The recently concluded US-India agreement for civilian nuclear cooperation has provoked controversy over its potential damage for the non-proliferation regime. In the process, however, critics may have overlooked the larger political implication of the deal: The agreement marks a strategic shift in US policy not dissimilar to Nixon opening to China in 1972. By designating India a virtual guest member of the official nuclear club, the Bush administration has reaffirmed to the world its willingness to pay a large price for a strategic partnership with Asia’s second biggest nation.
Of course, the deal has yet to be consummated. In the coming months, the agreement will undergo scrutiny of a skeptical Congress and still requires endorsement by the International Atomic Energy Agency (IAEA). Also, the 45-member Nuclear Suppliers Group (NSG) must reach consensus on a huge exception for the world’s second nuclear weapon state that never joined the NPT. US experts expect bruising scrutiny but eventual acceptance. The door to civilian nuclear technology and fissile material, shut so long to India, would reopen, giving the US access to Indian markets for both reactor technology and military hardware.
More than 30 years after India’s first test of a "peaceful nuclear device," US opinion for the country’s nuclear program has come full circle – from treating New Delhi as nuclear pariah to embracing it as a "responsible" member of the international atomic club. The single most influential catalyst for this radical shift has been an American president who raised US security in the post-9/11 world above all else, reinforcing his scant regard for the NPT or, for that matter, other international rules that may constrain his pursuit of America’s national interest. Concerned by growing terrorism and the rise of China, Bush has been eager to find a reliable long-term partner. Democratic and secular India with its growing economy and military power fit that bill.
Although US-India economic and technology ties have grown at a rapid pace since the launch of the 1991 reforms under Manmohan Singh, then finance minister and now prime minister, political ties have been constrained by the central disagreement over India’s nuclear-weapons program. Indian officials privately admit they were stunned to hear Bush’s message that the US was ready to remove the "irritant" nuclear issue in order to build a strategic relationship with India. For its part, long frustrated in its ambitious plans to build reactors to meet the country’s energy needs, India saw an opportunity to secure coveted nuclear fuel and technology while cozying up to the world’s only superpower.
India’s longstanding three-stage nuclear-power plan required it not only to build a number of civilian nuclear-power plants, assuring the supply of nuclear fuel, but to develop the ability to reprocess spent fuel. Plutonium, retrieved from spent fuel, is key to India’s goal of securing energy independence. Plutonium could be reused with thorium, abundant in India, to operate fast-breeder reactors to generate power as well as make full use of the nuclear fuel cycle. Scientists contend that reprocessed fuel, though expensive, yields 30 times more energy than conventional nuclear plants. Currently, nuclear power generates barely 4 percent of India’s electricity.
India’s plan, however, ran up against US law forbidding supply of technology or fuel to a non-NPT member and undeclared weapons state. More importantly, US law strictly forbade reprocessing by just about anybody. A path around these obstacles was found in 2005 when Bush described India as "a responsible state with advanced nuclear technology." Officials explained that, despite being a weapons state and non-NPT member, India had shown responsibility by fully respecting NPT laws regarding non-proliferation in sharp contrast to NPT members like Iran. As US Under Secretary of State Nicholas Burns noted, India had been "uniquely responsible in not proliferating" and was "in compliance with most of the norms" of the NPT.
The 2006 Hyde Act, subsequently passed by the Republican-dominated Congress, endorsed Bush’s approach of making an exception by opening the door to transfer of technology and fuel to India’s safeguarded civilian nuclear program. But New Delhi objected to the legislation’s preamble confirming the US non-proliferation goal and its injunction against selling reprocessing technology, claiming that such conditions violated its sovereign rights and belied its status as "a responsible" state. It took Indian and US negotiators two years to reconcile Bush’s promise of "full cooperation" with India’s civilian program on the one hand and US law restricting such assistance on the other.
The full text of the agreement has yet to be released, but US and Indian sources report that negotiators hammered out language that gives India what it wants and meets the requirements of US law. Highlights include:
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- India will set up a dedicated facility, safeguarded by the IAEA, to reprocess spent fuel to assuage concerns about the diversion of plutonium for bomb-making. By granting India the right to reprocess, Washington made exception to Bush’s earlier tough stand on allowing reprocessing by new countries.
- India sought guarantees of an uninterrupted fuel supply for its safeguarded civilian reactors while US law requires the cut-off of fuel and technology supplies in the event that the receiving country carries out a nuclear test. The US agreed that India could develop a strategic reserve of fuel to hedge against any supply disruption over the lifetime of its safeguarded reactors. It also pledged to help India find alternative suppliers, should it be forced to curtail activity.
- Although India has declared a unilateral moratorium on testing, it does not want to forego its sovereign right to conduct a nuclear test if national security – read, as officials privately say, tests conducted by neighbors Pakistan or China – so required. Both sides reached solution by remaining silent on the issue. As Singh said, "India has got the right to test and the US the right to react."
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Domestic critics in India, who feared loss of sovereignty, appear mollified. Although critics in Congress have already criticized the Bush administration for sidestepping US law and not respecting the spirit of the Hyde Act, administration sources express confidence that Congress will give assent after seeing the full text of the agreement. The main challenge, sources suggest, is for India to secure specific safeguard agreements with IAEA and specific NSG waivers. Skepticism from Chinese and Nordic members will place considerable demands on India’s diplomats seeking to achieve consensus from NSG.
Washington sources suggest the earliest the agreement can be delivered for a vote in Congress is spring 2008. Political exigencies could narrow the likelihood of approval during a presidential election year, and some US officials privately hope that the clout of the wealthy Indian-American lobby will ensure that lawmakers cast votes in favor of the deal.
When and if the agreement is finally approved, Bush can take credit for one major diplomatic success in deepening US ties with India. The nuclear agreement will also remove the last remaining shadow over the bilateral relationship and, as Burns was not shy in pointing out, would likely lead to increased defense cooperation and sales of US military technology. According to the US-India Business Council, the expansion of India’s civilian nuclear-energy program would generate $150 billion in commercial opportunities for American companies over the next 30 years. As illustrated by Lockheed’s proposal to sell its brand-new F-35 fighter to India’s air force, US defense industries also anticipate selling billions of dollars worth of military hardware to their newest strategic partner in Asia.
Nayan Chanda is director of publications and editor of YaleGlobalOnline. His most recent book is Bound Together: How Traders, Preachers, Adventurers, and Warriors ShapedGlobalization, published by Yale University Press in May 2007. Rights: © 2007 Yale Center for the Study of Globalization. YaleGlobal Online
