Center for Arms Control and Non-Proliferation

U.S.-India Nuclear Energy Deal: Status and Update

by Leonor Tomero [contact information]

June 24, 2008

President Bush and Prime Minister Singh (March 2006). AP.

SUMMARY

The U.S.-India nuclear deal has been delayed since last summer, when India and the International Atomic Energy Agency negotiated a safeguards agreement. For almost nine months, the deal has been in limbo due to opposition from Indian political parties like Bharatiya Janata Party and the Indian Communists that oppose the deal. The Indian Communists, who see the deal as a threat to an independent Indian foreign policy, threatened to withdraw from the coalition government led by Prime Minister Singh if India signed the safeguards agreement.

So far, meetings within India's governing coalition have failed to produce an agreement. One more meeting is now scheduled for June 25. Time is running out in 2008 for the Indian government to sign the safeguards agreement, have the Nuclear Suppliers Group change international rules to allow nuclear trade with India, and then have both houses of the U.S. Congress approve the agreement.

The U.S. Congress approved the first phase of the deal in 2006 in what was called the 2006 Henry Hyde Act. This second phase of the U.S.-India nuclear trade agreement poses significant dangers for U.S. and international nuclear non-proliferation efforts and fails to uphold the non-proliferation requirements that Congress approved in 2006.

LAST DITCH EFFORT TO MOVE THE DEAL FORWARD

The Bush administration continues to pressure the Indian government to act on the nuclear deal in an effort to salvage what was to be one of President Bush's foreign policy achievements. Last week, U.S. Commerce Secretary Carlos Gutierrez said "Now India needs to make some tough choices...We believe it's essential to quickly implement the landmark civilian nuclear agreement and bring India into the international nuclear non-proliferation mainstream."

Undersecretary of Commerce of International Trade Christopher Padilla also stated earlier in June that "The benefits for India are clear, and we hope that India's government will choose to move forward as quickly as possible to fully realize the potential of this historic agreement."

Meanwhile an Indian official noted in mid-June that "Keen on finalizing the safeguards agreement with the International Atomic Energy Agency before Director General Mohamed El Baradei completes his term in July, the government will make its last ditch effort to convince the communists."

Despite the objections of opposition parties, Indian leaders are now seriously considering moving forward with the nuclear trade deal, including signing the safeguards agreement, even if such action results in early elections. A withdrawal of the Communists from the coalition government would result in early elections in November or December. Until now, Prime Minister Singh had been unwilling to jeopardize his ruling coalition for the nuclear deal. A final decision is expected next week after the June 25 meeting with the Indian Communists.

Responding to mounting pressure to move the deal forward, prominent Indian nuclear scientists criticized the deal, noting that uncertainties on an uninterrupted fuel supply guarantee and reprocessing rights remain and that India had made too many concessions.

LITTLE TIME LEFT FOR U.S. CONGRESS TO CONSIDER THE DEAL

Senate Foreign Relations Committee Chairman Joseph Biden (D-DE) warned in February that the deal must come before the U.S. Senate by June 2008 in order to win congressional approval this year. Last week, when asked whether the deal was dead, Biden said "I think it is, but not because of us."

Even if the deal moves forward in India and Prime Minister Singh finalizes the safeguards agreement, it will be difficult to implement the steps that remain. The Nuclear Suppliers Group would have to review and give its approval to allow changes in international rules governing the export of nuclear material and technology. An ad hoc meeting would have to be convened and at least two sessions would be required for NSG consideration of the changes.

A change in international rules would probably also include non-proliferation conditions similar to the ones that the U.S. Congress provided in the first phase of the agreement in 2006, such as a halt in nuclear trade if India tests a nuclear weapon, despite India's insistence on a clean exemption without conditions. A change in NSG rules is necessary before Congress could vote on the U.S.-India agreement.

The Bush administration would have to submit the agreement to Congress. Congress would then have the opportunity to hold hearings before a vote. U.S. law provides Congress with at least a 90-day (counted as days of continuous session of Congress) review period to consider the agreement (including a 45-day Committee review period). If the deal moved forward now, Congress would have to agree to forego this 90-day timeframe for consideration and instead take up the agreement in a very short timeframe as the target date for adjournment is late September. Even in the event of a lame-duck session, the 90-day review period would not be possible at this point.

COUNTRIES HOPING TO TAKE ADVANTAGE OF INDIAN MARKET

Several countries, including Russia, Japan, and France, are poised to reap the economic advantages of nuclear trade with India if India and the United States are successful in changing international rules. The French Ambassador to India noted this week that a Indian-French agreement "was technically ready." Prime Minister Singh noted recently that "This agreement, if it materializes, if it sees the light of the day, will open up new possibilities of cooperation, not only with the U.S. but all other nuclear powers like Russia [and] France, who are very keen that once we have this deal through, that India should become eligible for civil nuclear cooperation."

INDIA DEPENDENT ON U.S. URANIUM FUEL?

India may perceive that it depends on its ability to import U.S. fuel to meet India's uranium demand, especially in light of Australia's recent refusal to sell India uranium because India has not signed the Nuclear Non-Proliferation Treaty (NPT) or made any significant commitments to nuclear non-proliferation.

India has also approached non-Nuclear Suppliers Group countries, including Namibia and possibly Niger, about the possibility of importing uranium. This option could allow India to circumvent international NSG rules against the transfer of uranium to non-NPT signatory countries.

DEAL WOULD WEAKEN NON-PROLIFERATION AND FUEL AN ARMS RACE

Importing U.S. fuel would free up limited Indian uranium to be used in its military program and thereby allow India to significantly increase its nuclear weapons production. K. Subrahmanyam, former head of the India's National Security Advisory Board, stated that "Given India's uranium ore crunch and the need to build up our minimum credible nuclear deterrent arsenal as fast as possible, it is to India's advantage to categorize as many power reactors as possible as civilian ones to be refueled by imported uranium and conserve our native uranium fuel for weapons grade plutonium production." Pakistan is likely to match India's expanded nuclear weapons capability, exacerbating a nuclear arms race in the region.

Prime Minister Singh has repeatedly reiterated India's refusal to sign the Comprehensive Test Ban Treaty, even if other countries ratify it, stating that "Despite the fact that we are not a signatory to the NPT, and we have also said that if the CTBT came into being we will not sign it, there is no pressure from the U.S. on India to sign the NPT or any other international arrangement ... to enter into nuclear cooperation for civil energy."

LIKELIHOOD THAT DEAL WILL COME UP NEXT YEAR

The question remains about the future of a civil nuclear agreement between the United States and India under the next U.S. administration.

In 2006, Sen. Barack Obama voted for the U.S.-India nuclear deal, but he also voted in favor of important non-proliferation amendments including requiring India to end military cooperation with Iran. He also successfully proposed an amendment in the Senate Foreign Relations Committee adding a "Sense of Congress" to the Senate bill that the United States should not seek to facilitate or encourage the continuation of nuclear exports to India by any other party if such exports are terminated under U.S. law. This provision was ignored in the U.S.-India "123" agreement and the United States committed itself to help India seek alternative suppliers if U.S. exports to India are disrupted. In addition, he offered a successful amendment (adopted by voice vote) during the floor debate to include a statement of U.S. policy that any nuclear power reactor fuel reserve exported to India for use in safeguarded civilian nuclear power plants should be commensurate with reasonable reactor operating requirements in order to avoid potential stockpiling of nuclear fuel. This provision was also ignored in the U.S.-India "123" agreement, which allows India to build up a "strategic reserve" of fuel.

Sen. John McCain has stated that he supports the "U.S.-India Civil Nuclear Accord as a means of strengthening our relationship with the world's largest democracy, and further involving India in the fight against proliferation. We should engage actively with both India and Pakistan to improve the security of nuclear stockpiles and weapons materials, and construct a secure global nuclear order that eliminates the likelihood of proliferation and the possibility of nuclear conflict." He did not vote for any of the non-proliferation amendments.