More than 100 years ago, decades before Samuel Huntington’s clash of civilizations theory, an Indian nationalist named Bipin Chandra Pal predicted the world would eventually split into two camps. On one side of this strategic divide, the prescient patriot saw forming a Hindu, Jewish and Christian alliance confronted by a Chinese-Muslim axis on the other.

The United States took a big step last Friday in turning this prophecy into reality when Secretary of State Condoleezza Rice and Indian External Affairs Minister Pranab Mukherjee signed a groundbreaking nuclear deal in a ceremony in the State Department’s Benjamin Franklin Room after three years of negotiations. Called the 123 Agreement after a section in the in the U.S. Atomic Energy Act, the pact will allow India to buy vital nuclear fuel and technology from American and other foreign companies. Besides strengthening America’s growing strategic relationship with the emerging South Asian power, observers say the pact will be regarded in later years as one of the President George Bush’s greatest foreign policy achievements.

“This legislation will strengthen our global non-proliferation efforts, protect the environment, create jobs, and assist India in meeting its growing needs in a responsible manner,” said Bush, who was instrumental in the deal’s success. The 123 Agreement was approved in the United States Senate by 86-13 vote this month only minutes before passing the $700 billion financial rescue bill. As a result, it received little media attention, although the measure will probably cement the American-Indian strategic alliance.

Previously, the 45-nation Nuclear Suppliers Group (NSG) had banned nuclear fuel and technology sales to India because the country had refused to sign the Nuclear Non-Proliferation Treaty (NNPT) in 1968 and had exploded a nuclear weapon in 1974. India, however, believed the NNPT was discriminatory, since it allowed only France, England, the United States, the Soviet Union and China to possess nuclear weapons.

Finally recognizing that India is a nuclear power and that the clock cannot be turned back, the NSG waived the sanctions in September, paving the way for the 123 Agreement. The lifting of the ban was also seen as a reward for India’s responsible behaviour over the years regarding its nuclear program. Unlike Pakistan, India did not share its nuclear secrets with rogue regimes and regards the ban’s abolition as the end of the NSG nations’ unjustified “technology apartheid” against the Hindu-majority nation.

The 123 Agreement is a win-win proposition. The Indian economy has grown almost nine percent annually the last five years but energy demands have not kept pace. Power shortages are so bad that even the country’s capital, New Delhi, experiences brownouts. So besides India’s business groups, ordinary people would also benefit from an improved energy supply.

India currently has 22 nuclear reactors that produce about three percent of the country’s electricity needs. Most of these, however, are running well below capacity because India could not buy nuclear fuel, due to NSG sanctions, on the international market. But as soon as the ban was lifted, France, the second-biggest nuclear fuel producer in the world after the United States, was able to negotiate a nuclear fuel contract.

The United States will probably be the foreign country to benefit most commercially from the $100 to $150 billion India is expected to spend on nuclear infrastructure over the next fifteen years. In order to help India achieve its goal of increasing its nuclear-generated electricity supply to seven percent, one American company, Westinghouse Electric, according to the Wall Street Journal, is planning to build eight nuclear reactors in India for about $40 billion.

Other benefits the 123 Agreement provides include a lessening of India’s dependence on foreign oil and a boost for its well-known environmental problems. Nuclear energy is more environmentally friendly than coal or oil burning power plants and thus will help fight both pollution and global warming.

Because of this new closeness in the Indian-American strategic relationship, the United States is also expected to have the inside track on the $30 billion in weapons purchases India plans to make over the next four years, as it distances itself from Russia, its current chief armaments supplier (Israel is India’s second main source of foreign weaponry). India recently bought its first American warship and agreed to purchase six transport aircraft for one billion dollars.

But a main reason for President Bush’s aggressive pursuit of Agreement 123 is that a strong Indian economy is seen as essential in building up India as a counterweight to China, the other Asian giant. A reliable supply of nuclear energy would help substantially in achieving this goal of strengthening India and making her a more valuable strategic ally.

Not without reason, both the United States and India regard China as their biggest military competitor in this century. China’s current massive military modernization program and the projection of its navy into the Pacific and Indian Oceans have caused some concern. India also directly faces the Chinese military along a four thousand kilometer northern border.

Critics of the 123 Agreement say India might use the new technology it receives to test another nuclear weapon, citing the fact that under the pact’s provisions only Indian civilian nuclear reactors will come under international inspection and not its eight military ones. But India has been warned against this. In such an eventuality, the deal would be immediately cancelled and sanctions imposed once more, a risk the technology- and energy-starved country is unlikely to take.

India, a country of 1.1 billion people, should become one of the world’s great powers in this century but energy shortages were hindering its great potential. And while some among India’s 130 million Muslims may not like their government’s new closeness with America, they should regard it positively. After all, it is America and the West helping their country to achieve prosperity and not the other side of the divide.