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Clinton Wraps Up India Visit, Nuclear Impasse Unresolved

U.S. Secretary of State Hillary Rodham Clinton, second right, shows appreciation after watching a performance by the Indian classical dancers at Kalakshetra in Chennai, India, July 20, 2011

U.S. Secretary of State Hillary Clinton described the deluge of topics on the agenda for this week's talks with Indian officials on bilateral cooperation as a "monsoon." As she ends her visit to India, however, the two countries remain at an impasse over buying and selling nuclear power technology.

As she spoke to students in the southeastern Indian city of Chennai Wednesday, Secretary of State Hillary Clinton described the two countries as friends that can occasionally disagree.

"We believe our differences are far outweighed by our deep and abiding bonds," she said.

Those differences, Clinton insists, does not include the issue of nuclear energy. The U.S. and India signed a landmark deal in 2008 offering India exceptional access to nuclear equipment and technology. It was framed as the new cornerstone of a deeper strategic relationship, and a reward for India's responsible management of its nuclear program.

The deal followed a decision by the global Nuclear Suppliers Group, or NSG, to offer India what it called a "clean waiver" that would allow New Delhi to expand its nuclear trade. The NSG is a global consortium formed in 1974 to limit access to nuclear technology, and includes nearly all of the world's declared nuclear powers.

That group stunned Indian policy makers a few months ago when it announced new restrictions on enrichment and reprocessing technologies to countries that have not signed the Nuclear Nonproliferation Treaty. That list includes India.

During her talks this week, Clinton offered reassurance to her Indian counterparts.

"Nothing about the new enrichment and reprocessing transfer restrictions agreed to by the Nuclear Suppliers Group members should be construed as detracting from the unique impact and importance of the U.S.-India Civil Nuclear Agreement or our commitment to full civil nuclear cooperation," said Clinton.

Despite assurances, many Indians are concerned. India is basing a big part of its energy future on nuclear power, and it was counting on receiving advanced nuclear technology transfers from NSG members like the United States and France. The new restrictions could delay those transfers indefinitely.

A second complication to U.S.-India bilateral nuclear trade is a liability law passed by India's parliament last year. U.S. companies say it disproportionately burdens sellers of nuclear technology with compensation payments in the case of a nuclear accident. During her visit, Clinton urged India to bring its liability policies more in line with global norms.

Experts describe the NSG restrictions and the Indian liability law as a double-sided nuclear trade dilemma.

"I don't think there's any kind of solution," said Bharat Karnad, a national security researcher with the Center for Policy Studies here in Delhi. Karnad says amending the liability law, or granting an exception in the form of an executive order, would create a confrontation between India's prime minister and parliament. Likewise, he says President Barack Obama is unlikely to get the NSG to ease its restrictions.

"I don't think the Obama administration is going to invest any more capital than they already have, and the [Indian Prime Minister] Manmohan Singh regime is in no condition to make any concessions," said Karnad.

Karnad says the paralyzed nuclear deal could further weaken Singh's government, which already faces steep domestic challenges related to corruption charges.