The unclear nuclear deal.

The Asian Age, April 8, 2006

Five myths about the nuclear deal

Brahma Chellaney

The lack of transparency that surrounded the July 18, 2005, nuclear agreement-in-principle and the subsequent deal-making have come to haunt both sides domestically. But while the US Congress, in open and closed-door hearings, is compelling the administration to provide evidence of tangible gains for America, the Manmohan Singh government faces no public scrutiny of its actions that put irrevocable fetters on India's most important national asset ― the nuclear deterrent.

The texts of various arrangements have come from the US side, with the Indians left to negotiate within the defined framework. The prime minister admitted in Lok Sabha on August 3, 2005, that the July 18 accord's "final draft came to me from the US side" after he had reached Washington. This, he went on to say, "held up our negotiations for about 12 to 15 hours" because he wanted the "support" of the Atomic Energy Commission chief, who was not in his delegation. Yet, after being summoned to Washington by the first available flight, the AEC chief was presented with a political fait accompli and asked to look merely at the language of the accord.

In similar fashion last week, the Americans handed the visiting Indian foreign secretary the text of what they want as the new bilateral civil nuclear cooperation pact. All the foreign secretary could do was to say that the US text needed "further examination". It is always harder to negotiate when one side dictates the text and confines the other side to a defensive negotiating position centred on a bureaucratic haggle on words.

It is an open secret that the US dictated India's civil-military separation plan, both by putting forward specific proposals and by orchestrating public pressure. The PM began haughtily, claiming, "It will be an autonomous Indian decision as to what is 'civilian' and what is 'military'. Nobody outside will tell us what is 'civilian' and what is 'military'." But he ended on a whimper, admitting that the US forced his hand on specific facilities. He told the Lok Sabha on March 10 that rather than place them under international inspections, he "decided to permanently shut down the Cirus reactor in 2010" and dismember Apsara ― Asia's first research reactor ― in order to "shift" its fuel core.

For the US, the deal holds multiple benefits ― from getting a handle on India's nuclear-weapons programme and leverage on Indian foreign policy to opening the way to lucrative reactor and arms sales. But for US revelations, the Indian public would not have known some of the commitments made by the PM ― from promising to buy "as much as $5 billion" worth of US arms once the deal is implemented (according to a July 18, 2005, Pentagon briefing) to agreeing "to import eight nuclear reactors by 2012," at least two of them from America, as disclosed by Condoleezza Rice in a recent op-ed. Each 1,000-megawatt reactor would cost India at least $1.8 billion ― or 2.3 times the annual budget of the entire Indian nuclear power industry.

In addition to giving the US for the first time "a transparent insight into India's nuclear programme", as Nick Burns puts it, the deal will help Washington oversee "nuclear balance" on the subcontinent. In the words of Burns' boss, Dr. Rice, "the nuclear balance in the region is a function of the political and military situation in the region. We are far more likely to be able to influence those regional dynamics from a position of strong relations with India and indeed with Pakistan".

In fact, Joseph R. Biden, the ranking Democrat on the Senate Foreign Relations Committee, said he is "probably going to support" the deal because it has "succeeded in limiting the size and sophistication of India's nuclear weapons programme and nuclear power programme". This is as candid and objective an assessment as any American can offer.

The deal's foreign-policy implications can be gauged just from the waiver-authority bill's Section 1(b)(5), which binds India forever to support "international efforts to prevent the spread of enrichment and reprocessing technology". By keeping the Damocles' sword of waiver termination hanging perpetually over India's head, the bill attempts to hold New Delhi to strict compliance with US policy towards "countries of proliferation concern" ― a category of states for many years at the centre-stage of US foreign policy, with one such nation at present under US occupation and two others on the US hit-list. Section 1(b)(5) will eliminate India's manoeuvring room with Iran, for example.

After adding eight separate conditions in its waiver bill to hold India to good conduct, the White House is encouraging Congress to attach riders of its own, as long as they do not entail a renegotiation of the deal. The already-inserted clauses ― one of which drags India through the backdoor into a treaty rejected by the Senate, the CTBT ― farcically attempt to make New Delhi accountable to the US government and legislature. The bill's test-ban clause actually imposes CTBT-plus obligations on India, tying its hands forever, with no exit option, and using the very phraseology the US opposed in the 1996 CTBT negotiations so as to have the loophole to conduct sub-kiloton and sub-critical tests.

The deal also holds major economic benefits for the US, with Dr. Rice voicing hope that it will create "3,000 to 5,000 new direct jobs in the US and about 10,000 to 15,000 indirect jobs in the US" just through nuclear commerce with India. In addition, US arms makers expect major Indian contracts, as underlined on March 2 by the Pentagon's unusually explicit statement hailing the nuclear deal for opening "promising prospects" for big weapon sales, "whether in the realm of combat aircraft, helicopters, maritime patrol aircraft or naval vessels." Lockheed Martin and Boeing are competing to sell 126 of their F-16s or F/A-18s in a potential $9-billion deal that would be India's largest arms contract ever.

In sharp contrast, the deal puts India squarely on the debit side of the ledger. There is no credit, only debit, for India on decision-making autonomy, indigenous capability, foreign policy and finance. Deal-related sweeteners will cost it many billions of dollars, as it impoverishes itself by importing uneconomical power reactors and buying arms it can do without. For a nation that budgeted a paltry $160 million for missile work and $425 million for nuclear research and development last year, such costly imports will be good news only for corrupt politicians and those who thrive on commissions and consultancies, including some strategic analysts, former military officers and ex-bureaucrats.

In the absence of concrete benefits they can showcase, the few in India hawking the deal have taken to selling dreams to the country. The main force behind the deal ― the PM ― has offered the nation only clichés and stock assurances straight from the boilerplate of bureaucratic homily. Each articulated hope sounds more like a wish tied to myth.

●Myth 1: The deal will end India's "isolation," end discrimination and allow it to take its rightful place on the world stage. Such wishful thinking cannot make dreams come true. If anything, it shows that the PM's foreign policy is guided not by reality but by the dream world he inhabits. The deal will not end discrimination against India or what the PM calls its "nuclear isolation." There will be no blanket lifting of the nuclear embargo against India. What the US has proposed is limited nuclear commerce with India, tightly regulated by its export-licensing requirements and subject to Indian "good behaviour." India won't get open access even to natural-uranium supply. It will only be able to import externally determined quantities of natural uranium for indigenous reactors under international monitoring.

With or without the deal, India will stay in a third aberrant category ― neither a formal nuclear power nor a non-nuclear nation, but a non-NPT state possessing nuclear weapons. The deal will only institutionalize India's status in the anomalous third category, even as New Delhi accepts NPT norms and extends full support from outside to a troubled regime that won't accept it as an equal or legitimate nuclear power.

●Myth 2: The way for India to meet its burgeoning energy demands is to import nuclear power reactors. The deal's very rationale is fundamentally flawed because generating electricity from imported reactors dependent on imported fuel makes little economic or strategic sense. Such imports will be a path to energy insecurity and exorbitant costs. The PM is seeking to replicate in the energy sector the very mistake India has pursued on armaments. Now the world's largest arms importer, India spends nearly $6 billion dollars every year on weapons imports, many of dubious value, while it neglects to build its own armament-production base. Should a poor India now compound that blunder by spending billions more to import overly expensive reactors when it can more profitably invest that money to commercially develop its own energy sources?

Even if India were to invest a whopping $27 billion dollars to increase its installed generating capacity by 15,000 megawatt through imported reactors, nuclear power will still make up a tiny share of its total electricity production, given that nuclear plants take exceptionally long to complete and the share of other energy sources is likely to rise faster. India could radically transform its energy situation if it were to invest such resources to tap its vast hydropower reserves ― a source that comes with no fuel cost ― and employ clean-coal and coal-to-liquids technologies to exploit its coal reserves, one of the largest in the world. Instead the PM wants India to subsidize the revival of the decrepit US nuclear power industry, which has not received a single reactor order in more than 30 years. The promise of nuclear power in the US has dimmed because of the unappealing economics of new nuclear plants ― a fact the PM turns a blind eye to.

Such is the capital-intensity of a nuclear plant that two-thirds or more of its costs are incurred up front, before it is even commissioned. And while the international price of coal has dropped over the last two decades, the price of uranium has tripled just in the past 18 months. Yet the itch to import reactors has been so irresistible that the PM signed a deal that actually compromises the defence of India and asks Indian taxpayers to fork out billions of dollars to put the nation firmly on the path to energy insecurity.

●Myth 3: Nuclear energy is clean. Official rhetoric has sought to portray nuclear energy as "clean" to help seduce public opinion. The proliferation-resistant light-water reactors (LWRs) that the deal allows India to import generate highly radioactive wastes. Although nuclear-generated power is free of carbon and greenhouse gases, the back-end of nuclear-fuel cycle is anything but clean, posing technological challenges and inestimable environmental costs.

Not only has America refused to adhere to the Kyoto Protocol's mandatory greenhouse-gas reductions, it persists with its egregiously high discharge of fossil-fuel effluents. With just 4.5% of the world's population, it emits 23% of the global greenhouse gases. And although India has no obligation under the current Kyoto Protocol to reduce its relatively moderate emissions (it ranks 139 in the world in per capita emissions), the PM wants his developing nation to make up for a wealthy America's disregard of the global environment. He told Lok Sabha on February 27, 2006: "While we have substantial reserves of coal, excessive dependence on coal-based energy has its own implications for our environment." Put simply, he wants India to import US reactors while the US burns more coal.

Before touting nuclear energy to be clean or seeking to import new US reactors, the least the government can do is to resolve the safety and environmental concerns arising from the accumulating spent-fuel at the US-built Tarapur nuclear plant. The US broke the 1963 civil nuclear cooperation pact with India by amending its domestic law to halt all fuel and spare-parts supplies. In spite of such a bald-faced material breach and the expiry long ago of the 1963 pact, India has continued to exacerbate its spent-fuel problem at Tarapur by granting the US a right it didn't have even if it had honoured the pact ― a veto on any Indian reprocessing of the fuel waste.

●Myth 4: Nuclear energy will reduce India's oil dependence . The truth is it won't cut India's oil imports. India does not use oil to generate electricity. In fact, petroleum is no longer used to propel electric generators in most countries. Even the US now employs only a small percentage of its oil supply to fuel its electricity-generating plants. Only standby generators for homes and offices in India use diesel fuel. Yet the PM has speciously linked the deal to "concomitant advantages for all in terms of reduced pressure on oil prices…"

In any case, India cannot correct its current oil reliance on the Persian Gulf region by fashioning a new dependency on a tiny nuclear-supply cartel made up of a few state-guided firms. While oil is freely purchasable on world markets, the global nuclear reactor and fuel business is the most politically regulated commerce in the world, with no sanctity of contract. Without having loosened its bondage to oil exporters, India is being yoked to the nuclear cartel.

●Myth 5: The deal paves the way for removal of all US technology controls against India. The most onerous technology sanctions India has endured for long are not in the nuclear realm but centre on advanced and dual-use technologies. Where export controls against India can be relaxed through executive action, such as on high technology or in the civilian space sector, the US has dragged its feet. But where congressional action is needed, it has concluded a nuclear deal, wringing a heavy price out of India. This shows that the US will use every export control it has in force as a bargaining chip against India.

Against this background, the PM has been unable to build a political consensus in favour of the deal, although he had publicly declared on July 20, 2005, that "we can move forward only on the basis of a broad national consensus." Spinning reality thus has become the favourite official pursuit, even as millions of dollars are being squandered to lobby US lawmakers to approve a deal that puts qualitative and quantitative ceilings on India's deterrent. By making India answerable to the US through unique, one-sided obligations, the deal makes a true strategic partnership with the US less likely.