On September 6, 2008 the Nuclear Suppliers Group (NSG) overturned a 34-year old ban against nuclear trade with India and approved the U.S.-India nuclear trade agreement (the so-called 123 Agreement). The bilateral agreement grants India access to U.S. civil nuclear technology and opens the door to trade with other countries in the future. As part of the deal, India agreed to divide its 22 nuclear facilities into two categories, civil and military, [1] and submit all 14 of its civilian facilities to the IAEA under a negotiated safeguards agreement. [2] The NSG waiver is historic because it marks the end to nuclear trade restrictions despite the fact that India refuses to sign the nuclear Nonproliferation Treaty (NPT) and adhere to other nonproliferation norms. [3] (For international reaction to the deal, see, “White Knight States Deviate from Long-Held Nonproliferation Ideals as Nuclear Suppliers Group Approves Waiver” in the October 2008 issue of WMD Insights.) In India, the waiver and subsequent U.S.-India nuclear deal is seen as a breakthrough for obtaining much needed nuclear material. But the deal was not without its domestic critics. P.R. Chari, Research Professor at the Institute of Peace and Conflict Studies, points out opposition parties criticized the waiver on the basis of political considerations, and a section of the intelligentsia was apprehensive about the fine print of the nuclear deal. [4]

Drafting the 123 Agreement was not easy. Several rounds of negotiations between Washington and New Delhi and major concessions on both sides were required to ensure that neither side compromised too greatly on its original positions. The agreement caused division within the Indian government, and in February India’s left-leaning parties began to warn the governing party, the United Progressive Alliance (UPA), that it would have to choose between the nuclear accord and government stability. [5] After months of discussions, on July 22, 2008, the UPA finally received a vote of confidence, gathering 275 votes from the 541 members of the lower chamber of Parliament. [6] India’s Minister of External Affairs, Pranab Kumar Mukherjee, said the vote allowed his government to move forward with the deal. He added that the vote of confidence was a “legal, constitutional, and political victory.” [7] The Communist Party of India – Marxist (CPIM) and a few journalists, however, pointed to the possibility that the UPA relied on “horsetrading” [8] and “cash-for-votes” [9] tactics to secure its victory. Mukherjee promised to investigate the allegations and penalize anyone found guilty.

Post Waiver Approval: India’s Strategic Concerns Heard
Even after the NSG approved the nuclear-trade deal, Indian officials remained divided. Those who championed the agreement aligned themselves with the current government. Other proponents were assured by U.S. commitments to the nuclear deal. Anil Kakodkar, Chairman of the Indian Atomic Energy Commission, argued that the United States will provide an uninterrupted fuel supply unless faced with market problems. He stressed that the continued operation of the country’s reactors was the most important objective of the deal and that the agreement provided adequate protection for that purpose. [10]

The main criticisms of the deal still lie with left-leaning political parties - the Bharatiya Janata Party (BJP) and the Communist Party of India-Marxist. The parties fear that the deal will diminish India strategically in relation to the United States. [11] The CPIM in particular believes that the nuclear deal will jeopardize India’s sovereignty and open the country’s civilian nuclear program to U.S. blackmail. [12] LK Advani, the leader of opposition in the Indian Parliament, expressed the need for the nuclear deal, but he also conveyed his concern that India not be strategically manipulated by the United States, or that his country not become a “subordinate ally ”of the United States.

Both the BJP Vice-President, Yashwant Sinha, and the former Union Federal Minister, Arun Shourie, believe that India will lose its right to conduct nuclear tests due to the recent agreement. They stated that upon testing the United States would cut-off all fuel and technology supplies. [13] This may have been implied by a letter released by the United States Department of State revealing both that the U.S. Congress has not assured fuel-supply to India and that the United States has not given permission to India to stockpile lifetime fuel reserves for its power reactors. [14] According to an editorial in the Indian Express, the “Berman Letter” makes clear that if India were to test a nuclear weapon, the United States has the “right to cease all nuclear cooperation immediately.” [15] Though India refuses to waive its right to conduct future nuclear tests, it seems that the international community agrees that if such an event were to occur the deal and the NSG waiver would be terminated. [16] India appears to recognize this reality. India’s Minister for External Affairs Mukerjee, for example, has stated that, “India has the right to test and others have a right to react.” [17]

On October 4, 2008, India’s Left party activists made last minute efforts to urge the UPA government not to go ahead with the agreement. The group was led by the Communist Party of India-Marxist senior leader, Sitaram Yechury, and Communist Party of India leader, D. Raja,who stated that the agreement did not assure an uninterrupted fuel supply, lacked provisions for a strategic fuel reserve, and did not include a regulation that prohibits the transfer of nuclear technology to Iran. [18] In response to President Bush’s signing the legislation that approved the Indo-U.S. civil nuclear cooperation agreement on October 8, 2008, Raja asserted that the deal was a sign of “mutual desperation” by the two countries. [19] He pointed out that the United States considers the Hyde Act, the Atomic Energy Act, and U.S. laws to act as the legal sources of the agreement while India views the 123 Agreement as its own legally binding entity. [20]

The Energy Dimension
Currently, India satisfies about 3 percent (approximately 4000 MW) of its energy requirements with nuclear energy. The government wants to quadruple that to 700 GW, approximately 25 percent by 2050, and the Minister of State for Power and Commerce, Jairam Ramesh, has argued that the nuclear deal would immediately increase India’s nuclear power by 2,500 MW by March 2009. [21] India’s nuclear expansion has been limited by a lack of access to adequate uranium supplies. According to Shreyans Kumar Jain, Chairman of India’s state-run Nuclear Power Corp. Ltd., “Any construction and transfer of reactors will be done with foreign vendors and tied to fuel supply arrangements.” [22] Jain added that he hoped to finalize contracts with General Electric Co, Westinghouse Electric Co., France’s Areva Group, and Russia’s Rosatom State Nuclear Energy Corp., to build the first round of eight reactors starting in 2009. [23] In fact, on September 30, 2008, before the U.S. Congress had ratified the 123 Agreement and the President had signed it into law, France had already signed an agreement on civil nuclear cooperation with India. This was the first such agreement since the NSG agreed to lift the restrictions on India, and SK Malhotra, spokesman for India’s Department of Atomic Energy, noted that India looks forward to making deals with other countries as well. [24]

Noting the agreements that India has already signed with the United States and France, Sushilkumar Shinde, the Indian Union Minister for Power, has expressed the hope that nuclear cooperation between the three nations would begin quickly and help India rely less on fossil fuels. Shinde stressed the importance of sustainable development in India, describing the endeavor as an “article of faith” and the use of nuclear energy as a “key component” of the country’s national development strategy. [25] Prime Minister Manmohan Singh called on India’s scientific community – whose scientists and engineers he believes are advanced enough to compete in the world market – to continue its research on nuclear technology. [26] The civil nuclear agreement will also allow India to market its reactors and nuclear technology abroad.

Concluding Comments
Indian Prime Minister, Manmohan Singh has stated that the NSG decision “marks the end of India’s decades-long isolation from the nuclear mainstream and of the technology denial regime.” [27] Although this kind of positive mood exists inside India’s government and business sectors regarding the benefits of the NSG waiver and U.S.-India deal, outside of the government, even some Indian analysts are concerned about the implications of the nuclear deal on security. One area of concern is the deal’s potential negative consequences for the international nuclear nonproliferation regime. Chari, for example, posits that the waiver will most certainly encourage states of concern like Pakistan, North Korea, and Iran to seek similar concessions, possibly with the help of China or others. According to Chari, “the nuclear deal will generate a permissive atmosphere that will further weaken the tottering international nuclear regime.” [28]

Indian analysts also suggest that the nuclear deal could disturb nonproliferation norms in the Asian subcontinent. Praful Bidwai, an Indian analyst, commented that the U.S.-India nuclear deal could spark an arms race in the region. [29] With the resources and know-how to which the NSG waiver now allows India access, fear surrounds the possibility that China may view India as a counterweight in the region. [30] According to one Indian analyst, China is now willing to provide more nuclear assistance to Pakistan, noting that “China is bound to react in its own way to maintain its premier position in the Asian security structure and stay ahead of India.” [31] China claims, however, not to be concerned with India’s nuclear deal. [32] For now, this remains conjecture; with time, the true results of the deal will be revealed.

Jack Boureston and Suzzette Lopez - FirstWatch International (FWI)