Tuesday, July 24, 2007

Indo-US Nuclear Deal: The last lap

(This has been revised in the past 12 hours)

As readers of this blog know, I have been, and remain, a strong supporter of the Indo-US nuclear deal. Many of my articles of the past two years can be found in this blog archive. I was 100 per cent sure that the US will concede all the major issues—right to reprocess nuclear fuel, accepting the concept of perpetual supply of fuel for reactors in exchange for our placing our civilian reactors under perpetual safeguards, linked to this ensuring that the deal is not automatically held hostage to the consequences of another Indian nuclear test, and the issue of fallback safeguards that would be needed if the IAEA failed to carry out it's duties.

My reasoning is that the US is not motivated by a desire to get a slice of the Indian nuclear power industry pie, or on capping India’s nuclear weapons programme. It based on a strategic calculation that requires a friendly India. This is not because we are ‘good’ and ‘deserving’ or even a democracy, but because our size, economic potential and location makes us just about the only large country that can offset the powerful gravitational pull being exerted by China. Our political ethos, not dissimilar to that of the US and the western world is a bonus. The problem for the US was that not only was India was subject to a host of US technology restrictions, but that most of the history of Indo-US relations was one of the Americans seeking to contain India, in alliance with Pakistan and even China. (see the previous post) You cannot befriend a country you also embargo and contain.

An awareness of the need to change this made the many US concessions possible. As for India, it sees the deal as a huge “confidence building measure” on the part of the Americans, or a token of atonement of the many wrongs they have inflicted on us in the past. India's new breed of realpolitik leaders don't want ritual apologies, they prefer to follow the Chinese style of extracting what you can when the situation is in your favour.

Now India has nothing to complain about the nuclear deal, and everything to celebrate. It's not surprising that on Wednesday, the Cabinet Committee on Political Affairs and the Cabinet Committee on Security met jointly and quickly approved of the draft agreement. External Affairs Minister Pranab Mukherji declared that all of India's concerns had been met in the recent round of talks in Washington DC.

Now, the world's sole super-power, one is willing to loosen the tight nuclear embargo it had placed on the civil part of our nuclear programme. The effect of the Indo-US nuclear agreement will be that while India remains a non-signatory to the Nuclear Non-Proliferation Treaty the US has agreed to resume nuclear cooperation in trade in the civil nuclear side, even while giving a specific commitment that it will not hamper India's weapons' programme. It has agreed to actively work to persuade the rest of it's cartel, the Nuclear Suppliers Group to do the same.

"It's too good to be true," said a senior official involved in the negotiations who spoke on background to this blogger earlier this week. The US decision has rescued the Indian civil nuclear programme as well, because India lacks natural uranium and its three-stage programme aiming at self-sufficiency through using the Thorium-Uranium cycle was in serious jeopardy. As it is, the American-led embargo had seriously crippled the programme both in terms of size and technology.

Because, say officials who went for the talks, the deal was wide open on all the three counts listed above when the team led by Indian National Security Adviser Narayanan and Foreign Secretary Shiv Shankar Menon went to Washington on July 17. There, in addition to the official-level talks, the Indian team leaders held parallel discussions with top US officials, Cheney, Hadley and Rice. By all accounts the talks were extended for a fourth and fifth day because of these discussions and in the end we have a “frozen text”—a draft agreement which, though already approved formally by India, must now be approved by the the US system.

The political push so vital for the agreement came from the very top-- President George W. Bush in the US and Prime Minister Manmohan Singh in India. Note the key role played by US Vice-President Dick Cheney and US National Security Adviser Steve Hadley and Secretary of State Condoleezza Rice in breaking the log-jam in Washington.

The latest report by one of the agreement’s more knowledgeable and balanced critics Siddharth Varadarajan of The Hindu indicates that the ‘frozen text’ now with the Indian and US governments has met all the many requirements that were set for it and more.
Already two nuclear scientists, Placid Rodrigues and M.R. Srinivasan who attacked the July 18 Agreement have come out to declare it a success. See this report.

A senior official involved in the negotiations says that the deal meets India's goals because:

1. It places no hindrance on our strategic or military programme. 2. It does not hinder our cherished indigenous three-stage nuclear power programme and finally 3. It is in consonance with all the assurances given by Prime Minister Singh in Parliament.

The senior official says that the agreement now contains “specific language” declaring that the aim of the agreement is not to hinder any “unsafeguarded nuclear activity” on the part of India-- in other words the military part of our programme. In fact he says the deal has ‘no language on nuclear tests’ . While the US is required by it’s law to halt all cooperation with countries that conduct nuclear tests, the Hyde Act has given an exemption that covers the May 1998 tests. While India is aware that another test will have consequences, the Indo-US 123 agreement remains silent on the issue, a fact that tells it's own story.

The ghost of Tarapur

In the frozen agreement according to the senior official, the US has agreed to give India “prior consent” to reprocess US-origin nuclear fuel. This is an issue that had bedeviled the past couple of rounds of talks because, first, the US did not understand India’s need for reprocessing (this is linked to making plutonium to fuel fast-breeder reactors for stage II of India’s power programme). The US prior consent is conditional on India creating a dedicated national facility for reprocessing fuel which will be safeguarded by the IAEA to it’s declared standards on reprocessing, storage, safety and security.

Such a consent was available for the US-supplied Tarapur reactors as well. But when India called for consultations on the issue of reprocessing in the 1970s, the US simply refused to sit down and talk and the result was that India has had to bear the cost of storing the US-origin spent fuel.
To ensure this does not happen the current agreement has a provision which requires consultations to begin within 6 months of the Indian request, and within a year an agreement will be reached.

Cessation of cooperation

Any agreement worth it’s salt must have some way of coping with a breakdown. In this case, the guiding star is again the Tarapur agreement. The US Atomic Energy Act insists that should this happen, it should get back all the equipment and materials supplied. This seems logical, but is impractical. Uprooting a nuclear power plant is simply not possible. The only option is to entomb it. As for materials, especially spent fuel, most suppliers would rather not have it back because of problems of storage.

The current agreement contains an elaborate schema for any “cessation of cooperation” situation. According to the senior official, it will have a “many-layered” process of consultation after the cessation. This will focus on safety and compensation, with US commitment to the “continuous operation of the reactor” of US origin. In other words, the US government will not seek to uproot or halt its’ operation. It could demand the return of US-origin fuel, but only after India was satisfied that it had made up the deficit from alternate sources. Here again the process would not be interminable. The US would be committed to stating what it wants back within a year and compensating India for the return.

What the draft agreement has not given us

The “frozen agreement” does not as yet enable trade in enrichment and reprocessing(ENR) technologies. The US prohibits their export to all countries, but says the senior official, India already has these technologies. What India wants, however, are components but this can only happen through an amendment to the current agreement. Parliament is also bound to question the “prior consent” framework for reprocessing saying that there is always a chance that the US may renege at the last moment. Officials say that the issue will really come up after a decade and more because this presumed that India will, first, have to buy a US reactor, then use it for several years and accumulate sufficient spent fuel for reprocessing. At the same time it would have to build the dedicated facility for reprocessing it. So why hold the agreement hostage to speculative possibility, namely that India will indeed buy a US reactor ?

The Real Prize

India now needs to work out an agreement with the International Atomic Energy Agency and get the approval of the 43-member Nuclear Suppliers Group cartel. This should happen by October or November. Then the draft agreement, the IAEA India-specific Additional Protocol and the NSG's new rules on nuclear trade with India would be together sent to the US Congress and the 123 Agreement would be subjected to an "up or down" vote. This means that there will be no discussion or amendment, simply a vote on whether the Congress approves or disapproves of the agreement.

The NSG is the real prize. The Indo-US Agreement is merely the key that will unlock the global embargo on our programme. When the embargo is lifted, India will have the option of nuclear trade with several countries who are not as finicky as the US on nuclear issues. It is not that they are less committed to non-proliferation and will not insist on stringent safeguards on us, only that they will not have onerous rules of the type listed in the US Atomic Energy Act. Further, and perhaps more important, they have more advanced nuclear power technology-- Russian reactors are cheaper and the French more sophisticated.

Could the US use the NSG to pin India down on issues it has conceded in the ‘123 Agreement’?
Unlikely, say Indian officials, they have tried in the past but failed. Indeed, they are actually obligated by the July 18, 2005 agreement to push India’s case in the NSG. The US will give it in writing to India that it will not press the NSG to cut off cooperation with India, should the Indo-US agreement be terminated in some future date for some unspecified reason.

Domestic fallout

“Success has many fathers, but failure is an orphan”. You will soon be reading about those who played a sterling role in working out the Indo-US nuclear deal. The actual fact is that barring Prime Minister Manmohan Singh himself, no senior political figure backed the deal openly, though External Affairs Minister Pranab Mukherji played a key behind-the-scenes role in promoting it. One reason was that many in the ruling coalition did not understand the deal and its implications and some didn’t bother to think about it. Among political parties only Left understood what it meant—the route to closer Indo-US ties—and so opposed it vehemently.

The BJP’s hostile stance is part of its addled post-2004 politics. The opposition of the “retired nuclear scientist” lobby ranged from senility to xenophobia. Many of those involved forgot their own record of incompetence and disservice to the Indian nuclear programme whose true history remains to be written. The mendacity of some of them has been truly astonishing.

And as for our bomb programme....

Those who claim that the deal will undermine our minimum credible deterrent should read the article here written by K. Santhanam, the DRDO scientist who steered the Indian nuclear weapons programme through the 1990s. He says "The accumulated weapons-grade plutonium in about 40 years of operating the CIRUS reactor (40MWt) and the relatively new Dhruv reactor (100MWt) has been estimated to be sufficient for the MCD (Minimum Credible Deterrent)."


Krishnamurthy said...

Manoj's analysis is balanced, factual and nuanced. Is required reading by parliamentarians, media commentators in India and abroad.

Wd add that the primary beneficiary wd be Russia since US (and NSG) opposition to build more Kudangulam- type power reactors wd not face opposition. And international finance institutions located in New York wd take the cue from this development in the US Administration.

We have apparently asked for `technology cooperation' in fuel reprocessing and uranium enrichment. This appears strange to me. Till yesterday, India had claimed mastery over these technologies, despite technology denials. Santy

Vivek Jain said...

Dear Manoj,

It is a well written article but focus only on the pros of the deal assuming India will get an unconditional waiver in NSG. However, USA is using the term "Clean" rather than unconditional. Now, how is unconditional different from clean will be revealed only after final draft which comes out of NSG after the proposed meetings of NSG starting from 22 August. According to me, the whole purpose of the deal for India is to acquire ENR and reprocessing technologies in terms of commercial viability. India already have these technologies for weapons programme.
India would be able to mine its own limited uranium resources and thus reducing the cost of power and would certainly help in 3 stage thorium based reactor research.
Without this provision, I would be strongly opposed to the nuclear deal because it does not make sense to me to play role of just a receiver. Also, it would make India a de-facto nuclear power.