Indo-US Nuke Deal: India's Needs and Ambitions

Indo-US Nuke Deal: India's Needs and Ambitions

Guest Column by Dr. Dheeraj Kumar

(The views expressed are his own)

The Indian government sees this Civil Nuclear Deal with the US as the fulfillment of a longstanding drive to restore a nuclear India to international respectability.

U.S. unwillingness to engage in even nonsensitive civilian cooperation rankled and was described by some Indian analysts as “nuclear apartheid.” This agreement, once implemented, will resolve that problem and cement relations with the United States as one of the pillars of Indian foreign policy.

It also responds to India’s need for expanding energy. Although nuclear energy is a small part of India’s overall energy demand, increasing needs in the future make all sources important, and in any case India is likely to become more dependent on imported fuel in the future and can ill afford to be cut off from international sources.

India’s foreign policy and nuclear establishment have good reason to exult on the agreement they secured on 2 March, 2006 detailing how India would separate its civilian and military nuclear facilities in compliance comply with the India - United States Joint Statement of 18 July 2005.

India has gained recognition as a quasi nuclear weapon state, and been pledged receiving nuclear technology, materials and equipment without joining the Non Proliferation Treaty or accepting fullscope safeguards over its entire nuclear programme.

“India would, thereby, acquire the privileges of a nuclear weapon state, avoid the liabilities of a non-nuclear weapon state, taking advantage of its intermediate status straddling both these groupings of nations”, writes P.R. Chari, Research Professor, Institute of Peace and Conflict Studies.1

India had earlier been a pariah after its peaceful nuclear explosion (PNE) in 1974 (Pokharan I), and denied access to nuclear, space and defence technology under the guidelines of the Nuclear Suppliers Group (NSG), Missile Technology Control Regime (MTCR), Wassenar Agreement and so on .

The political significance of the US-India nuclear deal for India emerges from a similar appreciation of international strategic realities by India and the furtherance of India’s national security interests. These can be summarized as under:

India’s national aspirations for emergence as a key global player can be facilitated only by a strategic partnership with USA, and not in opposition to it.
A comprehensive strategic partnership with USA would ensure that there would be an enhanced access for India to the vast resources of USA in terms of trade, financial investments, high-technology transfers and energy security.
India’s energy security could be greatly facilitated if USA took the lead in eradicating the restrictive barriers imposed against India through NPT, NSG etc. and that it would then be followed by other NSG members.2

After 50 years of isolation, India will have the opportunity to say something, in world forums like UN, WTO and World monetary lending institutions, and be heard. This was not the case previously. Reasons – India had no clout. With western economies in the future, tied more and more with India, the latter’s clout will improve.

There will be frequent inter-government exchanges on matters of mutual interest. India could become a full member of the select group of G-8 members. Gone will be the days that US politicians will heap scorn on India, the way they are doing it today.

“The Indo – US Nuclear deal is in fact dumping the past and unlocking the hidden potential of the future. In addition Pakistan may get the cue and begin a rethink of its policies towards India”, writes Hari Sud in his article ‘India – US Nuclear Deal – The Benefits’, March 20, 2006 for South Asia Analysis Group.3

Benefits to India are immense with this deal. First and foremost, is the de-facto recognition of India as a nuclear power? It is not clearly stated in the deal, but it’s an implicit understanding. India missed this opportunity in 1970-78.

Second, is “future recognition of India as a permanent UN Security Council member? India has tried this in last five years. It has not succeeded. It is unlikely to succeed in next 10 years. But with a Trillion and a half dollar economy (8% growth over ten years), India will make this grade. When UN reforming movement gains strength in the future, India will be right there and waiting for this opportunity”, writes Hari Sud.4

India's nuclear program has grown in total isolation. Now it would get integrated with the world, gaining access to materials, technology, know-how and markets. The agreement would open up new worlds of science and energy.

“It is not an accident, France and other nations are hoping to begin nuclear cooperation with India, if the U.S.-India negotiations succeed”, opines Fareed Zakaria in his article ‘Negotiating Nukes With India’ for Newsweek International Editions.5

Current state of power generation in India is bleak. There is overall 12% power shortage in the country. In some areas shortages are much higher.

Central and state governments generate bulk of the power 58% and 32% respectively. Private sector generates a meager 10% of the total power.

Most of the power is generated using coal (60%). Hydro accounts for 26%, gas accounts for 10% and nuclear accounts for 3% of power generated. Remaining 1% is generated using a mix of diesel and fuel oil.

As the economy grows at 8-9% a year for the next 15 years, power generation will have to fill up the previous gap plus grow at a rate of about 10% per year. That means, unless power generation capacity boosts up well above 10-12% a year, Indian industry and agriculture will find difficult to maintain the momentum it has created in last 5 years.

Hence nuclear or gas has to come to the rescue. Alternative to gas & nuclear is coal.

“Rough estimates are that to generate that much power using domestic and imported coal, an additional 130 million tons of carbon dioxide will enter the atmosphere. That will bring catastrophic change to the environment and hasten end of the planet earth. Hence, nuclear deal is not only important to India but also to the rest of the world”, calculates Hari Sud in his article ‘What If India-US Nuclear Deal Fails’, April 28, 2007 for www.ivarta.com.6

“Energy has become a critical constraint to expanding our economic growth and development. We have to expand our generating capacity in every form of energy”, speaks Pranab Mukherjee, the Foreign Affairs Minister, in the parliament in Dec 2006.

Presently, nuclear energy provides less than 3% of our energy mix.

Our current estimates envisage nuclear power generation of 30,000 MWe by 2022 and 63,000 MWe by 2032. The absence of international cooperation seriously constrains us from reaching these nuclear energy targets.

India is today seriously pursuing several energy options including clean coal technologies, exploitation of coal bed methane and gas hydrates, wind as well as solar power. India can today expand its access to other forms of energy, relying on market mechanisms to do so.

Our access to nuclear energy is impeded by an international regime and requires a political solution consistent with our national security and energy requirements.

Eventually, our objective is that technology denial regimes that have targeted India for so many decades must be dismantled so that our national development is unimpeded.

“We are also committed to creating a climate where our scientists and technologists can participate in and contribute to international initiative in various fields. We have taken a big step towards that goal and I am sure that the House would continue to support us in that endeavour”, as Mukherjee speaks.7

Although the Indian private players can't run nuclear power units, and have only been contractors to build the reactors, they too are excited about the prospect.

By 2030, the contribution of nuclear power to India's electricity generation is estimated to more than treble to 10 per cent.

An NPC study shows that if the private sector is allowed to enter the area, India can easily add 20,000-40,000 MW of nuclear power capacity over the next 10 years.But that will imply major changes in existing laws and policies.

Still, firms like Reliance Energy, L&T, Hindustan Construction and Siemens are preparing for their inevitable entry.

Earlier, Reliance Energy had initiated talks with NTPC and NPC for a joint venture. Today, it's in touch with global majors like GE and a few Russian firms for a similar deal. It's also looking at equity participation in new ventures.

The state-owned NTPC hopes to set up a 2,000-MW nuclear power unit by 2017.

L&T's M.V. Kotwal thinks that if the sector is opened up, "foreign firms will want to partner with us and NPC". Once they have access to global technology, Indian firms may also start manufacturing critical components.

NPC's Jain makes it clear that the bilateral business in the nuclear field will be a "two-way street". For instance, India can provide immediate skilled manpower as there will be a shortage in the US. L&T is clear it can provide several key components it has developed at competitive rates.

In addition, India can help the US and other nations that aim to rebuild old nuclear plants. "The Americans perceive India to be a convenient sellers' market. But we have told them that they too will have to source materials and expertise from us," says Jain.8

There is an urgent need in India for capital to build its infrastructure and manufacturing base. And there is only one source to get it i.e. US & Europe.

US and Europe at this moment are content with sending capital to China to supply them with consumer goods. The former very cleverly had avoided exporting manufacturing technology to supply high priced, high technology capital goods to China. This component together with auto-parts, pharmaceuticals and computer hardware could herald India into big leagues in ten years and beyond.

Commercial Aircraft manufacture, ship building, factories to make giant power plants, steel making plants, mining & drilling hardware, petroleum & petrochemical plant building facilities could be ultimately shared with India.

The latter within ten years will have a workforce sufficiently skilled to undertake all the foregoing. It will be beneficial to US. Labor costs in India, will always stay a third of US, and European costs. That will make India an ideal candidate for this technology transfer.

Opportunity of the KPO (Knowledge Process Off-shoring) is knocking at India’s door. Indian graduates of Science and Engineering will play a major role in this expansion.

“In about 5 years KPO Off-shoring will grow immensely. India stands to benefit most from it. Thanks to the edge, Indian science & technology graduates have established”, as Hari Sud writes.9

Indian military is in need to diversify its sourcing of military hardware.

Russia has been a very reliable source for the past 40 years. This source has to be diversified.

Ultimately all military hardware will have to be produced in India. But development time in India is too long and success factor is low. This has to be speeded up.

The only way at India’s disposal is buy its immediate needs and import technology to develop its own weapon system. It is a bit expensive up front but pays dividend later as India joins the select group of countries as a source of military hardware.

The immediate benefit would be in getting the latest technology for nuclear power generation. Current progress in India on building its own nuclear power plants at best has a failing grade. Most of nuclear power plants in India are of other country’s design.

The Indian Department of Atomic Energy falsely clings to the view that Fast Breeder Reactors will allow India to bridge the nuclear gap in the future. That future may be difficult to arrive. It may be too distant. This will hold economic development as hostage.

Moreover “developing nuclear technology is one thing, implementing it is another. For even homegrown technology, India will have to import critical components”, opines Hari Sud.10

It is also clear to seasoned observers of India's nuclear program that there is a danger of India's nuclear program grinding to a halt in a couple of decades if India doesn't go in for international cooperation.

“India's uranium ore is just adequate for 10,000 MW and India's nuclear weapons program will have to be accommodated within that. The U.S.-India deal, therefore, is India's best hope for integrating itself in the global nuclear framework and drawing its advantages”, writes Harsh V. Pant in an article ‘The U.S.-India Nuclear Deal, Iran, and India's Future’.11

Shortage of uranium is felt all over the country and India's ambitious target of achieving 20,000 MW in 2020 will be hampered if the Indo-US nuclear deal was not signed, Union Minister of State for Commerce and Industry Jairam Ramesh said on July 13, 2006 at Tiruchirappalli, reported by PTI and appeared at outlookindia.com.

Addressing a Press conference , he said the deal was very important to the future of India.

He claimed that the Madras Atomic Power Plant at Kalpakkam near Chennai, which he visited July 12 night, was facing shortage of uranium.

Out of the total installed capacity of 4,020 MW in nuclear mode as of July 12, 2008 only 1,800 MW was generated, he said and stressed the need for the deal.

The US-India nuclear deal, marked by hard negotiations, the following could be summed as substantial achievements:

India-projected separation plan wins US approval. It entails placing 14 nuclear facilities on civil list and 8 nuclear facilities reserved for military programme.
FBRs not on civil list.
Future supplies of uranium fuel to India assured on a permanent basis.
India will determine which nuclear facilities will in future be placed on civil or military lists and the latter exempted from international safeguards.
India-specific safeguards have been discussed with IAEA.
India’s separation plans will be executed in a phased manner from 2006-2014.

Further, the advantages accruing to India in light of the above can be said to be:

India’s global nuclear isolation will be ended.
Enabled implicit recognition of India as a de-facto nuclear weapons power. There is a direct recognition of India as a “civilian nuclear power.”
India’s strategic nuclear weapons programme remains untouched with its designated military nuclear facilities not open to international inspections. FBRs as a source of plutonium are untouched.
India can continue to build military reactors.

“It is indisputable that despite agreeing to place 65% of its current nuclear facilities under international safeguards, India has made the most significant gain in not allowing its strategic nuclear weapons programme to be impacted”,writes Dr Subhash Kapila.12

"The IAEA agreement released on July 10, 2008 by the government is a unique document of the IAEA in which an NPT country is conceded virtually the weapon status. It has provisions to the extent possible for the continued supply of nuclear fuel. It also meets all expectations of the country," Chairman, Accelerator Safety Committee of the Atomic Energy Regulatory Board, M R Iyer, told PTI in Mumbai on July 11, 2008 that appeared at outlookindia.com.

Iyer, who was the former head of BARC's Radiation Safety Systems Division and former Instrument Specialist and Inspector of IAEA's Safeguards, also said, "We should not miss this opportunity to open up our nuclear industry to the global mainstream.

"This is the first time that in any international document that India is conceded a position as a nuclear-weapon state albeit indirectly. There is also a clause for India to take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies."

"Nowhere it mentions any bar on setting up facilities outside the safeguards using local non-safeguarded resources. No mention of the extended Safeguards Protocols as in the case of NPT states finds a mention," Iyer said adding that fears expressed about the agreement are grossly exaggerated.

India also wants a multipolar world. It doesn’t favour unipolar world led by the USA. Also in Asia, Chinese Hegemony has to be broken. India wants power balance in Asia having bipolar Asia one being India itself. All these objectives can be achieved by India having strategic relations with the USA and other powerful nations of the world.

REFERENCES:

1. P.R. Chari, “Parsing the Separation Plan The Indo-US Subsidiary Deal’’ Institute of Peace and Conflict Studies, IPCS Issue Brief 36, March 2006.

2. Dr Subhash Kapila, “United States - India Civil Nuclear Deal Reviewed”, South Asia Analysis Group, Paper no. 1670, 10 Jan. 2006.

3. Hari Sud, ‘‘India – US Nuclear Deal – The Benefits’’, South Asia Analysis Group, Paper no. 1740, 20 March, 2006.

4. Ibid

5. Fareed Zakaria, ‘‘Negotiating Nukes With India’’, Newsweek International Editions, www.MSNBC.com, 27 Feb. 2006 issue.

6. Hari Sud, “What If India-US Nuclear Deal Fails”, www.ivarta.com, 28 April, 2007.

7. Pranab Mukherjee , “For The Record: Wait For 123”,Outlookindia.com, Web , 12 Dec, 2006.

8. Shuchi Srivastava,“NUCLEAR DEAL: Waiting To Go Boom”, Outlookindia.com, Magazine, 18 Dec, 2006.

9. Hari Sud, ‘‘India – US Nuclear Deal – The Benefits’’, South Asia Analysis Group, Paper no. 1740, 20 March, 2006 .

10. Ibid

11. Harsh V. Pant, ‘‘The U.S.-India Nuclear Deal, Iran, and India's Future’’, ZNet | India , Web, 31 Jan, 2006.

12. Dr Subhash Kapila, ‘‘United States: President Bush’s Visit to India (2006) Reviewed’’, South Asia Analysis Group , 03 March, 2006.

(Dr. Dheeraj Kumar is a lecturer in History at Jawahar Navodaya Vidyalaya in Nahan (Himachal Pradesh). He can be contacted at drdjworld@gmail.com)