Through The Fly's Eyes: Nuclear Energy
from Larry Ramer of Theflyonthewall.com
American Companies Hoping U.S.-India Deal Can be Saved
Many American corporate executives and investors are probably waiting nervously to find out if the American-Indian cooperation agreement can be rescued. The treaty is potentially worth tens of billions of dollars for several large American companies, according to an article in today’s Wall Street Journal.
The Indian energy minister had said that the country would look to make $30B in nuclear reactor deals over the next 20 years if the agreement is concluded, according to an article in the July 14 Wall Street Journal. The president of the U.S.-India Business Council, Ron Somers, has raised the stakes further, claiming that the potential revenue for American companies in the Indian nuclear energy market could reach $100B. India is also looking to spend up to $10B on fighter jet aircraft by 2012, within the framework of the agreement.
It is clear that American companies in the nuclear energy sector, such as General Electric (GE), have a great deal to lose if the agreement is not concluded and ratified by the U.S. Congress. Defense companies such as Boeing (BA) and United Technologies (UTX) will also see a great opportunity go down the drain if the agreement is not signed and ratified.
“If this deal falls apart, it will have real near-term consequences for everyone in the defense industry,” said Bill Begert of United Technologies in the Journal.
At the moment it looks like there is a very good chance that the deal will fall apart. The Indian government is opposed to several provisions that the U.S. Congress enacted in the process of ratifying the treaty last December. These provisions involve aspects of cooperation between the two countries in the field of nuclear energy. The Indians have objected to a provision that would punish them for testing nuclear weapons, and a clause preventing them from reprocessing any fuel provided by the U.S. Reprocessed fuel can be used for nuclear weapons.
American and Indian negotiators have held three days of intense discussions on the issues, but have not yet reached an agreement, according to an Economic Times article published late this morning for readers in the in the U.S. Unnamed U.S. officials tried to sound optimistic, saying that “many” issues separating the two countries have been solved.
But even if the two countries’ negotiators reach a compromise on the nuclear issues, Congress is unlikely to go along with the deal, according to the Journal. Congress’ mood towards India has not been helped by New Delhi’s cooperation with Iran on a proposed natural gas pipeline.
However, the U.S. Chamber of Commerce, along with several large companies, including Boeing and GE, are prepared to launch a huge lobbying campaign that they hope will convince Congress to ratify the amended agreement.