The nuclear deal between India and the United States has run into its biggest crisis yet and appears close to collapse (WashPost). It marks a huge loss of credibility (Bloomberg) for Indian Prime Minister Manmohan Singh, who tried to save face by saying "if it doesn't come through that is not the end of life." But Singh’s inability to push the deal through India’s parliament will be a big disappointment for the Bush administration, too, which has hailed the deal since its July 2005 inception as a historic initiative with long-term implications (NYTimes.com) for U.S. influence in Asia.
The nuclear pact has enjoyed central position in a much broader strategic relationship between India and the United States that includes expanding ties in trade, business, defense, space, energy, environment, democracy and development. U.S. Under Secretary of State R. Nicholas Burns writes in the current issue of Foreign Affairs that the rise of a new U.S.-India strategic relationship is "one of the most significant and positive developments in international politics." The possible demise of the deal, however, raises questions about the viability of a U.S. strategy which seeks to play a so-called India card, as this Policy Review article dubbed it in 2002, to balance China’s rising military power in the region. Heritage Foundation Senior Research Fellow Lisa Curtis says (BBC) the deal’s failure would make "it highly unlikely for any future U.S. administration to contemplate major initiatives with India."
The deal had faced several bumps and roadblocks along the way from diverse quarters. But the left-wing bloc in India’s parliament, comprised primarily of the Communist parties who form part of the ruling coalition, posed the largest hurdle. As this analysis from India’s Inter Press Service notes, the Indian left believes the United States is "a hegemonic, deeply destabilizing power and India cannot become a close ally of Washington without sacrificing or compromising its policy independence and narrowing its room for maneuver in world affairs." India's Communist parties are reluctant to break with their sixty years of ideology and history, says Brookings Institution Senior Fellow Bruce Riedel in an interview with CFR.org's Bernard Gwertzman. He calls the pause in the nuclear agreement "quite a tragedy for India, because almost anyone who's studied this deal believes India got a very, very good deal out of this."
In June 2005, India and the United States agreed on a new framework for their defense relationship, including increases in defense trade, technology transfers, and joint exercises. This opened up opportunities for U.S. arms exporters to vie for some of India’s $30 billion defense-modernization budget. At an Indian air show (Spectrum Online) in February 2007, the U.S. ambassador to India, David Mulford, said "we want to make a breakthrough in defense sales." The left has fought such deals on the grounds they would compromise Indian sovereignty.