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The U.S.-India Nuclear Deal

Authors: Jayshree Bajoria, and Esther Pan
Updated: November 5, 2010

Introduction

The U.S. Congress on October 1, 2008, gave final approval to an agreement facilitating nuclear cooperation between the United States and India. The deal is seen as a watershed in U.S.-India relations and introduces a new aspect to international nonproliferation efforts. First introduced in the joint statement released by President Bush and Indian Prime Minister Manmohan Singh on July 18, 2005, the deal lifts a three-decade U.S. moratorium on nuclear trade with India. It provides U.S. assistance to India's civilian nuclear energy program, and expands U.S.-India cooperation in energy and satellite technology. But critics in the United States say the deal fundamentally reverses half a century of U.S. nonproliferation efforts, undermines attempts to prevent states like Iran and North Korea from acquiring nuclear weapons, and potentially contributes to a nuclear arms race in Asia. "It's an unprecedented deal for India," says Charles D. Ferguson, science and technology fellow at the Council on Foreign Relations. "If you look at the three countries outside the Nuclear Non-Proliferation Treaty (NPT)-Israel, India, and Pakistan-this stands to be a unique deal."

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In July 2009, New Delhi designated two sites for U.S. companies to build nuclear reactors in India. But a nuclear liability law passed by the Indian parliament in August 2010 is causing a rift with U.S. nuclear suppliers. Critics of the law contend India's proposal to seek legal redress against nuclear suppliers is a sharp deviation from the international liability regime which holds nuclear operators solely responsible in case of an accident. India would also like the United States to relax some of its restrictions on technology transfer to India.

What are the terms of the deal?

The details of the deal include the following:

  • India agrees to allow inspectors from the International Atomic Energy Association (IAEA), the United Nations' nuclear watchdog group, access to its civilian nuclear program. By March 2006, India promised to place fourteen of its twenty-two power reactors under IAEA safeguards permanently. Teresita Schaffer, director of the South Asia program at the Center for Strategic and International Studies, says these will include domestically built plants, which India has not been willing to safeguard before now. India has promised that all future civilian thermal and breeder reactors shall be placed under IAEA safeguards permanently. However, the Indian prime minister says New Delhi "retains the sole right to determine such reactors as civilian." According to him: "This means that India will not be constrained in any way in building future nuclear facilities, whether civilian or military, as per our national requirements." Military facilities-and stockpiles of nuclear fuel that India has produced up to now-will be exempt from inspections or safeguards.
  • India commits to signing an Additional Protocol (PDF)-which allows more intrusive IAEA inspections-of its civilian facilities.
  • India agrees to continue its moratorium on nuclear weapons testing.
  • India commits to strengthening the security of its nuclear arsenals.
  • India works toward negotiating a Fissile Material Cutoff Treaty (FMCT) with the United States banning the production of fissile material for weapons purposes.India agrees to prevent the spread of enrichment and reprocessing technologies to states that don't possess them and to support international nonproliferation efforts.
  • U.S. companies will be allowed to build nuclear reactors in India and provide nuclear fuel for its civilian energy program. (An approval by the Nuclear Suppliers Group lifting the ban on India has also cleared the way for other countries to make nuclear fuel and technology sales to India.)
What kind of technology would India receive in return?

India would be eligible to buy U.S. dual-use nuclear technology, including materials and equipment that could be used to enrich uranium or reprocess plutonium, potentially creating the material for nuclear bombs. It would also receive imported fuel for its nuclear reactors.

What do proponents say about the deal?

Proponents of the agreement argue it will bring India closer to the United States at a time when the two countries are forging a strategic relationship to pursue common interests in fighting terrorism, spreading democracy, and preventing the domination of Asia by a single power. Ashley Tellis of the Carnegie Endowment for International Peace-who was intimately involved in negotiating the civil nuclear agreement with India as senior adviser to the U.S. undersecretary of state for political affairs-said in congressional testimony in 2005 that the deal recognizes this growing relationship by engaging India, which has proven it is not a nuclear proliferation risk. Other experts say the deal lays out the requirements for India to be recognized as a responsible steward of nuclear power. "This is part of a process of making India a more durable and reliable nuclear partner," Schaffer says.
Other experts say the deal:

  • Would encourage India to accept international safeguards on facilities it has not allowed to be inspected before. This is a major step, experts say, because the existing nonproliferation regime has failed either to force India to give up its nuclear weapons or make it accept international inspections and restrictions on its nuclear facilities. "President Bush's bilateral deal correctly recognizes that it is far better for the nonproliferation community if India works with it rather than against it," writes Seema Gahlaut of the University of Georgia's Center for International Trade and Security in a CSIS policy brief. IAEA Director-General Mohammed ElBaradei has strongly endorsed the deal, calling it a pragmatic way to bring India into the nonproliferation community.
  • Recognizes India's history of imposing voluntary safeguards on its nuclear program. Proponents of the deal say India has an excellent record of setting credible safeguards on its nuclear program for the last thirty years. After the safeguards on the U.S.-supplied Tarapur nuclear facility expired in 1993, for example, India voluntarily established a new agreement with the IAEA to continue the restrictions.
  • Recognizes that India has a good record on proliferation. Although it is not a signatory to the NPT, India has maintained strict controls on its nuclear technology and has not shared it with any other country. Proponents of the deal say this restraint shows that India, unlike its nuclear neighbor Pakistan, is committed to responsible nuclear stewardship and fighting proliferation. In May 2005 India passed a law, the WMD Act, which criminalizes the trade and brokering of sensitive technology.
  • Rewards India's decision to adopt similar nuclear export standards as those imposed by the Nuclear Suppliers Group (NSG). India has thus far chosen to abide by the strict export controls on nuclear technology set by the NSG, a group of forty-five nuclear-supplier states that coordinates controls of nuclear exports to non-nuclear-weapon states. Experts say if India chose to lift these voluntary restrictions, it could easily sell its technology to far less trustworthy countries around the world. The U.S. deal would reward the Indian government for its voluntary controls and give New Delhi incentive to continue them, against the demands of Indian hardliners who question what India gets out of placing such limits on itself.
What are the objections to the agreement?

Critics call the terms of the agreement overly beneficial for India and lacking sufficient safeguards to prevent New Delhi from continuing to produce nuclear weapons. "We are going to be sending, or allowing others to send, fresh fuel to India--including yellowcake and lightly enriched uranium--that will free up Indian domestic sources of fuel to be solely dedicated to making many more bombs than they would otherwise have been able to make," says Henry Sokolski, executive director of the Nonproliferation Policy Education Center, a nonprofit organization dedicated to improving awareness of proliferation issues. While India has pledged that any U.S. assistance to its civilian nuclear energy program will not benefit its nuclear weapons program, experts say India could use the imported nuclear fuel to feed its civilian energy program while diverting its own nuclear fuel to weapons production. New Delhi has done similar things in the past; India claimed it was using nuclear technology for civilian purposes right up until its first nuclear weapons test in 1974. A Congressional Research Service report (PDF) on the agreement states, "There are no measures in this global partnership to restrain India's nuclear weapons program."


Other objections raised by experts include:

  • The safeguards apply only to facilities and material manufactured by India beginning when the agreement was reached. It doesn't cover the fissile material produced by India over the last several decades of nuclear activity. The CRS report says, "A significant question is how India, in the absence of full-scope safeguards, can provide adequate confidence that U.S. peaceful nuclear technology will not be diverted to nuclear weapons purposes."
  • The deal does not require India to cap or limit its fissile material production. This comes at a time when nearly all the major nuclear powers--including the United States, France, Britain, and Russia--are moving to limit their production.
  • The deal does not require India to restrict the number of nuclear weapons it plans to produce.
  • There are more cost-efficient ways to improve India's energy and technology sectors. These could include making India's existing electricity grid more efficient, restructuring the country's coal industry, and expanding the use of renewable energy sources, Sokolski said in congressional testimony in 2005. All these steps would involve much less dangerous transfers of technology that would not be dual-use, and therefore not convertible to nuclear weapons production.
  • The agreement takes unnecessary risks without adequate preparation or expert review. The agreement "appears to have been formulated without a comprehensive high-level review of its potential impact on nonproliferation, the significant engagement of many of the government's most senior nonproliferation experts, or a clear plan for achieving its implementation," wrote William C. Potter, director of the Center for Nonproliferation Studies at the Monterey Institute of International Studies, in Nonproliferation Review in August 2005. "Indeed, it bears all the signs of a top-down administrative directive specifically designed to circumvent the interagency review process and to minimize input from any remnants of the traditional 'nonproliferation lobby.'"
Who needs to approve the agreement?

The final terms of the nuclear deal were approved by the following bodies before they could be implemented:

  • IAEA. India signed a safeguards agreement with the IAEA under which all nuclear material and equipment transferred to it by the United States as a part of this deal shall be subject to safeguards. In August 2008, the IAEA's Board of Governors approved an India-specific safeguards agreement (PDF). The IAEA said it will begin to implement the new agreement in 2009, with the aim of bringing fourteen Indian reactors under agency safeguards by 2014. The IAEA currently applies safeguards to six of these fourteen nuclear reactors under previous agreements. IAEA Director General Mohamed ElBaradei says the IAEA and India are in dialogue concerning an additional protocol to the draft safeguards agreement.
  • India's Parliament. While the deal does not require a formal vote by the parliament, the coalition government has faced a confidence vote over it. Many parliamentarians oppose the deal, arguing it will limit India's sovereignty and hurt its security. Some Indian nuclear experts are protesting what they see as excessive U.S. participation in deciding which of India's nuclear facilities to define as civilian, and open to international inspections under the plan.
  • The Nuclear Suppliers Group. In September 2008, after much lobbying by the Bush administration, the group approved the India-specific exemption.
  • Congress. In October 2008, the U.S. Congress gave final approval to the bill. Under the U.S. Atomic Energy Act, which regulates the trade of nuclear material, congressional approval was needed to pass the exemptions to U.S. laws required for the nuclear deal to be implemented. Some members of Congress were resistant, and called for India to commit to strict limits on its nuclear weapons program before the deal went through. There is a potential area of dispute with India over the terms for suspending the agreement. Before clearing the bill, the U.S. Senate rejected an amendment that would require U.S. nuclear supplies to be cut off if India tests nuclear weapons. The deal does not explicitly impose that condition, though it is part of a 2006 law known as the Hyde Act, which gave the deal preliminary approval.
What effect will the U.S.-India deal have on the NPT?

It could gut the agreement, some experts say. Article I of the treaty says nations that possess nuclear weapons agree not to help states that do not possess weapons to acquire them. David Albright, president of the Institute for Science and International Security, says without additional measures to ensure a real barrier exists between India's military and civilian nuclear programs, the agreement "could pose serious risks to the security of the United States" by potentially allowing Indian companies to proliferate banned nuclear technology around the world. In addition, it could lead other suppliers-including Russia and China-to bend the international rules so they can sell their own nuclear technology to other countries, some of them hostile to the United States. On the other hand, experts like Gahlaut argue the NPT was already failing in its mission to prevent proliferation. She says many countries-including North Korea, Libya, Iran, and Iraq-have cheated while being signatories of the NPT.

What role does China play in the U.S.-Indian nuclear deal?

It is a motivating factor in the deal, some experts say. China's rise in the region is prompting the United States to seek a strategic relationship with India. "The United States is trying to cement its relationship with the world's largest democracy in order to counterbalance China," CFR's Ferguson says. The Bush administration is "hoping that latching onto India as the rising star of Asia could help them handle China," Sokolski says.

Some experts say the growing economic relationship between China and India is so critical to New Delhi that its interests in China cannot be threatened or replaced by any agreement with the United States. Other experts worry U.S. nuclear aid to India could foster a dangerous nuclear rivalry between India and China. Though India has a strong interest in building economic relations with China, New Delhi is still wary of China's military rise in the region.

What effect will the deal have on U.S. and Indian relations with Pakistan?

Pakistan has not received a similar deal on nuclear energy from Washington. Some experts say this apparent U.S. favoritism toward India could increase the nuclear rivalry between the intensely competitive nations, and potentially raise tensions in the already dangerous region. "My impression is that [the Pakistanis] are worried this will feed the Indian nuclear weapons program and therefore weaken deterrence," Blackwill said. Other experts say the two countries, both admittedly now nuclear, could be forced to deal more cautiously with each other. Pakistan is already a proliferation risk: Pakistani nuclear scientist A.Q. Khan's illicit nuclear network, revealed in 2004, shocked the world with its brazen trade of nuclear technology. Some experts worry the U.S.-India deal could prompt Pakistan to go elsewhere, for instance to China, for similar terms.

What’s the history of India’s nuclear program?

In the 1950s, the United States helped India develop nuclear energy under the Atoms for Peace program. The United States built a nuclear reactor for India, provided nuclear fuel for a time, and allowed Indian scientists study at U.S. nuclear laboratories. In 1968, India refused to sign the NPT, claiming it was biased. In 1974, India tested its first nuclear bomb, showing it could develop nuclear weapons with technology transferred for peaceful purposes. As a result, the United States isolated India for twenty-five years, refusing nuclear cooperation and trying to convince other countries to do the same. But since 2000, the United States has moved to build a "strategic partnership" with India, increasing cooperation in fields including spaceflight, satellite technology, and missile defense.

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