INDIA: EMBASSY WAS WRONG TO TELL US PAKISTAN ARMS DEAL WILL HURT BUSINESS

INDIA: EMBASSY WAS WRONG TO TELL US PAKISTAN ARMS DEAL WILL HURT BUSINESS

The Indian government, overriding its embassy in Washington, reassured the United States on Wednesday that American business interests would not be harmed by an arms package for Pakistan.

A senior Indian official said the embassy had overstated the probable effect of the weapons deal, approved by a congressional panel on Tuesday, when it said U.S. business prospects in India would probably be hurt.At issue was a one-time waiver of a U.S. law against military sales to Islamabad. The waiver would allow Pakistan to take delivery of $368 million in missiles and other military equipment.

"This particular waiver is not going to affect business," said the official, who asked not to be identified. "U.S. business need not worry."

A House-Senate conference committee accepted the weapons package Tuesday as part of a foreign-aid bill, which must be approved by both houses of Congress and signed by President Clinton before taking effect.

A statement issued by India's embassy in Washington on Tuesday said New Delhi was especially disappointed because Indo-U.S. relations had progressed remarkably in the past few years, "above all in the areas of trade and commerce."

It said the liberalization of the Indian economy had created dramatic openings for U.S. companies. "It is likely that these prospects will now be adversely affected to some extent," it said without elaborating.

But the government official said: "They (embassy) went too far."

Foreign Minister Pranab Mukherjee issued a statement saying India was disappointed that the conference committee had not taken into account its ''serious concerns and the strong reaction of Indian political and public opinion."

But Mr. Mukherjee made no mention of any effect on business ties, which have blossomed under a four-year-old program of economic reform. Instead, he urged deeper cooperation.

"We continue to attach importance to improving Indo-U.S. bilateral relations," Mr. Mukherjee said.

"The approach of both governments has been to strengthen cooperation to the fullest extent possible, and not to permit differences where they exist to prevent cooperation in areas of mutual benefit."

Asked to weigh the statements by the embassy and Mr. Mukherjee, the government official said: "The foreign minister's is the final statement of India."

India and Pakistan have fought three wars since they gained independence in 1947, and tensions have built since a separatist revolt erupted in 1990 in India's state of Jammu and Kashmir.

India accuses Pakistan of arming separatist guerrillas. Pakistan says it provides only moral and diplomatic support.

Mr. Mukherjee said the transfer of advanced military equipment to Pakistan would not promote peace or stability in South Asia.