July 23, 2005
With Bush’s help, GE courts Indian PM, nuke sector
By Adam Entous
WASHINGTON (Reuters) - Just over an hour after the White
House's surprise pledge to help India develop its civilian
nuclear power sector, the head of General Electric, the
American company that could benefit most from the policy
change, sat down for a celebratory dinner.
The host was President Bush; a few feet away was India's
prime minister, Manmohan Singh, and his top aides. GE Chief
Executive Jeff Immelt, a contributor to Bush's presidential
campaigns, had a coveted seat at the president's table.
Bush's announcement on nuclear trade with India -- followed
by a formal dinner in the State dining room -- was not just a
victory for Singh. For GE, the only U.S.-owned company still in
the nuclear business, it marked a possible turning point in a
years-long push to re-enter the Indian nuclear power market,
which it was forced to leave in 1974 when India conducted its
first nuclear test.
"In the short term, it's really business as usual. ... But
if things unfold the way it looks they may, then clearly it is
a significant opportunity for us," said Peter Wells, general
manager of marketing for GE Energy's nuclear business.
While the policy change may benefit GE and other companies
in the long term, critics contend Bush's move closer to
accepting the world's largest democracy as a nuclear weapons
state could weaken decades-old prohibitions against atomic
"This administration's rogue, shoot-from-the-hip move to
launch nuclear cooperation with India puts the interests of
industry ahead of our national security," said Democratic Rep.
Edward Markey of Massachusetts, an arms control advocate.
GE was not mentioned in the joint statement issued by Bush
and Singh, but Bush specifically pledged "expeditious
consideration of fuel supplies for safeguarded nuclear reactors
GE built Tarapur and one of its immediate goals in India
would be resuming fuel sales to the reactors, Wells said.
Immelt -- who said in May that "all conditions are right to
invest in India" and predicted that GE revenues from there
could jump to $5 billion by 2010 -- was not the only American
executive at Monday's dinner with a reason to court Singh.
Bush also invited Lockheed Martin Corp. chief Bob Stevens
and Boeing Co.'s new chief executive, James McNerney. Bush
cleared the way in March for the two defense contractors to
compete for a potential $9 billion market selling combat planes
to India. GE makes jet engines for Lockheed and Boeing.
GE spokesman Peter O'Toole said "tying GE's attending a
State Dinner to a political contribution is misleading. We
support officials in both parties and have done so for years."
"Jeff (Immelt) wants GE products picked to help solve
India's challenges; who better to make the case with than the
prime minister?" O'Toole added.
BUSH'S NOD TO GENERAL ELECTRIC
Washington actively promoted nuclear energy cooperation
with India from the mid-1950s until the nuclear test in 1974.
U.S. nuclear cooperation and exports were later halted,
freezing out GE, which built the Tarapur reactor in 1963 and
supplied it with low-enriched uranium as fuel.
India has since become the second-largest growth market
behind China. In a sign of its growing importance to
Washington, Bush on Monday promised India full cooperation in
developing its civilian nuclear power program in exchange for
New Delhi's commitment to adhere to international regimes aimed
at curbing arms proliferation.
Provided the Indians move quickly to fulfill their
obligations, congressional sources said, it was Bush's
intention to seek congressional approval to implement the
agreement on civil nuclear cooperation this year.
"It's the jewel in the crown," GlobalSecurity.org's John
Pike said of the Indian market. "We're the world's two largest
English-speaking countries. We're the two largest democracies
and we're joined at the hip economically."
Henry Sokolski of the Nonproliferation Policy Education
Center said Bush's decision was unlikely to benefit GE any time
soon. "This may be cream but it's certainly not gravy train,
certainly not for a while." Sokolski said, adding that GE will
face stiff competition from non-U.S. suppliers.
In the runup to Singh's visit, GE held a series of meetings
at the departments of State, Commerce and Energy, but Wells
said the company did not explicitly lobby the White House to
change longstanding policy.
"It maybe sounds a little subtle, but we try not to tell
the U.S. government what we think their foreign policy should
be," Wells said.
At a recent State Department meeting, Wells said, "We
wanted to better understand what the U.S. government's view was
of the situation and also to put an offer out there to them
that was to say, 'We understand you've got a lot of
considerations to go through here when you make a policy
decision, and if there's anything we can do to help, then let
In addition to resuming fuel sales to Tarapur, Wells said
GE could move quickly to offer technical and maintenance
services for Indian nuclear plants, and eventually bid to build
new reactors. If Bush succeeds in pushing through the policy
changes, "clearly we would look for U.S. government support to
advocate on behalf of GE," Wells said.
That support could take the form of
government-to-government lobbying or Export-Import Bank loans
for future GE projects in India, experts said.
Earlier this year, the Export-Import Bank gave preliminary
approval for $5 billion in loans to help British-owned
Westinghouse Electric Co. and other U.S. suppliers win
contracts to build four nuclear power plants in China.