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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2613

Nuclear Cooperation: Mutually Beneficial Deal with the US

By Gurmeet Kanwal

The Indo-US nuclear deal, signed in July 2005 at Washington D.C., has been criticised on political, ideological and non-proliferation grounds in both India and the United States (US) as well as in some other countries. However, neither government appears to have any doubts about the deal’s mutual benefits. This week Indian and US diplomats have begun negotiations on the ‘123’ agreement that the two countries must sign consequent to the enactment in December 2006 of the Hyde Act that allows the US Administration to make an exception for India in nuclear trade and technology cooperation.

Besides allowing India to come out of the nuclear doghouse, the nuclear deal has enormous potential benefits. India has been under international sanctions and has been subjected to technology denial regimes, which have hampered India’s research and development (R&D) efforts in nuclear energy, defence, space and industry since May 1974. Sanctions were further tightened after India declared itself a state with nuclear weapons (SNW) in May 1998. These are already being eased and will be completely lifted eventually.

While Indian science and R&D have some spectacular achievements to their credit despite international sanctions and technology denial regimes, India is still a developing country with several hundred million people below the poverty line. India’s GDP is growing at an average rate of about eight per cent per annum and a recent Goldman Sachs report has predicted that India’s economy will overtake that of the US as the world’s second largest economy after China’s by about 2040. However, in order to sustain an eight per cent economic growth, India’s energy supplies must increase at an average rate of six per cent per annum. The demand for electricity is likely to grow from 130 giga watts (GW) at present to 1,300 GW by 2050.

India has very limited oil and natural gas reserves and already imports over 70 per cent of its crude oil needs. While India has sizeable reserves of coal, it is of low quality. Also, excessive reliance on coal and oil for India’s energy needs will contribute adversely to global warming. Though the full potential of India’s hydel power has not yet been exploited, there’s a finite limit to it. Non-conventional sources of energy, such as solar power and wind energy, are being exploited but cost-effective technologies for these are yet to be developed.

At 3,500 mega watts (MW) or 3.50 GW per annum, nuclear energy contributes only three per cent to India’s energy basket. India’s goal for the year 2000 was to achieve nuclear power capacity of 10,000 MW of power. India has neither modern cost-effective nuclear technology nor sufficient uranium reserves to appreciably increase its capacity for generating nuclear power. Modern nuclear reactors average 1,000 MW of power while Indian reactors average only 220 MW. India has only one reactor with 540 MW capacity. With continuing indigenous research, this may be enhanced to 700 MW at best. In case the thorium cycle is mastered successfully over the next decade or so, India could increase its nuclear power capacity to 275 to 300 GW by 2050. Even this would require external supplies of nuclear fuel.

It, therefore, emerges quite clearly that India needs both nuclear fuel supplies as well as nuclear reactor technology to enhance its capacity for generating electric power and to reduce its dependence on fossil fuels. India’s endeavour should be to eventually enhance the share of nuclear power in its energy basket to more than 25 to 30 per cent like France and Japan and several other countries. Hence, the Indo-US nuclear deal is primarily about nuclear energy. It will open up the Indian market for nuclear trade and by increasing the share of nuclear energy in India’s energy basket; it will help to reduce global warming.

India will also benefit when technology denial regimes are wound down. It will be able to get state-of-the-art weapons and C4ISR technology, Indian companies will be able to enter into cutting edge joint R&D projects, such as those in ballistic missile defence, with the world’s leading defence contractors. The Indian Space Research Organisation (ISRO) will benefit from commercially available space technologies. Due to the sanctions imposed on it, India was not allowed to purchase supercomputers for weather forecasting and will be able to do so once sanctions are fully lifted. Similarly, India will benefit in many other areas such as medical diagnostics and inertial navigation equipment as these employ dual-use technologies. Indian scientists will be able to travel freely and participate in international conferences for which they were so far routinely denied Visas. While some of the benefits are tangible and easy to calculate, many others will be indirect and will contribute in a substantive manner to India’s overall growth.

There have been many tangible gains for the US as well. While signing the “Henry Hyde United States-India Peaceful Atomic Energy Cooperation Act” on December 18, 2006, President George W. Bush had listed four major gains for the US: the agreement will help strengthen cooperation between India and the US on energy, “one of the most important challenges of the 21st century”; the deal will help to promote economic growth and open up an important market for American businesses “by paving the way for investment in India’s civilian nuclear industry for the first time ever”; It will enable India to reduce emissions of greenhouse gases and improve its environment; and, the agreement will keep America safe by paving the way for India to join the global effort to stop the spread of nuclear weapons.

While writing about the strategic logic underlying President Bush’s initiative, Ashley Tellis, one of the principal architects of the deal, has identified three major benefits for the US from close strategic cooperation with India: a strong American partnership with democratic India is essential for constructing “a stable geopolitical order in Asia that is conducive to peace and prosperity”; in order to promote “an effective non-proliferation system… it is necessary to have India on board”; and, an enduring relationship with democratic India is key for America to successfully preserve “a global order that protects liberal societies and advances freedom in myriad ways.”

Stephen Cohen, a noted South Asia specialist, is of the view that the deal provides the US with an opportunity to work with India to help prevent a broader nuclear arms race, “something that is certainly not in the interest of India, Pakistan, China, or America.” Hence, the nuclear deal is a win-win deal for both the countries as well as the international community.

Gurmeet Kanwal the writer is Senior Fellow, Centre for Air Power Studies, New Delhi.

- Asian Tribune -

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