India and U.S.A. work toward nuclear fuel agreement

February 28, 2006

With U.S. President George W Bush preparing for a March 2 visit to India, the two countries' diplomatic teams are pressing hard to reach agreement on a landmark nuclear fuel agreement.

India's booming economy, with 8% annual growth, has led to large expenditures to both its civilian and military infrastructure but few of those contracts have fallen to U.S. firms. The U.S. trade deficit with India nearly doubled between 2001 and 2005, to $10 billion.

A trade agreement between India and the United States regarding nuclear fuel, a key for India's rapidly expanding economy and for U.S. corporations - the deal would pave the way for expanded high-tech trade - appears to be stalled over agreement as to which of India's reactors are civilian and which are military.

"We are doing very hard bargaining," Indian Foreign Secretary Shyam Saran told reporters on Monday.

The agreement aims to reassure the U.S. Congress that nuclear technology sharing will not be used to produce nuclear weapons. The two parties have been working to separate India's civilian and military nuclear programs.

"The decision of what facilities may be identified as civilian will be made by India alone and not by anyone else," Prime Minister Manmohan Singh told lawmakers Monday.

DNA India reports a late-night call between India's Prime Minister Manmohan Singh and U.S. Secretary of State Condoleezza Rice on Monday night may have carried information the Indian administration was waiting for; their government sources indicate a declaration of intent will be signed by Mr. Singh and Mr. Bush, who will arrive in India on Wednesday.

Indian-U.S. relations have been poor throughout the cold war period and up to present. When India detonated a nuclear device in 1998, effectively announcing it was a nuclear power, the U.S. applied economic sanctions, further complicating the relationship.

The U.S. sanctions were lifted in 2001 when the White House searched for partnerships following the 9/11 attacks. This helped begin new dialogues between New Delhi and Washington. An agreement signed in July 2005 on nuclear technology sharing laid the groundwork for the accord being worked on now.

The current accord has the support of Mohamed ElBaradei, the NATO head of the International Atomic Energy Agency. India has never been known to have sold or traded nuclear technology.