Reprocessing arguments

The G-8 statement on non-proliferation does not take away the core benefits of the India-US nuclear deal

Don’t blame yourself if you have difficulty in navigating through the jargon, subtext and the writers’ agenda in the return this week of the India-US nuclear deal into the media limelight. But before you subscribe to any of the conclusions that reporter-commentators, opposition leaders and incumbent ministers want you to, take a step back and consider what the deal is about. (See A good deal, but bad politics, from August 2007)

The deal—which itself comprises of the bilateral agreements between India and the US; US domestic law in the form of the Hyde Act; and the multilateral “clean waiver” at the Nuclear Suppliers Group—allows India to import foreign reactors and nuclear fuel for generating electricity. These reactors and fuel supplies will be under an international inspection regime (called ‘safeguards’) under the International Atomic Energy Agency, which ensure that they are not used for producing weapons.

This means two things: first, provided the domestic regulatory environment is liberalised, it will be much easier for India to address the huge energy shortage by exploiting nuclear power. And second, it will free up domestic and foreign non-NSG sources of nuclear fuel for use in the weapons programme.

There is nothing in what the G-8 leaders said earlier this week that will change this. But wait, didn’t they, as Siddharth Varadarajan argues,—at the behest of the Obama administration—call for a ban on the transfer of enrichment & reprocessing (ENR) technology to India, even to safeguarded civilian facilities? Yes, but it doesn’t really matter.

It only means eight of the 45 countries of the NSG have agreed to implement a draft of a text that the NSG has not yet agreed to. The NSG is a cartel, not a treaty, and its agreements are non-binding on its members. The G-8 is a loose group, not even a cartel, less a treaty, and its agreements are non-binding on its members. France and Russia are aware that the United States disadvantaged itself as a nuclear supplier to India by hobbling itself with the Hyde Act. Are they likely to sign away a long-term competitive commercial advantage for the sake of a lofty principle? Unlikely—the prisoners’ dilemma is in India’s favour. But what if they do?

Well, it means that the fuel for civilian nuclear reactors will have to be sent back to reprocessing facilities abroad. While this might change the price of the fuel—and affect the competitiveness of the supplier of that fuel—it does not disturb the security of fuel supply.

Since India has its own indigenous reprocessing technology, the ‘ban’ on ENR exports to India, were it ever to materialise, does not affect the ability to produce fissile material for the nuclear arsenal. Even Mr Varadarajan admits that India is “technologically self-sufficient in reprocessing and enrichment technology” and its inclusion in the India-US nuclear deal was “matter of principle, positioning and ‘paisa’.” (Actually, the real problem with respect to reprocessing is not the G-8 or NSG rules, but rather, the Indian government’s lackadaisical attitude towards investing in new reprocessing facilities.)

So it turns out that even in the worst case—if the G-8 countries decide to overturn bilateral agreements, voluntarily give up their competitive advantages and prevent others from doing so—India’s energy security and nuclear programme will remain substantially unaffected.

Why the outcry then? Mr Varadarajan is right on two counts: the US government will do what it must to protect its interests, and the Indian government can’t afford to be complacent.

But unless you’ve been living in a cave you would have guessed by now that Barack Obama does not have the same view on India as his predecessor did. You will also know that Mr Obama intends to take the old arms control and non-proliferation route to nuclear disarmament. This means that the old alphabet soup of CTBT, FMCT and NPT is back on the table, and the G-8 decision is an early sign of that. Disagreements and differences of opinion are on the cards, but India is in a much better position to deal with these because of the nuclear deal, than it would have been without it.

12 thoughts on “Reprocessing arguments”

  1. Given the other factors surrounding the nuclear deal (reviving the US nuclear power industry, other military purchases by India), it seems odd that the US government has chosen to burn its bridges. As it is, there was little progress in terms of US companies being chosen as partners for nuclear fuel supply by NPCIL & other Indian organizations which were mainly looking at Russia & France. This development could make these companies even more wary of the USA!

  2. About time somebody wrote a rebuttal to all the unnecessary noise kicked up by Mr. Varadarajan, politicians and other commentators w. r. to the G-8 declaration. The Indian government, as usual, and as in the past w. r. to the Indo-US N-Deal, has proved completely inept at alleviating concerns through cogent and detailed arguments.

  3. Now we are down to “core issues!”

    The point is why bring it up now and tag NPT to the proposal. Surprising you dismiss G8 – the most significant members of NSG. Will the rest do anything without G8 giving permission? I doubt it.

    Wasn’t the whole point of this deal access to new technology along with material. If there are any more things not explicitly agreed and signed upon, guess which way they will go now!

    So much for Strategic Partnership.

  4. @chandra,

    ENR is one small piece of the overall benefits that might be denied to India. India has its own ENR tech.

    You mean you took the words ‘strategic partnership’ seriously? We have declared strategic partnerships with all and sundry, including with China.

    Storm in a saucer, dude, storm in a saucer.

  5. Udayan, you are right about strategic partnership…but why was ENR denied?

    Even thought it’s small piece, does it make sense? It wasn’t that our “other” strategic partner proposed it. It just shows the dynamics of the relationship between the two nations. For example, is Manmohan Singh proposing talks with Paki soon after they release LeT’s Saeed and before the blood dried in Mumbai all by himself or because the soon to be visiting foreign sec has something to brag about about the peace process.

  6. No nation will willing part with technology which is considered “dangerous” from their point of view. The Non Proliferation Ayatollahs in the USA equate Uranium Enrichment with building a bomb, which is why any mention of a civilian fuel cycle that uses ENR causes the non-proliferation experts to start throwing their loaded diapers on the unsuspecting public. Jimmy Carter shut down US’s nuclear energy route because of this paranoia and now this Obama is trying to continue that same tired policy and trying very hard to roll back the hard work done by the previous Bush Administration that saw this deal through. It is clear now Ms. Condoleeza Rice is a hard-core pragmatist unlike the current theological/ideological “non proliferation” crowd in Obama’s administration, which includes Obama himself. The only people who will lose a lot of money from all this will be the USA.

  7. The earlier claim in favor of the deal was that it signaled a strategic relationship with Uncle Sam. The new argument pretty much seems to be abandoning this line.

  8. If we really want an honest dialogue on the topic, it might do well to answer as to why MMS cut the Atomic Energy Budget by 40% in 2008 and why in spite of his statements about a lack of supply (and nuclear being the future), India actually has enough nuclear fuel for all its facilities for decades.

    If we really want india to be self-sufficient when it comes to energy, it must invest in renewable. Nuclear, whether uranium or thorium based is harmful to the environment (whatever one may say about positive impact on climate change) and is detrimental to the health of people in surrounding areas. Its real benefit is strategic, and as brahma chellaney pointed out the P-5 only have token “audits” by the IAEA, india has opened itself to permanent and irrevocable audits “in perpetuity:–and all the espionage that goes with it. while one may argue that it is only civilian installations, one must remember that all strategic programs rely on cooperation between both, which is why the P-5 retain the right to reclassify facilities on a whim. India did not. Moreover, all the cutting edge nuclear technology being developed in civilian facilities is then opened up to outsiders…

    With due respect to Mr. Pai, whose work on other topics I enjoy
    reading–esp those by my namesake, I’m afraid this post and its predecessors are absent the details needed to even begin to address the concerns raised by brahma chellaney, bharat karnad, and a.n. prasad.

    Indeed, as they noted, this deal actually leaves india in a weaker position to deal with the alphabet soup of nonproliferation treaties, since, as with the deal, the goal posts will continue to be shifted while india is hobbled with expensive LWRs and an increased need for nuclear fuel for which its PM has hobbled indigenous sources, for which of course, only the NSG can authorize and deny supply. As part of the deal, MMS agreed to shutdown the recently refurbished CIRUS reactor which provides india with strategic fissile material. With this shutdown, what kind of position would india even begin to have with the FMCT? FYI, all the p-5 are modernizing their arsenals, and pakistan has doubled-down on nuclear production (and probably already has surpassed india’s arsenal), all while this government is talking disarmament…

  9. We recently signed a deal with Kazakhstan on U imports. And kazakh isn;t an NSG member. The onerous post ENR accounting rules won’t apply to Kazakh maal, I hope.

  10. that doesn’t mean kazakhstan can’t be subject to pressure from the nsg in order to cutoff supply if india gets uppity…

    ultimately, the wisdom of investing in mid 20th century technology to meet 21st century energy needs make zero sense, when the developed world (and its oil companies) is heavily investing in renewable energy and when your “honest politician” of a pm cuts the atomic energy budget by 40% anyway. it makes even less sense when india is forced to open up its nuclear program to onerous safeguards and audits that prevent it from developing a true megaton deterrent needed to protect itself from its myriad of nuclear enemies. india may nominally retain the right to test (which it needs to since the hydrogen test in 98 failed), but the developed world retains to right to withdraw supply (which it would) and pressure others (which it definitely would), ostensibly including kazakhstan, to do the same. so your right in theory is not a right in reality…and the ENR line that kakodkar, singh et al trumpeted was always a pile of junk meant to make the deal seem like a winner. india will not be getting any cutting edge ENR technology…

  11. btw, kazakhstan is a member of the NSG: sorry sud, looks like those U-imports won’t be guaranteed after all…

    to all of you still trumpeting india’s “win” and it’s amazing “clean waiver” against all odds. just remember, diplomacy is the art of letting the other side have your way…

  12. India has signed bilateral agreements with countries like France and Russia that are in line with NSG’s rules, as approved for India. The first batch of Uranium for India’s plants has already started coming in from France and Russia. The equivalent agreement with the USA was trashed by the US’s own hand, in fact, by Obama himself, as the 123 bill made its rounds in the US Senate. It is not like signing the agreement is equivalent to doing a ton of work that needs to be done to realize the local 3-stage program. Acquiring capabilities, skilled workforce, and knowledge to manufacture high-tech items has to be the highest priority for India.

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