By Arshad Mohammed
WASHINGTON (Reuters) - The United States and India signed a potentially lucrative agreement on Friday that would allow India to buy U.S. civil nuclear technology for the first time in three decades.
Overturning a U.S. ban on nuclear trade instituted after India first tested an atomic device in 1974, the pact will provide India with access to U.S. nuclear fuel, reactors and technology to generate power for its population of more than 1.1 billion people.
The deal could produce some $27 billion (15.8 billion pounds) in investment in 18 to 20 nuclear plants in India over the next 15 years, according to the Confederation of Indian Industry. U.S., French, Russian and other companies are expected to compete for the business.
The accord, reached after years of tortuous negotiations and harshly criticized by nonproliferation advocates, was signed by U.S. Secretary of State Condoleezza Rice and Indian External Affairs Minister Pranab Mukherjee.
The Bush administration believes the agreement will secure a strategic partnership with the world's largest democracy, help India meet its rising energy demand in an environmentally sound way and open up a civil nuclear market worth billions.
At a State Department ceremony, Rice said the agreement "demonstrates the vast potential partnership between India and the United States -- potential that, frankly, has gone unfulfilled for too many decades of mistrust."
She also noted the efforts that were needed to secure approval for the deal in both countries, referring to the fact that the government of Indian Prime Minister Manmohan Singh nearly collapsed over the issue.
The communists withdrew their support from the Singh government in July over the pact, condemning it as India's "surrender" to Washington.
"Prime Minister Singh literally risked his political future for this agreement and then remade his government to gain the support that he needed," Rice said.
Before signing the pact, Mukherjee alluded to the business opportunities that may await U.S. firms.
"We look forward to working with the U.S. companies on the commercial steps that will follow to implement this landmark agreement," he said.
Mukherjee later said India would not extend "preferential treatment" to U.S. nuclear suppliers in deciding commercial deals that would also involve France and Russia.
"But we are aware of our expanding relationship with (the) U.S.," he told a news conference.
'NONPROLIFERATION DISASTER'
Critics argue the deal undermines efforts to prevent the spread of nuclear weapons and sets a precedent allowing other nations to seek to buy such technology without submitting to the full range of global nonproliferation safeguards.
In particular, the United States and other powers have been seeking to stop Iran and North Korea from developing their nuclear programs.
The agreement has drawn criticism because India is not a party to the Nonproliferation Treaty meant to stop the production and spread of nuclear weapons and a companion international agreement banning nuclear tests.
India conducted a nuclear weapons test in 1998, triggering a tit-for-tat test by its longtime rival Pakistan.
Daryl Kimball, executive director of the Arms Control Association and a leading opponent of the deal, disputed the Bush administration's claim that it would improve the global nonproliferation regime because a majority of India's nuclear reactors would now come under international inspection.
"The deal does not bring India into the nonproliferation mainstream," Kimball said.
"The arrangement will indirectly assist India's bomb-making effort and it's going to make it more difficult to reduce nuclear dangers in South Asia," he said.
"This is a nonproliferation disaster that is going to have negative effects for years to come because India is being granted the benefits of civil nuclear trade without fulfilling the obligations expected of virtually all the world's other countries."
Mukherjee, however, said "India's commitment to nonproliferation is second to none" and insisted that his country would implement the agreement "in good faith and in accordance with the principles of international law."
(Additional reporting by Paul Eckert)
(Editing by Xavier Briand)
