Financial Times
2 Feb, 1999

India and US are moving towards an agreement by which Delhi would agree to accede to the Comprehensive Test Ban Treaty, perhaps within a few months, would do so in return for having economic sanctions, imposed by the US after India's nuclear tests last May, lifted first.

The outlines of such a deal emerged after three days of talks between Strobe Talbott, US Deputy Secretary of State, and Jaswant singh, India's foreign minister. A joint statement ended on Sunday hailed them as "laying the foundations for a new, broad-based relationship that has eluded the US and India in the past".

Both sides resisted publicly suggesting any "break-through" from the weekend talks, the eighth in a series of Indo-US discussions prompted by India's nuclear weapons tests. But both US and Indian official shave privately suggested that the talks produced substantial movement towards an eventual deal to lift sanctions in reutrn for India's signing the CTBT, whch it has traditionally and staunchly opposed, around the middle of this year.

In an interview, Mr. Singh said: "What we are witnessing is the synergy of small steps, as against the explosion of a 'breakthrough' as such - but the small steps are directed towards a commitment the prime minister has given to the United Nations and India's parliament."

Atal Behari Vajpayee, India's Prime Minister, promised at the UN last year that India would work towards the "successful conclusion" of negotiations regarding the CTBT.

Mr. Talbott yesterday met the Delhi ambassadors of the G8 group of industrialised countries to discuss the progress of the latest round of US India talks. The eight agreed to freeze non-humanitarian lending to both India and Pakistan by multilateral agencies, including the World Bank and Asian Development Bank, in response to their respective nuclear tests. The US has isnce waived the restriction on Pakistan, citing its acute financial crisis.

The persisting block on lending to Delhi from international financial institutions has led to the deferral of more than $2bn worth of loans from the World Bank and the ADB.