Indo-US Nuclear Deal Said to Be Finalized, But Both Gov'ts Still Face Hurdles

By Deepak Mahaan | July 7, 2008 | 8:18 PM EDT

New Delhi ( - Indian scientists have hailed a nuclear agreement with the United States as a victory, although there are still uncertainties about exactly what was agreed - and the deal has yet to be approved by decision-making bodies in both countries.

After several rounds of hard-fought negotiations, a joint statement released in Washington Friday by officials of the two countries said "substantial progress" had been made with regard to "outstanding issues."

Although the details are yet to be released and a formal announcement depends on "final review" by political leadership, Indian Atomic Energy Commission member and former Chairman M.R. Srinivasan said the deal would end India's nuclear isolation. Senior officials at the Nuclear Power Corporation also praised the agreement, which will provide more power for the country.

Formally initiated two years ago by President Bush and Indian Prime Minister Manmohan Singh, the nuclear deal would make India the only country allowed to access nuclear fuel and technology without being a signatory to the non-proliferation treaty (NPT).

Nuclear power currently provides only three percent of India's energy supply. The agreement will enable India to expand its nuclear sector, providing a strengthened energy supply for its rapidly expanding economy. It will also open the door for billions of dollars worth of nuclear-related business for U.S. companies.

But before it can go into effect, it must gain the approval of the U.S. Congress and India's Cabinet Committee on Security (CCS).

India will also have to secure a safeguards agreement from the International Atomic Energy Agency and get the okay from the Nuclear Suppliers' Group of nations that control world trade in fissile materials.

It remains to be confirmed whether the U.S. has agreed to a key Indian demand for the right to reprocess spent nuclear fuel and an assurance of continuous fuel supply even if it conducts a nuclear test, but as India had been adamant on that score, analysts here say it is unlikely the deal would have been finalized in the absence of such concessions on the part of the U.S.

India's scientific community has insisted that India must not back down on the reprocessing demand, and Srinivasan said it had been up to the U.S. to resolve the matter.

Last December, Congress passed the Hyde Act, which paved the way for nuclear cooperation with India, despite its possession of nuclear weapons and NPT non-signatory status.

But the legislation also stipulated that cooperation should be terminated if India conducts another nuclear weapons test and tied continued cooperation to India's position on Iran, which the U.S. seeks to isolate in the international community.

India maintains that the restrictions contained in the Hyde Act are not binding, as they are not in accord with Indo-U.S. joint statements from July 2005 and March 2006. New Delhi also insists that it will not sacrifice its strategic program.

The existence of the Hyde Act is likely to complicate the Bush administration's efforts to get congressional approval for the agreement. The Indian government, too, faces strong opposition from some quarters at home.

A former prime minister, V.P. Singh, said he feared the deal could curb India's nuclear independence and demanded parliamentary approval - not just the endorsement of the CCS - contending that the "people have the right to know about everything."

The opposition Hindu nationalist Bharatiya Janata Party (BJP) and leftist parties view the deal as suspect. Opponents claim the Hyde Agreement is evidence that the U.S. is using the proposed deal in a bid to restrict India's nuclear weapons program.

But political analyst professor Ramakant, former director of the South Asian Studies Centre in Jaipur, said no government in New Delhi could accept restrictions that undermine the country's security and place it "at a severe disadvantage" with China, India's giant, nuclear-armed northern neighbor.

Another political analyst, Siddharth Varadarajan, argued that both the Indian and U.S. governments are racing against time as Bush's time in the White House is running out.

If the U.S. hoped to harness "India's evident strategic weight for its own geopolitical aims," Varadarajan said, it must do so quickly.

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