India steps back from brink of nuclear row
Tue Oct 9, 2007 4:43am EDT
By Palash Kumar
NEW DELHI (Reuters) - The India government and its communist allies stepped back from the brink on Tuesday, agreeing to meet again this month to resolve a row over a nuclear deal with the United States that threatens to spark a snap election.
"Where is the crisis? There is no crisis. We are meeting again on the 22nd," A.B. Bardhan, chief of the Communist Party of India, one of the main left parties, said after a meeting between the two sides.
A fourth meeting of a joint panel formed to end the face-off between Prime Minister Manmohan Singh's government and the left had been expected to make little progress, with media saying the angry impasse on Tuesday could pave the way to a vote.
But the fact the two sides would meet again signaled that the communists, whose parliamentary support keeps the ruling coalition in power, would not -- for now -- withdraw their support for the government.
The communists insist the nuclear deal would make India subservient to U.S. interests, but the government seems determined to seal the accord, potentially its biggest foreign policy achievement.
An early election could spark uncertainty in India's financial markets, worried the government could announce populist measures that would widen the fiscal deficit. Investors might also scale back if they felt a vote would produce an unstable coalition.
The deal would be a milestone in India-U.S. relations, not the best of friends during the Cold War. It would allow India to import U.S. nuclear fuel and reactors, despite having tested nuclear weapons and not signed the Non-Proliferation Treaty.
The deal has been criticized by many outside India, including by some members of the U.S. Congress, who say the deal unfairly rewards India and undercuts a U.S.-led campaign to curtail nuclear ambitions of nations like Iran.
The crisis still appears headed for a final showdown, with India facing an informal end-October deadline to begin securing clearances from the International Atomic Energy Agency (IAEA) and others to clinch the deal.
The communists have warned the government against negotiating with the IAEA to place India's civilian nuclear reactors under U.N. safeguards, one of the first steps towards making the deal operational.
Sonia Gandhi, ruling Congress party head and India's most powerful politician, talked with communist party leaders on Monday night in a surprise meeting and said the government wanted to start safeguard negotiations with the IAEA.
That was rejected by the communists, according to media reports, heightening speculation that Tuesday's panel meeting could see the government and the communists openly parting political ways, paving the way for early elections.
That scenario appeared to have been put off, for now.
"We will not let the government fall," Railway Minister Lalu Prasad Yadav said after the meeting, holding Bardhan's hand.
MARKET JITTERS
The growing crisis came just as Mohamed ElBaradei, director general of the IAEA, arrived in India on a technical visit to speak at an energy conference, visit a nuclear research facility in Mumbai and meet with Indian nuclear officials.
While the IAEA says his visit is not political, the timing added to tension between the government and the deal's opponents.
Newspapers on Tuesday talked about early general elections, originally scheduled for 2009, being almost inevitable. Morning television shows on Tuesday splashed headlines on their screens of "Nuclear Showdown" and "Will The Government Survive?"
The political crisis reached a flashpoint after Gandhi on Sunday called opponents of the nuclear deal enemies of development in a statement widely seen as hinting she was ready for a snap vote.
That infuriated the communist parties, who issued a joint statement on Monday saying "We need not to surrender our vital interests to America".
The Congress party has already started preparing for early elections, shuffling party leaders and announcing a slew of populist welfare measures to woo poor voters.
After negotiating with the IAEA, India must get clearance from the 45-nation Nuclear Suppliers Group (NSG) that controls global civilian nuclear commerce. Then the deal goes back to the U.S. Congress for a final approval.
A snap election could put the nuclear deal at risk by throwing the country into political limbo, but would not necessarily kill it. The government can still move ahead with the agreement without parliamentary approval.
? Reuters 2006. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
http://www.reuters.com/article/topNews/idUSDEL1735620071009?feedType=RSS&feedName=topNews
