By Roxana Tiron - 03/14/06 12:00 AM EST
U.S. businesses are strongly supporting America’s nuclear deal with India, foreseeing lucrative contracts for energy technology, military equipment, infrastructure and pollution control.
But despite cautious support for engaging India from leaders of the House International Relations and Senate Foreign Relations committees the pact could be “the next donnybrook,” one lobbyist said, because each party is trying to win voters over on national security.
Panel members are analyzing the administration’s draft legislation and India’s plan to separate civilian and military nuclear facilities, as required by the agreement.
Reps. Henry Hyde (R-Ill.), chairman of the House panel, and Tom Lantos (D-Calif.), ranking member, will introduce legislation seeking conditions for the deal’s approval.
“Because the national security issues are so important, the business world wants to be mindful and not get ahead of national security,” said a lobbyist working for U.S. businesses, “but they are not afraid to mention that this will be a strategic earthquake.”
Put another way, if Congress approves the deal and New Delhi “is feeling soft toward the United States, it is going to consider projects from the United States.”
India has traditionally looked to other countries, such as Russia and Britain, for defense contracts. “We expect a level playing field” competing with the British, the Russians and the French, said the lobbyist.
“Our trade with India should be much greater than it is,” said Jim Jatras, a lobbyist with Venable LLP, which New Delhi has retained to lobby on the nuclear deal.
India represents a $15 billion market over the next 20 years for military contracts alone, industry sources say.
Defense giants Lockheed Martin and Boeing are pushing the F-16 and the F/A-18 Super Hornets, respectively, to fulfill India’s plan to buy 126 fighters. The contract could be worth $9 billion or more. The United States has historically restricted military sales to India because of its nuclear-weapons program. India on its part has been concerned about difficulties with obtaining spare parts from the United States.
“We have been aware that India would be opening that competition for some time,” said Dan Beck, a Boeing spokesman. “We look forward to the competition.”
Another defense heavyweight, Raytheon, is the only U.S. defense contractor to sign a radar-system deal with India.
“There is a tremendous opportunity for American business out there,” Jatras said. “Some people might be concerned with foreigners eating our lunch, and some people seem to put this deal in that context. This is an issue where India wants to buy from us.”
India has a rapidly growing middle class of nearly 300 million, Jatras said, and “it is a very consumer-oriented middle class.”
“There is not a business in the United States that does not understand what India means to them,” said the lobbyist working with U.S. business interests. “All these jobs created by the Indian demand for consumer goods will have a ripple effect on America. There is not a corporate board that is not scratching its head about its India strategy.” India and China are the fastest growing consumer markets in the world.
Westinghouse, now Japanese-owned, and General Electric have long been interested in India, the lobbyist said, adding, “GE a long time ago said India is a hotbed. India was slow-moving in the ’90s. Now GE is looking brilliant.”
Lobbyists and the administration are trying to sway opinion on Capitol Hill, especially among Democrats, by pushing the energy-security aspects and environmental benefits of the deal. India, a nation of a billion people, has a voracious appetite for energy, and civilian nuclear energy will make it less reliant on unstable sources of oil and gas, Secretary of State Condoleezza Rice wrote in a Washington Post opinion piece.
The Chamber’s U.S. India Business Council (USIBC), which has almost 100 Fortune 500 companies as its members, hired Patton Boggs in January to represent its interests in the nuclear deal.
But businesses realize that lawmakers are swayed not just by commercial issues but also by national security. The USIBC is working on circulating a letter citing leading national security voices in support of the deal according to the business lobbyist.
The Chamber on Friday announced a grassroots campaign to win congressional approval. The Chamber is coordinating with the Coalition for Partnership with India (CPI), a forum created and managed by the Chamber that includes businesses, academic institutions, associations, think tanks and others. “This agreement could provide the U.S. business community with $100 billion worth of new opportunities in India in the energy sector alone,” said retired Lt. Gen. Dan Christman, the Chamber’s senior vice president of international affairs.
The administration is looking for India-specific waiver amendments to the 1954 Atomic Energy Act. The International Atomic Energy Agency would gain access to India’s civilian nuclear program. India would place two-thirds of its reactors and two-thirds of its generating power under permanent safeguards, with international verification.