Siddharth Varadarajan

Journalist | Writer | Analyst

Dateline Vienna: Thirty words that saved the day

An inside account of the roller-coaster ride and extreme mood swings at Vienna… With the NSG waiver creating rights for both India and its critics, diplomacy and power hold key to implementation.

9 September 2008
The Hindu

Thirty words that saved the day

With the NSG waiver creating rights for both India and its critics, diplomacy and power hold key to implementation.

Siddharth Varadarajan

Vienna: Only in the arcane world of diplomacy do the most implacable and bitter of disputes get settled with the addition and subtraction of a word here or a phrase there. At Vienna, the fate of the entire waiver for India from the export rules of the Nuclear Suppliers Group revolved around the use of some thirty odd words. That, plus some late-hour pinch hitting by the United States — which knew full well the disastrous consequences of failure — finally brought the NSG around to its momentous decision Saturday lifting a 16-year-old ban on nuclear sales to India.

Late on Thursday night, after the first round of discussions within the Nuclear Suppliers Group, so negative was the report sent by the United States about the level of opposition to the proposed draft waiver that the Indian delegation here was bracing itself for another battle over revisions to the text.

Barely six days earlier, a small band of Indian officials in Delhi had withstood “the heat of a pressure cooker” to ensure the second version of the draft waiver had none of the killer amendments the U.S. was insisting on following the debacle of the first NSG meeting on August 21 and 22.

But when this correspondent caught up with senior members of the delegation close to midnight, the sense of gloom and foreboding was palpable. The going was tough to impossible, they had been told by the U.S., and suggestions were made to be ready to compromise. “If this gets out of hand, our only option will be to do a ‘Kamal Nath’,” a senior Indian official told The Hindu, making a reference to the Indian commerce Minister’s dramatic rejection of American proposals at the World Trade Organisation meeting in Geneva in July.

September 4 began on a sour note for the Indians as the shockwaves from the ‘Berman bombshell,’ which had exploded in Washington and Delhi two days, made their way to Vienna. Several countries demanding strict conditions in the draft waiver latched on to the State Department’s answers to the questions posed by the House Foreign Relations Committee on the parameters of America’s own policy on nuclear cooperation with India.

“Why should the NSG settle for anything else?” was the question several countries, including New Zealand and Ireland, posed when the plenary got under way that morning. At the same time, a growing number of other states said they now wanted the text adopted. Germany, in particular, as the chair of the NSG, offered constructive support. And it was a suggestion by Berlin which India accepted that provided the meeting with its crucial turning point.

German role

For at least a month, Germany had been asking India to issue a statement or declaration outlining the country’s positions on non-proliferation. It is our assessment, a senior German official told The Hindu before the first NSG meeting, that such a reiteration of India’s positive views and record would be widely welcomed.

The idea originated with Viktor Elbling in the Foreign Ministry and was seen as helpful by both the Indian embassy in Berlin as well as the Ministry of External Affairs. In mid-August, German Foreign Minister Frank-Walter Steinmeier spoke to External Affairs Minister Pranab Mukherjee and reiterated the suggestion.

India, which was wary of establishing linkages or conditionality, tested the waters in late August with a letter to Mr. Steinmeier. This letter, say German officials, made a deep impression on their government and they reverted to Delhi with the suggestion: a similar letter to all 45 members of the NSG would go a long way towards assuaging lingering concerns about the waiver.

Foreign Secretary Shiv Shankar Menon worked on a draft and by Friday a statement on India’s stand on disarmament and non-proliferation was issued in the name of Mr. Mukherjee and sent to the NSG. Though the statement made the NSG context clear, India also sent word that it had reservations about the document being appended to the draft waiver. Despite this caveat, the effect was dramatic, if not electric. NSG members saw this as a last chance to break the impasse. When the plenary adjourned, the sense of optimism was obvious. This has generated new momentum, John D. Rood, the acting U.S. Under Secretary for Non-proliferation, told reporters.

The statement itself was used by India to advance a number of other goals, officials said, apart from reiterating the moratorium on testing. Thus, a major reference was made to India’s working paper on nuclear disarmament at the U.N. which calls, inter alia, for conventions banning the production, stockpiling and use of nuclear weapons and their timebound, non-discriminatory and verifiable elimination as well.

And in the sphere of nuclear energy, it said India was interested in “participating as a supplier nation, particularly for thorium-based fuel and in the establishment of international fuel banks, which also benefit India.” Giving a sense of India’s thinking on the usefulness of this approach, an official said, “Tomorrow if some NSG member questions our adherence to the commitments referred to in the waiver, we can just as easily turn around and ask why they are not supporting our move at the U.N. for the timebound elimination of nuclear weapons.”

While Mr. Mukherjee’s statement was widely welcomed by all, including Ireland, New Zealand, Austria, the Netherlands, Switzerland and Norway, the ‘Group of Six’ continued to insist on conditional linkage between the waiver and India’s commitments.

Draft changes

Of their various proposals, automatic termination of supplies in the event of an Indian nuclear test was seen as a killer, not only by India but by Russia and France which did not want such a major decision forced on them by committee. As the six dug their heels in, the mood in the Indian camp turned gloomy again. This is when the Norwegians, Dutch and others suggested making a reference to the Indian statement in the chapeau of paragraph 3. India responded warily at first but was able to eventually agree on language with the U.S. and the six holdouts. The chapeau, which establishes a link between India’s commitments in paragraph 2 of the waiver and the NSG’s decisions as enumerated in paragraph 3, finally ended up stating: “Based on the commitments and actions mentioned above, as reiterated by India on September 5, 2008, and without prejudice to national positions thereon, Participating Governments have adopted and will implement the following policy on civil nuclear cooperation … [with India]”.

The italicized words were all new compared to the earlier draft. If the Indians felt this reference did not create any additional commitment or linkage for India, the formulation also came with an unexpected bonus. Thanks to Argentina and Brazil, which were defending their own policy in favour of access to enrichment and reprocessing (ENR) technology, the reference to “without prejudice to national positions thereon” was inserted.

Indian officials feel this creates additional space for NSG members to exercise their independent national judgment in the event that one or more countries ever try to demand termination of supplies to India in line with paragraph 3(e) of the waiver and paragraph 16 of the NSG’s existing guidelines. Either way, supplies can only be terminated by a consensus decision.

But the reference to Mr. Mukherjee’ statement was not the only change that was made in the final waiver text. Para 3(e), which spells out what the NSG could do in the event of India violating its commitments, was strengthened in three minor but important ways.

First, the reference to intra-NSG consultation on implementation of the waiver — which was in a separate paragraph in the second draft — was merged with the paragraph envisaging termination action in accordance with paragraph 16 of the guidelines. Second, the scope of consultation has been explicitly mentioned as including the implementation of “all aspects” of the waiver. And third, the convening of a meeting to discuss any Indian violation has become obligatory even if any action which results from such a meeting will still have to be taken by consensus.

Thus, the waiver says: “In the event that one or more Participating Governments (PGs) consider that circumstances have arisen which require consultations, [PGs] will meet, and then act in accordance with paragraph 16 of the Guidelines”. (new text in italics)Other minor changes include substitution of the phrase ‘partnership with India’ by ‘cooperation with India’ in the paragraph 3(d) reference to the intensification of dialogue between the NSG and New Delhi. This change was made at the urging of the G-6, which did not want to acknowledge India as a ‘partner’ of the NSG so long as it continues to remain outside the Nuclear Non-proliferation Treaty.

The Indian side had no serious objection to this, nor did they have any problem with the ‘compromise’ effected to resolve the objection some states had to the transfer of enrichment and reprocessing technology and equipment to India. Since a ban was not acceptable to India and many other states, the final draft simply reiterates paragraphs 6 and 7 of the NSG’s existing Guidelines urging members to exercise restraint in their transfer to any country.

Finally, paragraph 4, which in the very first version in August, gave India extensive rights of consultation prior to the adoption of future Guideline changes by the NSG, stands further diluted by enlarging the scope of the NSG chair’s consultation with India to cover “changes to and implementation of the Guidelines”. However, the savings clause tying India’s effective implementation of the changed guidelines to its prior consultation survived a determined attempt to have it deleted.

As these changes were accepted by India, the ranks of the opponents gradually thinned. But even this, say Indian officials, required a series of “fairly real time demarches” by Washington to ensure the withdrawal of objections. After spending the better part of two weeks feeling frustrated and even angered by the contradictory manner in which the U.S. was handling the NSG issue, the Indians were finally able to see, in the game’s closing hours, the full weight of the American diplomatic machine swinging into action. At 2 a.m. on Saturday, the Gang of Four – New Zealand, Ireland, Austria and China – were still undecided. By the time the plenary reconvened at 11 a.m., each had come around.

But India’s sense of awe at Washingon’s midnight diplomacy comes tinged with the recognition that the same effective machine could just as easily be deployed again to get the waiver revoked should political circumstances change. The NSG’s decision meets the criteria of ‘clean and unconditional’ but it has done so by creating rights for both India and its critics within the NSG. Even without the textual changes introduced, NSG members were free to push for termination. Making sure such a push never succeeds will have to be a major goal of Indian diplomacy.

15 comments on “Dateline Vienna: Thirty words that saved the day

  1. Anonymous
    September 12, 2008

    Obviously the more you integrate with the world economy the more exposure you have to risks that may arise due to nuclear tests. But there is also lot to lose if you don’t reap the benefits of integrating with the world in all aspects of the energy industry – nuclear being one of them. No doubt nuclear tests and sophisticated nukes raises India’s profile in the world stage but creating world class nuclear industry also can make you a big player. The nukes have to be sophisticated enough to counter China and Pak and not too sophisticated and large as US/Russia/Britain arsenal that it becomes an economic burden. Does the US-India deal constrain the developments of nukes to match China that I don’t know. <>But what should be of more concern is that whether any indirect shackles are being put on the Indian nuclear industry in terms of technology that prevents it from creating Indian GEs, Westinghouse<><> If India can create such industries in the arena of nuclear industry then you have an equally good chance of upsetting the world power structure as in having nukes and retaining the right to test. Note the so called supplier nations will be equally interested in preserving their monopoly over technology know-how and making India just consumers just as in any other field of technology. A perfect example is space technology as nicely well put in this < HREF="" REL="nofollow">Economist article<> –Earthbound Gravity is not the main obstacle for America’s space business. Government is

  2. PM
    September 10, 2008

    Regarding the Rs. 200,000 crore (USD 45 bn) investment over a number of years, it is not as large a sunk cost as it seems, even assuming all of it becomes infructuous, which is extremely unlikely. As an order of magnitude, it is less than half the growth in our foreign exchange reserves over the past year.Alternately, every three months, India invests more than Rs. 400,000 crore There may be many other reasons why we may decide not to test, but this doesn’t look like one of them.Look forward to Siddharth’s China story.

  3. Anonymous
    September 10, 2008

    India needs to keep its nukes for good reason. They got china and pakis to keep at bay. Why reason do countries like UK and France have to keep nukes?

  4. Satish
    September 10, 2008

    I have mainly four concerns with this deal:1) INDIA is tied down to future rule changes by NSG (though NSG has to consult INDIA for effective implementations we will be under tremendous pressure to accept the rule changes). There seems to be no incentive for NSG to make INDIA its member unless we demonstrate thorium reactors/thorium breeder reactors (thorium cycle).2) There are lots of doubts among people about the potency of INDIAN H-Bomb. Lot of questions and/or rumors about a 6th device that was pulled out from the shaft in 1998. There are also rumors about abandoned test in 2002.3) I also have concerns about talented people leaving government research agencies (BARC, IGCAR,..etc) for doing menial jobs in private sector (nuclear industry) for better pay.4) Absence of big Indian reactor developers.I think the government should bind itself legally and commit to the parliament (by amending Atomic Energy Act) by:1) Mandating minimum funding allocation per year for development of thorium fuel cycle/thorium breeder reactors/AHWR.2) Mandating funding (in time bound manner) for dedicated LIF (Laser Ignition Facility) under military sector. 3) Modified Atomic Energy Act should take measures that places government employees pay structure in nuclear industry at least on par with employees in private sector at all times by de-linking pay structure of people working for government in nuclear sector from “Central Pay Commission” and forming a “Atomic Energy Pay Commission” (which includes INDIAN private firms in nuclear sector as members) under AEC to regulate pay structure (including benefits) through out the industry. This commission should also define the hierarchy and number of employees in private organization for a given installed capacity.4) Mandating grooming and promoting at least two players as nuclear reactor developers (PPP model) in medium to long term.Government should have at least 55% direct or indirect holding at all times.Each of the two reactor developers should be structured in such a way that AEC (Atomic Energy Commission) will have at least 30% permanent direct holding at all times with veto rights, one public sector firm which is involved in nuclear development and one Indian private company under PPP model (Public Private Partnership) with shareholding of each member never exceeding 45% (except AEC).The two firms should have 100% Indian holding at all times and any changes to that should need at least 6 months notice period to parliament and parliamentary approval/clearance with 3/4th majority after taking care of Indian commercial, Intellectual Property and Military interests. One private company I can identify is L&T.

  5. Siddharth Varadarajan
    September 9, 2008

    Thanks for your comments. I think the Bush-Hu call was less about strong-arming the Chinese and more about placating their egos.I am still getting feedback from NSG diplomats who were in the meeting and will write a separate piece on the Chinese role later this week. Stay tuned!

  6. Anonymous
    September 9, 2008

    India can do nuclear tests and never disclose them and reject the claim. This is possible for small output nuke tests. If India wishes to test a thermonuclear bomb it becomes very difficult to claim it as an earthquake.

  7. Anonymous
    September 9, 2008

    Addressing previous anonymous commentator who posted at 11-42 P.M.Sir! No one until now has figured out real agenda behind Indo-US nuclear deal. If you pose this question even to China “What would USA say to China to make them come around”? they will not able to answer, because they themselves are not aware of the agenda they have been set on to.Yes! for technical analysis and to cover up real agenda, one can list a few economic reasons such as:-1. USA has major investments in China. It may as well say,” Well I will pull out all my investments from China and put in India”. Even if it threatens like that, USA will not dare do that, because Chinese laborers are more easily controlled through party hierarchy than for say Indian dis-organized or “organized” labor, you may even call confused labor in Indian context. For USA it is much easier to use communist party hierarchy, than managing Indian multiparty leaders going haywire every other minute.2. USA possibly would have said, “Well ! My dear Chin Chin! Tibet is yours . We won’t fiddle with it say for next 10 or 20 years, even though we will now and then talk about human rights and send some HR groups to make noises now and then but” “that is only to cover up our real secret agreements”. 3. USA can even say,to Chinese “We will give you a percentage share of contracts” ( Chinese FM already in India?) and in fact Chinese can even get to operate on USA’s behalf by using US company’s names. Now a days, is there any perse ” US company” or ” Chinese company” operating as competitors. Aren’t they collaborators? And does not this apply to other NSG countries as well.Is not that why it was easier to manage other big powers as well?Real agenda of Indo-US deal is in Point 2 of the revised draft:- points d, e f and g.“point d:-Refraining from…..until point of multi-lateral fissile material cut off treaty”Yet it is not explicit.All the rest of the draft is to bind aka handicap India if at any point of time in future ( no matter which political party comes to power )if it refuses to comply with “real agenda” behind this deal, it will “really” be shown its place.This neither Indian nationalists who are shouting about “testing” nor non-proliferation specialists who are loyal to their ideals are able to see.Though every one has some sense of khatta meetha associated with this Indo-US nuclear deal, none of them still have figured out where the real poison is located and how it will be implemented later.Mr Anonymous! no one can give answer to your questions for you know fully well what you did and what you are doing. Even if some one answers you, it amuses you so well, imagining that no one has figured it out how all this happened.Well! Precisely for that reason I am posting this comment to let you know, some one has figured it out and agenda will be challenged tooth and nail, in ingenious ways.Regards, Mr Pegin.

  8. Anonymous
    September 9, 2008

    @Reality Bite Lurker:This deal gives India very high disincentives to test. This deal will make sure that Indian nukes will remain rudimentary and never attain the level of sophistication of nukes of P-5. If you want to be a big boy, you have to have the capabilities of big boy and seen to behave as a big boy. There are a lot of intangibles associated with sophisticated nukes. Madeleine Fulbright (or rather half-bright) tried everything to get India to sign CTBT and other treaties, why? Because India had(has) the capability to upset the power structure, US wanted to make sure that the India’s capability doesn’t turn into intent. With this deal, they have achieved that. Jaswant Singh confirmed that M. Fulbright confessed that India’s standing has increased and it more closely engaged in the world due to 1998 nuke tests. I have always maintained that asymmetric power (TN nukes atop ICBMs, which can strike anywhere in the world) against big boys will give us the required attention, engagement in all the relevant issues in the international arena.Also note that Clinton come to India only after nuke tests. India wasn’t on the radar of US before that.P-5 doesn’t need overt testing any more. Pakistan is happy with their nukes. In this situation, China can call India’s bluff on nukes in any conflict. Which Indian govt can afford to test after putting in Rs 2 lakh crores in imported reactors running on imported fuel, controlled by the tightest political cartel? Do you know India’s energy basket has more wind energy than nuclear energy? Why should not India put Rs 2 lakh crore in wind and solar energy?Manmohan Singh has assured that India will remain forever a 2nd class power in the current security architecture. We will always be looked down in contempt and remain pygmies despite having the capabilities second to none. – Just another lurker

  9. Anonymous
    September 9, 2008

    one thing which i could think of :),US to China: See buddy,do you really want the dollar to go down further? Siddharth,Would it be possible for you to write about possible impact of this ‘US-awe’ in Indian relationship with Iran and any other countries?Thanks,

  10. Anonymous
    September 9, 2008

    SiddharthAgain: what is the full weight of American diplomatic pressure actually mean? What specifically do they do? Do they have language gurus or is it that they are able to put very unsubtle pressure on recalcitrant countries?Though this might sound quite naive I have to know. What would the US say to a China to make them come around? What would China gain from this?

  11. Anonymous
    September 8, 2008

    @Sukla Sen: How materially different is the position now from if there was no nuclear deal and India had conducted another nuclear test? Would that have been consequence free? And do you seriously think that an explicit recognition of the right to test was ever likely to be politically sustainable at the NSG?–Reality Bite Lurker

  12. Sid
    September 8, 2008

    @ AdithyaAbsolutely not.The text I have analysed is the final approved text.The MEA clarification refers to today’s Indian Express, which erroneously carried the text of the 2nd draft…<>Briefing Points by Official Spokesperson regarding text of the NSG waiver 08/09/2008 • The text of the NSG waiver that has appeared in the <>Indian Express<> today is not accurate.• We would make the text available as soon as it is issued by the NSG in Vienna.New DelhiSeptember 8, 2008<> As if there was need for any more confusion to be spread….

  13. Adithya Das
    September 8, 2008

    Hi Siddharth,The NSG “text” which you have analysed seems to be “inaccurate” according to MEA. The report has come in Rediff. Pls kindly check and revert back.Best Regards,Adithya

  14. Chris
    September 8, 2008

    I'm not sure why the ppl opposing the deal for reasons of 'losing the right to test' want everything to be outlined in black & white… also this deal has larger implications in terms of India beginning to play a bigger role in intl politics… Going forward, India will be expected to weigh in on many intl situations than merely issuing statements condemning or condoning intl events. This means India can further leverage its position with the likes of USA, Russia to gain some brownie points (or maybe a bonus reactor, uranium, wotevr), if they want India to put its weight behind them. I believe Nehru started something good with the non-aligned movement, we are kinda reaping the benefits of it.. but if you take that to an extreme, the nation would become out-of-sight, out-of-mind.. Today the world views India as an Asian super-power & values its support in various matters & doesnt take its support for granted. In contrast, consider Pakistan.. US is today conducting military operations on Paki soil without bothering with Paki approval.

  15. Sukla Sen
    September 8, 2008

    [QuoteBut India’s sense of awe at Washingon’s midnight diplomacy comes tinged with the recognition that the same effective machine could just as easily be deployed again to get the waiver revoked should political circumstances change. The NSG’s decision meets the criteria of ‘clean and unconditional’ but it has done so by creating rights for both India and its critics within the NSG. Even without the textual changes introduced, NSG members were free to push for termination. ***Making sure such a push never succeeds will have to be a major goal of Indian diplomacy***. (Emphasis added.)UnquoteThat’s the real give-away.The mask finally slips off.India won’t test again. Just it is politically impossible for the present Indian government to give a binding commitment to that effect. This is only a matter of technicality, not to be made too much of it.The insincerity and vacuity of this argument now stands fully exposed.The question of revoking the waiver would conceivably arise only if India tests again.Even before the ink is dry, the all-important cautionary note is issued: “Making sure such a push never succeeds will have to be a major goal of Indian diplomacy”!Bravo!]

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This entry was posted on September 8, 2008 by in Indian Foreign Policy, Nuclear Issues.



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