US officials are making no secret of--or apologies for--using Washington's clout in multilateral financial institutions to club India into submission over non-proliferation issues. On the contrary, they are making it clear that they will use it as a bargaining chip in the ongoing security dialogue.

``We are very aware of their need for discussion (on the loans)... that's part of what's on the table,'' US Assistant Secretary of State for South Asia Karl Inderfurth said at a briefing on Tuesday. ``Our ultimate aim is to remove all sanctions... how quickly, depends on the progress we make,'' he added.

Inderfurth's comments appeared to directlychallenge the charter of the international financial institutions, which forbid their politicisation by member countries. He foisted the embargo decision--and the subsequent relaxation against only Pakistan--to resolutions by G-7 countries, but Indian officials say the US has actively lobbied to choke aid to New Delhi.

In a separate briefing over the weekend on the forthcoming talks, India's Ambassador Naresh Chandra bluntly said Washington was going beyond the prescribed Glenn amendment sanctions to block multilateral financing. The sanctions did not require the US executive director in the World Bank to use footwork and lobby to block the loans.

Indian officials say in the case of Pakistan, Washington has interpreted the Glenn Amendment to mean that ``abstention'' is sufficient, allowing multilateral finance to go through. But in the case of India, Bank officials have directly and actively opposed lending at the direction of the State Department.

``It was not conducive to accelerating progress in thetalks. It created a negative environment,'' Chandra said.

But US officials are unapologetic and stubbornly repeat the same arguments about Pakistani economy needing a bailout because of its precarious financial situation. ``It was our view then and it is our view now. India's economy is stronger than Pakistan's. We do not see that (allowing loans to Pakistan) as discrimination,'' Inderfurth maintained.

What is worrying New Delhi is that other international lenders like the Asian Development Bank and Japan are taking their cue from Washington. ``The international community has paid a price for it because multilateral agencies are supposed to be immune from political interference,'' Chandra said.

The whole issue is expected to come up in the talks this weekend, but judging from Inderfurth's remarks, Washington will continue to put the squeeze on New Delhi even as India's infrastructure crumbles. The US delegation going to India will also have a representative this time from the Treasury Department,indicating some serious bargaining may go on over financial matters.

One such item would be to broaden the definition of ``basic human needs'' under which head India was allowed some loans last year. At present, Basic Human Needs (BHN) does not include infrastructure development. New Delhi wants the BHN definition to include infrastructure loans since they go towards power plants and roads, which ultimately affect basic human needs.