Indo-US Nuclear deal: Road to serfdom
by Virendra Parekh on 26 Aug 2008 0 Comment

In an ultimate irony, only foreigners (NSG, US Congressmen) can save us from our own leaders. A great fraud is being perpetrated on the people of India in the form of the Indo-US nuclear deal. Even as vital national interests - commercial, strategic and diplomatic - are being bartered away in return for vague promises of selective cooperation, our leaders try to soothe us by bland assertions and self-serving opinions.


In the millions of words expended on the Indo-US civil nuclear cooperation deal, there is no convincing answer to a simple question: If the deal is of such a great benefit to India, if it is indeed a great diplomatic triumph for India, why have all the pulls and pressures, pushes and shoves come from America?


Each time the deal has shown signs of falling through, American pressure has revived it. Every time it looked like missing a deadline, Americans generously extended the deadline… They passed a special law (the Hyde Act) ‘for our benefit’ and promised to help us out at global forums like International Atomic Energy Agency (IAEA) and Nuclear Suppliers’ Group (NSG). Throughout the tedious negotiations between the UPA and the Left and between India and IAEA, the Americans steadily maintained relentless pressure on everyone to move faster. Why is a superpower, which has never favoured us on life-and death issues like terrorism, Pakistan or Kashmir, so keen to oblige us in this particular matter?


For those familiar with the actual contents of the deal (as opposed to official propaganda), the answer is no secret: the deal is loaded so heavily in favour of America and so heavily against India, that Americans will be willing to sign it any time India agrees.


For once Americans cannot be accused of duplicity. They have been clear in setting forth what they want us to do before we could expect anything from them. The subterfuges, half-truths and plain lies came from Indian leaders and officials. Americans want business worth billions of dollars for their defunct nuclear power industry; they want India never again to explode a nuclear device; they want it to stop producing fissile material that can be used in making bombs and they want India’s foreign policy to be in line with their own. The deal is designed as an instrument to achieve these objectives, without giving India anything substantial in return.


Over the three years since it was first mooted, the deal has been transformed from a key to power (in every sense) into a road to bondage in perpetuity. At every stage, there were voices of caution and protest from nuclear scientists, strategic analysts, defence experts – all were brazenly ignored.


The doors of international nuclear trade were shut on India after it conducted its first nuclear test in 1974. Washington led the nuclear apartheid regime and is the only country to have written the nuclear blockade of India into laws. Now that it has relaxed its laws with the India-specific Hyde Act, New Delhi, despite not being a signatory to the Nuclear Non-Proliferation Treaty (NPT) can buy much-needed nuclear fuel, equipment, components and technology to feed and upgrade its under-performing and undernourished civilian nuclear energy sector, if certain conditions are met.


This is touted as a great diplomatic achievement. The Prime Minister insists every patriotic Indian must support it. But American cooperation is reversible, conditional on India’s good behaviour on America’s non-proliferation concerns and comes at a huge cost -commercial, diplomatic and strategic.


India will be sinking billions of dollars in nuclear power plants totally dependent on imported fuel. The fuel will be America’s handle for ensuring India’s good behaviour. There is no guarantee of uninterrupted fuel supply for imported reactors. Nor will India be allowed to stockpile enough uranium supplies for the lifespan of these reactors. And US will cut off all cooperation, including fuel supply, if India oversteps the line on the strategic side. It will also persuade other members of the Nuclear Suppliers’ Group (NSG) to do the same. This could act as a severe deterrent in considering strategic options.


If fuel is the instrument to keep India on a leash, the requirement of the US President to submit reports to Congress is the mechanism to accomplish it. The US President has to keep a close watch on all nuclear activity in India and send his assessments to appropriate Congressional committees to keep them fully informed of the facts and implications of any significant nuclear activities of India. These reporting requirements are fairly exhaustive, ranging from the amount of uranium mined in India to whether India is cooperating with US on Iran. Hyde Act asks India to desist from nuclear testing, to throw open its reactors to intrusive international inspection, to kowtow American line on non-proliferation initiatives, and to keep its foreign policy congruent with that of the US, or else


Notice that the onus is on India to convince the US President and lawmakers that it is indeed fulfilling its obligations. If for his own reasons, the US president refuses to certify India’s compliance with terms of the deal, there is nothing India can do. Under the 123 Agreement, India has no legally enforceable rights, while its obligations are extensive and perpetual.


When the US House of Representatives passed the Hyde Act and the fact could no longer be denied that its provisions would jeopardize our strategic interests, we were told, ‘But this is just the House Bill. Our concerns will be taken care of in the Senate bill.’ When the Senate passed the bill and it could no longer be denied that its provisions made even deeper inroads into our strategic interests, we were told, ‘But we have to wait for the Joint Conference of the two Houses to hammer out a final version. That will take care of our concerns.’ When the final version was passed, and it could no longer be denied that it contained the harshest features of each version, we were told, ‘But India is not bound by laws made by any other country. We have to wait for the 123 Agreement. That will take care of our concerns.’


We then had the 123 Agreement, so-called because it is made under Section 123 of the Atomic Energy Act of 1954. And it nailed, inter alia, the brave assertion that we are not bound by the laws of any other country. The agreement explicitly states that ‘each party shall implement this Agreement in accordance with its respective applicable treaties, national laws, regulations, and license requirements concerning the use of nuclear energy for peaceful purposes.’ In the case of the US, the relevant ‘national laws’ include the original Atomic Energy Act of 1954, the Nonproliferation Treaty Act, and the Hyde Act of December 2006.


To operationalise the Indo-US deal, India has to sign a safeguards agreement with the global NPT watch dog IAEA specifying what kind of inspections and controls our nuclear reactors will be subjected to. This will have to be followed by a waiver from the NSG, before US Congress ratifies the 123 Agreement.


We now have the safeguards agreement with the IAEA. We were told this will be an India-specific agreement, that it will grant us special status, setting us apart from the non-nuclear weapon states and tacitly accord us a status similar to that enjoyed by the P5. But the fine print of the agreement shows it strongly resembles accords with non-nuclear weapons states, and does not acknowledge India as a nuclear power. Like them, India will be putting its entire civilian nuclear programme under permanent, legally irrevocable international inspections, and also pay for their enforcement.


What is particularly galling is that India will be undertaking these onerous obligations forever without getting any legally enforceable right on any core issue. There are four issues of great importance to India. Prime Minister Manmohan Singh assured Parliament categorically that the final agreement would take into account India’s concerns on these issues. On each issue, the Agreement makes mincemeat of his solemn assurances.


Uninterrupted supply of fuel for reactors


Dr. Singh pledged in Parliament to link perpetual IAEA inspections to perpetual fuel supply. But no such right has been secured from IAEA and we shall be totally at the mercy of fuel suppliers. The preamble to the IAEA agreement carries a perfunctory cosmetic reference to “corrective measures” India “may” take in the event of disruption of foreign fuel supplies.  The agreement does not define these corrective measures and does not give India any right to take such measures. The use of the word ‘may” instead of “shall” in this context means India has no legal entitlement.


The earlier 123 agreement with the US, instead of granting India the right to take corrective measures in response to a fuel-supply disruption, merely recorded that New Delhi will seek such a right in the IAEA accord. But in the India-IAEA accord, no such right has been secured in definable terms.


The Hyde Act which governs the 123 Agreement clearly stipulates that ‘any nuclear power reactor fuel reserve provided to India should be commensurate with reasonable reactor operating requirements.’ So India will not be able to stockpile fuel reserves for the lifetime of reactors, and should US stop fuel supplies, for instance, in the event of India testing a nuclear device, US would ensure that no other member of the NSG shall supply fuel to India.


Reprocessing of spent fuel


The 123 Agreement and the Hyde Act which governs it deny India the unfettered right either to reprocess spent fuel or ship it back to US for disposal. Right to reprocessing is crucial to India’s three-stage nuclear programme:


Stage I: Construction of reactors run on natural uranium and heavy water. Spent fuel from these reactors is reprocessed to obtain plutonium.


Stage II: Construction of Fast Breeder Reactors fuelled by plutonium produced in Stage I. One variant of the FBR uses plutonium with U-238 to produce energy and more plutonium. Plutonium made available from fast breeder reactors goes into India’s atom bombs and is crucial to develop our nuclear arsenal. Another variant uses a mix of plutonium and thorium to produce energy with uranium 233 (U-233) as a byproduct.


Stage III: Construct power reactors which use U-233 / thorium as fuel and produce energy and more U-233.


India is currently working at Stage II and our scientists have been able to put together a prototype fast breeder reactor. A second reactor is being built.


The three-stage nuclear programme conceived by Dr. Homi Bhabha in 1950 emphasises greater use of thorium (which we have in abundance) and minimum dependence on uranium, on which we are short. The US, for its own commercial and strategic interests, wants us to take a route where we shall be permanently dependent on imported uranium. That explains its foot-dragging on giving reprocessing rights to India.


Hence, India will have to depend on uranium supplies from a cartel notorious for resorting to price manipulations. In recent years, the price of uranium has risen six times from the usual average of about $25 per kg. With demand in India and China expected to rise, the price of uranium, already increasing faster than oil, will rise further.


Worse, Americans have been saying categorically that all future fast-breeder reactors, which can yield material for bombs, will be covered by safeguards. This means that the fast breeder programme, a key link to our strategic programme, will be stymied. In brief, our military nuclear programme, dependent on fissile material from facilities not covered by safeguards, will be capped as a prelude to an ultimate rollback. As a foretaste of things to come, under American pressure, Manmohan Singh has already ordered permanent closure of our fast-breeder reactor Cirus, one of India’s two reactors producing bomb-grade plutonium.


Nuclear Test


Several scientists have pointed out that India needs many more nuclear tests before it can refine its arsenal into a credible nuclear deterrent.


Nothing in the 123 Agreement prohibits India from conducting fresh tests. But the US has made it explicit that if India carries out a nuclear test, all N-cooperation will be terminated and US will have the right to demand return of any nuclear materials and equipment transferred under the agreement. Thus, the 123 agreement converts what has till now been a voluntary moratorium on further nuclear tests into a binding bilateral legal obligation; once NSG gets into the act, it will become a multilateral obligation.


India will be technically free to test, but the consequences will be swift and heavy, involving such colossal economic costs as to be impossible. China and Pakistan do not have to worry about such fetters.


Transfer of nuclear technology and materials


India expected the complete and irreversible removal of existing restrictions on all aspects of a complete nuclear fuel cycle - ranging from nuclear fuel, nuclear reactors, to re-processing spent fuel. What it got is cooperation on aspects of the associated nuclear fuel cycle. This arrangement is not about full cooperation but selective participation to the extent that it serves American commercial and non-proliferation interests. 


The contention that the nuclear deal will open the floodgates of technology transfer to India is largely wishful thinking. Article 5.2 of the much vaunted 123 Agreement categorically states that transfers of “sensitive nuclear technology” would require an amendment and that transfers of “dual use items that could be used in enrichment, reprocessing or heavy water production facilities will be subject to the parties' respective laws, regulations and licence policies”. This means that under the nuclear deal India has not even secured full civil nuclear cooperation, and transfer of technology from the US in this area will be less than complete.


The UPA Government has led India into a binding commitment that has little to do with production of civilian nuclear energy and everything to do with bringing us within the restrictive framework of nuclear non-proliferation. The ‘deal’ is not about liberating India from the clutches of wayward oil-producing nations and the vagaries of fossil fuel, but binding us to the interests of the non-proliferation lobby and the business interests of the nuclear power industry.


Having sunk billions of dollars into importing nuclear power reactors and even more in industries dependent on power from those reactors, India will be compelled to think twice before annoying the US on any count. That is the American strategy behind the strategic partnership with India. 


This is the deal that in which the Prime Minister has invested so much of his meagre political capital. It is a tragedy that a person who got the prime ministerial chair fortuitously, whose party has only around 150 MPs in the Lok Sabha (and he is not one of them) is all set to foist this deal on the country without any further discussion to meet the deadline set by his American masters — sorry, friends.    


India will be making a grave mistake - like the ones Nehru made in Kashmir and Tibet - if it continues to pursue the deal in terms of the 123 Agreement and IAEA pact. The consequences will haunt us for generations.


The author is Executive Editor, Corporate India, and lives in Mumbai

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