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India, US agree on nuclear accord; big economic gains seen

India, US agree on nuclear accord; big economic gains seen
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First Published: Sat, Jul 28 2007. 12 31 AM IST
Updated: Sat, Jul 28 2007. 12 31 AM IST
Even as both sides seemed to have different interpretations of critical fine print, India and the US said they have finally reached an accord that will end India’s isolation from the rest of the world in civilian nuclear energy and is likely to pave the way for serious ramp-up of business between American companies and Indian businesses.
While the actual accord—dubbed “1-2-3 agreement”—itself wasn’t made public, India claimed that the treaty was silent on the contentious issue of its future nuclear tests. But the US undersecretary of state for political affairs Nicholas Burns categorically said in a briefing in Washington that existing US law, which says any agreement will be cancelled if India were to conduct a nuclear test, will prevail.
Burns also revealed that the “turning point” in the negotiations was India’s offer to set up an alternative reprocessing facility of the spent fuel that would be under the purview of the International Atomic Energy Agency (IAEA).
Despite both sides hailing the deal, which has been in the works for a little over two years, hurdles—primarily political—remain on what has been a highly charged issue in India albeit one that is seen as quite esoteric to most Indians because of its complexity.
The text of the final agreement will have to be approved in an “up or down” vote in the US Senate. It will also be debated in the Indian Parliament during the monsoon session that starts on 10 August.
Issuing a joint statement here and in Washington simultaneously, Indian external affairs minister Pranab Mukherjee and US secretary of state Condoleezza Rice said the “historic” agreement would open the door for American and Indian firms to participate in each other’s civil nuclear energy sector.
“Civil nuclear cooperation between the United States and India will offer enormous strategic and economic benefits to both countries, including enhanced energy security, a more environmentally-friendly energy source, greater economic opportunities and more robust non-proliferation efforts,” the statement said.
Anil Kakodkar, chairman of India’s Atomic Energy Commission and a key player in the negotiations, said on Friday that the final text is “the best possible” and a “full reflection” of the March 2006 agreement between the two nations.
That agreement, on “nuclear fuel separation”, had determined the level of safeguards that can be imposed on nuclear plants in India after the bilateral deal is signed.
Kakodkar also sought to allay a key concern on the Indian side that the text may not allow India “reprocessing” rights to nuclear fuel. “Starting from reactors to reprocessing, all has been provided for in the deal,” said Kakodkar,?while refusing to provide more details.
Nuclear fuel that has once been used to generate power can be “reprocessed” to make it fit for use again. One concern on the US side was that advanced reprocessing rights would lead to non-civilian use of nuclear fuel after it is procured for civilian purposes.
“This deal is on civil nuclear cooperation and makes no particular reference to any detonation or test. We will come to that if there is any such event,” said national security adviser M.K. Narayanan. Foreign secretary Shiv Shankar Menon added that India’s strategic nuclear programme allows it to stockpile nuclear fuels, independent of the civilian-use arrangement.
“Let me make it clear once and for all—we are not using the treaty with the US as anexcuse to enhance any strategic military objective,” said Menon.
Over in the US, the Bush administration sought to assuage concerns raised by several US lawmakers, saying the terms of agreement was in the country’s “national interest” and right for addressing global non-proliferation goals. “We believe that this is the right deal for the US national interest, for our relationship with India,as well as for addressing our concerns about non-proliferation globally,” state department spokesman Sean McCormack said.
Strategic affairs analyst Brahma Chellaney, who hasn’t seen the text, said: “Though we should wait for the text, the provisions are clearly short of the assurances made by Prime Minister Manmohan Singh in Parliament. It seems India will not only embrace CTBT (Comprehensive Test Ban Treaty), but additional obligations as well.”
India will still have to go through three more stages that could take up to a year. In the first stage, they will seek a ratification of the deal from the IAEA. Thereafter, they will seek an endorsement from the 45-nation Nuclear Suppliers Group, which includes China—who so far has not signaled their position.
“Our expectation is for an unconditional, clean exemption (from the NSG). Dwelling on anything else is hypothetical at the moment,” saidMenon.
In terms of economic benefits, Indian utilities would be allowed to buy equipment, fuel and reactors from Fairfield, Connecticut-based General Electric Co. and Monroeville, Pennsylvania-based Westinghouse Electric Co. In exchange, the South Asian nation would open some of its plants to international inspections to ensure that the fuel isn’t being diverted for weapons. India, the world’s second fastest growing major economy, needs atomic power to supplement conventional energy resources and to fire idle electricity-generation plants. Atomic power now accounts for about 3% of the country’s total electricity production.
pragya.s@livemint.com
Bibhudatta Pradhan and Ashok Bhattacharjee of Bloomberg and PTI contributed to this story.
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First Published: Sat, Jul 28 2007. 12 31 AM IST