India looks to U.S. to cement nuclear warming

U.S. President George W. Bush (R) meets India's Prime Minister Manmohan Singh in the Oval Office at the White House in Washington September 25, 2008.

NEW DELHI (Reuters) - India will gain recognition as a nuclear power if the U.S. Senate passes a civil atomic cooperation deal on Wednesday, unleashing billions of dollars of investment and drawing the country closer to the West.

The vote will cap a tortuous negotiation process and, if it goes through, represent something of a triumph for U.S. President George W. Bush and Indian Prime Minister Manmohan Singh.

It will also cap India's gradual rapprochement with the West since the days of socialist self-reliance, a process which began with economic reforms in the 1990s and has gathered pace with the spread of wealth and Western culture ever since.

"The U.S.-India relationship had a certain trust deficit, but this removes that deficit," said Robinder Sachdev, president of Imagindia, an Indian lobby group. "It brings India closer in terms of its engagement with the West."

Critics say the deal blows a hole in global efforts to contain the spread of nuclear bombs, by allowing India to import nuclear fuel and technology even though it has tested atomic weapons and never signed the Non-Proliferation Treaty.

But that argument was brushed aside by the Nuclear Suppliers' Group, under intense U.S. lobbying, in September.

Business opportunities, not only in nuclear trade but also elsewhere in one of the world's biggest and fastest growing emerging markets, also helped overcome any scruples.

"India has got what it wanted on its own terms," said Seema Desai of political risk consultants Eurasia Group in London. "That is a sign of India's rise."

The deal could open up around $27 billion in investment in 18-20 nuclear plants over the next 15 years, according to the Confederation of Indian Industry, with companies from the United States, Russia, France and India all expected to benefit.

By 2030, the overall economic benefits that will accrue to India's economy could touch $500 billion, says Imagindia.

But the deal will not solve India's energy deficit, which is yawning as its economy accelerates. Nuclear power could double its share in India's electricity supply but is unlikely to surpass 7 percent in the next two decades, analysts say.

Singh had to overcome fierce opposition from his own communist allies and a nail-biting no-confidence vote to get the deal through India's parliament in July.

"This will send a message to the world that India's head and heart is sound, that India is prepared to take its rightful place in the comity of nations," he said at the time.

BRIDGE BETWEEN ASIA AND THE WEST

Despite opposition from the non-proliferation lobby, the deal got an easier ride through the House of Representatives last week, winning by 298-117 votes, and is expected to get final Senate approval without too much trouble.

For Washington, the deal seals a strategic partnership with the world's largest democracy and a growing business partner, a country that can act as an Asian counterbalance to China's rise.

Ever prickly about its independence, India's government has never sold the deal to its own people in those terms, stressing instead its benefits in purely economic and energy terms.

Nevertheless, India is increasingly walking in step with the West over Iran, Singh telling European leaders this week that his country was opposed to Tehran's "nuclear ambitions".

The mild-mannered Singh may have overstated the case last week when he told Bush "the people of India deeply love you," and was mocked as a result. Like France, India will never be an unquestioning servant of American interests.

There is no denying, however, the broader sweep of history.

Almost half of India's 1.1 billion people are under the age of 25, and many look for American inspiration in what they wear and how they entertain themselves. Ideas like competition and individualism are gathering pace too.

"We share democracy and we have a historical relationship with the West, the U.K.," said Sachdev. "We are a bridge between Asia and the West."