US, India see progress with nuclear deal

Published Jun 14, 2012 03:19am

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Indian Minister of External Affairs S.M. Krishna (L) laughs with US Secretary of State Hillary Clinton during a press conference following the US-India Strategic Dialogue at the State Department in Washington, DC June 13, 2012. - Photo by AFP.

WASHINGTON: The United States and India sought on Wednesday to dispel doubts over their relationship as a US company signed a deal on nuclear power, long a source of disappointment between the countries.

Secretary of State Hillary Clinton, who once called US affection for India an “affair of the heart,” said that the world's two largest democracies had entered a “new and more mature phase” in their partnership.

“With respect to affairs of the heart, they usually have ups and downs, but that does not make them any less heartfelt or any less of a commitment,” Clinton said as she held annual talks with India.

“There is less need today for the dramatic breakthroughs that marked earlier phases, but more need for steady, focused cooperation,” Clinton said as she met with Indian Foreign Minister S.M. Krishna and other senior officials.

But the deal that was arguably the most dramatic of the past breakthroughs between India and the United States - a 2008 agreement on nuclear power - has increasingly been cited as proof that the US-India relationship has not lived up to its potential.

On Wednesday, US-based Westinghouse Electric Co. announced that it was signing a preliminary deal with the state-run Nuclear Power Co. of India to build the first US nuclear reactors in the South Asian nation.

Westinghouse, a unit of Japan's Toshiba Corp., said that it had agreed to conduct initial licensing and site development work to build reactors at the Mithivirdi site in the western state of Gujarat.

Clinton called the agreement “a significant step toward the fulfillment” of the landmark US-India nuclear agreement, but acknowledged that the deal was preliminary and there was “still a lot of work to be done.” Krishna, speaking later at a solo news conference, said the Westinghouse agreement carried “special importance” in light of the concerns expressed earlier by US businesses.

The deal “opens up new vistas of opportunities for business in the United States,” Krishna said.

Former president George W. Bush spearheaded the 2008 deal, which recognized India's global stature by giving it access to civilian nuclear technology after decades of being treated as a pariah for building nuclear weapons.

But US companies have been reluctant to get to work in India as they are seeking greater protection from liabilities in the event of a nuclear disaster - a dispute that could still potentially affect the Westinghouse deal.

The United States argues that other countries such as Russia and France enjoy an unfair advantage as their nuclear companies have the backing of the state which can handle liabilities. The issue is sensitive in India, where thousands died in 1984 in a leak from a US-owned pesticide factory in Bhopal.

India has pledged to move ahead with nuclear power to support its growing economy and reduce the need for oil imports and dirty coal, despite rising global concerns about atomic energy since Japan's Fukushima disaster.

Despite concerns on both sides about the nuclear agreement, overall relations have been growing between the United States and India with the two governments forecasting that two-way trade may hit $100 billion for the first time this year.

The United States and India, which had uneasy relations during the Cold War, have also found common cause on security issues. India is one of the most enthusiastic supporters of US-led efforts in Afghanistan as extremists consider New Delhi a top target.

Clinton welcomed the $2 billion given by India to Afghanistan since the 2001 war overthrew the Taliban. Pakistan has fiercely opposed its arch-rival's influence in Afghanistan, but US relations have sharply deteriorated with Pakistan.

“I am very pleased that Afghanistan is getting this kind of encouragement and tangible support because it's in everyone's interests that Afghanistan be as secure and stable as possible,” Clinton said.

Clinton also welcomed India's reductions of oil purchases from Iran. On Monday, Clinton exempted India from new US sanctions on countries that maintain trade with Iran despite Israeli and Western concerns over its nuclear program.

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