Home/ Politics / Policy/  How the nuclear deal thawed India-US relations

New Delhi: On 18 July, India and the US mark a decade since the two countries decided to join hands in the area of civil nuclear cooperation marking a paradigm shift in relations and laid the foundations of a truly strategic partnership. The deal, which was finally signed on 10 October 2008, injected warmth and vitality into an otherwise cold relationship.

Seen on the side of the former Soviet Union during the Cold War years, the world’s oldest and largest democracies were then more commonly known as “estranged" than “engaged" democracies. With the US seen as aiding India’s arch rival Pakistan—militarily as well as economically, sometimes to India’s detriment—the two countries seemed to have little in terms of strategic commonalities, apart from some cooperation in the civil nuclear power sector in the 1960s.

“What the deal did was (when it was signed in 2008) to remove decades of mistrust between India and the US," said C.U. Bhaskar, a foreign policy expert with Delhi-based think tank Society for Policy Studies. “It removed the estrangement, and drained negativity from the relationship," he said.

It was on 5 July 2005 that then US president George W. Bush and then Indian prime minister Manmohan Singh made the announcement on the White House Rose Garden lawns.

According to the India-US joint statement issued on 18 July 2005, “The president told the prime minister that he will work to achieve full civil nuclear energy cooperation with India... The president would also seek agreement from Congress to adjust US laws and policies, and the United States will work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India..."

“The prime minister conveyed that for his part, India would reciprocally agree that it would be ready to assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States. These responsibilities and practices consist of identifying and separating civilian and military nuclear facilities and programmes in a phased manner and filing a declaration regarding its civilians facilities with the International Atomic Energy Agency (IAEA)."

Lifting of sanctions

Until then, India was placed under sanctions, ever since it conducted its so-called peaceful nuclear test in 1974, that prevented it from sourcing nuclear fuel, atomic plants and high-end technologies from the international market. India’s nuclear tests in 1998 resulted in the international community imposing another round of sanctions that included a ban on the transfer of any kind of high-end technology and the sale of dual use items to India.

Though the two countries engaged in negotiations to rid India of some of the sanctions in the aftermath of the 1998 nuclear tests during the Clinton administration, the progress was slow, given reservations over nuclear non-proliferation.

An important turning point was the election of Republican Party’s George W. Bush as president of the US in 2000. Between 2001 and 2004, many sanctions on Indian “entities"—government-run military, defence and space establishments—were removed, though there were embargos on technology transfers. And India and the US took their first tentative steps towards civil nuclear cooperation with the “Next Steps in Strategic Partnership" document signed in 2004 during a visit by then Indian prime minister Atal Behari Vajpayee. The July 2005 document is seen by many analysts as a follow up of that.

The final deal

After many rounds of tough negotiations spanning the next three years, the US Congress on 27 September 2008 gave its final approval to the agreement facilitating nuclear cooperation between the US and India. The deal was finally signed by then US secretary of state Condoleezza Rice and then foreign minister Pranab Mukherjee.

The signing of the deal rid India of the tag of nuclear pariah attached to it for more than three decades. It also lifted a three-decade US moratorium on nuclear trade with India. It also helped India add nuclear energy to its list of energy options that was heavily reliant on coal-based thermal power plants. For the US, it resulted in opportunities to engage in nuclear commerce—to invest in India’s huge energy market.

“The deal removed the politico-diplomatic ostracization of India and of course the technology sanctions," said Bhaskar. “Of course, then president Bush has to be given credit for this—for his single minded Texan perseverance" in seeing the deal through, he added.

But dampening the high spirits post the conclusion of the deal was India’s nuclear liability law enacted by Parliament in August 2010 that placed heavy penalties on the suppliers of equipment in case of a nuclear accident. This made many of the US firms wary of entering the Indian market as well as resulted in some friction in the India-US relationship. The US administration complained that despite all the “heavy lifting" by Washington, US firms were not able to access the Indian market.

“Of course, there is disappointment on the part of the US about this. But after the Fukushima accident, there is awareness that India’s concerns are justified," said Bhaskar, referring to the March 2011 radiation leak at the Fukushima Daiichi nuclear power station in Japan that was triggered by a malfunction after giant tsunami waves, triggered by a powerful earthquake, slammed the plant.

“But I think, this in a way has been compensated by India buying a large amount of military hardware equipment from the US through the foreign military sales route which is also one of the advantages of the deal that allows high technology transfer to India," said Bhaskar.

According to Anil Razdan, India’s former power secretary, “The real benefit of the civil nuclear deal has so far been the availability of fuel in nuclear power generation which is evident by the upsurge in the plant load factor (PLF) of nuclear power plants, which definitely will be higher than the PLF of thermal coal and gas fuelled power projects."

“Nuclear capacity addition is yet to fructify. It is going through the pains and rigours of nuclear liability law," added Razdan, who was also an additional and special secretary in India’s petroleum ministry.

Utpal Bhaskar contributed to this story.

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Updated: 17 Jul 2015, 01:41 PM IST
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