Siddharth Varadarajan

Journalist | Writer | Analyst

Analysis: G8 ban is sign India’s nuclear quest is not over

Reversal raises questions about effectiveness of Indian diplomacy…

The Hindu

G8 ban is sign India’s nuclear quest is not over

Siddharth Varadarajan

New Delhi: In diplomacy, as in football, smart players know the consequences of losing sight of the ball. The blink of an eye is all it takes to miss a goal or lose a hard-won advantage.

2008 was a signal year for Indian diplomacy when a set of international restrictions that had starved the country’s nuclear industry of fuel and equipment for two decades was lifted on terms less restrictive than what Washington — which initiated the drive to make an exception for India — had been prepared to grant New Delhi.

In the months that followed the successful campaign to lift trading restrictions on India at the Nuclear Suppliers Group, however, a complacent establishment decided to rest on its laurels and forgot about the obstacles and dangers still remaining. And then, seemingly out of the blue, came the first American attempt at clawback: on Thursday, the G8 agreed to adopt new rules prohibiting the sale of ENR components and technology to countries like India which have not signed the Nuclear Non-proliferation Treaty (NPT).

Much to the consternation of U.S. legislators, last year’s NSG exemption placed American nuclear vendors at a disadvantage by making imports from the U.S. far less attractive than comparable purchases from elsewhere, especially Russia and France. The 123 agreement, which governs bilateral commerce between the U.S. and India, allowed for the sale of reactors and fuel to India but these came saddled with a risky ‘right of return’ clause in the event that Washington terminated cooperation. At India’s insistence, enrichment and reprocessing (ENR) items were not excluded but their sale was made conditional on a subsequent agreement that both sides knew would never see the light of day. Reprocessing of spent fuel was allowed but only in a new, permanently safeguarded facility and that too, under yet-to-be-negotiated arrangements and procedures.

By comparison, the NSG’s exemption made no provision for ‘right of return’ and allowed U.S. competitors to make ENR transfers so long as they were satisfied these would not be misused by India. The spent fuel could also be reprocessed in existing Indian facilities provided the reprocessing was done under safeguards. Net-net, this made non-U.S. reactors more attractive.

Somewhere along the line, the Indians assumed the game was over. The whistle blown at L’Aquila is a reminder that the U.S. has plenty of extra time in hand.

Of course, the tell-tale signs were all around: in the U.S. State Department’s answers to pointed queries from Congress about the need for a ‘level playing field’ at the NSG. And in the assurances Secretary of State Condoleezza Rice gave to Capitol Hill in order to ensure the speedy ratification of the 123 agreement last October.

Getting the NSG to agree to prohibit the export of ENR equipment and technology to states such as India that are not members of the NPT would be the United States’ “highest priority,” Dr. Rice told Congressman Howard Berman at the time.

The fact that the NSG held intensive consultations on the issue last November was also well known, as was the fact that the U.S. was managing to create a consensus around NPT conditionality, even as other issues like adherence to the Additional Protocol was opposed by some NSG members like Brazil and uranium-rich countries like Canada objected to ENR sales being restricted to so-called black-box technologies which could prevent them from developing their own enrichment know-how.
Full cooperation

Although India is technologically self-sufficient in reprocessing and enrichment technology, the inclusion of ENR components in the nuclear deal was a matter of principle, positioning and ‘paisa’. That is why Indian negotiators insisted in July 2005 that they would settle for nothing less than “full civil nuclear cooperation.”

After all, if an exception was being made for India because of its status as a responsible country with advanced nuclear technology, excluding sensitive technologies made no sense. India was also aware of the role ENR services would play in the future evolution of the global nuclear industry. With attempts under way to monopolise the fuel cycle, India needed to ensure its status as a ‘supplier’ country was recognised. Finally, costs were also an issue. Why spend crores producing components for ENR plants when the parts could be imported for a fraction of the cost? When push came to shove, the U.S. reneged on “full cooperation” but allowed India to get what it wanted at the NSG. Now, that is in jeopardy too.

As part of the NSG exemption, New Delhi pledged voluntary adherence to the cartel’s present and future rules. But the NSG also said it would “consult” with India prior to new rules being adopted. If these consultations have been held, New Delhi has clearly not been effective in putting its views across. The fact that the cartel is still some distance away from reaching a final decision provides cold comfort: the G8’s endorsement of last November’s “clean text” will certainly have the effect of speeding up the deliberative process at Vienna.

India had a chance to press its case with friends and allies and also to leverage the massive expenditure it is prepared to make on Russian, French and American nuclear reactors in order to ensure it does not become the target of fresh restrictions. By failing to be proactive, however, it has allowed the U.S. to gain the first mover advantage.

If a formal consensus does not emerge in the Nuclear Suppliers Group by the time the next plenary is held, India may have a small window to undo the symbolic and substantive damage that has occurred at L’Aquila. But it needs to lobby hard to ensure the interim ban adopted on ENR sales is not carried over to next year’s G8 statement.

Otherwise it should prepare for several rounds of bruising negotiations ahead. The second U.S. target will be spent fuel reprocessing. Existing agreements with Russia and France do not stipulate a new standalone facility or more intensive safeguards. And as the Obama administration presses ahead with the Comprehensive Test Ban Treaty, attempts could be made to get the NSG to adopt a version of the U.S. ‘right of return’ for exported items in the event that India is seen as deviating from the disarmament and non-proliferation commitments it made last September.

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One comment on “Analysis: G8 ban is sign India’s nuclear quest is not over

  1. Anonymous
    July 11, 2009

    Officially nuclear fuel recycling & GNEP in USA is nearly dead and so it is going to be tough sell for India to convince the US Democratic admin. for “exisiting” reprocessing technologies. But at the same time some US experts want to continue to invest in R&D to explore “new/long-term” reprocessing and fuel-cycle technologies to solve the waste problem. Sounds inconsistent but that explains why Canada, France and Russia will not toe the US line easily since that would mean they would be at a loss of technology/business in future. In the short-term the admin. will harp on the futility of reprocessing, importance of non-proliferation to gain the maximum advantage in its dealings with Iran and Russia.

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This entry was posted on July 11, 2009 by in Indian Foreign Policy, Nuclear Issues.

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