treaty.
Some Indian scientists say they would like New Delhi to have the freedom to test again, while agreeing to the condition would make the moratorium binding.
This is also a political landmine for Indian Prime Minister Manmohan Singh as he is under strong pressure from communist allies and the opposition Hindu nationalists who don’t want him to succumb to U.S. pressure.
Already weakened by losses in local elections and facing flak for rising prices, Singh’s ruling Congress is not in a mood to face charges of a sell-out to Washington.
A second, and what some Indian experts say is a more important hurdle, is Washington’s refusal to allow India to reprocess U.S.-origin spent fuel.
India has negligible uranium of its own and the country’s nuclear programme is pursuing an ambitious plan to eventually switch to using thorium — another nuclear fuel of which India has nearly a third of global reserves.
However, the thorium cycle needs to use small quantities of plutonium, extracted from reprocessing spent fuel rods. Plutonium can also be used to make bombs and Washington ostensibly doesn’t want to allow that.
But with the potential of India’s nuclear market seen at $100 billion (Rs4,177 crore), some Indian experts said they suspect Washington is more keen to ensure India does not become independent of U.S. uranium supplies and technology.
“The biggest challenge to the consummation of the agreement is from the economics of nuclear policies that India is pursuing,” said Sachdev.
The government official said while New Delhi could agree to the clause on future tests if Singh could do some political tightrope walking, it was unlikely to compromise on reprocessing.
“The whole thing has begun to smack of atomic colonialism,” said R.R. Subramanian, an independent Indian nuclear expert. “America wants India to be dedicated to its enriched uranium. They don’t want India to become independent and lose business.”