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'Economic fallout on abondoning N-deal'

world Updated: Oct 27, 2007 12:03 IST

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Terming opponents of the Indo-US nuclear deal as being unable to "grasp the magnitude" of policy change Washington was making for India, a leading expert on South Asia has said in order to end New Delhi's "nuclear pariah status", it could not avoid the "relatively modest conditions embodied in the agreement with the US".

Teresita Schaffer, who heads the South Asia programme of the Centre for Strategic and International Studies, also warned that if the deal is not approved this year, new governments in both countries will be "very cautious" about picking up the agreement, and the economic fallout of failure to follow through on the pact will be "significant" for India in the long term.

"Political India did not really seem to grasp the magnitude of the legal and policy changes the US was prepared to make on India's behalf," Schaffer said in the latest issue of the South Asia Monitor.

She said opponents of the deal defined success in a way that made a "remarkably favourable" agreement look bad, adding "the nuclear deal has turned out to be a rather uncomfortable means for Indians and Americans to learn about each other's democratic systems".

Americans underestimated the emotive power of accusations that the US was trying to dictate India's broader foreign policy, she said. "But if the nuclear deal cannot be revived soon, its freezing will be a serious setback".

Schaffer said the "most troublesome" question is whether India is ready to sustain the rough-and tumble of participation in global politics as a major power, adding its inability to follow through on an undertaking of this magnitude will affect its "reputation".

India's principal short-term cost is embarrassment for the government. In the longer term, the economic impact of not moving the deal forward could be "significant," she said adding there is no scope for renegotiating the text of the agreement.

"In 2009, there will be a new government in Washington and elections in India as well.... A new US administration will be very cautious about picking up this agreement. It will also need to put its own stamp of ownership on the agreement," she said.

"A new Indian government will face similar pressures and will need to articulate how a revived deal addresses India's 'strategic autonomy'. Progress will be slow, and both governments will be determined to avoid another failure," Schaffer said.

Terming the nuclear agreement as the most compelling symbol of the new US-India relationship, she said leaving aside the feelings of US negotiators who invested many hours and much jetlag in the deal, facing withering criticism from the US non-proliferation community, Americans "inevitably wonder how important the new relationship really is to India".