New Energy on India

By Steven Mufson
Washington Post Staff Writer
Tuesday, July 18, 2006

Like his father, who once headed covert operations for the Central Intelligence Agency, Graham Wisner has constructed a matrix about people he believes to be of special interest.

But Wisner, a lawyer and lobbyist at Patton Boggs LLP, is seeking passage of a bill that would allow nuclear energy cooperation between the United States and India. So his matrix includes such useful lobbying details as these: The independent-minded Sen. Paul S. Sarbanes (D-Md.) cares more about nonproliferation issues than about corporate interests; Sen. Barbara Boxer (D-Calif.) is anxious about India's relationship with Iran; and two-thirds of the physicians in the district represented by House Democratic Whip Steny H. Hoyer (D-Md.) are Indian Americans.

His efforts and those of Indian American groups, leading U.S. companies and other lobbyists paid off last month, as foreign relations committees in both the House and Senate approved by wide bipartisan margins the gist of a deal struck last July by the Bush administration. That deal would eliminate obstacles to U.S. participation in India's civilian nuclear energy sector, brushing aside restrictions in effect since 1974 when India tested its first nuclear bomb.

American business executives think a lot is riding on the bill. The deputy chairman of India's planning commission, Montek Singh Ahluwalia, said in a visit here in April that India "ought to be targeting something of the order of $200 billion" in infrastructure spending -- half public money, half private -- over the next five years. And U.S. companies hope that the passage of this deal, after three decades of U.S. bans on the sale of nuclear equipment to India, will help them get their share.

The sanctions have been a "cinder in the eye of India," said Wisner, quoting his brother, Frank, a former U.S. ambassador to India and now vice chairman at American International Group Inc. While proliferation experts say that lifting restrictions would enable India to channel more nuclear material to its weapons program, the Indian government has made the vote a test of U.S. reliability and India's prestige.

It's possible that few U.S. companies would directly benefit from U.S.-Indian cooperation on civilian nuclear power plants. Only four companies worldwide build the most sensitive components of such plants: France's state-controlled Areva; Toshiba Corp., which is buying Westinghouse's nuclear unit from British Nuclear Fuels PLC; Russia's newly consolidated Atomprom; and General Electric Co.

One executive said the French and Russian firms are already in the advanced stages of negotiations to build the eight nuclear plants India is planning. "We're afraid that they may get all eight," said the executive, who spoke on the condition of anonymity because his company does not want to comment on the status of talks.

Even if the French and Russians prevail, U.S. companies are hoping to win related contracts either building containment structures, selling turbines or providing services for the handling of waste.

Above all, U.S. companies hope the goodwill from lifting nuclear restrictions will spill over to other types of business just when the world's 11th largest economy is racing ahead. U.S. exports to India have nearly doubled in three years, to $8 billion, still less than 1 percent of total U.S. exports.

GE, which had about $1.1 billion in sales in India in 2005, has set a goal of $8 billion in sales there by 2010. It hopes to achieve that mostly through big infrastructure projects providing water, energy and aviation equipment.

"Expectations in the business world have been growing for the past decade, and they are beginning to be requited," said Thomas R. Pickering, a six-time ambassador, including a stint as the U.S. envoy to India. Boeing Co., where Pickering has been vice president of international relations for five years, signed an $11 billion deal in January to sell 68 planes to Air India. Boeing is also eyeing sales to private airlines there, which, Pickering said, "are growing by leaps and bounds."

Pickering said Boeing also is seeking to supply more than 120 fighter planes to the Indian air force. "That would be the largest fighter sale for the decade, if not the century," he said. Lockheed Martin Corp., another supporter of the U.S.-India Business Council, also hopes to win contracts from India's military, which has a $23.5 billion budget this year. India has not bought arms from the United States since 1965, when President Lyndon B. Johnson cut sales during the India-Pakistan war.

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