A Secondary Role for U.S. in India's Nuclear Future

By Rama Lakshmi
Washington Post Foreign Service
Tuesday, September 2, 2008

NEW DELHI -- Four months before India shocked the world by conducting underground nuclear tests in 1998, French President Jacques Chirac visited India, bringing along 100 business leaders and meeting with Indian p olicymakers and industrialists.

At one meeting, Chirac surprised the Indians: "He said, 'France would fully understand if India conducted nuclear tests. We will be with you,' " recalled Tarun Das, chief mentor of the Confederation of Indian Industry, a business lobby that received the French delegates.

France has a long history of working closely with India's nuclear industry, as does Russia, Das noted. But American nuclear companies have been unable to do business in India since 1974, when trade restrictions went into effect after New Delhi tested its first atomic device.

Now, a historic civilian nuclear deal between India and the United States will allow American companies to return and will lift restrictions on other countries' sales of nuclear technology and fuel to India.

France and Russia "come at the head of the queue for business contracts from the nuclear deal now," Das said. "But let us not forget it is a very, very long line behind. And Americans and others are the long line behind."

Beyond shrill political statements, climate change and proclaimed foreign policy triumphs, the nuclear energy agreement is also about business worth more than $100 billion over about two decades and potentially tens of thousands of jobs in the United States and India. American companies hope to get a sizable slice of the Indian nuclear pie and land big contracts in defense and aerospace.

The accord is on track to be approved this week by the 45-country Nuclear Suppliers Group, which governs the world's trade in nuclear materials.

But many officials and experts in both countries say that even after the political and diplomatic hurdles are cleared, contracts for U.S. companies will not be given out immediately. The first round of contracts after the suppliers group's approval will probably go to France and Russia, they say. A delay in U.S. ratification of the agreement, a lack of liability laws in India and the disquieting memory of severed nuclear ties would probably slow things down for the Americans.

Because of a severe shortage of uranium, many of India's 17 nuclear reactors are operating at 40 percent of capacity. About 30 reactors are expected to be built by 2030 in the energy-starved country.

Nuclear experts in India and the United States say India has given informal approval to government-owned companies in Russia and France to build six to eight reactors in the near term.

"It is not right to say that France and Russia have been given the sites for reactors. But it is not wrong either," said Sudhinder Thakur, executive director of the Nuclear Power Corp. of India, a state-owned company that has a monopoly on nuclear power generation in India. "It is known that we have commenced preparatory work of land acquisition and infrastructure building at four places. We have enjoyed long-term cooperation with Russians and French."

When some American delegations asked for a similar declaration of support, India would give only verbal assurances. Such agreements with American firms would have been politically inflammatory in India because of opposition to the nuclear deal based on Cold War-era wariness toward the United States.

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