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NSG Waiver: What does it mean for India?

To begin with, the victory at Vienna has greater political standpoint that India has been adhered to by not signing the Non-Proliferation Treaty (NPT) due to its discriminatory nature. Moreover, the deal essentially endorses India's position as a weapons power, allowing it to keep its nuclear test option in future while participating in civilian nuclear and other high-tech trade. Neither will India's nuclear weapons programme be open to intrusive inspection.

Second, the waiver, like economic liberalization in 1991, marks the second advancement in the history of India's growth story. Incidentally, Prime Minister Manmohan Singh is the architect of both the historic decisions. Not only India has initiated proactive engagement with the world but has also worked hard to safeguard its national interests. In a major policy shift, India has managed to diversify its friends in recent years. For example, the five countries - the US, the UK, France, Germany and the USSR - who had formed the NSG in 1974 in response to India's Pokhran test have changed their position on India and pushed through the waiver and even persuaded other countries which opposed the waiver. At the highest level, President Bush spoke to his Chinese counterpart Hu Jintao and urged him to support the waiver. This is a major diplomatic and political boost that India got from the global community. Above all, India's strategic closeness to the US is a new development that would help India in the future through mutual cooperation in various fields such as nuclear and weapons technology. As an equal partner, India can now deliberate the US position at the WTO talks, which has been in stalemate due to the US' reluctance on farm subsidy.

Third, India's image as an emergent nation has not been viewed as a threat by the international community. India has indigenously developed its own advanced nuclear technology reactors, and fast breeder reactors in spite of technology denial by the NSG countries and is attempting to develop uranium-233 from thorium owing to which countries like the US, France, Russia and the UK realized that India should be incorporated in the international nuclear non-proliferation regime. Besides, major world powers have started appreciating India's impeccable record on non-proliferation as also India's policy of no-first-use and its voluntary moratorium on testing.

Fourth, though analysts and experts may argue that the Indo-US nuclear deal would contribute to a mere 5-6 per cent energy needs for the next three decades, it is the strategy of energy diversification that matters most in a world of energy shortage. With global sanction being lifted, India can now look forward to imports of nuclear technology and fuel which can help generate electricity to power our development efforts. The deal could spur India's economic growth and bring in US$150 billion in the next decade for nuclear power plants. It is India's stated objective to increase the production of nuclear power generation from its present capacity of 4,000 MWe to 20,000 MWe in the next decade.

Fifth, more than nuclear power, India stands to gain access to a wide range of dual-use technologies as a result of the waiver. With NSG waiver, India can now import many of the otherwise banned dual-use items and technologies, including software. This is likely to have a more immediate impact on Indian manufacturing, research and development and scientific programmes than nuclear power.

Finally, industry gains in terms of trade and employment would be huge. As many as 400 Indian and foreign firms are seen as the beneficiaries of the NSG waiver that allows for a resumption of civilian nuclear commerce with India. The Indian industry is expected to attract over US$40 billion in foreign investment over the next 10-15 years as the result of private sector entry into India's nuclear power generation. This will ensure the participation of 200 firms with capabilities to operate and maintain nuclear plants. Besides, India expects another 200 medium and small firms to get into the business as ancillary producers for the big companies, thereby giving a new direction to efficient and cheap power production in the country, and India could even become a manufacturing hub. Lastly, NSG waiver is a win-win situation for Indian diplomacy that has come of age due to pragmatic and judicious diplomatic efforts that won India what it wanted in Vienna.