Monday, July 21, 2008

$100B Business at Stake in US-India Nuclear Deal

As the Indian parliament gets ready for a confidence vote this week, the fate of the government of Prime Minister Manmohan Singh and the US-India nuclear deal hangs in the balance.
The Indian government is pulling out all stops to win this vote to salvage the US-India nuclear deal. In addition to the Indian people, the international community and the nuclear suppliers group (NSG) are also watching the vote closely.

The NSG's interest lies in the estimated $100 billion worth of nuclear business in India over the next two decades. U.S. companies hope to capture as large of a share of that business as possible. Private studies suggest that if U.S. vendors win just two civil nuclear reactor contracts, they would create 3,000–5,000 new direct jobs and 10,000–15,000 indirect jobs in the United States, according to US International Trade Administration. Major nuclear plant manufacturers such as GE, Siemens, Urenco, Hitachi and others stand to gain from the consummation of the deal.

It has now been three years since the signing of the historic agreement between President Bush and Indian Prime Minister Manmohan Singh. During this period, political parties and media in India have been debating the merits and pitfalls of the agreement.

India has also asked the International Atomic Energy Agency to place the draft India-IAEA Safeguards agreement before its Board of Governors. After the board's approval, the U.S. will seek an exemption from the international Nuclear Suppliers Group that would allow the deal to proceed. The final step will be a vote in the U.S. Congress on the so-called 123 Agreement.

As the deal makes its way through the Indian parliament, the IAEA, the NSG and the US Congress, there is heavy lobbying taking place on all sides. The US nuclear suppliers lobby is actively pushing for passage in the US Congress, even if it requires a lame-duck session after the November elections. Some nonproliferation advocates in the U.S. have also stepped up their campaign against the deal. They claim the agreement will facilitate a new nuclear testing by India, and thereafter will allow India to upgrade its nuclear arsenal. Non-proliferation advocates have also argued that India could expel IAEA inspectors in the future and thwart the IAEA inspection regime.

The US legislation passed in 2006 -- the so-called Hyde Act -- that gave preliminary approval to the U.S.-India agreement, requires that Congress be in 30 days of continuous session to consider it. Congressional aides said that clock can begin to tick only once India clears two more hurdles -- completing an agreement with the International Atomic Energy Agency, and securing approval from the 45 nations that form the Nuclear Suppliers Group, which governs trade in reactors and uranium. Because of the long August recess, less than 40 days are left in the session before Congress adjourns on Sept. 26, according to the Washington Post.

India is said to be running short of uranium needed to fuel its reactors. It is anxious to win "clean" agreements with the IAEA and the NSG that would not result in fuel cutoffs if it decides to resume testing nuclear weapons.

Sen. John McCain, the Republican presidential candidate, is a strong supporter of the agreement, but Sen. Barack Obama, his Democratic rival, is more skeptical. During the congressional debate on the Hyde Act, Sen Obama added language in the bill limiting the amount of nuclear fuel supplied to India from the United States to deter nuclear testing. Though proliferation is a constant concern raised in the US, there has not been much discussion of the implications of this deal for other nations in the neighborhood: Pakistan, Iran and China.

Pakistan's nuclear fuel needs are currently very modest and they currently are met by China. China has promised to help Pakistan achieve its target of generating 8,800 MW of nuclear power by 2030 by speeding up the delivery of the six nuclear plants and supply the necessary fuel, according to various reports. At the same time, Pakistan is building a $1.2 billion facility to develop the capability to manufacture full-cycle nuclear fuel and power plants. The Iranian situation is currently very murky with the US and EU threatening sanctions if Iran continues to enrich uranium.

If India wins the IAEA and the NSG approvals that would not result in fuel cutoffs in the event it decides to resume testing nuclear weapons, it could easily bypass any US restrictions and obtain needed nuclear supplies from other nations eager to do business with India.

Here's a brief video clip with Dr. Leonard Weiss, an NPT expert, explaining the US-India nuclear deal:


Anonymous said...

Its insane to state that India could test a nuclear device again. There is a regular consensus that enough data is gathered from Pokhran II and scientist have to make do with simulation with super-computing mainframes.Anyway the nuclear apartheid can only last for 20 more years since thorium based capabilities will mature.India have infinite reserves of thorium (32% of world's thorium reserves). India would lose 1,00,000 crores of invested money in rectors if it go ahead with tests. Barack Obama has fliped-flopped again ;-) ..he say that he is "reluctant to seek changes in N-deal...and hope that deal will go through before the end of the year (something like that..)"
It is probable that Australia (as a Chinese proxy) or Canada or China itself will screw India up in NSG.
If China does that, it would be great in the sense that Govt could go open with public with its anti-China alliance.

Anonymous said...

Obama now supports the indo-us nuclear agreement.
But Australia,Canada or China directly could screw India up on nuclear apartheid regime. And about nuclear testing, it would be insane to test for 10 or more years apart from wasting multi-billion dollars of investment in building civilian reactors that would come under safegards, it would also kill programs like Ballistic missile defence,Phalcon AWACS delivery,LCA programe etc which have significant American inputs.


Riaz Haq said...

India, Israel and Pakistan are not signatories to NPT or Nuclear Test Ban Treaty, and for good reason. The US has signed Nuclear Test Ban but there has been talk in Washington lately to pull out of it. As the world changes, the circumstances change for each nation. So I would not be surprised if India decides to do nuclear tests sometime in the future. Never say never.

Obama continues to be a wild card. It's hard to say where he stands on any thing. His positions are quite fluid.

Riaz Haq said...

As President Bush lobbies for the US-India deal with the NSG (Nuclear Suppliers Group), Rep Ed Markey and Ellen Tauscher have written an Op Ed in NY Times opposing the loosening of certain NSG restrictions on India. Here it is:

Don’t Loosen Nuclear Rules for India
New York Times, August 20, 2008

IN the next day or so, an obscure organization will meet to decide the fate of an Indian nuclear deal that threatens to rapidly accelerate New Delhi’s arms race with Pakistan — a rivalry made all the more precarious by the resignation on Tuesday of the Pakistani president, Pervez Musharraf.

Nonetheless, President Bush is lobbying the Nuclear Suppliers Group, which governs international nuclear commerce, to waive its most crucial rules in order to allow the trade of reactors, fuel and technology to India. If the president gets his way, the Nuclear Nonproliferation Treaty — for 50 years, the bulwark against the spread of nuclear weapons — would be shredded and India’s yearly nuclear weapons production capability would likely increase from 7 bombs to 40 or 50.

India’s nuclear history is checkered at best, and New Delhi has been denied access to the international nuclear market for three decades. The reasons are well known: the country has never signed the nonproliferation treaty or the Comprehensive Nuclear Test Ban Treaty, it misused civilian nuclear technology to produce its first nuclear weapon in 1974, and it continues to manufacture nuclear weapons to this day.

Paradoxically, the Nuclear Suppliers Group was formed in direct response to India’s illegal 1974 nuclear test. Its central purpose is to ensure that no other country exploits foreign nuclear energy assistance to make a bomb, as India did. If the group accedes to President Bush’s dangerous request, countries such as Iran and North Korea would certainly use the precedent to their advantage.

The Indian nuclear deal threatens international security not only by undermining our nuclear rules, but also by expanding India’s nuclear weapons program. That’s because every pound of uranium that India is allowed to import for its power reactors frees up a pound of uranium for its bomb program.

Pakistan, with its unstable government and Al Qaeda sanctuaries, is already ratcheting up its nuclear weapons program in an attempt to keep pace with its regional rival. Just last month, the Pakistani government darkly announced that waiving the nuclear rules for India “threatens to increase the chances of a nuclear arms race in the subcontinent.”

Because changes to these international rules can be made only by unanimous agreement, every country in the 45-nation group has the ability and the duty to insist that this flawed nuclear deal be improved and to ensure that nuclear trade with India cannot benefit New Delhi’s nuclear weapons program.

Thankfully, there is an easy solution. The group can say yes to nuclear trade with India if two simple conditions are met. First, India must sign the Comprehensive Nuclear Test Ban Treaty, a step already taken by 178 other countries and every member state of the Nuclear Suppliers Group. After all, why should the group’s members grant India a huge exemption from the rules that they themselves are supposed to follow?

Second, India must agree to halt production of nuclear material for weapons. That doesn’t mean that India has to give up the weapons it has, or even that it cannot make more weapons with the nuclear material it has already produced. But by closing down its manufacturing of new plutonium and highly enriched uranium, India would prove to the international community that opening up nuclear commerce would not assist, either directly or indirectly, its nuclear weapons program.

This deal was foolish when Pakistan was relatively stable; with Mr. Musharraf gone, an arms race on the subcontinent would likely be more difficult to control. But even if the president continues to insist on the deal, he can’t do it alone. He needs the 44 other countries in the Nuclear Suppliers Group to acquiesce. And the group, created to prevent the further spread of the atom, would vote itself out of existence if it allowed India to have nuclear technology with no strings attached.

Edward J. Markey, a Democrat of Massachusetts, is co-chairman of the House Bipartisan Task Force on Nonproliferation. Ellen O. Tauscher, a Democrat of California, is chairwoman of the House Strategic Forces Subcommittee.

Riaz Haq said...

The latest media reports indicate that the 45-member NSG (Nuclear Suppliers Group) agreed to all the waivers for India. This was done after President Bush actively lobbied on India's behalf with countries such as Australia, New Zealand and Ireland who opposed granting special waivers to India. In effect, these waivers represent a set back for nuclear non-proliferation by giving India a carte blanche to build a vast nuclear arsenal, thereby sparking a hew, dangerous nuclear arms race in South Asia. It also undermines the US efforts to keep nuclear tech out of hands of the Iranians.

Riaz Haq said...

Here's a piece by Eric Margolis on US-India ties titled "Welcome to India, Obama Sahib":

While the western media fulminates against Taliban’s or Iran’s treatment of women, a leading British medical journal reports an estimated 40,000 Indian women are burned alive each year by their in-laws to grab their dowries. Infanticide of female children is endemic. But few in the west seem to care.
India is a giant with feet of clay. A senior western diplomat in unhealthy Delhi told me that at any given time, half his staff is ill with serious maladies. India is plagued by grave health and environmental problems.
India is really two nations: modern, dynamic, high-tech urban India of about 100 million, and antique, timeless rural Mother India of 1.1 billion souls.
To China’s annoyance, President Obama proclaimed in Delhi that India should have a permanent seat on the UN Security Council. India is becoming a great power and deserves a seat among the world’s big boys. But so do Germany, Japan, Turkey and Brazil.

India and its people, long disparaged by British racist jokes, are delighted to be called equals by the great powers. In fact, nuclear-armed India sees itself very much as regional hegemon of the entire Indian Ocean extending from East Africa to Australia.

The Bush administration’s deal with Delhi to sanctify and facilitate India’s nuclear weapons programs was thought at the time a clever move. But it dismayed the rest of the world, made a mockery of non-proliferation, and outraged the entire Muslim world, which has been blasting the US for hypocrisy by threatening war against Iran, which is under UN nuclear inspection, while playing nuclear footsie with India, which rejected all UN inspection.

India’s leaders are no fools and will not be easily pushed or bribed into a stronger anti-China and anti-Iran stance by Washington – Delhi maintains cool but correct relations with Beijing, but behind the wintry, trans-Himalayan smiles lies growing rivalry over Chinese-occupied Tibet, Indian-ruled Ladakh and Kashmir, their long, poorly demarcated Himalayan border (another gift of the British Empire), strategic Burma, and their intensifying nuclear and naval rivalry.

India claims China is trying to surround it, using Pakistan, Sri Lanka, Bangladesh, and Burma. The two Asian superpowers have been locked in a strategic and conventional arms race for a decade. In 1999, this writer postulated that the two giants would one day clash over their contested borders.

India will follow its own strategic and diplomatic interests – which are not synonymous with those of the United States.

Delhi has a long record of clever diplomacy that has isolated Pakistan and kept the world and UN out of the burning Kashmir problem, where 40,000–80,000 Kashmiris have died in a long independence struggle against Indian rule.

But the United States is now slowly being drawn into the dangerous Kashmir dispute – which triggered the 2008 terror bombing in Mumbai. Just look for example at the embarrassing revelations that one of the men involved in the 2008 Mumbai massacre was working for the US Drug Enforcement Agency.

The more Washington backs and arms India, the more its relations with China will deteriorate. Japan is also quietly building up India against China, to Beijing’s mounting anger.

The US could even be drawn into an India-China regional conflict. So caution is advised to US diplomats as they charge into the murky, tangled, poorly understood geopolitics of South and East Asia.

We also wonder if President Obama was briefed on India’s growing strategic arsenal.Delhi already has enough medium-ranged Agni-series missiles to cover potential foe China. Why then is Delhi spending billions to develop a reported 12,000 km ICBM whose only targets could be North America, Europe or Australia? ..

Riaz Haq said...

China is proceeding with the sale of 2 more civil nuclear plants at Chashma, amidst reports that US will not object.

ISLAMABAD: The US will not object to any civil nuclear deal between Pakistan and China if it abides by international rules of such agreements, and chances of the US making such a deal with Pakistan too cannot be ruled out, the American envoy here has said.

US Ambassador to Pakistan Cameron Munter said Friday that the US had recently made a civil nuclear deal with India and the chances of such a deal with Pakistan also cannot be ruled out, the Express Tribune reported.

Munter made the remarks while talking to media here.

Answering a question on the Pakistan's efforts to fight terrorism, he said the US wants Pakistan to launch a military operation in North Waziristan soon.

Munter said he would leave it to the Pakistan Army to decide when to launch such an operation.

The army has assured the US that they will take action in North Waziristan at the right time.

Pakistan has long been under pressure from the US to launch a military offensive in North Waziristan.

The foreign office, however, has denied being under US pressure to launch an offensive in the northwestern region which the US calls a "hub of militant activity", saying that the operation will be launched only if it is in Pakistan's "interest", the report said.

Last month, the daily reported that the government had authorised army chief General Ashfaq Parvez Kayani to take a final decision on when and how to launch a military operation in the North Waziristan tribal region.

Riaz Haq said...

Here's a BBC report on South Asia's reaction to nuclear crisis at Fukushima, Japan:

The nuclear disaster in Japan has prompted several countries to slow down and even suspend some of their nuclear programmes.

But South Asia - a region that hosts two rival states with nuclear weapons - has made no such move.

No nuclear plants in the region have been shut down nor are any expected to be suspended in the wake of the Fukushima crisis.

Instead, the Bangladeshi government announced on Tuesday that it would go ahead with its earlier plan to build a nuclear power plant with the help of Russia.

The Pakistani government has chosen to remain quiet although all three of its nuclear plants are said to face risks from earthquakes or tsunamis.

Major regional player India has announced a review of safety systems in its nuclear power plants but many believe there are no indications for a shift in its pro-nuclear policy.

"India's Department of Atomic Energy and the Nuclear Power Corporation of India will try to reassure the people of India that they are far more superior than everybody else in the world and this kind of accident would never happen in Indian facilities," read a statement by the National Alliance of Anti-Nuclear Movements, a civil campaign in India.

It also accused the authorities of admitting that one of the reactors in south India was built without factoring in the risks from tsunamis.
'No alarm'

Another activist group, the Coalition for Nuclear Disarmament and Peace said: "The (Fukushima) incident calls for a thorough review and transparent audit of the safety performance of all nuclear reactors in India, as well as of evacuation and other emergency procedures, which are known to be flawed."

In Pakistan also, few civil societies have raised the alarm.

"The aged Karachi nuclear plant on the coast is as much susceptible with as much serious consequence [as nuclear plants in] Japan because of the proximity of a dense population," said the Pakistan Peace Coalition in its statement.

"The two reactors in Chashma are known to be sitting on a number of criss-crossing tectonic plates."

Pakistan's leading newspaper, The Dawn, wrote in its editorial: "The government needs to reassure the people that natural disaster contingencies are in place at the nuclear units."

Riaz Haq said...

Here are some excepts from BBC's Soutik Biswas on anti-nuke protests at Jaitapur in India:

...By all accounts, the violence was allegedly instigated by a right-wing regional party which is struggling to regain lost political ground in the Konkan coastal area where Jaitapur is located. The upshot of such cynical politics: one 'protestor' dead when police fired on irate villagers, at least 20 wounded, a hospital damaged and passenger buses gutted by the mob.
This is tragic because there are much more significant and vexing issues at stake in Jaitapur. After the disastrous tsunami-induced meltdown in Fukushima, Japan, should India reconsider its push towards nuclear energy? (With the landmark nuclear deal with the US under its belt, India can now import reactors and nuclear fuel.) Will acquiring large tracts of land for nuclear power stations again set the government on a collision course with sections of the unwilling - and sometimes uninformed - farmers?
Critics like Praful Bidwai believe that India's nuclear energy drive will sound the death knell of precious ecosystems - six 1,650 megawatt reactors will be built at Jaitapur on the west coast, it is planned, in what would turn out to be the world's largest 'nuclear park'. They say the government has forcibly acquired farmland using a colonial law to build the plant. Mr Bidwai, who visited Jaitapur, writes that the nuclear plant will be situated on fertile farmland, not barren wastelands as the government would have people believe. Then there is the threat the plant poses to thriving fisheries. Officials say no local will be displaced from his land, although more than 2,000 people have had to sell parts of their land. So are the protests about better compensation for land, and guarantees about safety?

Most scientists I spoke to dismiss a lot of what the campaigners say, insisting that nuclear power is really the only option India is left with to meet its growing energy needs. An astonishing 400 million Indians continue to live in the dark, without electricity. "You have to choose the lesser evil - more carbon dioxide or the threat of radiation," one told me. Smoke-belching thermal power plants use the atmosphere as a "sewer" and impact climate change. Solar and wind energy cannot meet India's energy demands, they say. Ergo, nuclear power, they say, is the only sensible and clean option. That is why India is planning to set up some 30 reactors over as many years and get a quarter of its electricity from nuclear energy by 2050.

Scientists agree the government has to tread carefully in building consensus at the grassroots and while acquiring farmland to set up the nuclear plants - there is no room for forcible acquisition of land at unremunerative prices.

Then there is this shrill debate over the safety of the plant. Critics point out that the French-built reactor meant for Jaitapur has still not been approved by nuclear regulators worldwide. They say that the site is seismically hazardous - the area was apparently hit by 95 earthquakes between 1985 and 2005 - and since it will be built on the coast will be prone to tsunamis.

Scientists dismiss these arguments as naive and ill-informed. India, they say, will not buy these third generation reactors until international and local regulators clear them. India's nuclear regulators say that Jaitapur is in a "significantly low seismic zone" compared with Japan and Fukushima. Also, the reactors will be built on a cliff 82ft (25m) above the mean sea level. With its 20 reactors, India, scientists insist, has a good safety record. (There was a turbine room fire at a plant in 1993, and a sodium leak in another in 2000). "There have been no serious incidents. There has been no radiation leak. Our record is clean," one official said....

Riaz Haq said...

Here's an excerpt from a piece by Paul Leventhal, Nuclear Control Institute, about US's secret help that led to India's 1974 nuclear test, with the US being a proliferator:

At that time (1974), I was working on legislation to reorganize the AEC into separate regulatory and promotional agencies. I had begun investigating the weapons potential of nuclear materials being used in the U.S. Atoms for Peace program, both at home and abroad. The official wanted me to know there was no need to consider remedial legislation on nuclear exports because the plutonium used in India's test came not from the safeguarded nuclear power plant at Tarapur, supplied by the United States, but from the unsafeguarded Cirus research reactor near Bombay, supplied by Canada. "This is a Canadian problem, not ours," he said.

It took me two years to discover that the information provided me that day was false. The United States, in fact, had supplied the essential heavy-water component that made the Cirus reactor operable, but decided to cover up the American supplier role and let Canada "take the fall" for the Indian test. Canada promptly cut off nuclear exports to India, but the United States did not.

In 1976, when the Senate committee uncovered the U.S. heavy-water export to India and confronted the State Department on it, the government's response was another falsehood: the heavy water supplied by the U.S., it said, had leaked from the reactor at a rate of 10% a year, and had totally depleted over 10 years by the time India produced the plutonium for its test.

But the committee learned from Canada that the actual heavy-water loss rate at Cirus was less than 1% a year, and we learned from junior-high-school arithmetic that even a 10%- a-year loss rate doesn't equal 100% after 10 years. Actually, more than 90% of the original U.S. heavy water was still in the Cirus reactor after 10 years, even if it took India a decade to produce the test plutonium---itself a highly fanciful notion.

We also learned that the reprocessing plant where India had extracted the plutonium from Cirus spent fuel, described as "indigenous" in official U.S. and Indian documents, in fact had been supplied by an elaborate and secret consortium of U.S. and European companies.

Faced with this blatant example of the Executive Branch taking Congress for the fool, the Senate committee drafted and Congress eventually enacted the Nuclear Non-Proliferation Act of 1978. And the rest, as they say, is history.