The Telegraph
Since 1st March, 1999
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- The shape of the India-US nuclear balance sheet

The details of the negotiations behind the India-US civilian cooperation agreement are unlikely to become fully public in its immediate aftermath. This is a period reserved for positive spin and self-congratulation. The full story will probably be told only when the principal negotiators retire. In the meantime, debates will continue to rage about what the United States of America has gained and what India has conceded ' with each side overemphasizing its gains.

From the US point of view, the arguments for the deal were simple. For more than 30 years, there had been no international supervision of India's nuclear programme. Despite its good record on non-proliferation, India was outside the global arrangements. With the new agreement, it is moving back inside these arrangements and adopting internationally-accepted practices and laws. The question before the US policymakers was: Now that India is a de facto nuclear power, should America continue punishing it for its bad behaviour or get it on board the non-proliferation regime so that it becomes a part of the US scheme of things'

The agreement, in a sense, answers the worries the US might have had about the safety and secrecy of the Indian nuclear programme and the possibility of the spread of nuclear technology. The agreement curtails the autonomy of India in the highly critical area of nuclear technology while balancing it by promising to dismantle the technology-denial regime that forced India into isolation in high-end technologies. The dismantling of the technology-denial regime holds great commercial benefits for US businesses. The US under secretary of state for political affairs, Nicholas Burns, said as much in Delhi: 'The economic benefit is going to be in billions, there is no question about that, because of the huge nature of the Indian economy and the expansion that they are planning in the civilian nuclear energy field.'

The US is also hopeful that a large proportion of the big-ticket Indian defence contracts would go to them. Up to now it was seen as an unreliable supplier, but this would now change. The expectation of defence contracts was clear from the Pentagon statement issued a day after the agreement: 'Where only a few years ago, no one would have talked about the prospects for a major US-India defence deal, today the prospects are promising, whether in the realm of combat aircraft, helicopters, maritime patrol aircraft or naval vessels.'

There are other compelling reasons also for the US to opt for the agreement. It has serious concerns about the rise of China. It also recognizes the economic and political potential of a democratic, plural India as a counterweight to China. India's eight per cent economic growth rate, its increasing participation in the international knowledge economy and its attractiveness as an investment destination, make it prime economic real estate that cannot be ignored.

To partake of the Indian economic pie, the US needed to forge closer ties with it and stop punishing it for its nuclear programme. Focusing only on policing proliferation, something India has never been accused of, would have got it nowhere. This was the political decision the US took. However, there are a few things that the US did not concede. It has not recognized India as a de jure nuclear weapons power. It will not get all the benefits of a nuclear weapons state. India has clearly compromised on this issue, on grounds of pragmatism.

The US has also forced India to accept international safeguards in perpetuity. Thus, in New Delhi's India-specific safeguards agreement with the International Atomic Energy Agency, there will be no 'national security' clause. Unlike the five nuclear weapons states, India would not be able to withdraw some nuclear facilities from the safeguards, if its security interests so demand. However, this has been balanced by permanent guarantees of fuel supply.

The US has also, to some extent, curtailed India's independence by reducing 'flexibility' in handling and use of indigenously produced nuclear material. No nuclear weapons state is required to put its indigenously produced nuclear material under compulsory safeguards. So the purpose of capping the military programme has been partially achieved.

India has also agreed to work with the US on halting fissile material production under the Fissile Material Cut-off Treaty. This is not a distant prospect in US eyes. Unless India creates a sufficient inventory of fissile material in time, this may be a potential problem. Then in the Global Nuclear Energy Partnership, India is not part of the supplier chain like the US, Russia, France, Japan and the United Kingdom. It will only be a buyer of nuclear fuel with no right to reprocess the spent fuel. Nor has the US said a word about India's aspiration to be a member of the Nuclear Suppliers Group.

However, it is not as if India has gained nothing. New Delhi's nuclear weapons programme has been legitimized. It would gain further legitimacy when negotiations start with the IAEA. India, for the first time, would have the possibility of buying nuclear reactors from other countries. They may also set up nuclear plants in India. But this is not an unvarnished game ' India will pay for them and the suppliers will make money. India had a shortage of natural uranium. Its mining capacity has also been limited because of environmental reasons (as in Nalgonda in Andhra Pradesh) or because of civil society opposition (Meghalaya). Now, it would be possible to source natural uranium or even ready to use nuclear fuel internationally. The civilian nuclear cooperation agreement would also make India's international position stronger. Nuclear isolation had prevented India from playing an effective role in the nuclear and WMD-related international structure.

The fact that New Delhi has resolved this tangle will have a fallout on India's ability to do better diplomacy in other regions. India will acquire greater political and economic muscle; US recognition of it will have a cascading effect on other countries.

On the downside, there are some fears that the time-lines of India's three-stage nuclear power generation programme would now get pushed further. New fast-breeder reactors within safeguards would have to be constructed as an intermediate stage to the third-stage thorium reactors. Also, easy availability of nuclear reactors from the international market may mean that there is no incentive for indigenous technology and self-reliance (India has huge thorium reserves which could meet its energy demand for hundreds of years). Dependence on imported reactors would imply moving away from domestic efforts to which international technology was only meant to be supplementary.

There are also problematic areas inherent in too close a relationship with the US, as some European countries, especially Germany, have realized. The view of the Indian leadership is that the nuclear deal does not mean an endorsement of the US perspective on the world. However, the statements made by US officials on Indian policy towards Iran could be a pointer to the problems that can arise. Also, the US policy towards Pakistan is likely to remain an area of non-understanding between the two countries. India's problems on terrorism originate in Pakistan, while the biggest ally of the US against terrorism is Pakistan. Any understanding on Pakistan is likely to remain fragile in any shared agenda on foreign policy.

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