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India conducts more nuclear tests
Clinton to announce sanctions against India
May 13, 1998
Web posted at: 6:03 a.m. EDT (1003 GMT)NEW DELHI (CNN) -- India announced Wednesday that it had conducted two more underground nuclear tests, two days after three such tests sparked international controversy. The tests "completed the planned series," officials said.
The announcement came as U.S. President Bill Clinton was prepared to impose economic sanctions against India. The sanctions are to be announced by Clinton at an address in Germany Wednesday, administration officials tell CNN.
The move comes two days after India announced three successful underground nuclear tests, and claimed the capability to develop nuclear weapons. The move has brought condemnation and a broadening willingness to impose sanctions in international circles, but has been wildly popular in India.
Two officials traveling with the president in Germany said Clinton planned to announce the U.S. sanctions during a joint appearance with German Chancellor Helmut Kohl.
They said the president would call on other nationals to quickly adopt sanctions as well, and urge India and Pakistan not to take steps that intensify military tensions.
On Tuesday, Clinton recalled the U.S. ambassador to India for consultations. Ambassador Richard Celeste, on his way to India when U.S. officials learned of the tests, was ordered to turn around and head back to Washington.
1994 law requires sanctions
The sanctions are based on the 1994 Nuclear Proliferation Prevention Act, also known as the Glenn-Symington amendment. The law requires that nations that detonate nuclear devices:
- Are subject to denial of U.S. credits and credit guarantees.
- Face U.S. opposition if they request loans from international lending institutions such as the International Monetary Fund or the World Bank.
- Are barred from loans from any U.S. bank, except borrowing that provides food or other agricultural commodities.
The officials said the sanctions would include suspending virtually all direct U.S. aid to India, more than $140 million a year.
Importantly, the sanctions would bar sales to India of any equipment and technology with a possible military application by U.S. companies -- that category includes computers and other high-tech hardware. The United States is India's largest trading partner.
International aid threatened
Perhaps most important is the U.S. opposition to loans from international institutions. The World Bank's loan package for India totalled $3 billion for 1998.
Japanese Prime Minister Ryutaru Hashimoto announced Wednesday that Japan would cut off all aid except humanitarian assistance. Japan had pledged over $1 billion in loans for the current fiscal year.
Combined, the United States, European Union nations, and Japan account for 70 percent of the voting power of the IMF and World Bank.
Indian business leaders calm
Business leaders in India insist they aren't worried by the prospect of sanctions. Dewang Mehta, head of India's National Association of Software and Service Companies, was quoted in the Times of India saying that U.S. companies "need us as much as we need them."
India's economy has only recently been opened to overseas investment, so unlike many other developing countries, outside investments have a limited impact on its economy.
The markets did not register any great concern. The Bombay Stock Exchange dropped only 1.3 percent from its Tuesday close in early trading. "The market is betting on sanctions not being severe," said U.R. Bhatt, a fund manager at Jardine Fleming.
The Indian populace is also bullish; an opinion poll published in the Times of India showed that 91 percent of urban Indians approved of the tests and 82 percent believed the country should now build nuclear arms.
White House Correspondents Eileen O'Connor and John King, The Associated Press and Reuters contributed to this report.
Related stories:
- U.S. recalls ambassador to India - May 12, 1998
- CIA caught off guard on India nuclear test - May 12, 1998
- Indian nuclear test sparks concerns of arms race - May 12, 1998
- India nuclear tests condemned by Pakistan, U.S. - May 11, 1998
- India conducts underground nuclear tests - May 11, 1998
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