- The Washington Times - Thursday, August 19, 2010

NEW DELHI | India’s main opposition party is demanding that Prime Minister Manmohan Singh explain a leaked e-mail from an American official that the party says shows the Obama administration is seeking to link U.S. investment in India to damages for the 1984 Bhopal gas leak.

Sushma Swaraj, leader of the Hindu nationalist Bharatiya Janata Party (BJP), created an uproar in the lower house of Parliament over the e-mail on Thursday and asked all lawmakers from Madhya Pradesh state, of which Bhopal is the capital, to walk out and hold a sit-in protest outside the Parliament building.

The e-mail, which was first reported by Times Now news channel, has re-roiled the opposition, which recently had relented in its dissent over a bill that would limit how much foreign companies would pay to victims of a nuclear accident. At stake is India’s $150 billion-a-year energy market, which U.S. energy suppliers General Electric Co. and Westinghouse Electric Corp. are seeking to enter.

According to Times Now, the e-mail from Deputy National Security Adviser Michael Froman shows the Obama administration is pressuring India to “go slow” on Dow Chemical Co. with regard to seeking damages for the Bhopal gas leak - the world’s deadliest industrial accident.

Dow Chemical owns Union Carbide Corp., whose Indian subsidiary in 1984 operated a plant in Bhopal that leaked a toxic gas that killed 15,000 people and injured 500,000. Union Carbide paid India $470 million as a settlement in 1989, and Dow took charge of the company in 2001.

However, India has sought a claim of 15 billion rupees (about $325 million) in Bhopal damages from Dow Chemical, which has refused to pay because it did not own Union Carbide at the time of the accident.

In his e-mail in July to Montek Singh Ahluwalia, deputy chairman of the Indian Planning Commission, Mr. Froman wrote: “We are hearing a lot of noise about the Dow Chemical issue. I am not familiar with all the details, but I think we want to avoid developments which put a chilling effect on our investment relationship.”

Mr. Froman sent the e-mail when Mr. Ahluwalia was enlisting U.S. support for India to borrow funds from the World Bank.

A U.S. official said the Obama administration is not trying to pressure India and is not linking future investment in Asia’s third-largest economy to the nation’s claim for damages for the Bhopal accident.

“The assertion that there was linkage between two separate and distinct issues is wrong, is incorrect,” said Benjamin Chang, a spokesman for the National Security Council, as reported by the Press Trust of India news agency from Washington.

“We are not going to comment on the specific contents on e-mails. We certainly recognize the importance and sensitivity of this issue in India. We are committed to building a strong, broad and deep relationship between our two countries, as you know.”

Nonetheless, opposition groups said the Indian government has compromised itself and the country on the issue.

“It is a small but revealing document,” said Prakash Karat, chief of the Communist Party of India-Marxist.

Mr. Karat, whose party strongly opposes the U.S.-India civilian nuclear energy deal, said the leaked e-mail proves that India’s daily affairs are influenced by the United States.

Under the 2008 U.S.-India Civil Nuclear Cooperation Initiative, the U.S. would end its nuclear trade ban on India, and India would open its commercial nuclear-power facilities to international inspectors. The U.S. imposed the ban in 1974 after India conducted a nuclear test and refused to sign the international Nuclear Non-Proliferation Treaty.

For the agreement to become effective, India’s Parliament must approve a liability bill that complies with the Convention on Supplementary Compensation for Nuclear Damage.