By Susan Cornwell
WASHINGTON (Reuters) - The U.S. Congress approved a landmark deal on Wednesday ending a three-decade ban on U.S. nuclear trade with India, unleashing billions of dollars of investment and drawing the country closer to the West.
The vote hands a victory to President George W. Bush on a top foreign policy priority, and will be welcomed by Indian Prime Minister Manmohan Singh who fought hard for the deal.
Final approval came as the Senate voted 86-13 to ratify the agreement, sending the legislation to Bush to sign into law. The Senate's move came just ahead of an expected trip to India this weekend by U.S. Secretary of State Condoleezza Rice.
Bush said he looked forward to signing the bill.
"This legislation will strengthen our global nuclear non-proliferation efforts, protect the environment, create jobs, and assist India in meeting its growing energy needs in a responsible manner," Bush said in a statement.
The Bush administration says the pact will secure a strategic partnership with the world's largest democracy, help India meet its rising energy demand and open up a market worth billions.
For India, it will cap a gradual rapprochement with the West since the days of socialist self-reliance, a process that began with economic reforms in the 1990s and has gathered pace with the spread of wealth and Western culture ever since.
But critics say the deal does grave damage to global efforts to contain the spread of nuclear weapons, by letting India import nuclear fuel and technology even though it has tested nuclear weapons and never signed the Non-Proliferation Treaty (NPT).
NON-PROLIFERATION DISASTER?
"The U.S.-Indian Agreement for Nuclear Cooperation is, nonetheless, a non-proliferation disaster," said Daryl Kimball, head of the Arms Control Association.
"Contrary to the counterfactual claims of proponents and apologists, it does not bring India into the "non-proliferation mainstream."
The ACA is a non-partisan Washington-based arms control policy organisation.
India has a yawning energy deficit, and the accord opens up a market worth billions to American companies such as General Electric and Westinghouse Electric, a unit of Japan's Toshiba Corp.
"In terms of India-United States, it will be a boost for business ties. It's not just about nuclear technology but the transfer of high technology to India," said Mohan Malik, professor at the Asia Pacific Centre for Security Studies in Honolulu.
"It's a good example in terms of the U.S. and India on how big countries can collaborate, increase the pie and increase the field and compete in it," Chang Young Ho, a nuclear energy expert at Singapore's S. Rajaratnam School of International Studies.
Secretary of State Rice spent much of the past month in an all-out effort to persuade Congress to approve the pact, which the Bush administration says will transform the U.S.-India relationship. Bush wanted the deal approved before leaving office in January. Congress is expected to adjourn soon for elections.
The accord enjoys bipartisan support in Congress, where many lawmakers favoured it as a way to create jobs in the U.S. civil nuclear industry while cultivating the small but affluent Indian-American community.
CRITICS' FEARS
Critics said the deal was deeply unwise, overturning decades of U.S. policy of refusing to sell nuclear technology to nations lacking full safeguards against diversion of that technology into nuclear weapons programmes.
"Why are we rushing to pass this gravely flawed agreement?" demanded Senator Tom Harkin, an Iowa Democrat, before the vote. There was nothing in it, he said, to prevent India from resuming nuclear testing. India, which first detonated a nuclear device in 1974, last tested in 1998.
The deal would also weaken U.S. efforts to deny Iran a nuclear weapon, Harkin said. He said Indian entities already had sold sensitive missile technologies to Iran.
But supporters said they expected India to move quickly to negotiate a new safeguards agreement with the International Atomic Energy Agency.
"The benefits of this pact are designed to be a lasting incentive for India to abstain from further nuclear weapons tests and to cooperate closely with the United States in stopping proliferation," Indiana Republican Senator Richard Lugar said.
The deal could open up around $27 billion in investments in 18-20 nuclear plants in India over the next 15 years, according to the Confederation of Indian Industry.
But there is global competition. France announced on Tuesday that it had signed a nuclear cooperation agreement with India, and Russia is already building two 1,000-megawatt reactors in the southern Indian state of Tamil Nadu.
Local media say India's monopoly Nuclear Power Corp has tentatively picked four suppliers, including Westinghouse Electric and France's Areva, for planned new projects.
India is also reported to be negotiating with General Electric, Japan's Hitachi Ltd and Russia's atomic energy agency Rosatom.
(Additional reporting by Alistair Scrutton in NEW DELHI and Menaie Lee and Jerry Norton in SINGAPORE; Editing by Eric Walsh and Roger Crabb)
