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In New Delhi, everybody says that United States Secretary of State Hillary Clinton's visit to India is crucial and it might turn out to be a historic one also.
But the atmosphere is not a desired one in the Indian capital.
"Clinton's visit is crucial and historic," said a senior officer in the Prime Minister's Office, while talking to the media, on the way back from the G-8+5 summit in Italy. But there are too many hot issues on the table that don't have an easy solution. India is under pressure on the issue of climate change, nuclear non-proliferation and trade talks under the Doha round.
The bilateral issues include climate change, which many in the government describe rightly as a 'life and death' issue; America's increasing protectionism that would have a direct impact on Indian businesses and services; its stance on visa and outsourcing issues, which will hit India's foreign reserves and local employment; the US State Department's thinking on India's role in Afghanistan; the few important agreements like the end users verification agreement; and various legal issues about communication and defence technology to fulfill the demands of American laws.
Of course, the differences between the US and India on the Doha rounds is one of the most serious issues.
To add to India's woes, on the eve of Clinton's arrival, the biggest dampener of all has come in the form of America's clever attempt at G-8 to insert a clause asking G-8 nations to ban transfer of enrichment and reprocessing (ENR) technologies to countries that are not signatories to the Nuclear Non-Proliferation Treaty.
By all accounts, it seems that Prime Minister Manmohan Singh and Indian diplomats did not even know about it, even though India had participated in the summit. America's action in this regard is considered the manifestation of President Barack Obama's desire for wide-ranging measures to control nuclear proliferation and free the world of nuclear arms.
The Indo-US nuclear agreement was touted as the success story of the bilateral relationship, but in less than a year India has been given a jolt. The Nuclear Suppliers Group had given India a specific waiver to allow access to nuclear plants, nuclear fuel and latest technology to reprocess unspent fuel. Now, due to America's hyperactive attempt at the G-8 summit in L'Aquila, Italy, India may lose this advantage before it could ink the nuclear co-operation deal with Russia and France.
Since 2004, the Indo-US nuclear deal has been a dividing issue in India's strategic community. The Manmohan Singh-led government and his Congress party have been supporting it and have won a difficult election after backing and subsequently securing the deal.
But the G-8 ban has been criticised even by supporters of the nuclear deal, because if the US pursues this action beyond the G-8 meet then it will deprive India of having a 'full civil nuclear co-operation'.
Understandably, in view of Clinton's visit, the government is trying to underplay the issue and many distinguished American visitors to the capital, like Frank Wisner, former US ambassador to India, are dismissing it as a 'non-issue'.
A government source told rediff.com, "All the G-8 countries are members of the NSG. At the NSG meet in Vienna, all the countries including the G8 members agreed unanimously to the waiver, giving India certain privileges. This India-specific waiver is our basis for moving forward. Rest of it is just speculation."
The Indian establishment says it has taken 50 years of impeccable record to get this kind of a waiver from the NSG. "Our position is clear -- we are guided by the NSG's public document that was finalised at the group's meet last September. In these kinds of things, there is general dispensation and specific dispensation," said the source.
But this explanation is overtly defensive. Writing today in the Wall Street Journal, former envoy to the United Nations T P Sreenivasan, a staunch supporter of the Indo-US nuclear deal, stated, 'The latest G-8 decision to ban the transfer of enrichment and reprocessing items to non-NPT countries strikes at the very root of full civil nuclear cooperation. This move might jeopardise the talks scheduled for modalities of reprocessing. What would happen to the spent fuel from Tarapur (atomic power station) if reprocessing is not facilitated? This partnership may end up looking like a three-legged race in which two athletes are tethered together but incapable of deploying their collective strength.'
The issue is certainly serious because it requires some quick action.
When asked about his response to the government's contention that India is solely guided by the NSG waiver, Siddhartha Varadarajan, senior journalist with The Hindu who broke the story about the G-8 ban, told rediff.com, "India may be guided solely by the NSG waiver but the G-8 will be guided by its decision and the NSG by whatever new rules they adopt in the future. If the government does not act now to prevent new rules from being adopted, it will eventually be faced with a difficult choice in the future, neither of which is good: Either it will have to accept the US-led unilateral reversal of the terms of the deal with the NSG, or will have to declare that it is no longer bound by its own commitments to the NSG, thereby ending nuclear imports from all the 45 countries, including reactors and fuel. Both of these outcomes will be bad for India."
The experts who have opposed the deal since 2005 are now saying loudly "We told you so!"
Satish Chnadra, former deputy national security advisor, told rediff.com, "If you read the Hyde Act, it is quite clear that America will never allow certain things. Our political leadership is refusing to read the Hyde Act and that is unfortunate."
Most experts feel that the problem actually goes back to the George W Bush administration, and it is important to realise that. The action taken by the US at the G-8 meet is being seen by Indians as a way to put pressure to sign the NPT, by the Obama administration.
Like Chandra, Dr A N Prasad, former director of the Bhabha Atomic Research Centre, is also arguing that the nuclear deal has fundamental and inherent problems, which are disadvantageous to India.
"It is very obvious that the Indian government managed to get a favourable language fix in the text of the NSG waiver in September 2008 and called it a clean waiver for public consumption, knowing full well that it could at best be only on paper, as there was a great hurry to give it a shape within President Bush's tenure. Some of us had amply vented our apprehensions at the double game being played out by the US administration, in giving assurance to the US Congress to work with the NSG to deny full civil nuclear cooperation to India by denying the ENR related issues on the one hand, and tightening up its nonproliferation related agenda. The very fact that the NSG plenary has re-discussed the waiver in its plenary in November 2008 and that the G8, comprising most of the states which matter for the ENR including France and Russia, on whom we are pinning great hopes, shows that the NSG waiver is as good as dead," Prasad told rediff.com.
He added, "In spite of the writing on the wall being crystal clear, the government wants to hang on to a dying NSG declaration. If the NSG as a whole or even the G-8 refuses to cooperate on ENR matters, what leverage do we have to force the issue? The way the123 text is worded cannot give us any relief! If this is the state of affairs, when India is being bulldozed into accepting obnoxious conditions even before the actual take-off on nuclear trade, one can only imagine what will be the fate as we get deeper in committing huge investments!"
Those who are against the deal also argue that the government can't say that since India has the technology for ENR, why bother.
"This is a ridiculous argument. Only those who have hands-on experience can appreciate the issues involved in coping with the denial of equipment and components, particularly in the ENR sector. While we have stuck our neck out by agreeing to set up a dedicated state-of-the-art reprocessing plant, we seem to accept the denial of any supplies related to this plant and at the same time, subject the design of the plant to external review to assess its safeguardability. This is a huge trap being laid out to deny us reprocessing rights and may ultimately prove suicidal," said Prasad.
When asked for further clarification on the issue, a source in the ministry said, "We have not seen the specifics of the G-8 document because it is not public, so I can't comment further."