Contrary to the traditional Indian instinct to see the latest Russian offer as a counter to the US deal, Putin’s proposals merely complement the Bush initiative towards India. To be sure, there is vigorous competition between Russia, France and the US to get the lion’s share of the potentially large Indian nuclear market. But that dynamic, of great value for India, would come into play only when the Indo-US nuclear deal is approved by the International Atomic Energy Agency and the NSG.

New Delhi has no reason to cut out the American reactor suppliers after the Bush administration did all the heavy political lifting. Nevertheless there is one apparent problem. Unlike Moscow and Paris, which are only bound by the NSG rules, Washington’s nuclear engagement with India is also defined by the domestic nuclear legislation on India, now called Hyde Act, which was approved by the US Congress last December. The reason behind President George Bush’s rejection of the many of the hortatory provisions of the Hyde Act, which caused so much of hand- wringing in New Delhi and Mumbai, was simple. Washington has no desire to put itself at a disadvantage vis-a-vis Moscow and Paris in the Indian nuclear sweepstakes.

After Putin’s nuclear offer to India, New Delhi and Washington have a strong incentive to quickly wrap up the bilateral agreement on civilian nuclear cooperation. There are outstanding issues on India’s right to reprocess spent fuel, fuel supply assurances, and the termination of cooperation in the event of a future nuclear weapons test by New Delhi. Finding appropriate solutions should not be too difficult. It would also be a lot easier if India had taken a closer interest in the fast changing international debate on nuclear energy and non-proliferation.

... contd.