NEW DELHI — It was supposed to signal a new era of strategic and economic cooperation between India and the United States, but four years after a ground-breaking nuclear deal between the two countries, frustrated American companies are wondering what happened to all the lucrative deals that were supposed to come their way. And Pakistan, which tends to view India's every move on the global chess board as a zero-sum game, has registered its unhappiness by ramping up its capacity to produce weapons-grade plutonium with two new Chinese-supplied reactors.
The deal, known as the U.S.-India Civil Nuclear Agreement, ended a 34-year embargo on the transfer of nuclear technology to India, paving the way for U.S. manufacturers and suppliers to sell reactors and fuel to India, even though it is one of the four nuclear weapons states that are not party to the Nuclear Non-Proliferation Treaty, or NPT. (Pakistan, Israel, and North Korea are the other three.)
Giving India this exemption did not sit well with the non-proliferation community -- it still doesn't -- but heavy lobbying by the U.S. nuclear industry helped the Bush administration push the deal through Congress.
Thus far, however, the results have disappointed the Americans.
"It's no secret...that the U.S.-India Civil Nuclear Agreement hasn't met U.S. commercial expectations due to the nuclear liability law passed by the Indian Parliament, which essentially shuts out U.S. companies," said Rep. Steve Chabot (R-OH), chairman of the House Foreign Affairs Subcommittee on South Asia at a hearing in May. That's putting it mildly. Of the $150 billion jackpot that was supposed to be in play, U.S. firms have not yet earned a dime.
Hillary Clinton traveled to New Delhi the same month as the hearing, to nudge the process along. A few weeks later in Washington, standing beside her Indian counterpart, she announced the first modest piece of good news: Westinghouse, whose headquarters are in Pennsylvania but which is owned by the Japanese conglomerate Toshiba, had concluded what is called an "early works agreement" to begin preliminary negotiations on site development and licensing issues for a proposed 1,000-megawatt reactor in the western state of Gujarat. But this is far from a done deal and it could be years before an actual contract is signed. "An agreement has to be reached on the liability law before we do anything," said Scott Shaw, a spokesman for Westinghouse.