Nuclear - Articles

On 6 September 2008, the NSG lifted the embargo it placed on India and granted a waiver to conduct nuclear trade to a country that is not a signatory to the Nuclear Non-Proliferation Treaty (NPT). This historic decision is being hailed as the end of nuclear and technological isolation faced by India since Pokhran I.

What does the NSG waiver mean for India?

The waiver is significant because India can now engage in high-tech nuclear commerce while its nuclear weapons programme remains unaffected - a right enjoyed only by the P-5. India can now have access to nuclear technology without signing the NPT or the Comprehensive Test Ban Treaty (CTBT). The waiver also means that India can enter into civil-nuclear agreements with Russia and France and will also enable India to gain access to nuclear fuel from the international market. Most importantly, the waiver confers a de facto nuclear weapons power status to India.

Economically, the NSG decision will increase international investment in the Indian economy. The National Thermal Power Corporation (NTPC) and National Power Corporation of India Limited (NPCL) are expected to be the immediate beneficiaries. Presently, nuclear energy constitutes 3 per cent of India's total energy and with the deal coming through it is expected to increase to 8 per cent by 2020 and 20 per cent by 2030. Other sectors that will benefit from the deal are defence and IT industry besides pharmaceuticals. Equipment suppliers such as Larsen & Toubro (L&T) and Bharat Heavy Electricals Limited (BHEL) are also expected to reap heavy benefits in the long run.

Is the waiver "clean and unconditional"?

Responding to a query whether the waiver was "clean and unconditional," Atomic Energy Commission (AEC) Chairman, Anil Kakodkar, responded by saying, "There are no new conditions...it is consistent with what we were looking for." (The Hindu, 8 September 2008)

The waiver text highlights India's voluntary and unilateral moratorium on nuclear testing and its no-first-use policy. To this extent, the final text has incorporated the 5 September statement made by External Affairs Minister, Pranab Mukherjee, reiterating India's stand on disarmament and non-proliferation.

What does India's NSG waiver mean for the US?

India's NSG waiver is politically important as this diplomatic initiative is a major step to bridging the gap that has separated the two democratic states. Further, by laying a strong foundation with nuclear civilian technology cooperation, it opens up the door for cooperation in other areas.

Economically, the NSG waiver provides an unprecedented economic opportunity for American nuclear suppliers. Nuclear giants such as GE Energy, USEC and Westinghouse will have an opportunity to capitalize on the opening of India's market and the country's growing energy needs as it seeks to reach its goal of adding 20,000 MWe of nuclear power by 2020. Although the FBRs will be produced within India's borders, it will look to other nations to purchase at least 12 LWRs. Although the price of a reactor varies, by manufacturer, the average cost is a whopping US$2 billion dollars. Capitalizing on this opportunity is crucial for the US and will reinvigorate the American nuclear industry that has remained dormant since the Three Mile Island incident.

Will the US Congress pass the 123 Agreement before it adjourns?

When the US Congress reconvened on 8 September, only fifteen days remained in the legislative calendar, exactly half of the 30 days required by the Hyde Act. To achieve this seemingly impossible objective, House of Representatives Majority leader Nancy Pelosi must call a lame duck session; however, she has repeatedly refused to do so. The Bush administration has responded by applying pressure on Pelosi and fellow Congressional leaders to introduce this legislation before the legislature adjourns.

Ensuring a lame duck session is a big task, but it pales in comparison to the other steps that must be completed. Once the 123 Agreement is approved by Congress, it moves to the executive for approval before returning to the legislature for 60 days, as required by the Atomic Energy Act. After 90 days of deliberation, the President must then verify that India has worked to negotiate an Additional Protocol and identified the facilities it will place under IAEA Safeguards. If these steps are not completed before Bush's term, they must be repeated in the next Congress. This should not pose a problem, considering the overwhelming support the Hyde Act received in both houses. But, lack of Congressional support was never the problem that would arise with the passing of the Agreement onto the next administration. The fear is that the new American executive will seek to make a mark that may not be acceptable to India and this could unravel the deal on the American side.

Time is running out and it is no surprise that some have suggested that the Bush administration can bypass this process and re-introduce this issue as new legislation. Although this is feasible, it could cause greater problems. By creating new legislation, Congress would need to first confirm that India has completed the terms it has agreed to. Such a process would not happen overnight and would provide legislators an opportunity to add additional constraints or work to stall the deal in other ways.