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The FAQ of US sanctions

Under US laws, President Bill Clinton had little choice but to impose sanctions after India conducted nuclear tests. The 1994 Nuclear Proliferation Prevention Act, which had not been invoked before, stipulates the president can only delay sanctions for 30 days, but not waive them. Only Congress can actually lift sanctions.

Some questions and answers about his action:

What do the sanctions require?

A cut-off of US financial aid to India other than humanitarian and food aid, an end to the export of certain defence and high technology material, a stoppage of military aid, a halt to US credit and credit guarantees other than for the purchase of food. American will also automatically oppose international financial institutions' loans to India.

How much US money is involved?

The US is providing 142.3 million dollar in aid to India this year, including 91 million dollar for humanitarian and food aid. Most of the remaining 51.3 million dollar in development aid would be cut off.

An assistance programme to help India develop its stock market and sell municipal bonds would be halted. Four billion dollars awaiting approval for projects from the US Export-import Bank will be blocked, as will be 10.2 billion dollars in insurance and financing for American firms from the Overseas Private Investment corp. Another 20 million dollars for agriculture export credits will also be halted.

Could private US investment in India be affected?

Possibly, depending on a project's use of international and US loans. Boeing is delivering 737s to the private carrier Jet Airways, for example, but is relying on a 200 million dollars Exim bank credit for the deal. US bank loans to the government worth 1.9 billion dollar will also be halted.

The United States is India's largest trading partner and largest investor. State department figures indicate imports from India totalled 7.3 billion dollars in 1997 while US exports to India reached 7.7 billion dollars, led by aircraft and parts, machinery, fertilisers, scrap metal and computer hardware. Direct US investment in India is around seven billion dollars a year.

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