Nuclear deal strains India's government

"Specifically, insurance and pension reforms, which left parties have been opposing, will be delayed assuming an early poll.

"I think investors' confidence is affected but the magnitude will not be high. The domestic market is not factoring the political uncertainty but it's going to affect foreign investors' confidence to some extent.

"Political uncertainty is one of the factors taken into account by global credit rating agencies for assessing the country risks."

HAN SIA YEO, STRATEGIST, BANK OF AMERICA, SINGAPORE:

"I think there is probably no near term risk to the market. As far as reforms are concerned, we have not seen much happening. Privatisation has stopped. If the communist parties pull out support, elections will be brought forward. But the timing won't be bad for the government as headline inflation is below target and growth is good. On the ground, you can sense some improvements taking place, particularly on the infrastructure front, and we are seeing some trickling down effect."

MAHESH RANGARAJAN, POLITICAL ANALYST:

"It is the beginning of the end of the United Progressive Alliance and left relations. The relations were based on some foundations which are now being questioned.

"They (the left) are questioning the judgment of the prime minister and the government over the negotiations with the United States.

"I think early elections are becoming a reality. It will not happen in the next two months but certainly we are looking at general elections ahead of 2009, most probably in early 2008."

HARISH MENON, ECONOMIST, ING VYSYA BANK, MUMBAI: