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India Risks `Damage' to Ties If Nuclear Deal Halted (Update1)

By Bill Varner

Oct. 23 (Bloomberg) -- India should move within the next several months to complete the proposed civilian nuclear accord with the U.S. to avoid harm to the relationship between the countries, Undersecretary of State Nicholas Burns said.

``We don't have an unlimited amount of time,'' Burns told the Council on Foreign Relations in New York today. ``The Indian government needs to make a decision, which we hope will be positive, because the deal has enormous benefits for the U.S. if it goes forward. There will be damage if it doesn't.''

Burns said India needs to resolve internal disputes over the agreement and come to terms on inspections by the United Nations nuclear watchdog agency before the 2008 U.S. presidential campaign makes it unlikely that Congress would back the final pact. An election year is ``never a good time'' for Congress to ratify a major new treaty, he said.

Indian Prime Minister Manmohan Singh last week told President George W. Bush for the first time that the 2005 agreement might founder because of domestic opposition. Burns cited opposition from ``four left parties'' that don't want to see stronger U.S.-Indian relations.

Completion of the agreement is critical to U.S.-Indian cooperation on combating global warming and terrorism and stabilizing Sri Lanka, Pakistan, Myanmar, Nepal and Bangladesh, Burns said. The U.S. is pushing for expanded use of nuclear power to reduce greenhouse gas emissions blamed for a warming global climate.

`Greatest Change'

The new U.S. focus on South Asia represents the ``single greatest change in how the U.S. looks out at the world,'' said Burns, who has led American efforts to complete the nuclear agreement.

``The greatest possibility for growth of any relationship we have is with India, but there has to be a connection point where we can establish a vision, and that issue is nuclear power,'' Burns said. ``We have an opportunity now and we have bipartisan support in Congress.''

Backtracking by Singh may stall his plan to buy reactors from General Electric Co. and Westinghouse Electric Co. that the country needs to help build 40,000 megawatts of nuclear capacity by 2020, equivalent to a third of current generation. Singh indicated this week that he is prepared to forego the agreement to prevent the collapse of his government.

Domestic Resistance

Burns said the U.S. would appeal to the Nuclear Suppliers Group, a consortium of 45 nations that monitors transfers of nuclear technology, to begin trade with India after it accepts inspections by the Vienna-based International Atomic Energy Agency.

Singh's Communist allies contend the accord will weaken the nation's ability to follow an independent foreign policy and compromise the country's own scientific capability. They want the agreement to be delayed until it is debated in parliament. They also have asked the government not to discuss power plan safeguards with the IAEA.

Completing the accord would end a 33-year period during which India was unable to get fuel and technology from overseas. Nuclear sanctions were imposed against India after it tested atomic bombs in 1974. Under the agreement, the U.S. would accept that India, which exploded nuclear devices again in 1998, operates its civilian and military programs outside the Nuclear Non-Proliferation Treaty.

Bush and Singh agreed in July 2005 that U.S. companies would sell India nuclear technology, opening a market for equipment, fuel and reactors from Fairfield, Connecticut-based General Electric and Monroeville, Pennsylvania-based Westinghouse Electric, a unit of Toshiba Corp. of Japan.

The U.S. Congress in December passed legislation allowing final talks on the accord to proceed, reversing decades of policy that barred nuclear exports to India.

To contact the reporter on this story: Bill Varner at the United Nations at wvarner@bloomberg.net

Last Updated: October 23, 2007 10:51 EDT

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