India's government lost the support of its communist partners as PM Manmohan Singh pressed ahead for a nuclear deal with the US. The agreement will allow India to legalise its standing in the international nuclear community.
NEW DELHI - Indian communist parties said on Tuesday they were withdrawing support for the government after four years in protest against a civilian nuclear deal with the United States.
The four parties, which say the deal makes India subservient to Washington, will call for a vote of no confidence in Prime Minister Manmohan Singh's government.
The government believes it will survive the vote, having secured parliamentary support from the regionally based Samajwadi Party. Political analysts say the vote could be as early as next week if the president decides.
The leftists, whose support had secured Singh's parliamentary majority, had said they would withdraw if the government formally approached the International Atomic Energy Agency (IAEA), the next international step needed to make the delayed deal operational.
On Monday, Singh said that move would come "very soon". The left reacted as expected.
"That time has come," Prakash Karat, head of the Communist Party of India (Marxist), India's biggest communist party, told reporters.
Singh, in Japan this week for a G8 summit where he is expected to tell U.S. President George W. Bush that the deal will go ahead, three years after they shook hands at the White House, shrugged off fears for his government.
"I just learned it (about the withdrawal). But I don't think it will affect the stability of our government," Singh said in Sapporo, where he was meeting the leaders of other big emerging economies on the summit sidelines.
The withdrawal and likely holding of a vote of no confidence will lead to a period of political uncertainty just as the government is grappling with inflation at a 13-year high and signs of an economic slowdown.
Markets have already been hit over the last week by fears for the government of Asia's third-biggest economy.
But the pact's approval would be a major success for Singh, giving India access to U.S. nuclear fuel and technology and moving the Asian giant's trade and diplomatic relations closer to the West.
The deal has been criticised by some as granting India rewards it does not deserve, lifting a 30-year ban on sales of U.S. nuclear fuel and reactors imposed after New Delhi, which has not signed the Non-Proliferation Treaty, conducted a nuclear test in 1974.
Karat said the communist parties would formally announce their withdrawal in a meeting with India's president on Wednesday.
Foreign Minister Pranab Mukherjee said on Tuesday that the government would arrange a vote of no confidence after it receives a notice from the president. The government said parliament would reconvene from Aug. 11-Sept. 5 but the vote could be earlier.
India will seek IAEA approval only after it secures a vote of confidence, Mukherjee added.
TOO LATE FOR THE DEAL?
The stakes are huge.
The nuclear deal is potentially worth billions of dollars to U.S. and European nuclear supply companies, and would give India more energy alternatives to drive its booming economy.
IAEA diplomats said on Monday there was talk of a special meeting of the board on July 28 to discuss the deal, but any timetable for advancing it would be unclear until Singh authorised the IAEA to proceed.
"This meeting would be India-specific, but no date for it has been set yet. It would be premature at this point," said an IAEA official who, like the diplomats, asked for anonymity due to political sensitivities.
But some say it could already be too late for the deal to be passed before the end of Bush's term.
Time is running out before the U.S. election in November.
India needs to seek approval for the deal from the IAEA, then the 45-nation Nuclear Suppliers Group, where there is doubt about it since India is outside the Non-Proliferation Treaty, and finally ratification by the U.S. Congress.
"We obviously recognise, as well, that we have a limited number of legislative days for our Congress to get a lot of work done," White House spokeswoman Dana Perino said.
The support of the Samajwadi Party, which has a history of pragmatic alliances with governments, should ensure Singh wins any vote in parliament and avoids an early election this year.
The Samajwadi Party has 39 seats in parliament, compared with 59 for the communist parties. The Congress-led ruling coalition needs the support of 44 lawmakers to reach a majority. It will try to win the other five seats from smaller parties.
Indian stocks were down around 1.3 percent on Tuesday, after trimming early losses as the exit of the communists raised hopes of reviving stalled economic reforms.
"The markets have factored in this development and there may not be any major impact on the financial market behaviour in the short run," said N.R. Bhanumurthy, an economist at the Institute of Economic Growth.
"For the long-term impact, we need to wait and watch how the government is going ahead with pending economic reforms."
Date created : 2008-07-08