U.S., India sign unprecedented nuclear deal

updated 6:48 p.m. ET Oct. 10, 2008

WASHINGTON - The United States and India signed an accord Friday that allows American businesses to sell nuclear fuel, technology and reactors to India, reversing a three-decade ban on atomic trade with the fast-growing nuclear-armed Asian power.

The civilian nuclear cooperation agreement, the result of three years of often frustrating political and diplomatic wrangling, marks a major shift in U.S. policy toward India after decades of mutual wariness. India has faced a nuclear trade ban since its first atomic test in 1974 and has refused to sign nonproliferation accords.

"This is truly a historic occasion," Secretary of State Condoleezza Rice told a crowd gathered for the signing ceremony in the State Department's ornate Benjamin Franklin Room. "Many thought this day would never come, but doubts have been silenced now."

The two countries "now stand as equals, closer together than ever before," said Rice, with India's foreign minister, Pranab Mukherjee, sitting by her side.

The Bush administration portrays the accord as the cornerstone of a new strategic relationship with a friendly democracy that borders China and Pakistan and that supporters hail as a responsible nuclear power.

India's government hopes the deal will bring a new source of desperately needed energy as it works to lift millions out of poverty.

Mukherjee said his country looks forward to working with American companies eager to enter India's multibillion-dollar nuclear market. More access to nuclear power, he said, also will boost India's industry and rural development and help every sector of the economy grow.

He called the accord a sign "of the transformed relationship and partnership that our two countries are building together."

Nuclear proliferation
Indian critics say the pact could cap the country's nuclear weapons program and allow the United States to dictate Indian foreign policy.

Opponents in the United States say the extra fuel the measure provides could boost India's nuclear weapons stockpile by freeing up its domestic fuel for use in weapons. That, they say, could spark a nuclear arms race in Asia, where neighboring Pakistan and China also have atomic weapons.

U.S. lawmakers opposed to the plan have said it ruins the Nuclear Non-Proliferation Treaty, the global agreement that provides civilian nuclear trade in exchange for a pledge from nations not to pursue nuclear weapons and which India refuses to sign.

President Bush this week signed into law the congressionally approved plan to start nuclear trade in exchange for safeguards and U.N. inspections at India's civilian, but not military, nuclear plants. The accord marks a rare foreign policy victory for Bush in his final months in office.

Bush and Prime Minister Manmohan Singh announced their intention to pursue nuclear cooperation in July 2005. U.S. lawmakers overwhelmingly approved the deal in a conditional form in late 2006. It then overcame strong political opposition in India, where critics threatened to bring down Singh's government, denouncing the accord as a ploy to make India Washington's pawn.

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