**OT** Rise In India-US Trade Remains Hostage To Nuclear Issue
Monday, March 20 12:40 PM SGT
NEW DELHI (Dow Jones)--When U.S. President Bill Clinton and his entourage of cabinet secretaries and executives begin their official visit to India March 21, the talk and publicity shots will be about doing business with the new technologically savvy and reform-minded India.
But senior policy analysts, including the author of a recent book about India's nuclear weapons program, say both countries will be stymied on forming a wider business relationship until one of them blinks on their seemingly irreconcilable positions on nuclear non proliferation.
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George Perkovich, author of "India's Nuclear Bomb,"
has interviewed senior U.S. and Indian officials ahead of the first trip by an American president to India in 22 years to get a sense of the mood on the non-proliferation issue. His book received wide acclaim in nuclear policy circles in both the U.S. and India as a timely and accurate review of the state of nuclear policy in South Asia.
"There is a very unsettled quality to the way the U.S. is thinking about India and non proliferation," Perkovich, director of the Secure World Program at the California-based W. Alton Jones Foundation said in an interview with Dow Jones Newswires. "The emphasis is on making exceptions to build stronger trade and diplomatic ties. But in the larger picture it means a change in the idea of how non proliferation is supposed to work."
In a recent speech to the Asia Society, U.S. Secretary of State Madeleine Albright, who will visit India with Clinton, brought out these seemingly contradictory policy goals, expressing concern about India's maverick nuclear weapons program while also saying the U.S. is keenly focused on the Indian economy, which she referred to as "one of the great underreported success stories of the 1990s".
Indeed, as part of its pursuit of a bigger piece of the Indian growth story, Washington is looking at new forms of business development loans including rupee-denominated payback terms to unleash billions of dollars for Indian companies to buy American goods, said James Harmon, chairman of the U.S. Export-Import Bank.
While India isn't necessarily looking for new loans, it does want modern technology from the U.S. and would use the low-interest funding provided by the Ex-Im Bank to buy what it can under existing US law.
More important for New Delhi is getting foreign direct investment, especially in infrastructure projects from U.S. companies. India's goal is $10 billion of FDI for the fiscal year beginning April 1. But FDI has steadily fallen since the nuclear tests to below $2 billion for the current fiscal year from more than $3.5 billion before the tests.
And in her Asia Society speech, Albright put a major caveat on expanding the economic relationship by noting that the nuclear tests of May 1998 by India and Pakistan are still a topic of unfinished business.
"The United States continues to seek universal adherence to the NPT (Non Proliferation Treaty)," Albright said. "We believe the South Asian nuclear tests on May 1998 were a historic mistake" referring to tests both by India and Pakistan in May 1998.
Perkovich and other analysts, however, suggest the U.S. is floundering in trying to convince India to rectify the so-called mistake.
The initial effort to get India to abandon nuclear weapons - economic sanctions mandated under U.S. law - was a failure. But the new policy of political and commercial engagement doesn't always seem better and may be sending mixed messages, Perkovich said.
Clinton spent one night as a rest stopover in New Delhi Sunday and is off to Dhaka, Bangladesh, Monday, a public holiday in India. His official visit to India starts March 21 and ends March 25 followed by a brief stop in Pakistan.
U.S. Still Calls For Abandonment Of Nuclear Weapons
India believes wider commercial dealings will lead to the U.S. changing its views, and not prompt it to "cap, reverse and eliminate" its nuclear weapons program as the U.S. desires, according to V.R. Raghavan, a retired lieutenant general who was a director general of military operations on the line-of-control in Kashmir and now works with the privately funded Delhi Policy Group think tank.
However, many in the U.S. policy establishment still believe they can convince India to sign the Non Proliferation and Comprehensive Test Ban (CTBT) treaties, Perkovich says.
"Really, the two countries have two different views about what's happening," Perkovich said. "The U.S. thinks it is inching India forward on joining the NPT regime and India thinks it's convincing the U.S. that a new paradigm on NPT needs to evolve."
For India, the NPT, which allows only five countries nuclear weapons status, is discriminatory and it claims the nuclear powers aren't actively achieving the goal of eliminating their own nuclear arsenals. As well, the rejection by the U.S. Senate of the CTBT last year made the issue of India becoming a signatory a dead letter, says Raghavan.
"Neither side looks ready to budge and it creates an uneasy road for trying to build a special commercial relationship," Raghavan said.
But Clinton can take executive branch actions that lessen the impact of nuclear laws and treaties, Perkovich says, most of which are economic in scope. For instance, one carrot the U.S. may offer is a switch on current U.S. export policy of high technology items to India that could have military applications, or so-called dual-use technology. Perkovich said Clinton may tell India it is ready to move to a presumption of approval for such exports from the current presumption of denial.
Pakistan And Kashmir Remain Serious Issues
Adding to the deadlock, is India's rival and neighbor Pakistan. The U.S. had a strong Cold War alliance with Pakistan and continues to want to support the country despite the military coup in 1999. But both India and Pakistan are using increasingly harsh language about the ongoing fighting in the disputed Himalayan region of Kashmir.
Startlingly, Perkovich says many in the intelligence communities of the U.S. and India he spoke to recently actively think a war between India and Pakistan is possible soon and have even raised the specter of a nuclear exchange. While Raghavan, and even Foreign Minister Jaswant Singh in a recent interview, ruled out such a possibility, ongoing and increasingly fiercer skirmishes between India and Pakistan in Kashmir continue to remain a hot news topic. Clinton recently termed the region "the most dangerous place in the world."
Perkovich says tension with Pakistan is a key reason why India wanted overt nuclear weapons capability. It wanted to make explicit, what was previously implicit, it had the technology and delivery systems to deter its rival.
As well, it wanted to enjoy the kind of wide recognition afforded to China as a nuclear weapons state - including massive investment. New Delhi has previously pressed for a seat on the U.N. Security Council as a permanent member, saying the post-World War II membership based on nuclear capability is out of date.
A series of talks between Foreign Minister Singh and U.S. Deputy Secretary of State Strobe Talbott are discussing these issues. The talks led to an indefinite waiver of some sanctions and moral support this past summer when India and Pakistan came close to war in the Kargil region of Kashmir. Clinton asked then Pakistan Prime Minister Nawaz Sharif to order militants that invaded Indian-controlled Kashmir to withdrawal from strategic heights.
But for countries like Ukraine, Brazil, South Africa and Argentina which either gave up weapons programs or signed the NPT as nuclear weapon capable states it would be a bitter pill to see India get politically and commercially rewarded for defying the international treaty, Perkovich says.
"If countries like India and Israel in particular are both allowed special status for thumbing their noses at NPT, what's the point of any other country signing?" Perkovich says. The U.S. said to those countries, "if you join the NPT no one else gets to be a bomb state - how can they now keep that currency at a high level?" |
