Introduction
The India-USA nuclear agreement referred to
in the January 2015 Joint statement of President Obama and Prime Minister Modi
needs to be viewed in a historical context.
There are too many educated people in India who believe that the
India-US nuclear deal of 2005 was mostly about civil nuclear co-operation and about US
selling nuclear reactors to India. This represents a dangerous misunderstanding
of India’s perspective and National interest.
India-USA Nuclear Agreement (2005)
The 2005 Indo-US
nuclear agreement was, from India’s perspective mostly about
Strategic & Defence technology. These are technologies, products and
services that are not governed by normal
rules of competitive markets. Their development, production, sale and export is
controlled by all countries who have the capability to develop or produce them. The 2005 deal was a game changer for India, because it promised to break the
“technology denial regime” (termed “Nuclear Apartheid” by us) covering a wide
range of “Strategic Technologies”, put in place under US leadership, to punish
India for its PNE (nuclear test) in May 1974.
Geo-politics and domestic politics of the two countries, made it
necessary to give “peaceful nuclear energy co-operation” a central position in
the public discourse, even though its importance to India was small compared to
that of “strategic technology”(1/4th of total say).
India’s “Nuclear
liability law (2010)” appeared however to jeopardize the ‘peaceful nuclear
co-operation’ element of the historic deal, the basis on which many influential
Americans either supported or reluctantly acquiesced to the deal. The slowdown,
and a few major reversals, in economic reforms from 2010, which halted progress
toward more open, market based development, accentuated the sense of betrayal
among influential US lobbies, leading to an unpleasant counter reaction. PM
Modi, with his new approach to economic and foreign policy and President
Obama’s appreciation of this approach, has put India-USA relations back on the
rising trend, from which it was derailed in the previous 4-5 years.
Mini Nuclear Deal (2015)
The India-US mini nuclear deal clears the
logjam created by the Nuclear Liability law, which under communist cum leftist
pressure, broadened potential liability for nuclear power accidents, much
further and deeper than any other country’s law (opening space for individuals to sue original supplier for personal damages). This “social revolution” could
also have ended Indian nuclear power development for good, much to the delight
of anti-nuclear activists. A broad political solution has been found
around this law, as well as an equally unreasonable demand for universal &
lifetime tracking of nuclear supplies by USA itself, rather than by the agency
IAEA, responsible for such tracking under multilaterally agreed rules.
Implications & benefits
A number of analysts
have pointed to the fact that, there is no public document giving the specifics
of this agreement and that it is not clear whether US companies will actually
determine that the risks are now reduced sufficiently to make it profitable to
set up nuclear power plants in India. In my view, this is the least important
part of the mini-deal from our perspective.
For India, it is more
important that the deal opens the way for similar operational agreements with
Japan, which is an important supplier of nuclear reactor vessels and major equity
holder in US Westinghouse Corporation. Similarly the India-Australia agreement
on Nuclear co-operation can now be quickly operationalized, to start supply of
Uranium for use in India’s Nuclear power reactors.
Most importantly, It clears the way for US to resume action
on its commitment to assist India in joining the four technology clubs (NSG,
MTCR, Wassener Agreement, Australia Group) which still impede India’s access to
“strategic” technologies, parts and components. The full promise of the India-US
nuclear deal (2005) for India will only be realized once we are admitted into
these control regimes.
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