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. Last Updated: 07/27/2016

U.S. Threatens Indian Aid Over Test

WASHINGTON -- In the first use of a sweeping anti-nuclear law, the Clinton administration quietly warned India last month that if it conducts a nuclear test, the United States will cut off virtually all U.S. economic benefits granted to India.

The unpublicized message was delivered after U.S. intelligence officials detected early signs that India might be preparing to conduct a nuclear test explosion. U.S. officials, reportedly including U.S. Ambassador to India Frank Wisner, cautioned the government in New Delhi that any such test would prompt the administration to invoke a little-known 1994 statute called the Glenn Amendment.

That law requires the United States to cut off all economic aid, military aid, credits, bank loans and export licenses to any country, other than the five acknowledged nuclear powers, that tests a nuclear weapon. Even more important for India, the law dictates that the United States will oppose World Bank loans and all other international lending to the offending nation.

The loss of these benefits could cost India billions of dollars. Its loans from the World Bank alone amount to about $2 billion a year. India gets $173 million a year in economic aid from the United States. And the curb on export licenses would mean that, at least in theory, India would be unable even to buy new computers from the United States.

The Glenn Amendment has never been invoked before. "This is the first time [since 1994] we've ever had a scare of any actual detonation," explained one U.S. official.

India conducted its only nuclear explosion in 1974 and has not carried out any new tests. Indian officials have denied that they were planning to do so, despite news reports last month of possible preparations for a new test.

Asked about the U.S. warning, Shyamala Cowsik, deputy chief of mission for the Indian Embassy in Washington, replied: "We know that the Glenn Amendment exists. But there has been no such demarche [official protest] with us here."

The 1994 anti-proliferation law applies to all undeclared nuclear-weapons states. In effect, that means every country except the United States, Britain, France, Russia and China.

Any other country -- including, say, Israel or Pakistan, which like India are believed to have well-developed nuclear-weapons programs -- would be subject to the same broad economic sanctions if it carried out a nuclear test. India is now the third-largest recipient of loans from the World Bank, after China and Mexico. The United States is the leading shareholder in the World Bank and thus has the greatest number of votes on the board that approves billions of dollars in bank loans.