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20/12/2006 | U.S. President Awards India ''Unique'' Nuclear Status

Global Insight Staff

U.S. President George W. Bush yesterday signed the controversial United States-India Peaceful Atomic Energy Co-operation Act, 2006, further deepening the strategic relationship that he has secured with India since 2004.

 

Global Insight Perspective

Significance

Bush agreed the civilian nuclear deal with Indian Prime Minister Manmohan Singh in July 2005, and the subsequent negotiations to flesh out the proposal have been lengthy and at times fraught.

Implications

The deal has its supporters and critics in equal measure. Supporters argue that India needs global support to develop its civilian nuclear energy programme while critics warn that the deal will weaken international moves to counter nuclear proliferation.

Outlook

There are more negotiations and three more stages that the bill still needs to go through before it can finally come into effect, although its recent passage through the U.S. Congress was regarded as the greatest hurdle it faced.

The Deal

Essentially, the deal will allow the United States to export sensitive nuclear material and technology to India. India is not a signatory to the Nuclear Non-Proliferation Treaty (NPT), and as such is banned from receiving these exports. The U.S. government has argued that India is a "unique" case, stressing that these restrictions should be removed so that India can pursue its nuclear energy programme. U.S. policymakers argue that India has consistently shown a responsible attitude towards the nuclear issue, and that without support for alternative energy sources its economic growth will be hindered.

The United Sates has essentially amended its own nuclear export regulations. Although it appeared that the U.S. Congress might block the move, a successful lobbying campaign on the part of the Indian and U.S. Chambers of Commerce finally swung the vote convincingly in India's favour. This has however, come at a price. The U.S. government has negotiated a number of provisions, which India has already said it will not accede to in the agreement's final version. Among the more contentious provisions is a moratorium on nuclear weapons testing, with the U.S. government reserving the right to suspend all exports and re-exports of nuclear material if this occurs; a separate agreement that binds India to International Atomic Energy Agency (IAEA) regulations; and international inspections of 14 of India's nuclear plants, with eight nuclear military facilities remaining off-limits.

What Still Needs to be Done?

The deal has passed a series of major hurdles, but now faces a period of further negotiation as the U.S. and Indian teams seek to find common ground on its provisions. It also needs to pass through three more stages of approval, namely:

The U.S. Congress has yet to ratify an agreement between India and the United States regarding nuclear trade, that is specifically related to the sale of nuclear technology and fuel by the latter.

 

The IAEA has yet to approve its inspection programme of India's nuclear facilities.

 

The Nuclear Suppliers' Group (NSG), which represents the nations that are legally allowed to export nuclear materials and technology, is yet to approve the India-U.S. deal.

 

Its Ramifications

The agreement has divided opinion. It is truly a unique case, and potentially paves the way for further bespoke international agreements.

Supporters: The deal's supporters argue that countries like India should not be ostracised because of their circumstances. India has not signed the NPT because Pakistan has also failed to do so. India could find itself in the position of agreeing to the NPT terms—which include a freeze on nuclear military development—while Pakistan, possibly with Chinese support, builds up its own nuclear arsenal and potentially places India in a vulnerable position. At the same time however, India is facing major energy shortfalls which can only increase as the burgeoning economy develops. Its efforts to seek out new sources of oil, coal and gas are bearing fruit, but nuclear energy is regarded as the answer to many of its problems, particularly when issues like emissions are included in the equation. As the situation stands, India does not have the resources to develop its nuclear energy programme, making the deal with the United States, and potentially other NSG members, key.

Detractors: For the agreement's detractors, this deal not only represents a fundamental threat to the NPT but also sends out the wrong signals which undermine policy towards Iran and North Korea's nuclear programmes. They argue that it sets a dubious precedent and shows U.S. disregard for international counter-proliferation initiatives. Alongside this, there are fears that special dispensation for India's nuclear programme will irk both China and Pakistan, potentially leading to more rather than less nuclear problems in the region. Given that Pakistani scientist A.Q. Khan was found to have actively supported the programmes of Libya and North Korea, proliferation fears abound. The United States has already ruled out a similar deal with Pakistan, pressing India's errant neighbour to seek out other sources of support for its own nuclear development for civilian and potentially military purposes. The criticism is not purely international, with domestic rumblings of a different character emerging from India itself. The primary concern appears to be the fear of overt U.S. bias in India's foreign policy. Given that India has long committed to a non-aligned stance, it will not welcome U.S. provisos affecting its bilateral relationships with other states, particularly Iran.

Outlook and Implications

Notably, Bush's signature to this agreement came on a day when the six-party talks aimed at tackling the North Korean nuclear impasse restarted. The U.S. government is keen to reward its allies, with India having become an increasingly important strategic partner in the past few years. The U.S. defence industry is also keen for the administration to favour nations like India, as it eyes deals reportedly worth tens of billions of dollars. The U.S. government is however, acutely aware of the concerns surrounding this bill, and this has resulted in the extra provisions. Given the contentious nature of these, hard bargaining can be expected in the coming months as the deal's substance is finally concluded. For India, this bill represents a major victory that takes it an important step closer to securing unlimited nuclear supplies and international acceptance of it as a nuclear state. India has been ostracised on this front—unfairly it believes—since its first nuclear tests in 1974, and the deal marks a long-won sea-change in international attitudes. At this stage, the agreement is expected to be finalised by mid-2007.

www.globalinsight.com

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Global Insight (Reino Unido)

 



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