India: Wheeling and (nuclear) dealing

Posted in India | 05-Jul-06 | Author: Siddharth Srivastava| Source: Asia Times

Siddharth Srivastava is WSN Editor India.
NEW DELHI - Last week's easy approval of the draft legislation needed to effect the Indo-US nuclear deal by both the US House International Relations Committee and the Senate Foreign Relations Committee was proceeded by an unprecedented, extensive and, above all, expensive lobbying effort by New Delhi.

The Indian Embassy in Washington signed up two local lobbying firms to sell the deal. This includes a US$700,000 contract with Barbour, Griffith and Rogers, an outfit led by Robert Blackwill, former US ambassador to India from 2001-03 and an advocate of closer Indo-US ties. The embassy is also paying $600,000 to the top US law firm Venable, with former Democratic senator Birch Bayh of Indiana as its point man. The Indian taxpayer picks up the tab totaling $1.3 million.

In what is being seen as the biggest Indian push on Capitol Hill, officials such as Foreign Secretary Shyam Saran have been repeatedly dispatched to charm and persuade congressmen. Saran has had meetings with the big names of the Senate and House committees, including Senators Richard Lugar and Joseph Biden, and Congressman Henry Hyde and Tom Lantos.

These efforts are complemented by the US-India Business Council (USIBC), which has engaged the politically well-connected Patton Boggs law firm to lobby lawmakers. Boggs is one of the most expensive lobbying firms in Washington, with a billing rate of $495 an hour. While announcing the hiring of Patton Boggs, the USIBC, which has nearly 100 Fortune 500 companies among its members, said, "We strongly feel that the fate of the strategic partnership between the United States and India is key to our business interests."

Although Washington has been insisting that the nuclear deal involves more than mere commerce, the business potential cannot be ignored. Sales of civilian nuclear technology and equipment to India could open up $100 billion in energy business ventures for US companies, says Dan Christman, the US Chamber of Commerce's (USCC's) senior vice president for international affairs.

One of most persistent and subtle efforts to cajole Congress on Indian policy matters has been the Confederation of Indian Industry (CII), which represents some of India's most profitable and biggest companies. The report said the CII has spent more than $1 million over the past six years on "fact-finding" trips and lobbying efforts.

According to a review of congressional disclosure records conducted by the Center for Public Integrity, a non-profit research organization in Washington, the CII was among the top international organizations paying for congressional travel between 2000 and 2005, even though they were not registered to lobby during this period. During this period, CII doled out more than $540,000 in travel expenses for trips by 19 members of Congress, 11 spouses, and 58 congressional staffers.

In April 2005, the CII registered to lobby for the first time, with the first bill, $520,000, going to Barbour Griffith & Rogers, whose brief was to influence US government agencies, including Congress, the White House, the State Department, and the Department of Defense.

"It is clear that business interests and US defense contractors and former US officials involved in South Asia policy have been working hard to push this deal," Daryl Kimball, executive director of the Arms Control Association, said to the Indo-Asian News Service (IANS).

Gifts have also been lavished on US officials, though in this India has been exceeded by its traditional rival Pakistan.

US companies too have mounted a multimillion-dollar campaign to sell the energy deal to the US Congress. It is being emphasized that the deal promises a "bounty of opportunity". The lobbying drive is the most expensive ever mounted by business, USIBC president Ron Somers said. What is more is that the US will benefit despite not having built any new nuclear power plants for more than 30 years.

Somers told Reuters that a retired US Army lieutenant-general, Daniel Christman, a former superintendent of the US Military Academy at West Point, New York, now working for the USCC, will coordinate a broad effort as the Coalition for Partnership with India that groups businesses, think-tanks and academics supporting the deal.

And Raymond Vickery, senior adviser to USIBC, said: "I believe that all things being equal, we [US] will get a considerable portion of the $20 billion to $40 billion in acquisitions that the Indians plan on making by 2020."

Vickery has said congressional approval of the deal would give Lockheed Martin (the maker of F-16 fighter jets) a reasonable chance to get a $4-billion-to-$9-billion contract to supply 126 combat fighter planes to the Indian Air Force, a contract that India would have been unlikely to approve while sanctions were in place.

The Boston Globe said, "For Indian entrepreneurs, it is an opportunity to make money on privatized nuclear power plants and buy high-tech equipment that has been restricted for decades. For US businesses, it is a chance to invest in India's rapidly growing energy sector, to sell supplies to Indian nuclear reactors, and - for the first time - to have a shot at large-scale military contracts."

Of course there are other aspects of business that US has marked out for India. There is a bid to double bilateral trade to $40 billion in three years. The Pentagon expects India to start purchasing as much as $5 billion worth of conventional military equipment.

In keeping with the new-found bonhomie, in April last year, US aerospace giant Boeing won a $6.9 billion order for 50 aircraft from Air India, India's public-sector airline. Boeing faced stiff competition from France's Airbus, but a personal intervention by President George W Bush sealed the deal.

US firms are eyeing India's huge retail market, which is valued at more than $200 billion, with several foreign players urging New Delhi to open up the sector. Among those making an aggressive pitch are the world's largest retailer, Wal-Mart. Outsourcing from the US of course remains the money-spinner for India. The bulk of India's outsourcing business in the range of $20 billion to $25 billion in a year's time will be from the US.

Siddharth Srivastava is a New Delhi-based journalist.