Page last updated at 08:45 GMT, Friday, 11 July 2008 09:45 UK

Why US could lose out on India nuclear trade

By Brajesh Upadhyay
BBC News, Washington

Indian PM Manmohan Singh
Manmohan Singh wants the deal despite domestic opposition

US companies may end up watching from the sidelines as nuclear fuel and technology trade between India and other suppliers develops.

That is the warning to Washington if the Indo-US nuclear deal is unable to get Congressional approval in time.

Experts closely associated with the deal say there is a serious risk that the Congressional calendar may not have enough days left to clear the deal, that is assuming that India gets the go-ahead for it from the International Atomic Energy Agency (IAEA)and the 45-member Nuclear Suppliers Group (NSG).

A nod from the IAEA and the NSG would open the door for India to trade in nuclear fuel with other countries. But US companies would still have to wait for a final approval by Congress to engage in this potentially lucrative trade, even though it was set in motion on US soil.

'Big blow'

Xenia Dormandy served as the director for South Asia at the National Security Council when the deal was conceived in July 2005 during Indian Prime Minister Manmohan Singh's visit to Washington.

She says if the NSG clears this deal, US congressmen may find themselves in a situation where India can engage in nuclear trade with every other country but America.

President Bush
President Bush's administration faces a tight deadline

If Congress doesn't ratify the deal in time and US companies lose out, "that will be a big blow to our industry," says Ms Dormandy, who now serves as the director of the Project on India and the Subcontinent at Harvard University.

She says there is nothing in international law to stop India from doing nuclear trade with countries like Russia or France.

Congress needs to be in 30 days of continuous session to clear the nuclear deal. But there are only about 40 session days left before it adjourns on 26 September.

A spokesperson for the House Foreign Affairs Committee, Lynne Weil, was quoted by the Washington Post saying that both IAEA and NSG actions "have to take place in the next couple of weeks for the deal to be considered by Congress".

The Congress could convene for a lame-duck session after the 4 November elections, but for now House speaker Nancy Pelosi has said there will be no such session.

Started mobilising

The State Department though has repeatedly said that the current administration will keep trying until 19 January, the day before the next president takes his oath of office.

"There will be a lot of lobbying from US industry to make the Congress move as quickly as they can," says Ms Dormandy.

In fact, the lobbying has already begun.

Swadesh Chatterjee of the Indo-US Friendship Council, a group that has worked hard for the deal, says if the Congress wants, it can reduce the timeframe needed to ratify it.

"We have already started mobilising our group, working closely with US business interests and the administration," says Mr Chatterjee.

He points out that the 2006 Hyde Act, which provided the framework for the nuclear deal in Congress, was passed at 0130 hours on the last day of a lame-duck session in 2006.

"This needs a simple up and down vote and they better think twice if they can't assemble for something that's so important for US business as well as Indian-Americans," says Mr Chatterjee.

The race against time is now well and truly on.

India left ends coalition support
08 Jul 08 |  South Asia
US warning on India nuclear deal
05 Mar 08 |  South Asia
India urged to sign nuclear pact
27 Feb 08 |  South Asia
New life for India's nuclear deal
16 Nov 07 |  South Asia
Military ties of India and US
06 Sep 07 |  South Asia
Indian cabinet backs nuclear deal
25 Jul 07 |  South Asia

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific