Chair: Amb. Lalit Mansingh
Speakers: C Rajamohan, P R Chari and Alexander Stolar

The seminar focused on developments relating to the Indo-US Nuclear Deal since the July 2005 Agreement between Prime Minister Manmohan Singh and President George Bush. The following issues, amongst others, were discussed: the American legislative process and the various steps leading up to nuclear cooperation ; the Indian perspective; obstacles to the passage of the nuclear bill; and ,questions about whether India needs to test again and the importance of Atomic energy to India.

Opening Remarks

Amb. Lalit Mansingh

Welcome to this discussion on the Indo-US Nuclear Deal which has entered a critical phase one year after the July 2005 Agreement between Prime Minister Manmohan Singh and President George Bush. It has been a long time since we have witnessed a period as exciting and full of suspense as the last 6 months. It all began with Secretary of State Condoleezza Rice's visit to India with a stunning proposal. This led to the July 18th 2005 agreement. Then, there was the unnecessary diversion of the Iran vote issue. All this happened externally between the two countries. Internally, within India, we had the Ministry of External Affairs quarrel with the Atomic Energy Commission over the agreement. Ultimately, the bill came up for scrutiny in the House International Relations Committee and the Senate Foreign Relations Committee. There was lot of pessimism surrounding the enabling bill in both countries. President Bush's domestic approval ratings were at their lowest at about 30 per cent and the critics kept harping on the wide gaps that existed in the thought process of both countries towards the deal. The significance of the passage of the bill in both the committees and, subsequently, by the House of Representatives restores our faith in the centrality of the agreement. It proves beyond doubt that there is a bipartisan American consensus. Of course, there are road bumps ahead in the passage of the bill through the Senate followed by its reconciliation and consensual passage in the Nuclear Suppliers Group (NSG) and the International Atomic Energy Agency (IAEA).

Alex Stolar

The Agenda of my presentation revolves around the following points: The American legislative process, the House resolution, the Senate resolution, speculation about the Conference Bill, sequencing and the conclusion. In the first stage, the bill is introduced in the House of Representatives which is followed by the second stage in which the House International Relations Committee considers the bill. Subsequently, in the third stage, the full house debates and votes on the bill. Meanwhile, in the Senate, the Senate Foreign Relations Committee considers the bill and then the full Senate debates and votes on the bill. This process is followed by an evaluation by the Conference Committee, which reconciles the two bills. The Conference Committee produces an identical version for both Chambers to consider. Thus, the full Houses of the Senate and the House of Representatives debate and vote on the bill. If the bill is passed by both houses, the President signs it and it becomes law.

The key Legislative Points in the current bills provide a glimpse of what might be in the final legislation and until the Conference Committee releases the final bill, we will not know how the law will read. Now, let us address the key differences between binding and non-binding legislations. Binding issues constitute the law and create legal obligations, rights, and responsibilities. On the other hand, Non-Binding issues do not matter and create no legal obligations. In the House of Representatives, the Resolution under Number 5682 was introduced by Congressman Henry Hyde - the Chairman of the International Relations Committee. It was passed by the House on 25 July 2006 by an overwhelming majority of 359 for and 68 against the resolution. The House Bill permits the President to waive portions of the Atomic Energy Act and sets forth conditions for the waivers. It also enables Indo-US nuclear cooperation. More importantly, it has reporting requirements under which the President has to submit reports on American Foreign Policy objectives and India's Nuclear Program. This includes annual reports on the Fissile Material Cut-Off Treaty, India's participation in the Proliferation Security Initiative,, US efforts to dissuade and, if necessary, sanction Iran for its efforts to acquire WMD, as well as India's fissile material and nuclear weapon production rate and whether imported uranium has enhanced India's nuclear weapon production rate.

The conditions of the House Bill are:

1. Credible separation plan for India's civil and military nuclear programs.
2. IAEA safeguards agreement in perpetuity in accordance with IAEA standards.
3. India is making substantial progress toward concluding an Additional Protocol.
4. India is working toward the FMCT.
5. India is supporting efforts to prevent the spread of enrichment and reprocessing technology.
6. India is securing nuclear materials.
7. The Nuclear Suppliers Group has decided by consensus to permit nuclear cooperation with India.

Significantly, the joint resolution requirements of the House Bill are:

1. The Indo-US nuclear agreement becomes effective after it is approved by a joint Congressional resolution.
2. If India tests a nuclear weapon, nuclear cooperation must stop.

Meanwhile in the Senate, Resolution 3709 will be introduced by Senator Richard Lugar. It has already been endorsed by the Senate Foreign Relations Committee and the floor vote is expected in September 2006. The Senate Bill permits the President to waive portions of the Atomic Energy Act and sets out conditions for the waivers. It enables nuclear cooperation, export prohibitions, End-use monitoring and reporting requirements. The conditions of the Senate Bill are:

1. Credible separation plan for civil and military facilities.
2. IAEA safeguards agreement in perpetuity in accordance with IAEA standards.
3. India is making substantial progress toward implementing an IAEA additional protocol.
4. India is working toward the FMCT.
5. India is supporting efforts to prevent the spread of enrichment and reprocessing technology.
6. India has secured nuclear materials.
7. A consensus decision in the NSG to permit nuclear commerce with India.
8. The NSG decision must not permit nuclear commerce with any other non-nuclear weapon state that does not have full scope safeguards.

The Joint Resolution Requirement of the Senate Bill is:

1. The Indo-US nuclear cooperation agreement becomes effective after it is approved by a Congressional joint resolution.
2. If India tests a nuclear weapon, nuclear cooperation must stop.
3. Export prohibitions cover. There is an exception for two classes of end users: Class 1: Multinational facility participating in an IAEA-approved program for national fuel cycle capability alternatives, and Class 2: A facility participating in a bilateral or multinational program to develop a proliferation-resistant fuel cycle. For both classes of exceptions, the President must determine that the export will not improve India's ability to produce nuclear weapons and fissile materials.
4. Prohibition of technology or materials transfers for uranium enrichment, reprocessing spent fuel and production of heavy water.

As far as end-use monitoring is concerned, it must be ensured that recipients of nuclear exports are authorized recipients and that the exports are used only for peaceful safeguarded nuclear activities. The Senate bill also seeks reports from the President on any material non-compliance by India like the non-proliferation commitments in the 18 July 2005 Joint Statement, the separation plan, the IAEA safeguards agreement and additional protocol, and the Indo-US Nuclear Cooperation Agreement. It also seeks a report on any construction of a new Indian nuclear facility, significant changes in the production of nuclear weapons or fissile materials by India, and it's participation in the Proliferation Security Initiative.

To speculate about the conference bill is pointless since we do not know how the law will read, until the conference committee releases the final bill. Will provisions unpalatable to India be removed, revised, or maintained? India, the Bush administration, and the non-proliferation advocates will all lobby for changes to the bills. As far as sequencing goes, Step 1 will see the US law revised to enable Indo-US Nuclear Cooperation; Step 2 is that India concludes an IAEA safeguards agreement and begins Additional Protocol negotiations; Step 3 is that the NSG decides by consensus to permit nuclear commerce with India. Will China or the Scandinavian nations prevent a consensus decision? Will China seek a Pakistan exception? These will be the key questions. Step 4 may see the President submitting determinations to the Congress on the legislative conditions regarding IAEA Safeguards Agreement, IAEA additional protocol, and NSG consensus decision. Step 5 is that, if these conditions are met, the President may make the necessary waivers for Indo-US nuclear cooperation. Step 6 is that the Indo-US nuclear cooperation agreement is enacted into law by a joint resolution of the House and Senate, and thereafter becomes effective. Subsequently, nuclear cooperation would commence.

C Raja Mohan

For the deal to go through, the United States has to make exceptional changes to its domestic laws for India. This has to be followed by a consensual vote in the NSG, followed by India specific amendments in the IAEA Safeguards Agreement. The number of players involved makes the whole process cumbersome. If one looks at Indian domestic opinion on the deal one can see that there is a lack of consensus. The left parties are opposing it, while the BJP is taking potshots at a policy which was initiated by them. How can they complain of any divergences? It seems that many within the system are not ready for the deal. Significantly, several key sections have not understood the deal. The problems from the Indian perspective are, as the Prime Minister himself put it,- "It's a work in progress for us." Thus, there is nothing that India can do about it at present. It has to wait for the final product to emerge. The Indian Prime Minister has expressed his concern about the version that has come out of the Senate.

The major problem is with the clause pertaining to India not being given technology for enrichment and heavy water production processes. This clause was introduced by the non-proliferation lobby though India does not want this clause.The second clause of concern relates to certification requirements. It is not a reporting requirement clause, but actually demands that the President commit to reporting on certain activities,. This creates an unstable environment. The third clause is on further testing. It specifies that the US will stop nuclear cooperation if India conducts any tests in the future. Has India actually committed to this requirement? India has accepted a voluntary moratorium on testing after the May 1999 nuclear tests. So, why is there this emphasis on no further testing? The real question is: do we need to test now? It is not right to ask why the US should tell us not to test now. We need nuclear technology and hence we have to agree. If we test in the future, we must be prepared to face the consequences. If China or the US tests, the consequences might not be as damaging as in the first case. The fourth clause that is of concern relates to the FMCT. Why has it been inserted when the Bush administration has not even joined it? The FMCT negotiations have not started yet. India already possesses a large amount of reactor grade plutonium. India has not built a reprocessing plant for using it, and neither are there any such plans in the near-term future. Hence, the issue of accelerating the program does not exist. Consequently, for the US, a rising India is a useful partner.

This nuclear deal is only one of the means for establishing a working relationship. If there is a political motive behind the whole process then India should not feel inhibited about whether there is any sinister American plan behind the deal. This will simply destroy the whole relationship. The question that has been raised is what China would do in the NSG. This is an interesting question. China will not come out openly against the deal. If China openly opposes it India will be pushed into the US arms. This, for the Chinese, would be writing off any investment opportunities in India for the next 10 years. Hence, China will make its best effort to prevent the deal from going through, while attempting to please Pakistan. As far as the Scandinavian countries are concerned, if they push hard India will have to be persuasive. However, they might also keep quiet about whole process. To conclude, the Indo-US nuclear deal has come a long way. There is enough incentive for the Bush administration to leave a legacy behind, considering what they have done in Iraq and Afghanistan. However, there will be an executive vs. Congress dominance battle that might prove to be an obstacle to the passage of the nuclear deal bill.

P R Chari

This is a good opportunity to pause and reflect on where the deal is going both retrospectively and prospectively. When the deal was signed, it was a dream agreement for India. The real question now is whether Bush can push it through Congress, NSG and IAEA in a form that is acceptable to India. Ironically, the political opinion in the US is in favour of the deal while the political opinion in India seems against the deal. Interestingly, the charge in both countries has been led by the respective legislatures. Why is Indian political opinion against this dream agreement? Is India over-investing political capital in nuclear energy? India produces only 2.8% of its total energy through atomic energy, which is in the public sector. Wind energy, which is in the private sector, gives us more than 4% of our total energy demands. In 1974, before the Pokhran test, the Atomic Energy Commission produced 800 MW of electricity. 32 years later, in 2006, it is producing 2700 MWs. This means that just over 2000 MW has been added over three decades. It seems that Atomic Energy has never been a priority.

What purpose does the concluded nuclear agreement serve? It could only be for military purposes. If one looks at the 18 July 2005 agreement, it also talks about space cooperation between the two countries, knowledge initiatives, combating HIV Aids and clean energy. These areas of cooperation have not received much attention. Only atomic energy seems to be in the news. In the deal signed between the two countries, 14 out of the 22 thermal reactors and certain research facilities are placed in the civilian category for IAEA inspection. The establishment of a strategic fuel supply has been envisaged; if there is any disruption of fuel supply the US would ensure other supplies. How effectively this will work out can only be answered in the future. What about the looming Congressional elections in November? What if the current equations within the Congress change after the elections? If the bill is not passed by then, will it have a smooth passage after the elections? The key question now is: Does the bill introduced in the House go beyond the Indo-US nuclear deal? The answer is yes- it does go beyond the deal of July 2005. The Senate bill also goes beyond the July 2005 nuclear deal. The mention of a consensual vote in the NSG is unnecessary because every decision of the NSG has to be taken by consensus. Further, the bill wants no transfer of nuclear materials to non nuclear weapons states, except for India. What happens if China provides nuclear assistance to Pakistan? Will the whole deal be called off? There are a whole lot of issues which have to be examined and hence, the entire matter needs to be placed before Parliament. The Prime Minister also agreed to this modality being adopted in his May 2006 speech in Parliament.

There is a need for greater transparency in the whole process. There is high secrecy surrounding the process at present . It seems that all decisions are being taken by a small coterie within the two governments. Hence, the key issues which need to be examined are the following:

1. How important is atomic energy for India? Why have no steps been taken by the Atomic Energy Commission to secure the supply of Uranium and enrich it over the last 3 decades?
2. Does India need to test again? Is this important or must India wait for someone else to test and then react?
3. How much fissile material is required for minimum deterrence?
4. Who is making these decisions in India? Is it the Prime Minister or the Atomic Energy Commission or the Ministry of External Affairs? Are the Ministry of Defense and armed forces being kept in the loop? To conclude, the deal could go either way.

Discussion

Comments

• Contrary to common perceptions, India is not over-investing in this deal. There is a considerable gap between the energy demand and energy supply coming from thermal and other sources of energy. There is international consensus that nuclear energy is the way to fill this gap.
  

• The agreement is symbolic because it has addressed the broader issue of nuclear ostracism which was being practiced against India for the last 30 years.
  

• India can rely on presidential assurance. President Bush is the first president to have recognized India as a strategic partner of the United States. India, which was at the receiving end of US foreign policy during the Cold War, has now become an ally of the United States, which is of great significance.
  

• The opposition by the political parties in India is not a serious issue; it is only a product of political opportunism. Even political parties have accepted that this deal is in the interest of India.
  

• After the 18 July agreement, sentiments were expressed in the United States that India will become a global power and play a leadership role in non-proliferation efforts worldwide. Nonetheless, these sentiments are non-binding in nature and not covered under this law.
  

• The nature of this deal is 90 per cent political and 10 per cent technical. Politically, the US needs India in the long term and India needs the US in the short term. Most of the technology which this deal envisions is available in India. In terms of energy production, nuclear reactors cannot produce more than 10 per cent of India's total energy requirements, but even for that immense investment is needed. Eighty percent of Indian energy comes from thermal and hydel sectors. So, technologically, atomic energy has minimum use. Even if the US Congress does not approve this deal, it will not be a major problem for India because this deal symbolizes India's arrival as a major power.
  

• Pakistan will not get the same facilities. President Bush told President Musharraf that India and Pakistan are two different countries with two different histories. Gary Ackerman (D-NY) said that if Pakistan wants similar concessions it must do what India has done. There is a sense of confidence that Pakistan's case can be promoted, but Pakistan will never meet the benchmark set by India. China will not jeopardize its relations with India on this issue. It has already emerged as India's second largest trading partner.
  

• Iran will not be an issue. The United States expects India to join its efforts to stop the manufacture of Weapons of Mass Destruction in Iran, especially nuclear weapons. This expectation is non-binding on India.
  

• Symbolically, India has already got what it wanted and a huge psychological victory has accrued to India. India requires natural uranium - low enriched uranium for Tarapore and technical assistance for up scaling its 15 MW Fast Breeder Reactor to 500 MWs. Then for start up, highly enriched uranium will be needed. The Atomic Energy Commission should be asked why it has not developed or imported enough natural uranium since 1974.
  

• The deal is part of a larger restructuring of the international system. Unfortunately in India, not enough thinking has gone into the understanding of big picture. India needs to acquire the maneuverability to deal with Russia, China, Japan and US simultaneously. India cannot over-invest in any one relationship.
  

• Are doubt that India is over investing in this deal actually true? The Indian energy demand is going to double over the next two decades. The vulnerability of sea lanes of communication and gas/oil pipelines, their environmental implications and the small scale localized nature of wind energy makes the development of nuclear energy critical. Additionally, the development of nuclear technology in India has taken place at a time when the technology was developing at the global level itself. India needs enriched uranium only for the Tarapur Reactor which only produces 140 MW of electricity. This reactor can be closed down. However, in the future, India needs high technology for its other sophisticated reactors, for which the deal is essential.
  

• India's heavy dependence of on hydrocarbons has a negative impact on its foreign policy and the overall posture on world events. In the recent Lebanon-Israel crisis, the rise in the prices of hydrocarbons has become a big issue. So, this deal is very important for India.
  

• Though there are disparities in the language of the bills tabled in both houses, they will be reconciled through negotiations.

Questions/Answers

Question: Why is there paranoia about the US in India? There is no need to narrowly focus on the US-India Nuclear deal. It is part of a larger paradigm shift in which the N-5/P-5 states have provided tacit approval to the United States in signing this agreement with India. After this, other agreements are going to come. So ,why doesn't India look towards the future?
Answer: Most people think that the US could abandon India at any time and the paranoia will subsequently persist in India. Nevertheless, the US is on test since 2000, and it has tried to maintain consistency in its actions. During the Kargil crisis, President Clinton conveyed a stern message to Pakistan and there was no ambiguity over this issue with India. Since then, the US is trying to prove that it will not abandon India and needs a long term partnership. Even before this deal, opinions were expressed that it will not go through, but it has crossed many hurdles.

Question: There is a need to involve the Indian Parliament to see the comfort level of the Indian people with the deal just like American Congress.
Answer: In India, getting the Parliament involved is dangerous. The Indian government makes foreign policy, and the parliament debates over it: involving the Parliament in foreign policy making would amount to transferring the foreign policy making process to the legislative.

Question: What exactly will break the agreement from the Indian side? What are the issues on which India will reject the deal?
Answer: There cannot be one deal breaking clause. Rather, the bill can be rejected in its entirety. If the Nuclear Suppliers' Group says that similar facilities should be extended to Pakistan and China brings a bill to confirm it, India will reject the deal.

Question: What will be the stand of Scandinavian countries on this deal? Will they become a major obstacle in the Nuclear Suppliers' Group (NSG)?
Answer: If the P-5/N-5 agrees then the small countries will have a problem in holding up the deal in the NSG. Currently, the deal is getting support from N-4/P-4 only. The Chinese have done several strange things in the past which makes their moves on this deal quite uncertain.

Question: Isn't there a difference between consensus and unanimity? Doesn't the Nuclear Suppliers' Group speak of consensus not unanimity?
Answer: The concept of consensus in the NSG is equal to unanimity. Looking forward 10-15 years, if China decides that Pakistan should get similar facilities from the NSG and then brings up a resolution where only five-six states disagree, what would be the Indian reaction? That would not be in the interest of India. So, India should be careful about getting consensus in the NSG.

Question: Is President Bush's foreign policy likely to survive after the end of his term?
Answer: I am not sure that President Bush's foreign policy will survive after him. The next president, if a Democrat, will not put as much pressure on the NSG as Bush . Nevertheless, the relationship between US and India will not weaken.

Question: Will the deal incite a clash of commercial interests between the US and France?
Answer: The deal will not incite a clash and nobody can stop competition. For India, the US and France are both good. Since the US nuclear industry has become non-functional over the last two decades, the Russians and the French could walk away with the contracts.

Question: Can the US carry out some of the tests which India needs to do to get data? Can NASA share this data with the Indian establishment? What should be the governing factors for nuclear testing over the short and long term?
Answer: India has done six nuclear tests till date. For advanced weapon designs, the field tests apart from lab tests are needed. As per the existing US laws, any country which carries out a nuclear test automatically comes under sanctions. At the time of the 1998 tests, there were reports in India about laboratory testing being enough to ensure the validity of nuclear weapons designs. These tests are allowed under the CTBT and this option can subsequently be exercised.

Question: Why is the US against India's acquisition of nuclear weapons? It will help the US to have a stronger India as its ally.
Answer: The deal explicitly prohibits any military help to India. However, the thought of a stronger India being in the US's favour has seeped into the US Congress. They are mulling over it.

Concluding Remarks

Amb. Lalit Mansingh

India and the United States have covered much ground. One year back there were apprehensions that the deal will not go forward. However, this deal has defied all predictions. The way the Indian-American Community has lobbied for it , and the manner in which President Bush has pushed this deal-despite his political problems , makes it seems like the deal will cross all hurdles. India needs the United States for growing at 10 per cent per year. There is no shame in asking for help when it is needed. In 1971 India took help from USSR when help was badly needed. Today the same can be done with the USA. This is important and it will make all the difference.