Parties meet over fate of nuclear deal

By Alistair Scrutton

NEW DELHI (Reuters) - A coalition of smaller parties in India will hold a meeting on Thursday to decide whether to support a civilian nuclear deal with the United States, a move that could help decide the fate of India's embattled government.

The United National Progressive Alliance (UNPA) includes the regional Samajwadi Party, which the ruling coalition wants to woo amid signs communist parties that currently back the government in parliament will withdraw their support over the nuclear deal.

National security adviser M.K. Narayanan met leaders of the Samajwadi Party late on Wednesday to try to persuade them to back the deal, seen as a landmark accord moving India's trade and diplomatic relations closer to the West.

"Yes, we will discuss the nuclear deal and its implications today," Amar Singh, the Samajwadi Party general secretary, told Reuters hours before the meeting was due to start.

The stakes are huge.

If the government fails to secure Samajwadi support and the left withdraws from supporting the coalition, the government will almost certainly face early elections this year just as inflation rises to record levels and the economy shows signs of a slowdown.

The ruling coalition already faces other challenges, including an indefinite strike by truckers across the country to protest against rising fuel prices. The strike threatens to drive inflation even higher and choke off some supplies of basic goods.

The pact, which would give India access to U.S. nuclear fuel and technology, is potentially worth billions of dollars to U.S. and European nuclear supplier companies and would give India more energy alternatives to drive its development.