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Diehard liberals and antinuclear proponents from former U.S. President Bill Clinton’s era are back in the State Department and are calling the shots. A focus on the Nuclear Non-Proliferation Treaty as well as the Comprehensive Nuclear Test Ban Treaty and its ratification by the U.S. Senate are driving their agenda.

The White House, in its enthusiasm for treaty ratification, is prepared to put the brakes on the Indo-U.S. nuclear deal and has used multiple excuses to slow it down. To make a better case for U.S. Senate ratification, Obama is making a point of getting India to ratify the test ban treaty too.

Who will benefit most from this spat? China – which was unhappy with growing Indo-U.S. ties, as India’s emergence would prevent China’s domination of Asia and the Indian Ocean.

But diehard nuclear deal opponents in the United States are unmindful of the strategic implications of the deal. For India, the deal is a statement of the United States’ strategic interest in India. Without India as a bulwark, the chances for U.S. policy to succeed in Asia are limited. It may well have to vacate the South China Sea and the Korean peninsula.

The first seven years of Clinton’s presidency were pro-China years. He offered China financial and commercial benefits and allowed it to cart away U.S. manufacturing jobs. It was during Clinton’s presidency that the trade deficit with China began to balloon. He never realized the consequences of his pro-China policy. But they are clear now.

Presently, the United States has a US$300 billion trade deficit with China – a country that wants to replace the United States as the world’s power broker. It wants to replace the U.S. dollar with the yuan as the world currency and keep the United States off balance with debts and loans. It wants to build a military that matches that of the United States.

Only in the last year of his presidency did Clinton realize India’s potential and the folly of offering too much to China. Since manufacturing had almost all gone to China, he offered India information technology and back office processing work.

His successor Bush continued the policy and also offered nuclear power to help India’s perpetually underperforming power sector. He also facilitated greater access to foreign direct investment. The nuclear deal, like foreign direct investment in China, is the key to unlock India’s potential. This will add directly to India’s stellar growth of 9 percent achieved from 2005 to 2008.

U.S. ratification of the CTBT is one of the key objectives of Obama’s administration. The ratification vote failed ten years ago during Clinton’s presidency. Now the U.S. liberals believe that they have the votes and the moral authority to get it ratified, provided they get India to do the same.

For India, the nuclear deal’s objectives are simple. These are purely commercial and financial. But it seems that the deal’s fate is enjoined with U.S. ratification.

Somehow, China’s non-ratification of the CTBT is not an issue. Neither is its non-compliance with the NPT, even though disgraced Pakistani nuclear scientist A. Q. Khan has confirmed China’s proliferation activities. The United States could take China to task on this, but will not because it has dug itself into a financial hole and needs China’s money.

So the focus is on India, which is feeling the chill as ten years of progress in a U.S.-India strategic partnership are under review. A few provisions in Obama’s February stimulus package to prevent aid recipient companies from outsourcing work to India have hit at the heart of U.S.-India relations.

But the “Buy America” slogan does not hurt China. There is not much manufacturing left in the United States and most consumer goods are imported from China – which is prospering during the bad times in the United States. People have turned to cheaper but not so durable Chinese goods.

Gone unnoticed is the quiet withdrawal of U.S. support vis-à-vis India’s 50-year-old border dispute with China. It appears that the United States has signaled the Asian Development Bank that it is unlikely to support a loan request from India that contains a provision for flood control measures in the disputed territory. This lack of understanding of India’s position was unthinkable under previous administrations. Obama is definitely implementing “change,” but in the wrong places.

In a turn of events noticed by the media, U.S. Secretary of State Hillary Clinton’s visit to India in July was not to smooth out implementation of the nuclear deal but to extract concessions from India on climate change. The United States wants India to give up coal-based power plants and agree on emissions restrictions. But India is a small polluter compared to Europe, the United States and China. India has low emissions for its size, but is being pressured stop building fossil fuel-based power plants.

Although other small irritants in Indo-U.S. relations have come and gone, the unfinished business of the nuclear deal has led to a freeze in ties. Disagreements over implementation of the 123 Agreement, nuclear reprocessing rights and now climate change concessions are dogging relations.

Indian Prime Minister Manmohan Singh’s visit to the United States is eagerly awaited. Chief executive level political discussions may turn out to be fruitful, although not much hope can be placed on them. The United States has made up its mind on CTBT ratification and it will drag India in too.

Obama needs to understand that India has the market for U.S. goods and services that China is not offering. China is all about exports and pressure tactics to gain advantages. The United States can come to India and indulge in free trade in a balanced way.

India’s 300 million-strong middle class can buy everything the United States has to offer. If the United States bought half of its consumer and industrial goods from India it would improve India’s economy and give Americans the flexibility of sourcing products from both India and China.

Not everybody is in agreement with the current U.S. position on civilian use of nuclear commerce, or for that matter on nuclear weapons. While Obama is pushing for a world without nuclear weapons, Iran and North Korea are doing the opposite and neither the NPT nor the CTBT will stop them. The rules are only for law-abiding nations.

That was the disagreement that emerged between the United States and France in the U.N. Security Council over a U.S.-sponsored resolution on a nuclear weapons-free world. French President Nicolas Sarkozy pointed out that “We live in a real world, not a virtual world.”

The point is that India-U.S. relations are being sidetracked under domestic pressures in the United States and the limitless idealism of newly appointed officials that have little practical knowledge. While the United States is putting misguided pressure on India, China is quietly expanding its influence in Asia, unchecked.

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(Hari Sud is a retired vice president of C-I-L Inc., a former investment strategies analyst and international relations manager. A graduate of Punjab University and the University of Missouri, he has lived in Canada for the past 34 years. ©Copyright Hari Sud.)