India has mixed feelings about close ties with U.S.

NEW DELHI -- With India and the United States struggling to work out a nuclear pact before President Bush arrives this week, India's prime minister pledged Monday not to compromise the country's security to seal the deal.

During his visit beginning Wednesday, Bush is likely to find excitement over Indian-U.S. ties mixed with ambivalence about sidling up to a nation many see as the world's bully.

The landmark nuclear pact has, for many here, come to illustrate what India stands to gain from America -- and what it has to lose.

Talks on the nuclear deal "are currently at a delicate stage," held up by disagreements over which of India's nuclear facilities are to be designated as civilian and which are to be considered military, Prime Minister Manmohan Singh told lawmakers Monday.

Separating India's tightly entwined civilian and military nuclear programs is key to the deal, because the United States has only agreed to recognize India as having a civilian nuclear program -- not as a legitimate nuclear weapons state.

"We have judged every proposal" from the U.S., Singh said. "The decision of what facilities may be identified as civilian will be made by India alone and not by anyone else."

The pact would allow the United States to provide nuclear technology and fuel desperately needed by India to fuel its booming but energy-starved economy. In return, India has pledged to separate its programs and open the civilian ones to international inspection.

The deal has faced opposition from some members of U.S. Congress, which must approve the pact. They argue it could undermine the Nuclear Nonproliferation Treaty. India has refused to sign the treaty and defied the world by openly conducting nuclear weapons tests in 1998. India and Pakistan have often staged tit-for-tat missile tests that raise regional tensions.

White House press secretary Scott McClellan said the president's approach with the pact will address energy needs for India and important proliferation issues.

"We've made some progress. The negotiations are ongoing," he said. "Whether it gets done during the trip or not, we will see. But we believe it will get done."

Indian opponents worry the United States is pushing to classify far too many of India's facilities as civilian, and thus subject to international safeguards. Some see it as an attempt to undermine the country's nuclear weapons program.

Among Indians, there is also "a sense of America being arrogant in its dealings surrounding the nuclear pact," said Nandan Unnikrishnan of New Delhi's Observer Research Foundation.

"India does not like to be perceived as someone who is doing something according to an external diktat," he said. "And the U.S. has been a little ham-handed in terms of trying to get India to see the world its way."

He cited U.S. Ambassador David C. Mulford's remark in January that if India did not support referring Iran to the U.N. Security Council over its nuclear program that the India-U.S. nuclear pact could "die" in Congress. The U.S. and other Western countries suspect Iran's program is geared toward making weapons.

Parties crucial to the survival of Singh's government seethed at the comment, claiming it as evidence that New Delhi was selling out to Washington for the sake of the nuclear deal.

The deal is also seen by some as Washington's attempt to balance to China's growing economic and political clout -- something New Delhi wants no part of.

India and China "will cooperate, they will compete, they will try to balance each other," said analyst C. Raja Mohan. "But we certainly don't want to be seen as acting as a task horse for the Americans."

A poll in India's Outlook magazine illustrates the mixed feelings of many here.

Asked if India could trust the United States in times of need, 55 percent of the 1,634 people interviewed by pollster AC Nielsen said yes. But asked whether they thought America was a bully, 72 percent said yes. No margin of error was given.

"It's a situation of a rich man and a poor man who's getting richer," said Vijay Bhagat, a shop owner in New Delhi. "We need to work with the United States, we need the money -- but we Indian people have to keep our self-respect."

There's little doubt that India has reaped tremendous economic benefits from its American ties.

India's outsourcing industry, for example, is expected to bring in $22 billion in revenues this fiscal year, much of that generated by business from America.

The boom has created millions of jobs, and has even given rise to luxury goods market with brands like Louis Vuitton and Rolls Royce setting up shop.

But the luxuries are for a tiny few, and the economic liberalization that has stoked the boom has also raised fears among Indians -- some 80 percent of whom live on less than $2 a day -- that the government will soon have to remove subsidies on essentials such as cooking oil.