In early February, President Obama issued a memorandum certifying that India has placed its civilian nuclear facilities under IAEA safeguards, thereby bringing the Indian Safeguards Agreement into force and moving the two nations another step closer toward cooperation in the field of nuclear energy under the auspices of the landmark U.S.-India deal.
Yet while progress is being made toward implementing the agreement, a few steps remain before U.S. firms such as Westinghouse Electric and G.E. Hitachi can begin nuclear trade with India…
On September 6, 2008, India, with the strong support of the U.S., secured a rare exemption from the 45-member Nuclear Suppliers Group (NSG) allowing it to conduct civilian nuclear trade despite not being party to the Nuclear Non-Proliferation Treaty (NPT). A little over a month later, on October 6, President Bush and Indian Prime Minister Manmohan Singh signed the United States-India Nuclear Cooperation Approval and Non-proliferation Enhancement Act.
Supporters of the cooperation agreement argue that U.S. backing for the exemption indicated “a new chapter of engagement with India.” During the Cold War the world’s two largest democracies were often at odds, as India was the leader of the non-aligned movement and at times sided with the Soviet Union. President Obama has noted that the agreement “will increase American exports and create jobs in both countries.”
Another argument made in defense of the deal is that because India has limited domestic uranium reserves, it needed the ability to trade with other nations to ensure a steady supply. Moreover, it requires India to place its civilian nuclear reactors under IAEA safeguards for the first time. The State Department argues that the initiative “will help meet India’s growing energy requirements and strengthen the non-proliferation regime by welcoming New Delhi into globally accepted nonproliferation standards and practices.”
Critics of the agreement, however, note that by providing India with additional nuclear material, New Delhi could choose to divert more of its domestic supply of uranium toward its weapons program, thereby fueling a potential arms race not only with Pakistan, but with possibly China as well.
They also cite concerns that it could do serious damage to international efforts to curb the spread of dangerous nuclear weapons technologies. While Article IV of the NPT affirms that all state parties in good standing under the Treaty have a right to benefit from the peaceful uses of nuclear energy, the deal allows India to reap rewards without being a signatory to the Treaty. Moreover, India has not stopped producing nuclear weapons-usable fissile material or signed the Comprehensive Test Ban Treaty. Critics fear that extending special rights to India without simultaneously requiring it to make meaningful commitments toward disarmament could undermine the shaky bargain upon which the NPT is based.
India, for its part, continues to insist that all action, including application of IAEA safeguards to civilian nuclear facilities, is voluntary and that its military facilities will remain exempt from inspection.
A few obstacles remain before the U.S. and India can commence nuclear trade. First, India is demanding that the two sides complete an agreement regarding a nuclear spent fuel reprocessing facility. The terms of the U.S.-India deal grant India reprocessing rights under the condition that it establishes a facility to safeguard nuclear material monitored by the IAEA. Indian officials have expressed concern that the U.S. is trying to re-open discussion on the conditions under which it can suspend reprocessing consent rights to India. Current estimates are that such an agreement will be finalized by August of this year.
In addition, New Delhi must agree to join to the Convention on Supplementary Compensation for Nuclear Damage, lest U.S. firms balk at engaging in nuclear trade with India. The Convention would shield U.S. and international suppliers from liability in the event of a nuclear accident and make plant operators responsible for damages from any accidents. While the Indian cabinet has approved the necessary legislation, the national legislature has yet to consider the proposal. Competitors to U.S. firms such as France’s Areva and Russia’s Rosatom are not similarly constrained because they are covered by liability protections from their home governments.
India is aggressively pursuing deals with other nations worldwide, especially those with large uranium reserves. Last week it was reported that Russia planned to follow-up the nuclear cooperation pact it already signed with India last December with a deal next month which would enable Moscow to construct additional power plants. In addition to the U.S. and Russian deals, India has inked agreements with the UK, France, Mongolia, Kazakhstan, Argentina, Namibia, and Canada.
As nuclear trade between the U.S. and India comes closer to becoming a reality, the Obama administration should be concerned that the U.S.-India deal, as well as agreements between India and other nuclear suppliers, could weaken the nonproliferation and disarmament regime at a time when strengthening this regime is a top Obama administration priority.