There is no dearth of US experts, UPA-inspired spin doctors and Indian intellectuals who advise ad nauseum that India must quickly complete negotiations with the International Atomic Energy Agency [IAEA] and the Nuclear Suppliers Group [NSG] so as to rush the India-US Civil Nuclear Cooperation Agreement [123] to the US Congress before June/July 2008 and get signature of the outgoing President George Bush before he demitted office in January 2009.
The central premise of their argument is that the present text of the 123 Agreement is the most favourable to India, that US President George Bush has been the most favourable US President to India in offering this treaty and, if this text is not finally approved by the current US Congress and Mr. Bush, India may not get so favourable terms from the next US President and the next US Congress.
The UPA spin doctors claim that three steps of India signing [i] India specific general safeguard agreement with IAEA, [ii] some sort of general waiver agreement with the NSG, and, [iii] ratifying the 123 Agreement would dismantle the technology denial regimes, end ?nuclear isolation? of India and enable the 45 countries of the NSG to have nuclear trade with India. This is a totally false claim as Article 5(2) of the 123 Agreement does not authorise supply of [i] dual use equipment and technologies, [ii] reprocessing, [iii] enrichment, and, [iv] heavy water equipment and technologies to India. To have nuclear trade in these areas a fresh negotiation to amend the current version is stipulated in this very agreement. Despite general waiver from NSG, nuclear trade of India with each of the NSG member states will still be subject to their national policies. So the technology denial regimes shall continue and ironically by signing this version of 123 Agreement the Manmohan Singh government has given added legitimacy to continuation of such technology denial regimes. Patriotic Indian leaders like L.K. Advani who oppose technology denial regimes naturally resent the current submissive version of the 123 Agreement. Its Article 5[4] restricts fuel supply in such a manner which will not permit build-up of nuclear fuel reserves.
This 123 Agreement does contain American agreement in principle to let India reprocess imported uranium fuels but it can be done only in a separate facility [costing about Rs 2500 crore] to be set up in India, under a procedure yet to be negotiated with the IAEA and the US. To give effect to the reprocessing of imported uranium fuel in India a separate agreement under Article 131 of the US Atomic Energy Act is necessary which India has to negotiate obviously with the next President and the next US Congress. So why not negotiate the entire package with the next US President on equal & better terms?
Since the IAEA and the NSG cannot be more liberal in offering terms better than what Manmohan Singh government has already accepted in the current text of the 123 Agreement, it is better to let this agreement lapse. The IAEA does not manufacture nuclear fuels so IAEA cannot guarantee uninterrupted supply of nuclear fuel. Accepting paper guarantee from IAEA in this regard is self-cheating.
There can be no hope for securing better terms if the UPA functionaries on one hand keep claiming that the existing text of the 123 Agreement is the best that India could hope for, and, on the other hand, UPA keeps strangulating domestic nuclear sector by curtailing budgetary allocations.
Teasing the Left parties, Ronen Sen, Indian Ambassador to US, on March 14, 2008 told the media that his government was ?committed? to operationalise the 123 Agreement. On March 17, the Left parties had the seventh round of eye-wash meeting with the UPA but, as usual, with no decision except to meet again. On March 19, Pranab Mukherjee to chagrin of the Left parties, told the Rajya Sabha that the UPA government could ?neither mend nor amend? the 123 Agreement. On March 25, Pranab Mukherjee told the media in Washington after meeting the US Secretary of State that the UPA government was interested to implement the ?landmark? agreement because India was energy deficient and harnessing nuclear energy could help India sustain nine to ten per cent annual economic growth for the next twenty years. Prime Minister also keeps stressing that nuclear energy is the most important for economic growth of India. There could be no quarrel with this argument of PM but difference between PM and patriotic Indians is that whereas PM wants to promote imported nuclear reactors on cost of domestic nuclear industry by reducing budgetary allocations, patriotic Indians do not want any curtailment of indigenous nuclear energy sector.
The UPA government has been consistently trying to strangulate domestic nuclear energy sector by curtailing budgetary allocations so as to create conditions conducive to justify import of nuclear reactors. To kill domestic industry so as to promote imports is typical mentality of ex-World Bank employees working in national governments. Budget allocation for nuclear power schemes has been reduced by the Manmohan Singh government from Rs 2333 crore in FY 2007-08 to only Rs 889 crore in FY 2008-09.
Among the heads for which allocations have been cut are the Nuclear Fuels Complex, Heavy Water Board, Board for Radiation & Isotope Technology and the thorium plant. Outlay for operation and maintenance of the thorium plant at Mumbai has been reduced from Rs 15 crore to Rs 13 crore. The Indira Gandhi Centre for Atomic Research, which is developing the Prototype Fast Breeder Reactor (PFBR) at Kalpakkam, Tamil Nadu, has been given a peanut increase of Rs 1 lakh. Once completed, this facility will for the first time attempt commercial production of energy using thorium, a nuclear fuel found abundantly in India. Bharatiya Nabhikiya Vidyut Nigam [Bhavini] which is building the PFBR has also suffered a major cut of Rs 306 crore in budgetary support from Rs 926 crore in 2007-08 to Rs 620 crore in 2008-09. This cut will obviously retard the pace of commercialisation of fast breeder reactors whereas national interest demands its acceleration. Capital outlay for the Nuclear Fuels Complex, which produces the crucial uranium oxide fuel and several other components for strategic use, has been cut from Rs 221 crore to Rs 90 crore. This will accentuate not ease the shortage of uranium fuels to existing uranium-based Indian reactors. So downsizing the domestic nuclear energy sector has begun while shouting loudly for increasing share of nuclear energy in energy profile. This shows contradiction in the UPA nuclear energy policy.
The November 2007 debate in the Parliament on this subject is treated by the Opposition as having expressed the ?sense of the House? in which supporters of the deal were seen to be in the minority but PR Dasmunshi, Parliamentary Affairs Minister disputes this interpretation saying that a short duration discussion under Rule 193 in absence of voting can not indicate the ?sense of the House.? Another opportunity has come for the NDA and the Left parties to corner the UPA on this subject either by moving a cut motion on demand of the Department of Atomic Energy or moving a resolution to triple budgetary allocations to nuclear power schemes in FY 2008-09. And both options entail voting on the floor of the House, and if carried, would reaffirm the sense of the House being against the current version of the 123 Agreement.
One may ask whether India will be able to secure better terms from the USA in future than the current version of the 123 Agreement. Reply is in the affirmative provided Indian establishment comes out of its self-imposed Stockholm syndrome. I was Ambassador to Finland [2001-05] and just before and after the US invasion of Iraq, the then US Ambassador to Finland had offered to get all the demands of India [including permanent membership of the UN Security Council, dismantling of all technology denial regimes etc] approved by the White House if India agreed to send Indian troops to Iraq. I offered to recommend to Delhi to send Indian Army units after fall of Iraqi govt for fixed duration under NAM or Asian initiative to stabilise Iraq and asked the MEA to send me our charter of demands. Rather than seizing upon this golden opportunity, Saurabh Shukla column in the Hindustan Times reported that my proposal was consigned to trash bin by the then Foreign Secretary as soon as it had landed on his desk. So India lost a historic opportunity to strike the deal when the iron was red hot. The Manmohan Singh government has failed to secure US support for permanent membership of UNSC, and, has so far succeeded in getting assurances of partial dismantling of technology denial regimes on cost of nasbandi [vasectomy] of Indian nuclear weapon programme implied in opening five research institutes [including Tata Institute of Fundamental Research, Mumbai] for perpetual inspections by IAEA. Theoretical R&D for weapon modernisation is done in research institutions.
Another opportunity is fast approaching for India to secure better terms if its future negotiators show more pragmatism and tenacity to fully implement mandates set by political masters. Present negotiators have failed, they were mandated to secure facilities for ?full? nuclear cycle and dismantling of technology denial regimes but they ended up securing only ?truncated? cycle and legitimising technology denial regimes!
In November 2008 US Presidential election will take place. Senator McCain will be the nominee of the Republican Party. Senator Barack Hussein Obama, an Afro-American or Senator Hillary Rodham Clinton will be the Democratic nominee. Senator Obama is leading the race for Democratic nomination. All the three candidates are under pressure to create more jobs in the US. During Indiana democratic primaries Hillary has been declaring that her single point agenda will be jobs, jobs and jobs. President Bush and former President Bill Clinton are being accused of having shipped jobs and manufacturing units abroad. During Ohio primaries Senator Hillary was under pressure for having spoken in favour of the North American Free Trade Agreement [NAFTA] when she was the First Lady. Both Hillary and Obama have promised to re-negotiate NAFTA if elected. Senator Obama has promised to remove tax cuts to those corporations which ship jobs abroad. 78,000 jobs were lost in January and February each and, another 80,000 in March 2008. Unemployment rate is over 5.1 per cent. It is feared that in the next 12 months about 200,000 jobs will be lost in financial sector alone. In April 2008 number of jobless seeking social security payments touched 407,000 the highest since September 2005. Housing crisis in US is expected to cause loss of $500 to $1,000 billion, and, economic cost of Iraq war is put at $3,000 billions. In April, Bernanke, Fed Chairman told the Congress that US economy might shrink during the first half of 2008 hinting at recession. Alan Greenspan, former Fed Chairman and IMF have also indicated US economy entering into recession.
Addressing the Indian American community, Senator Obama has said: ?The world'soldest democracy and the world'slargest democracy are natural partners, sharing important interests and fundamental democratic values. Together with Indian-American community we can restore and revitalise America'sinnovation based economy so that we create jobs and meet our pressing domestic challenges. That is why I voted for the US-India nuclear deal on the Senate Foreign Relations Committee.? Job creation mantra of Obama has helped him breach the racial barrier and is getting him votes and support of ?white? Americans especially the younger ones.
One of the three contenders for the US Presidency looks at the 123 Agreement not in non-proliferation terms but more in terms of job creation in the USA. Sooner than later voters? pressure to create more jobs in America which is sinking into recession will subdue the non-proliferation American ayatollahas opening another opportunity for India to secure better terms. After all, we know economy leads the politics.
But the million dollar question is: are we Indians prepared psychologically and diplomatically to take advantage of this emerging opportunity? Let us realise that by importing American reactors India will be doing a favour to recession hit US, not the other way. And this favour should be done on our terms. Every country wants large export orders especially recession-hit countries.
(The writer recently retired in the rank of Secretary to the Government of India in the Indian Foreign Service, 1971 batch.)
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