INDIA: COUNTRY FACING INTERNATIONAL OUTRAGE OVER NUCLEAR TESTS

Описание: (14 May 1998) English/Nat

After five nuclear explosions in three days, India on Thursday said it planned no more tests, even if neighbour and rival Pakistan conducted its own.

The nuclear tests caused a shockwave of indignation across the continent - China even went so far as accusing India of developing nuclear weapons to dominate South Asia, while at the same time trying to paint Beijing as the region's biggest threat.

While many Indians are still rejoicing, some financial investors are now grappling with the impact they fear international sanctions may have on India's economy.

India's Prime Minister, Atal Bihari Vajpayee, is being treated like a hero in India.

On Thursday, he congratulated the nuclear scientists who carried out the tests and then posed for photographs with key political rivals.

Members of the opposition Congress party, including the former finance minister Manmohan Singh, stood alongside the premier at the photo op outside his residence.

Almost all of India's political groups have backed the decision to go ahead with the tests.

They are confident that the sharp criticism and the determined sanctions announced by the United States and other countries won't be too painful.

But the impact could affect big business deals.

Sanctions could undermine Boeing's contract with Air India to supply the company with aircraft.

Boeing is one of the key contenders for the deal to replace an ageing Indian fleet.

Boeing's India president, Dinesh Keskar, has said the U-S sanctions could jeopardise a deal worth 350 million U-S dollars.

One analyst says India cannot afford to drive away investors, which may happen as a result of the sanctions.

SOUNDBITE: (English)
"Can the economy afford this at the time? It will certainly ride it out, but India needs to attract investment. India has a very sluggish economy right now and needs to reassure foreign investors that this is a place that is a safe investment for their money. It needs to enthuse foreign investment, and that may just - this decision may create a delay in all of that."
SUPER CAPTION: Jonathan Karp, Wall Street Journal

One of the biggest American investors in India, the energy company Enron, has in the past survived difficulties with a previous B-J-P government in building a power plant.

But more projects are pending and the company is waiting to see if sanctions affect the deals, whose financing is still being negotiated.

Power Minister Rahul Bedi insists that India will ride out any adverse affects the sanctions might have on the economy.

He said even if international aid agencies joined the U-S and others in holding back aid to India, his agency and others could find other funding.

SOUNDBITE: (English)
"We are more than confident that even if the situation arises where multilateral agencies withdraw or communicate their intention to withdraw future assistance or even already-granted assistance, we would have no problems."
SUPER CAPTION: P.R. Kumaramangalam, Indian Power Minister

The number of countries announcing sanctions continues to grow.

Japan has suspended 30 million U-S dollars in grants, including, officials said, funds for modernising hospitals and fighting polio.

Badly needed infrastructure projects are also going to be hit.

And it will likely not be the government that will feel such ripple effects, but Indians living in the slums and poor areas who depend on such projects.

But Indian officials say they are confident that even in the worst-case scenario, the effects are not going to be far-reaching.




SOUNDBITE: (English)



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