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Nuclear Deal Report

The foundation of the Indo-US Nuclear deal was laid when Prime Minister Manmohan Singh and US President George W Bush initiated talks on civil nuclear co-operation in Washington in July 2005. Then on March 2, 2006, the two leaders signed a civil nuclear co-operation pact, commonly known as 123 Agreement.

Features of 123 Agreement:
  • India and the US agree to facilitate nuclear trade between themselves in the interest of respective industries and consumers.
  • Both the countries agree to transfer nuclear material, non-nuclear material, equipment and components. Any special fissionable material transferred under the agreement shall be low enriched uranium and meant for use as fuel in reactor for civil purpose only.
  • The ambit of the deal includes research, development, design, construction, operation, maintenance and use of nuclear reactors, reactor experiments and decommissioning.
  • The US will have the right to seek return of nuclear fuel and technology but it will compensate for the costs incurred as a consequence of such removal.

One of the contentious part of the Agreement was its dependence on an internal US legislation - the Hyde Act.

The Hyde Act prescribes that before any deal as per section 123 of the US Atomic Energy Act for nuclear cooperation with India (which is not a party to the Nuclear Non-Proliferation Treaty) can be operative, the President must submit a report to the US Congress for its approval.

It also expected that India works with and supports the US' and other international efforts to prevent the spread of enrichment and reprocessing technology to any state that does not already possess full-scale, functioning enrichment or reprocessing plants.

However, more clarifications are sought.

Despite the minor irritants, the Act received tremendous bi-partisan support in the Senate and the House of Representatives.

Why India needs the deal?

The Indo-US nuclear deal, apart from ending India's three-decade-old nuclear apartheid, opens the door to high-end technology that will help propel industries ranging from pharma to bio-tech and from avionics to manufacturing. Specifically, it would pave the way to energy security for India.
  • 17 existing reactors, which at 54 percent in 2007-08 had the lowest plant load factor in a very long time, will get access to imported uranium. This will help in overcoming the paucity of fuel.
  • Access to imported fuel will fire three new reactors in Rawatbhata in Rajasthan.
  • The deal will help in the expansion of the Kundankulam Atomic Power Project in Tamil Nadu.
  • India will be able to access Canada's CANDU reactors that allow direct breeding of thorium, a mineral that is available in abundance in India.
Apart from the above mentioned benefits the deal also gives access to dual use technology that can be used in various industrial and scientific sectors. Some of the dual-use technology and trigger list items that will now be available to India are:
  • Sonar, used for undersea warfare can now be used for finding minute abnormalities in mammograms.
  • India can now have advanced computers having weather forecasting applications such as CRAYXPM 14.
  • The country's oil refineries can now access digital phosphorous oscilloscopes.
  • We can get biotechnology that can improve public health, agriculture growth and fasten economic development.
  • Hydrocarbon prices are rising by the day. A diversification of our energy basket will help in controlling inflation.
Key players

Apart from India and the US, the key players that played an important role in building international consensus were the UK, France and Russia.

The game plan

Building consensus in India: The deal resulted in an intense political debate in the country with the Opposition questioning the utility of the deal. The Left Front, then an important ally of the ruling United Progressive Alliance coalition, was dead opposed to the deal and saw it as US' nefarious design to make India a client state. It cited national interests for the opposition of the deal. The BJP on the other hand accused India of a sell-out. The most contentious issue for the opposition was that they felt the government has sacrificed India's right to conduct further tests at the altar of the nuke deal.

The Left alleged that the deal would undermine India's independent foreign policy and accused the government of hiding certain clauses of the deal, which were inimical to India's indigenous nuclear programme.

However, the country's leading nuclear experts and scientists unanimously supported the deal saying that it was very important to end India's nuclear isolation. Former President APJ Abdul Kalam, who is also a renowned space scientist, was also instrumental in developing a positive opinion in the country, especially within the political class.

Building Consensus in the US: Like India, the deal faced resistance in the US. President Bush personally made efforts to convince the Congress about the justification of the Agreement. Efforts at building a consensus in the US were:
  • The Bush administration justified a nuclear pact with India on the grounds that the deal would be helpful in expanding the non-proliferation framework by formally recognising India's impeccable non-proliferation record, despite being a non-signatory to the NPT. It would bring India into the NPT framework without it actually signing the treaty.
  • India's trust, its credibility, the fact that it promised to create a state-of-the-art facility, monitored by the IAEA and because it has not proliferated the nuclear technology, till now, went in its favour.
  • The deal would also bring huge economic benefits to the US. It is understood that the deal would amount to USD 150 billion worth of investments in the next 10 years for nuclear power plants. The US believes a major share of it would go to US companies.
  • Though unstated, the deal was also sold in the US as a tool to contain the rise of China and keep it in check.
Making the world understand the deal's importance:

Hectic diplomacy preceded the days leading to the crucial IAEA and NSG meet in Vienna. Indian bureaucrats flew to various world capitals to convince the international community about the deal's importance. Some of the points put forward to bring home the importance of the deal were:
  • At a time when the threat of climate change is so very evident, emerging economies like India with massive energy needs, need a clean form of energy to tackle global warming.
  • The deal will bring India into the global nuclear club thus making it accountable to the international community. The induction of the world's largest democracy into the nuclear regime will bolster non-proliferation.
  • Nuclear market worth billions of dollars would open up and countries that helped India could hope to get a pie of it.
Formal Steps

For the Indo-US Nuclear Deal to become a reality it had to clear three hurdles: India specific IAEA safeguards agreement, NSG waiver and its passage in the US Congress. The first two steps have been completed; while the last one was officially initiated on 8th Sept.

IAEA: On August 1, 2008 the IAEA Board of Governors approved the agreement with India. Salient features:
  • It is envisaged that a total of 14 reactors will come under Agency safeguards by 2014.
  • As with other safeguards agreements between the Agency and Member States, the (Indian) agreement is of indefinite duration.
  • Nuclear facilities can be withdrawn from safeguards only after these facilities are no longer usable for any nuclear activity.
  • Facilities that are to be brought under safeguards will be notified by India to the Agency in stages.
  • India may take corrective measures to ensure continuous running of its civil nuclear reactors in case of disruption of fuel supplies.
NSG: The meeting of the Nuclear Suppliers Group in Vienna on Saturday went to the wire before India was finally able to get a waiver. Opponents to the deal like Austria and New Zealand wanted to include more amendments in the draft waiver. Highlights of the NSG meet:
  • The biggest win for India was the non-inclusion of any clause on India's right to test nuclear weapons. That effectively meant that India reserves the right to test and the NSG the right to react to it.
  • US and other countries supportive of the initiative held intense discussions with those countries which had reservations; particularly with regard to testing and transfer of enrichment and reprocessing technologies to India.
  • The major turning point came with the issuance of the statement by External Affairs Minister Pranab Mukherjee in which he talked about India's abiding commitment to strengthening the non-proliferation system and unilateral moratorium on nuclear testing.
However, China, in a very subtle manner, egged on smaller countries to sabotage the India-US Nuclear Deal but shied away from openly opposing the landmark deal for India. China probably fell in line because it did not want to stand alone in denying India the waiver and also because of the pressure mounted by the US.

Deal in US Congress: The final destination for the deal is the US Congress. The deal should pass without any major problem as it enjoys considerable bipartisan support.

Emergence of India: It would be na´ve to see the deal only as an energy tool. Its implications go well beyond that. India, in one stroke, has joined the world's high table. India is now the only sixth country after US, UK, Russia, France and China that has been officially recognised as a nuclear power.
  • In an unprecedented move, the NSG waiver allows India to have a nuclear weapons programme without signing the NPT or the CTBT and still participate in nuclear trade.
  • India got the waiver and also retained the right to testing.
  • The waiver symbolises India's recognition as an emerging power in the world arena.
  • The waiver in one go de-hyphenated India and Pakistan.
  • The NSG outcome shows global acknowledgement of India's nuclear parity with China.

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