India Inc. hails pact with U.S.

Special Correspondent

Deal will meet demand for clean power

Turning point in U.S. ties: Assocham survey Global giants will make a beeline for India

NEW DELHI: Even as the New Delhi-Washington deal is set to go to the U.S. Congress for ratification, 92 per cent of India's top chief executive officers and managing directors have described it as a "major breakthrough" in ending three decades of nuclear isolation of the country and denial of technology.

An Assocham Business Barometer survey among 25O CEOs and MDs shows that a euphoric India Inc. believes that the energy cooperation agreement will be a turning point in the ties between the two countries. They said the deal would not only catapult India into a different league but also help to meet its increasing demand for clean power.

Seventynine per cent of the corporate heads felt that the deal meant much more than mere energy cooperation. It would help in India's admission into the nuclear club and lifting of the curbs imposed on all those outside the body.

Press criticism

Only about 40 per cent of the respondents were concerned at the criticism in the U.S. press of Washington treating India differently from other nuclear states. They said that despite the criticism by ardent India supporters such as Thomas Friedman of The New York Times and The Economist, President George Bush would be able to get the deal ratified by Congress, given India's improving image as an economic leader in the developing world.

Besides, it emerged as a strategic nation to not only the U.S. State Department but also to the best names on Wall Street. Most of these firms have already set up base in India or are in the process of doing so. General Electric, Sun Microsystems, Intel, Daimler Chrysler, Hewlett-Packard and Microsoft have established their research and development bases in Bangalore, Gurgaon, Pune, Hyderabad or Chennai.

Natural allies

"Given the rising profile of India as one of the fastest growing economies upholding democratic values, I see India and the U.S. as natural allies," says Assocham president Anil K. Agarwal.

Over 50 per cent of the U.S. Fortune 500 companies outsource IT requirements to Indian software companies, which in turn get 60 per cent of their revenue from American business houses. He pointed out that 89 per cent of those polled said the shift in the world nuclear order would make global giants such as General Electric and other U.S. and European firms make a beeline for civilian nuclear power plants to make investments.

They said the eight-10 per cent GDP growth would be difficult to sustain year-on-year if power shortage was not removed in the near future. Given the constraints in coal and gas-fired power plants, nuclear energy is considered a safe and cost-effective alternative.

The executives are happy with the target, set by Prime Minister Manmohan Singh, of generation of 40,000 MW of nuclear power within a decade. At present, 15 civilian nuclear plants generate 3,360 MW.

Change of guard helps

As many as 77 per cent of the CEOs polled agreed that President Bush was more decisively inclined towards India in his second term than during the first. The change of guard in the State Department from Colin Powell to Condoleezza Rice meant the balance tilting in India's favour.