The US may have no nuclear trade with India

Known_Unknown

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The US may have no nuclear trade with India

August 21, 2009 13:05 IST

The US may have no nuclear trade with India: Rediff.com news

Lucrative nuclear trade with India, including supplies of reactors, was among the obvious reasons for the Bush administration to think in terms of offering India a special dispensation for full civilian nuclear co-operation.

Varying assessments of the massive increase in jobs in the United States on account of the expected trade in equipment were made. These projections went a long way in vetting the appetite of the industrial sector in the United States and in aggravating the suspicions in the non-proliferation lobbies.

The enthusiasm for the nuclear deal by the US-India Business Council (USIBC), consisting of the big players in India-US trade was attributed to the lure of nuclear trade with India. The USIBC engaged professional lobbyists in Washington to promote the deal on the Hill and elsewhere and there was considerable jubilation in it when the deal was signed.

In India too, the presumption was that significant nuclear trade with the US would follow the deal. Although experts knew that the US had no ready reactors to sell, it was believed that the US industry had already begun to fabricate reactors, using old technology to capture the Indian market.

The US insistence on strict regulations on nuclear trade and its reluctance to give assurances of perpetuity of supplies were seen as mere ploys to get the best business terms for nuclear trade. The argument was that the US would not sacrifice business opportunities for the sake of non-proliferation objectives.

Why should the US work so hard to secure Nuclear Suppliers Group (NSG) waiver for India merely to facilitate supply of reactors by Russia [ Images ] and France [ Images ] to India?

There were whispers in India during the negotiations that we should be Machiavellian in our approach to the United States. Some suggested that India should go along with the US conditions till we obtained the necessary clearances and then not place any orders in the US if the conditions of supply were not favourable to us.

The natural reaction of the US side was to extract a Memorandum of Understanding from India that we would seek to secure a significant percentage of our nuclear supplies from the US. It was also insisted on that India should earmark two locations for the installation of US reactors in India.


The Obama [ Images ] administration has maintained this position and one of the trophies that US Secretary of State Hillary Clinton [ Images ] carried back from India was an assurance on locations for American reactors.

But the latest indication from Washington is that the US may not be interested in supplying nuclear material and reactors to India under the new dispensation. This is emerging as a matter of policy as well as a practical measure. President Obama does not want to stand in the way of the implementation of the 123 Agreement, but he is sensitive to the criticism that he is willing to dilute his commitment to non-proliferation for the sake of commercial advantages.

He has, therefore, embarked on a path to do the minimum necessary to let the deal run its course without the US itself contributing to the growth of the nuclear strength of India. He wishes to remain committed to the universalisation of the NPT, while pursuing the vision of a nuclear weapon free world in the long term.

The Washington move in G-8 on enrichment and reprocessing should be seen in this context. While the discussions on reprocessing, as provided for in the 123 agreement, will proceed, supply of equipment and technology in the sensitive areas will be ruled out. The US will also work for a gradual revision of the NSG consensus to put sensitive technology beyond the reach of India and others.

Nor will there be iron glad guarantees of perpetuity of supplies. The US understands that an inevitable consequence of this strategy is that the US will not be able to supply any nuclear material to India at any time. This fact is being accepted as a reality and as a virtue. It will demonstrate to the world that the US is serious about its non-proliferation protestations.

The new men and women in charge of non-proliferation in Washington do believe that the nuclear deal is not in the interest of non-proliferation and they want to curb it to the extent possible without appearing to back off from it.

The US is also reconciled to Russia and France supplying fuel and equipment under the terms of the NSG waiver. It may not be averse to indirect participation in the French deals, if such opportunities arise, but it is gradually preparing the industry to close their options to open nuclear trade with India.

The compensation that the US expects is in terms of defence deals with India, which have as much potential, if not more, for job creation and overall growth in trade. The US has, therefore, been diligent about pursuing the end user agreement, without which defence deals would not be possible under the US laws.

The US had no doubt that this would be clinched as India had agreed to have similar agreements in the past. Compared to the legal rigmarole that the industry would face in the case of nuclear supplies, the defence formalities are not difficult to complete.

Defence supplies will meet the needs of a vibrant industrial complex, which cannot sustain without exports, while nuclear trade regulations in the US are too complicated to be tackled. The choice, therefore, is clear for the US policy makers.

As for India, no tears will be shed for loss of unreliable supplies from the US as long as the other suppliers keep their commitments.

The new strategy in the US will mean the emergence of tough choices for India in the years ahead. Once the US is out of any obsession with the attractions of nuclear trade with India, it will be more direct in pursuing its non-proliferation objectives with India.

When the Comprehensive Test Ban Treaty (CTBT) and the Fissile Material Cutoff Treaty (FMCT) are mature for ratification by India, the pressure on us will be very great indeed. There will be no industrial lobby to shield India at that time.

If the US is willing to give up its nuclear trade with India and the China factor is diminishing, what other factors will make it possible for the United States to sustain the deal?

Two theories have surfaced in recent days. One is a cynical view that the deal was just a lollipop offered to India to compensate for the massive supply of arms to Pakistan, which was already on the anvil during the Bush era.

India could hardly complain as the beneficiary of a waiver on nuclear matters when the US steps up military cooperation with Pakistan. This theory assumes that President Bush had the foresight to anticipate the Af-Pak crisis.

Another theory is that the real reason for the deal was that the US wanted a massive infusion of Indian nuclear technicians into the country in the next few years, when the US unveils its own plan to reduce dependence on foreign oil. By offering India the deal, the Bush administration was simply setting up a nursery of nuclear scientists, who could be transplanted to the US at the appropriate time. This may be far fetched, but the theory exists.

India must brace itself for a new round with the US, not only on the unfinished business of the nuclear deal, but also on the new dimensions emerging in the thinking of the Obama team.


T P Sreenivasan, a former member of the Indian Foreign Service, was India's ambassador to the United Nations, Vienna [ Images ], and governor for India, International Atomic Energy Agency, Vienna.
 
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as long as the Russian and French deals are allright ,this is for the better. Why would we sign NPT and CTBT if there is no deal with the Americans??
 

NiketRC

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It will be their loss. For business russians , french are EverReady .
 

hit&run

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1.China factor!!!!!!!!!!!!!!!!
2.Barack Obama factor!!!!!!!!!!!
 

hit&run

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the deal is on no doubt, there was and is a very strongly lobby pledging heaps of dollars from day one, just to make it ineffectual(short term) and to raise suspicion in the minds of participants including Democrats. Business runs on confidences this what they are targeting now. what Indians lack is proactive pursuance of such important deal through and through and underestimating enemy once the deal was signed. Above article is not a surprise but the by product of such developments
 
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HR the hesitation is from the fact that Bush gave us a deal that we agreed upon and signed and now Obama is trying to give us a different deal than what was signed and passed by congress under Bush.
 

Daredevil

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Good riddance. American nuclear technology is not very great either.
 
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US is offering reactors; USA has not built in decades ,but the real reason for the deal was for FUEL
and nothing is clear about that even after finalizing the deal ,and all these years.
 

fulcrum

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Good riddance!! The U.S commercial nuke reactor tech is so old it has grown cob-webs. French and Russians are more than enough and have no strings attached.
 

ppgj

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the democrats have always been dogmatic when it comes to nuclear issues.
 
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John

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GE's 1500MW and Westing house's 1100 MW reactors have been sold in many countries... just because US hasnt put a reactor on its soil for year doesn't mean US companies havent done anything..they have been selling reactors to Japan, China and US is building some too. US reactors are cheaper than French reactors which are the most expensive. Either way US companies will come, Hillary on her trip also looked at some proposed nuke sites...100 billion is a lot..and US govt. can't defy the powerful lobbies, if Obama comes in between some one will have him shot...just for the oppourtunity.100 billion goes beyond any person or president.
 
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India, U.S. Announce Nuclear Reactor Deal

U.S. Secretary of State Hillary Clinton formally announced yesterday that firms from the United States would build two nuclear reactors in India, Agence France-Presse reported (see GSN, July 20).

Indian Prime Minister Manmohan Singh told Clinton in New Delhi that approval had been given for construction of facilities in the Indian states of Gujarat and Andhra Pradesh. The work would be carried out under a deal in which India gained access to U.S. nuclear materials and technology in exchange for allowing international monitoring of its civilian nuclear facilities (see GSN, Oct. 14, 2008).

The projects would "facilitate billions of dollars in U.S. reactor exports and create jobs in both countries as well as generate much needed energy for the Indian people," Clinton said.

Since being freed from international restrictions on trade in sensitive materials, India has also signed similar agreements with France and Russia. India possesses nuclear weapons but has not joined the Nuclear Nonproliferation Treaty (Lachlan Carmichael, Agence France-Presse/Google News, July 20).

U.S. companies could reap $10 billion from sales of nuclear power facilities to India, the Associated Press reported (Robert Burns, Associated Press/Google News, July 20).

Clinton and Indian Foreign Minister S.M. Krishna also yesterday issued a joint statement addressing nuclear nonproliferation and other issues, the State Department said.

"India and the United States share a vision of a world free of nuclear weapons. With this goal in sight, Minister Krishna and Secretary Clinton agreed to move ahead in the Conference on Disarmament towards a nondiscriminatory, internationally and effectively verifiable fissile material cutoff treaty. India and the United States will also cooperate to prevent nuclear terrorism and address the challenges of global nuclear proliferation. A high-level bilateral dialogue will be established to enhance cooperation on these issues," according to the statement (U.S. State Department release, July 20).

NTI: Global Security Newswire - India, U.S. Announce Nuclear Reactor Deal
 

roma

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No big problem . IN fact it is the US companies which stand to lose . India already has the nsg waiver , even pakistan without such a waiver is negotiating with both france and china for defacto approx same benefits which the nsg waiver purports to give india. General electric and other nuclear equipment manufacturers were lining up for business, Well if their govt wont allow them to participate , other countries will. It is the same as the sanctions which bill clinton placed on india after the pokhran 2 , later to find theat other countries made up for the deficit and the sanctions hurt US companies more than depriving india of anything.
 

kuku

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We should look for trade with France, they are the ones running a very successive nuclear energy program.

And probably send USA a big box of Kaju Barfi for clearing the way to trade....
 

ajay_ijn

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guyz, generally DRDO is criticized because failure to indigenize the weapon systems but then how can DAE explain the need to import reactors paying billions of dollars even aftering having nuclear R&D program for nearly half a century and active support from govt.

its not that we don't have reactor technology. DAE does talk about developing and constructing 700 MW PHWR reactor units in various locations. we may have shortage of uranium but we have problem with constructing enough uranium powered reactors too?
 

NSG_Blackcats

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Our requirement was NSG waiver and we got it primarily because of US support. Now it is up to Obama administration whether they allow US companies to do business with India or not. The only looser here will be American companies.

Russia will be always with us as in the past. Now we have signed nuclear deal with France. [France derives over 75% of its electricity from nuclear energy. This is due to a long-standing policy based on energy security. France is the world's largest net exporter of electricity due to its very low cost of generation, and gains over EUR 3 billion per year from this. France has been very active in developing nuclear technology. Reactors and fuel products and services are a major export. It is building its first Generation III reactor and planning a second. Link]

So now it is for US govt to decide. India is in a Win Win situation.
 

ajtr

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India moves on U.S. nuclear deal with new law

NEW DELHI, March 2 (Reuters) - India's parliament will debate over the next month a new law to limit nuclear firms' liability in the case of industrial accidents, a move crucial for U.S. firms to tap into India's estimated $150 billion nuclear market.

Though the bill faces some political obstacles, particularly from the communists, Indian officials and analysts say it will be endorsed because the government had approached the top opposition party and been assured of its support.

"The political managers of the government have reached out to the opposition and discussed the importance of this bill,

especially in the context of a possible visit by (U.S.) President (Barack) Obama to India this summer," said Robinder Sachdev, president of Imagindia Institute, a New Delhi-based independent think tank.

India's government has offered to tender construction of two nuclear power plants, a business opportunity worth $10 billion, to U.S.-based firms such as General Electric Co (GE.N) and Westinghouse Electric Co, a subsidiary of Japan's Toshiba Corp (6502.T).

But the liability issue has delayed things, putting U.S. firms at a competitive disadvantage over Russian and French companies whose accident liability is underwritten by their governments. The Russian and French have already been awarded contracts.

The 2008 U.S. deal ended the nuclear isolation India had experienced since its 1974 atomic test and gave it access to U.S. technology and fuel, while also opening up the global nuclear market to India.

Two Indian ministers said permission had been sought from the speaker of parliament's lower house to introduce the nuclear bill in the budget session now underway, which runs through May 7.

"The bill will be ratified I think," a minister who asked to remain anonymous told Reuters.

While the government has a majority in the powerful lower house, it needs the support of the opposition Hindu-nationalist Bharatiya Janata Party (BJP) to ratify the bill in the upper. The bill has been cleared by the cabinet.

Other smaller procedural hurdles remain, such as New Delhi and Washington agreeing a fuel reprocessing pact, after which India will have to sign up to a global convention on nuclear liability.

The issue is sensitive in a country where a gas leak in a Union Carbide factory killed about 3,800 people in 1984, one of the world's worst industrial disasters.

The bill will cap the accident liability of foreign contractors and supplier companies, including those from the United States. The liability of a nuclear reactor operator is likely to be pegged at about $650 million.

India's nuclear sector is state controlled.

The South Asian nation, which relies on imported oil for some 70 percent of its energy needs, says the U.S. nuclear supply pact will help feed energy demands in its expanding economy, while helping combat global warming linked to fossil fuel emissions.

It could also help double nuclear power's share in India's electricity grid to 5-7 percent in the next two decades. (Additional reporting by Nigam Prusty; Editing by Alistair Scrutton and Jerry Norton)
 

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