Behind the bargain

Published : Aug 12, 2005 00:00 IST

The Bush-Manmohan Singh nuclear deal, which signifies a major shift in U.S. policy, is criticised as having led to the bartering away of the independence of India's nuclear programme. Perhaps there is an unwritten caveat - a commitment to buy U.S. reactors.

R. RAMACHANDRAN in New Delhi

THE most significant part of the joint statement of July 18 issued by Prime Minister Manmohan Singh and United States President George W. Bush is the nuclear component. Given the nature of the deal contained therein, it has evoked diverse responses and commentaries, with reactions ranging from calling it a "breakthrough agreement" to criticising it severely. The Bharatiya Janata Party, under whose regime the 1998 Pokhran tests were carried out, has criticised the deal for compromising on India's national security interests. A section of the nuclear science community too has made the criticism that the deal has led to the bartering away of the independence and autonomy of the Indian nuclear programme.

What does the Bush-Manmohan Singh nuclear deal entail?

According to the joint statement, the U.S. President "will work to achieve full civil nuclear energy cooperation with India". He will "also seek agreement from Congress to adjust U.S. laws and policies ... to enable full civil nuclear energy cooperation and trade with India, including but not limited to expeditious consideration of fuel supplies for safeguarded nuclear reactors at Tarapur." Alongside, the U.S. "will work with friends and allies to adjust international regimes" towards this objective.

This paradigm shift in the U.S. policy towards India is indeed significant. The U.S. Nuclear Non-Proliferation Act (NNPA) of 1978 and the pursuant amendments to the U.S. Atomic Energy Act (AEA) of 1954, in the wake of India's nuclear test in 1974, had effectively closed the doors for any nuclear cooperation with India, a non-signatory to the Nuclear Non-Proliferation Treaty (NPT). Bush's assurance, therefore, marks a big departure from the entrenched thinking in the U.S. bureaucracy for the past three decades. It is indicative of a definitive political will to break down barriers and begin talking on nuclear matters. If Bush succeeds in getting the support of Congress, and also that of its allies and friends to "adjust international (non-proliferation) regimes", it would amount to a de facto recognition of India's nuclear status. At present, however, this is only in the realm of hypothesis.

In reciprocation, Manmohan Singh has agreed to "assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the U.S." This bargain means that India has accepted a whole range of conditions.

These include:

* Identifying and separating civilian and military nuclear facilities and programmes in a phased manner" and placing all the civilian nuclear facilities voluntarily under the safeguards regime of the International Atomic Energy Agency (IAEA);

* Implementing IAEA's enhanced safeguards system of Additional Protocol with respect to civilian nuclear facilities;

* Continuing unilateral moratorium on nuclear testing;

* Working with the U.S. for the conclusion of a multilateral Fissile Material Cut-Off Treaty (FMCT);

* Putting in place comprehensive export controls on sensitive goods and technologies; and,

* "Harmonisation and adherence to Missile Technology Control Regime (MTCR) and Nuclear Suppliers Group (NSG) guidelines.

NOW what is it that the Indian nuclear programme critically needs through external nuclear cooperation and trade, in particular with the U.S.? The mainstay of India's three-stage nuclear programme is Pressurised Heavy Water Reactors (PHWRs), which use natural uranium (containing 0.7 per cent fissionable isotope U-235), the technology for which has been indigenously developed and proven in the currently operational 13 units with a total installed capacity of 2,990 MWe. A 10,000 MWe base in PHWRs is expected to sustain a chain of fast-breeder reactors (FBRs) to breed U-233 using the vast reserves of thorium (Th-232). U-233, in turn, will fuel the next generation of thermal reactors, such as the indigenously designed Advanced Heavy Water Reactors (AHWRs). So access to technology is not the issue.

What is increasingly becoming critical is access to fuel - both natural uranium for the indigenous PHWRs as well as enriched uranium (with 2-3 per cent U-235) for the twin U.S.-built light water reactors (LWRs) at Tarapur. Particularly the former, essentially because uranium ore from the currently operational mines at Jaduguda in Jharkhand is of very poor quality and is depleting as well. Mining operations at other potential uranium deposits in Nalgonda district of Andhra Pradesh, and Domiasat in Meghalaya have not taken off on environmental grounds. However, other mining sites have been identified in Jharkhand itself, in the same region as Jaduguda.

But, as the Tenth Plan mid-term appraisal (MTA) document of the Planning Commission notes, "the development of domestic mines has not kept pace with the addition of generating capacity." The situation, in fact, is so serious that, while the capacity factor of the operational plants is being deliberately lowered by as much as 10 per cent to save fuel, requisite quantities of fuel may not be available for even loading the upcoming four and the future ones. On the other hand, the final loading of enriched uranium fuel for the Tarapur LWRs from the 58 tonnes supplied by Russia in 2001 is expected to run out in 2006. And India has no indigenous source for enriched uranium yet.

But the Guidelines of the 45-member Nuclear Suppliers Group (NSG) - which forms an essential component of the current non-proliferation regime built on the tenets of the NPT - require the application of full-scope safeguards (FSS) of the IAEA on all current and future peaceful nuclear activities of a non-nuclear weapon state (NNWS) for transfer of items on the NSG's Trigger List, which include equipment, material and technology directly related to the nuclear fission fuel cycle. This includes the source of the fissionable material, namely uranium ore or the processed yellow cake, as well. And since India is an NNWS according to the NPT definition, it will have to accept FSS if it has to import fuel from any NSG member-country.

However, the phrase "all current and future peaceful nuclear activities" above can be interpreted to India's advantage provided "peaceful activities" are identified, separated from military activities and put under IAEA safeguards (Frontline, April 22). Of course, this is at present only a theoretical possibility unless the NSG, given the new realities, endorses this interpretation of the FSS to accommodate NNWSs. By accepting the first condition above, India has essentially committed itself to implementing this limited form of FSS. There is no other way to get around the NSG guidelines if India is seeking an external source of nuclear fuel and/or other nuclear technologies, including reactors.

This is the minimum India will have to do if the NSG accepts the new premise. And getting the U.S.' support to convince NSG members towards realising this is indeed the maximum that India could have hoped from the negotiations. To that extent the outcome of the Indo-U.S. nuclear dialogue has gone a great deal beyond expectations. And there was no earlier indication whatsoever that the U.S. would go this far given its hardened position with regard to proliferation in recent years. Considering the surprised reactions even within the Indian nuclear community, the details of the deal were clearly held tightly.

Of course, it remains to be seen if the U.S. is able to carry the other 44 members along with it in this interpretation. According to a report in The New York Times, which quoted Nicholas Burns, the U.S. Under-Secretary for Political Affairs, both the U.S. Congress and the European allies had responded positively when sounded about this possible development in the Indo-U.S. nuclear dialogue. Indeed, the last plenary meeting of the NSG was held on June 23 and 24 in Oslo. Also, Burns was in India on June 24. Perhaps he was carrying the message of a positive signal from Oslo to India.

Even if Bush does not win the support of Congress but succeeds in convincing its NSG partners, it opens the doors of the world nuclear market to India. Countries such as France and Russia have all along been keen to enter the Indian nuclear sector. If Bush succeeds in getting Congress' support, then the U.S. too becomes a potential source of supply for India.

Actually, there is no need to amend the NNPA or change any other U.S. law to enable nuclear cooperation and trade with India. As the joint statement says, there is need only to "adjust" the policy set forth in the relevant law. Article 123 of the AEA governs the U.S.' nuclear cooperation with any other country. This requires a general agreement of cooperation that would include nine conditions stated under the Clause. One of them relates to implementing IAEA safeguards "with respect to all nuclear materials in all peaceful nuclear activities within the territory of such state ... etc. etc." (emphasis added).

The President, however, has the authority to waive any of the nine conditions, if he determines that inclusion of any such requirement would be seriously prejudicial to the achievement of U.S. non-proliferation objectives or would jeopardise national security.

In any case, Congress has the final say in allowing such an agreement through. It can reject the cooperation agreement if it passes a resolution to that effect within 60 days. Bush can, therefore, either choose to interpret the clause suitably or waive the requirement depending upon which would carry muster with Congress. However, even if the U.S. domestic policy is "adjusted" to favour India, the U.S. can supply fuel or any of the Trigger List items only if there is a corresponding consensual approval of the NSG on the manner of application of safeguards.

The next plenary of the NSG is, however, only next year, unless, of course, the U.S. asks for an emergency meeting. Pending this, and the possible NSG endorsement of the proposed change of policy, one has to wait and see how the assurance in the joint statement of "expeditious consideration of fuel supplies for safeguarded nuclear reactors at Tarapur" is realised. It is this issue that is most likely to be addressed following the joint declaration.

One possibility is to allow China to supply fuel under the 1995 agreement. Recall that, after the single consignment from China in 1995, India (for some inexplicable reason) went to Russia in 2001 even though China was still not a member of the NSG. It became a member only in April. As a quid pro quo, China may be allowed to supply reactors to Pakistan that is similarly `grandfathered' by an earlier agreement. It is of interest to note that both A.S. Kakodkar, Chairman, Atomic Energy Commission (AEC), and S.K. Jain, Chairman and Managing Director, Nuclear Power Corporation of India Ltd. (NPCIL), went to China just a couple of days before the Indo-U.S. agreement.

One could ask what is in it for the U.S. for Bush to go this far. Arguments that Bush wants India as a counterweight to China apart, there could be an unwritten commitment from India to buy nuclear fuel and reactors from the U.S. if appropriate changes are made in U.S. policy. That would help in bailing out companies on the decline, such as General Electric and Westinghouse whose nuclear divisions have been deprived of orders for years. Only recently Westinghouse's nuclear division was bought over by Mitsubishi Electric.

Indeed, the Tenth Plan MTA document has recommended: "India must seek at least 20,000 MWe of additional nuclear power capacity on a turnkey basis, based on a competitive power tariff, to be built over the next 10-12 years. Alternatively, India must seek nuclear fuel on competitive terms for a similar level of capacity to be built by NPCIL in the next 12-15 years." As pointed out earlier, any additional nuclear capacity that India is likely to get from the U.S. or elsewhere will be based on LWRs, a technology that does not fit into the country's stated long-term nuclear strategy. But, given that NPCIL is unlikely to be able to install 20,000 MWe in the 12-15-year time-frame, it would seem that the government would prefer to import LWRs if possible.

THE advisability of import-led growth in nuclear power capacity needs to be, however, questioned. First, the scale of imports that is being envisaged would mean it would eventually harm the indigenous programme because of lessening emphasis. Second, the experience of Tarapur's spent fuel would suggest that U.S. suppliers would be unwilling to take back the spent fuel because of domestic political pressure. Unless, of course, one conceives of reprocessed plutonium from both PHWRs and LWRs feeding into the breeder and AHWR stages, which would now any way be under safeguards.

But experts such as A. Gopalakrishnan, former Chairman of the Atomic Energy Regulatory Board (AERB), do not see nuclear power being critical to India's short-term energy plan. They argue in favour of sustaining the indigenous programme, even if it means a slower growth than the planned 20,000 MWe by 2020. For a short-term solution to the energy requirements, it would be more prudent, they point out, to implement gas-based projects and even imported coal-based plants. These would be much cheaper than having imported nuclear plants (with a high capital cost of over $2 m/MWe) whose power tariff would be much higher than the current price of power from the new PHWRs of Rs.6 a unit. There would, in addition, be the dependence on external fuel supplies and attendant problems forever.

However, the apparent shift in focus to nuclear power as being central to energy planning is because the Planning Commission sees "de-carbonisation" in the energy sector as an important criterion. If that is the case, the government should be more willing to initiate appropriate measures to increase uranium mining operations and support the indigenous programme with adequate funds. Also, given the seriousness of the issue of fuel (both natural and enriched uranium), government efforts have been particularly wanting in identifying and seeking supplies from countries like Niger, Namibia and Uzbekistan that are not members of the NSG. Now, by getting into a bilateral deal with the U.S., India has effectively foreclosed this option because any such attempt now would be vulnerable to U.S. pressures on any potential source.

Even if dependence on imported fuel has become necessary, and placing all our civilian facilities under safeguards consequently becomes inevitable, it could have been done more autonomously than under a binding bilateral Indo-U.S. agreement that entails many conditions beyond nuclear safeguards, including perhaps a commitment to buy U.S. nuclear goods. The Prime Minister's remarks on the Iran gas pipeline project, that it is "fraught with difficulties", seem to suggest that India has already yielded to U.S. pressure on this issue.

With a well-planned strategy, one could have unilaterally offered to place civilian facilities under safeguards and negotiated with the NSG directly. Of course, U.S. support would have been still important but that would have been through a diplomatic exercise on an equal footing with all the key members of the NSG. This would have also allowed India to access multiple sources for fuel or technology. Now, though in principle India can approach any supplier, India would be obliged to source from the U.S. Besides, India also has let the U.S. call the shots with its apparent benevolence.

The opposition to accepting safeguards on the grounds that it is difficult to separate civilian and military facilities, and that it compromises on national security, is, however, ill-founded. Demarcation of facilities as military should not be difficult but a detailed exercise of identifying these has to be carried out. The manner in which the Department of Atomic Energy (DAE) declared the Bhabha Atomic Research Centre (BARC) and a few other facilities out of bounds for AERB inspections with a single bureaucratic order in 2000, would suggest that the process should not pose any administrative problems either. In any case, the agreement is for a phased declaration. But there will be a substantial cost involved and that is the price one has to pay for failing to plan for long-term fuel needs properly.

Since the research reactors Dhruva and Cirus are the chief sources of weapons-grade plutonium, and it makes no sense to use reactor-grade plutonium for weapons, one can easily demarcate all the power plants as civilian. It would seem that the main costs would pertain to replicating reprocessing plants specifically for weapon purposes because one cannot declare the existing plants - which currently reprocess spent fuel from power reactors as well as research reactors to yield plutonium for the breeder programme and weapons respectively - as military.

It is obvious that one-way traffic of nuclear material from military to civilian reactors does not pose any problem; it is only when there is a two-way traffic, as in a reprocessing plant, a dedicated facility for each objective becomes necessary because of safeguards on the material that comes in and goes out. There could be other costs involved in duplicating personnel and equipment required in this as well as other operations where people and equipment double up for the twin objectives at present.

Acceptance of Additional Protocol (A.P.) for enhanced safeguards of the IAEA, which includes intrusive and challenge inspections even in undeclared facilities and research and development (R&D) programmes, implementing this would require a well-thought-out strategy. Since 65 countries, including all the weapons states except the U.S., have implemented A.P. without any apparent problems so far, it should be possible for India to accept the same as well. Of course, there would be costs involved in this as well beyond the expenses in implementing comprehensive safeguards.

Since it has only been agreed to work towards concluding an FMCT, there is no immediate cap on fissile material production. Of course, it is high time that our strategic establishment knew precisely the amount of material required for a "credible minimum deterrence" after which the production can be capped. But it is a moot point if the strategists of the country know what they need for "national security". India has already been imposed a unilateral moratorium on nuclear testing. Export controls are being harmonised with the MTCR and NSG Guidelines in any case. These other conditions, therefore, do not seem problematic. The binding caveat perhaps is the unwritten one - a commitment to buy U.S. nuclear reactors.

Bush's assurance to persuade international partners to admit India into the International Thermonuclear Experimental Reactor (ITER) project for nuclear fusion and the programme for Generation IV nuclear systems is welcome. The former should actually pose no problem as it does not raise any proliferation concerns whatsoever. In any case, these are evolving concepts for energy sources for well into the century.

A curious element in the joint statement, however, needs to be pointed out. It speaks of the "completion of the Next Steps in Strategic Partnership (NSSP) initiative". Considering that the NSSP, which was announced in January 2004, is yet to take off, this statement is rather surprising. There is no tangible outcome yet with regard to cooperation on space programmes, particularly on facilitating launch of satellites with U.S. technology on the Indian Space Research Organisation's (ISRO) rockets. Even the launch of the proposed NASA (National Aeronautics and Space Administration) instrument on board ISRO's Chandrayaan mission to the moon, is yet to obtain the Technology Assistance Agreement (TAA) from the U.S. State Department. Only after a TAA, ISRO and NASA can even sit and discuss before things can move forward.

The much-talked-about Boeing-ISRO joint fabrication of satellite has been shelved, it is learnt. The bureaucratic hassles that the Boeing had to go through for the limited business prospects was not attractive enough for Boeing to pursue the project. The promise of lifting sanctions from the ISRO units still on the Entities List is perhaps the most tangible outcome of Indo-U.S. space cooperation.

How things play out on the nuclear front from here on remains to be seen. It all depends on whether Bush is able to bring both Congress and the NSG around to accommodate India. One could argue that similar demands would be made for the analogous cases of Israel and Pakistan. Though this has the potential to disrupt the process, it probably will not be a serious threat because Israel does not have any power programme and Pakistan does not have much of an indigenous power programme to worry about. From the Indian perspective, phrases such as `phased manner' and `voluntarily' would acquire new meanings when indications of the NSG's possible approval to the bargain begin to emerge. The pace at which the phased declaration and implementation of safeguards has to be done will be dictated by the outcome of negotiations with the NSG and its stipulations on India.

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