Rediff Logo Business IDBI Find/Feedback/Site Index
November 7, 1998


Clinton decides to lift economic sanctions

Email this report to a friend

In a major development, US President Bill Clinton has decided to lift a bulk of the economic sanctions that the United States had imposed on India and Pakistan in protest against their nuclear tests in May last.

However, the ban on the weapons sale and transfer of dual-use equipment such as the supercomputer will remain in place as before. But, the two countries will have access to US credit and development agencies.

Prohibitions on Indian and Pakistani participation in US foreign investment and trade promotion programmes will also be lifted. The programmes are carried out by the Overseas Private Investment Corporation and the Export-Import Bank. The programmes were worth 300 million dollars in case of India before the imposition of sanctions.

A senior US official, who made this announcement last night, said the decision to relax sanctions followed the progress made by the two countries in curbing their nuclear weapons programmes and their commitment to have a moratorium on further testing.

President Clinton, who was given authority to waive sanctions by the US Congress last month, is expected to make a formal announcement, lifting the curbs on New Delhi and Islamabad, within the next few days.

Officials circles in Washington hope that this US gesture will help persuade the two countries to formally sign the CTBT, abandoning their reservations.

The official drew attention to the promise by India and Pakistan to adhere to the Comprehensive Test Ban Treaty which the US wants both countries to formally sign before it comes into force in September 1999.

He said they had committed themselves to strengthen controls on sensitive materials used in the weapons of mass destruction. Besides, they were considering controls on the production of fissile materials and agreed to participate in the negotiations, currently going on in the Conference on Disarmament in Geneva, on a treaty on the subject.

The US believes that the easing of sanctions would help create an environment for further progress on non-proliferation between India and Pakistan.

Factors that have weighed with the Clinton administration in going ahead with this decision include the adverse impact that these sanctions have been having on the US trade and investment prospects in the two countries, particularly India with a vast economic potential.

The US has been having high-level discussions with both India and Pakistan on the non-proliferation issue for the last five months and is, apparently, satisfied with its progress.

The latest round in the ongoing dialogue with Pakistan, sixth in the series, ended in Washington on Thursday at which Pakistani foreign secretary Shamshad Ahmed had expressed his country's inability to sign the CTBT with the sanctions in place.

Deputy Secretary of State Strobe Talbott represented President Clinton and Secretary of State Madeleine Albright in these talks.

Talbott will have a similar meeting with Prime Minister A B Vajpayee's special envoy Jaswant Singh in Rome on November 19. This will be their seventh meeting on the subject.

Though both India and Pakistan have no objection to the CTBT as such, according to observers, there is a technical problem in the way of their signing the treaty. Under the nuclear Non-Proliferation Treaty, there could be no nuclear power other than the US, Russia, Britain, France and China, all having conducted their tests in the 1960s.

Now both India and Pakistan have become nuclear powers but the NPT does not grant them the status of nuclear powers. The question, therefore, is in which capacity they will participate in the CTBT.

These problems of technical nature had to be resolved for them to sign the treaty, observers say.


Business news

Tell us what you think of this report