Nations can't agree India nuclear pact, set Sept talks

Posted 08 23 2008 11:14AM

VIENNA (Reuters) - A 45-nation meeting on whether to lift a ban on nuclear trade with India ended inconclusively on Friday after many raised conditions for the move, leaving the future of a controversial U.S.-Indian nuclear deal unclear.

The countries in the Nuclear Suppliers Group (NSG) will meet again on Sept. 4-5 to try to resolve the matter, diplomats said.

The nuclear cartel must agree to allow nuclear fuel and technology exports to India for its civilian atomic energy programme to help seal the 2005 U.S.-Indian trade accord.

The bilateral deal has disturbed pro-disarmament nations and campaigners since India is outside the global Non-Proliferation Treaty (NPT) and developed nuclear bombs in the 1970s with Western technology imported ostensibly for peaceful ends.

Washington and some allies assert the deal will shift India, the world's largest democracy, towards the non-proliferation mainstream and will combat global warming by fostering use of low-polluting nuclear energy in developing economies.

But to the apparent surprise of Washington at the two-day meeting, diplomats said, over a third of NSG members proposed amendments to a U.S. draft for a waiver breaking a trade embargo imposed on India after its 1974 nuclear test blast.

Many felt Indian access to "dual use" nuclear materials could unravel the 40-year-old treaty unless the waiver language was toughened to protect NPT principles and avoid indirectly benefiting New Delhi's nuclear weapons programme.

"There were really masses of amendments and suggestions absorbed at this meeting. Many of the delegations said the same thing in different words," said one senior diplomat.

NSG delegations debated conditions further on Friday but, far from reaching consensus required for a decision, agreed to hold a follow-up meeting on Sept. 4-5, participants said.

REVISED U.S. DRAFT

The United States was expected to rework the draft taking account of their concerns and re-submit it at the next session, according to diplomats at the Vienna meeting.

The failure of the Bush administration's first draft to reflect special U.S. legislation from 2006 laying down strict terms for nuclear commerce with India, such as no more nuclear tests, had exacerbated concerns within the NSG, they said.

A U.S. State Department spokesman said Washington still hoped the NSG would eventually clear exports to India but the group must act soon to give time for final ratification by the U.S. Congress before it adjourns this autumn for elections.

"Timing is still a concern of course because of the congressional calendar," spokesman Robert Wood said. "We want to see this process move as quickly as possible ... We'll continue to do what we can to see that agreement come into fruition."

Critics said it would be dangerous to rush an NSG decision.

"Key NSG states have rightly insisted on restrictions and conditions on nuclear trade with India to reduce the risk that (this) will assist its nuclear bomb programme and hold India accountable to its political commitment not to resume testing," said Daryl Kimball of the Arms Control Association think-tank.

"... This sensitive issue will profoundly affect global nuclear non-proliferation efforts for decades to come."

Diplomats said conditions tabled at the NSG included intrusive U.N. inspections of Indian civilian nuclear sites; cancellation of any waiver if India tests bombs again; and periodic reviews of Indian compliance with the exemption.

New Delhi, sensitive to domestic leftist charges that closer ties with the United States will undo its strategic autonomy, has insisted on a "clean and unconditional" waiver from the NSG.

(additional reporting by Susan Cornwell in Washington)