End of Technological Apartheid

The Indo-US Nuclear Deal


Lt.Gen. Eric A. Vas

09 January 2007



After 1971, America began dealing with China not as an adversary but as a rival.  This strategy is the exact opposite of confrontation or containment and implies engagement.  While the US had confronted the USSR during the Cold War and had avoided trade and economic links with Moscow, it has become the largest trading partner of China and is heavily involved in the Chinese economy. China responded enthusiastically to this US strategy and embraced American investments on a massive scale.  They send their students in thousands annually to US universities.  This had indirectly persuaded the Chinese leadership to abandon Communism in economic terms. Today, Chinese Communism is only a cover for authoritarian rule by the Communist Party. US efforts now attempt to bring about change in China and make it accept democracy and abide by the rules of the international game.  The US hopes to bring China around through its relationships with Japan, South Korea and India.  Towards that end, Asia must have a balance of power.  The US initiative to help India to develop itself as a world class power is related to the creation of this balance of power in Asia in which all major economies will be interactively engaging with and not containing or confronting China.

The Indian government's response to US initiatives was positive.  Indian army, naval and air force units have begun carrying out joint military exercises; US officers attended Indian military training establishments and vice versa.  The US has offered to sell India F-16 and F-35 strike aircraft, PAC-3 missiles and net-work-centric web-face systems.  Americans began talks with Tatas, Reliance, Infosys, HAL, BEL and Defence organisations for manufacture, research and development.  In the civil sector, the US look for opportunities in border security and surveillance systems, air port security systems, the postal department, census and space.  The Americans visulaise business opportunities of over billion dollars in the coming decade. Many Indians oppose this growing Indo-American co-operation.  Underlying this timidity is an exaggerated fear of the US as the sole superpower. To think of the US as an all-powerful superpower able to impose it will on the rest of the world on every issue is a continuation of the Cold War mindset and does not represent the reality of today.   Many in India have not grasped this point, but US leadership appears to have done so.

The Americans have done their homework.  To stay competitive in business, they need three things.  First, increasing amount of brain power that could sustain American inventiveness; second, an ability to cut costs through outsourcing. third, a large market.   The emphasis is on India as a rising economic power, a potential third market of the world and a reservoir of brain power available to be tapped. Let us do an elementary assessment of the global balance of power some three decades from now.  China will have overtaken the US in terms of aggregate GDP.  Unless China becomes democratic it will face political uncertainties and instability.  India will be the most populous country in the world and be comparatively younger than China in age profile.  In terms of skilled manpower generation India will have an advantage.  It is also likely that the Indian population in the US will be many times what it is today and in all possibilities will have commensurate political clout. As US and China compete for a pre-eminent position, India as a third market power and the largest reservoir of scientific talent will be in a significant position to influence the result. In India, this issue has not been fully understood.

The main obstacle to meaningful Indo-US technical collaboration is the US Nuclear Non-Proliferation Act of 1978 under which the US imposed a ban on India after the Pokhran nuclear explosions. In 2001-2002 the Government of India approached the US to explore a nuclear bargain.  Since then, the two governments worked to not only enhance the standards of technology security in India to permit greater US-India trade in advanced dual-use items, but also interacted closely to codify some of India's informal practices in the area of export controls. 

Both nations agreed for the need to evolve a consensus outside the NPT to quarantine the new nuclear states. Today the risk of terrorists and non-state actors getting their hands on enriched fuel and manufacturing a crude nuclear explosive device cannot be ruled out.   In early 2004, President Bush unveiled a 7-point plan outside the NPT to deal with new nuclear challenges.  This included proposals such as the Container and Proliferation Security Initiatives [CSI and PSI] to tackle the possible transfer of weapons of mass destruction [WMD] by sea as also additional protocols to inspections by the IAEA.  India joined the CSI and supports the PSI India had already imposed a self-regulatory ban on testing further NW. It supports the UN plan for the universal capping and reduction of NW and the eventual control by a UN Agency of all residual NW and weapon grade fissile material.   Although India continues the overt development of next generation force projections and delivery technology, cruise missiles and a missile defence shield, it confirms that it merely displays this potential but will not weaponise.  India did not want to be called or treated as a NW power. 

The Weapons of Mass Destruction [WMD] and Their Delivery Systems [Prohibition of Unlawful Activities Bill 2005 was passed in the Lok Sabha in May.  The WMD Bill underlined the principle that India is, and must be seen, as a responsible nuclear power, and hopes to promote a political reconciliation rather than a confrontation with the world order. India had joined a US-led CSI and has made it clear that it is willing to join the international community in stopping the spread of NW technology.  The US has accepted that India has the ability to contribute to the new nuclear regime. These steps were initiated within the High Technology Co-operation Group [HTCG] and the Next Step in Strategic Partnership [NSSP].  Both paved the way for a subsequent nuclear agreement, which was not undertaken without proper spadework and careful consideration on both sides.

The 18 July 2005 Indo-US joint statement on civilian nuclear co-operation generated spirited debate in both countries.  This is not surprising given that it implications would be enormous not only for the bilateral context but also for the international community.  The Joint Statement is not an agreement per se but "codifies" the bilateral intent to co-operate in pursuing a sequence of discrete steps to make civilian nuclear energy available to India and will be pursued on essentially reciprocal lines

Among other things, the US agreed to work with India to ensure the latter's plan to separate it civilian and weapon-dedicated nuclear facilities is credible and verifiable.  The Bush Administration presented a plan to the US Congress and requested it to amend its National Non-Proliferation Act 1978 in order to permit civilian nuclear assistance to India.  The US also initiated dialogue with states party to the Nuclear Suppliers Group [NSG] to make a substantive "exception" to India such that members could engage in nuclear co-operation with India's civilian nuclear complex.  For India as well, the deal represents a net-positive situation.  It does not curtail its domain of decision-making regarding a weapons program.  It creates an international framework that can accommodate India's unique status and secures it access to civilian nuclear technology, which facilitates India's nuclear energy program.

The first stage of India's nuclear energy program comprised of 12 Pressurised Heavy Water Reactors [PHWRs] which generate about 2500 mw, a mere 2.5 per cent of the current national requirement with itself is growing rapidly.  The scope of scaling up operations with PHWRs remains very limited.  In the 2nd stage, the DAE plans to use fast breeder reactors [FBRs] which can process he spent [uranium] fuel from he PHWRs to create plutonium and residual uranium.  If successful this could generate up to 5,00.000 mw and vastly improve the energy situation.  But DAE has not yet been able to operationalise this model.  And only after the FBRs begin functioning smoothly would DAE be able to proceed to the 3rd stage of building Advanced Heavy Water Reactors [AHWRs]  which can use a mixture of thorium-uranium fuel. 

The July deal can provide critical additional resources to complement India's domestic nuclear energy options.  It has also committed Washington to securing India's membership and participation in the International Thermonuclear Energy Research [ITER] and Generation Four programs which seek to augment the current nuclear fuel cycle options and make them commercially viable.The "deal" will in effect place over 80 per cent of India's un-safeguarded fissile material under UN control.  India has agreed to separate its nuclear assets. 14 nuclear facilities are to be placed under IAEA safeguards.  Six facilities will continue to remain under India's control.

The US has recently doubled the H1-B visa quota to enable an increased inflow of technically skilled migrants.  We can expect that a larger number of talented Indians will move to America.  The US wants greater interactions between the armed forces, industrial and commercial sectors.  This is already happening. The Bush Administration is taking pains to ensure that political friends, opponents and world leaders are briefed so that the value of enhanced nuclear co-operation with India is understood.  The IAEA has welcomed the deal. On 27 June a bill renamed "US Nuclear Co-operation Promotion Act,2006" was passed by the House International Relation Committee with solid support from both Republicans and Democrats, after warding off many deal-breaking amendments. The Bill got similar overwhelming bi-partisan support when the Senate's Foreign Relations Committee on 29 June passed legislation endorsing the deal.

On 26 July, the US and India Nuclear Co-operation Act of 2006 was renamed the Hyde Amendment after the lawmaker who engineered it.   The US House of representatives passed the Bill by a massive 358-68 margin. The 100-member Senate passed the Bill by a 85-13 margin.  After the Senate vote a Committee examined the various versions and hammered out a single legislation.  US lawmakers on 8 December gave a final stamp of approval to the nuclear deal.  The President signed it into law on 18 December thus allowing fuel and technical know-how to be shipped to India even though it has not submitted to full international inspections.  The deal allows India to maintain a nuclear arsenal and obtain materials and technology for nuclear power plants.  New Delhi will no longer be locked out from high-end double-use technology.  This means that there are now fewer constraints to the expansion of India's technological ambitions.

President Musharraf has asked President Bush for a Nuclear Agreement similar to one made with India.  This was publicly refused.  During the Cold War, the US applied pressure on India through support to Pakistan.  Today, all political parties in the US want to lead Pakistan towards becoming a moderate Islamic state.  General Musharraf is considered necessary for that policy.  Though Pakistan has not yet dismantled its terrorist infrastructure, US policy is committed to a reduction in cross border terrorism in Kashmir and secessionists can no longer look for US support.  In the present situation the US needs Musharraf for its war on terrorism just as our Central Government needs tainted politicians to sustain its majority in Parliament.   The US is offering a measure of defence co-operation with India which will in a few years leave Pakistan far behind.  Musharraf knows that the changes occurring on the international scene are reducing Pakistan's utility for US global strategy

Some domestic critics of the agreement claim that India has sold out to the Americans. They warn that US is a hegemonic power and India can never have an equal partnership with it. Critics should not forget the past.  India was able to resist the entire international pressure between 1990 and 1998 when US was all powerful.  Since then, India has become a stronger economic and political power and has developed new linkages.  There is no way that India can be made to accept discriminatory controls over its nuclear or missile programs. There is no denying that the US has been a hegemonic power for the past six decades.  But the arguments advanced so far have demonstrated that the system is changing fast.  The US will have to accept the discipline of a global balance of power and a more norm-based international system in future.  Iraq is as much a new beginning for the US as it is for the authoritarian Islamic states.   Anyway, the US is more of a liberal democracy in its domestic policies than other major powers including India.

Those who talk of hidden costs involved in accepting the American offer have a valid point.  But they should not stop at just raising fears and walking away.  They should try and spell this out in long and short terms.  Our attempt should be to have an objective assessment of the US offer and to carry out a calculated cost-benefit analysis on it. Initially, the DAE were understandably unhappy that it would have to share its authority and supervision over the civilian-designated complex with the IAEA.  Moreover, once the veil of national security is lifted from these facilities, and their performance assessed on international benchmarks, DAE is likely to come across as having performed rather poorly.  This negative assessment has actually been made several times by the Atomic Energy Regulatory Board [AERB] and the Comptroller and Auditor General [CAG].  But now questions will be raised more openly about why a country whose first research reactor [Aspara] became operational in 1956, has not done more to reduce prices and increase power production in the past five decades?   Now the yardstick by which they will be judged will to be the power plants built in India by Russia, Canada, France and the US.

Though the Government assured the country that no external "interference" would be allowed in the nation's strategic programme, nevertheless, it was under attack from left allies and opposition parties when the deal was discussed in Parliament.  The Government frankly admitted that the US law contains certain 'extraneous and prescriptive ' provisions but explained that concerns over these would be addressed in a separate agreement with Washington.  The new US law was purely a domestic matter.  This now empowered the US Administration to negotiate a bilateral 123 Agreement with India, which will bind both countries.  The US President has given an assurance that the 123 Agreement will be entirely within the provisions of the joint statement of the PM and the President of 18 July 2005 and 2 March 2006.   Now it up to India to ensure that its concerns are met whilst arriving at a consensus on the draft 123 Agreement.  The government said that experts who oppose the deal for technical reasons will be consulted while drafting the Agreement.   After concluding the 123 Agreement with Washington, India will have to arrive at an understanding with the IAEA whose Chief, Mohammed el-Baradei, favours the deal.  Finally, India will have to convince the Nuclear Supply Group whose heavy-weights like Washington, Paris and Moscow are backing New Delhi

Perceptive Indians have begun to appreciate how perilous their country's condition currently is with respect to nuclear fuel supplies and power generation.  If India cannot secure new sources of nuclear technology and natural uranium, their capacity to produce nuclear power, let alone weapons-grade plutonium- would suffer greatly.  Apart from the nuclear aspects of this deal, a whole new sphere of advanced technology, which has till now been denied to India will be made available.   Surely, Manmohan Singh and Bush made the right choice in Washington on 18 July 2005, which marked the end of "technological apartheid" against India.