Taking stock of India

11 May 2006

Draft legislation was introduced in both US Houses of Congress aimed at waiving certain requirements of the 1954 Atomic Energy Act under which the USA is barred from selling nuclear equipment and fuel to India, a country which is not a signatory to the Nuclear Non-Proliferation Treaty (NPT) and which, in May 1998, conducted five nuclear explosive tests, subsequently declaring itself to be in possession of nuclear weapons.

Following a landmark agreement between the two countries on 18 July 2005, the USA undertook to lift domestic and international legal restrictions on nuclear sales to India by amending its own laws and working with its allies in the 45-nation Nuclear Suppliers Group (NSG) to make an India-specific exception to the cartel’s rules prohibiting nuclear cooperation with countries that have not placed all their nuclear facilities under full-scope safeguards. In return, India undertook several commitments, the most important of which was to affect a phased separation of its civilian and military nuclear facilities and to place the islanded civilian facilities under International Atomic Energy Agency (IAEA) safeguards. In addition, India reiterated its moratorium on nuclear testing, agreed to work with the USA for the early conclusion of a Fissile Materials Cut-off Treaty (FMCT) and undertook to strengthen its export control regulations to ensure against onward proliferation.

Following a difficult and sometimes testy process of negotiation, the Indian side finally produced a separation plan which fit the US criterion of being “credible and defensible from a non-proliferation perspective.” The two countries signed off on this plan on 2 March 2006, during president George Bush’s visit to New Delhi.

The legislative changes proposed by the White House would amount to giving the US president the authority to waive – in the case of only India – NPT membership as a prerequisite for making nuclear sales. The waiver authority itself is contingent on seven conditions:

  • India has provided the USA “a credible plan to separate civil and military facilities, materials, and programmes.”
  • An agreement has “entered into force between India and the IAEA requiring the application of safeguards in accordance with IAEA practices to India’s civil nuclear facilities.”
  • India and the IAEA are “making satisfactory progress toward implementing an Additional Protocol” for India’s civil nuclear programme.
  • India is working with the USA for the conclusion of a multilateral FMCT.
  • India is “supporting international efforts to prevent the spread of enrichment and reprocessing technology.”
  • India has robust export controls and adheres to the guidelines of the Missile Technology Control Regime (MTCR) and NSG.
  • The NSG’s rules allow an exception for India.
The draft law also adds that notwithstanding India’s fulfilment of these seven conditions, the country would no longer be eligible for a waiver if it detonates a nuclear explosive device after the date the act is passed.

Parallel to this effort to change domestic statute, the USA presented NSG member countries a draft amendment to the nuclear cartel’s export rules. Paragraph 4(a) of the NSG’s revised Guidelines for the Export of Nuclear Material, Equipment and Technology – adopted in 1992 – explicitly prohibits “nuclear transfers” to a country like India. The two exceptions to this rule are transfers deemed essential for the safe operation of existing facilities (paragraph 4(b)) and transfers pursuant to agreements or contracts drawn up on or prior to 3 April 1992 or, in the case of countries joining the NSG after that date, to agreements to be drawn up after their date of adherence (paragraph 4(c)).

In a nutshell, the USA wants this offending paragraph waived for India. Its draft, that was circulated at an official meeting of the NSG in Vienna, Austria, on 24 March, states that in exchange for India (a) having publicly designated peaceful civil nuclear facilities which will be submitted to IAEA safeguards in perpetuity; (b) having committed to continue its moratorium on nuclear testing, and to work with others towards achievement of a FMCT; and (c) having committed to accept an Additional Protocol covering designated civil nuclear facilities, and also committing generally to having good export control systems etc, the NSG will override paragraphs 4(a), 4(b) and 4(c) of its 1992 export guidelines and allow its members to sell nuclear equipment, fuel and technology to “safeguarded civil nuclear facilities in India” provided they are satisfied India is adhering to all its commitments.

At the Vienna meeting of the NSG, Washington was unable to forge a consensus, with many members insisting that the US domestic statute be amended first before an India-specific exception to the NSG rules could even be placed on the group’s agenda. On the other hand, Russia has signalled its eagerness to have the restrictions on India lifted as soon as possible. In March, before the Vienna meeting, it sent a consignment of low enriched uranium (LEU) for the US-built BWRs at Tarapur. Moscow justified this by invoking the safety exception clause in the NSG’s guidelines, something it had done once before only to be greeted by a chorus of disapproval. This time, however, the international reaction was much more muted.

On Capitol Hill, the Bush administration’s move to open the door to nuclear commerce with India has generated a mixed reaction. Key Senators such as Joseph Biden, Richard Lugar and Sam Nunn either continue to withhold support or are less than fulsome in their advocacy of the law change. Among Congressmen, there is greater overt hostility. Secretary of state Condoleezza Rice’s back-to-back testimony to the foreign affairs committees of both Houses in the first week of April won the White House additional backing but even the most ardent Congressional champions of the deal with India now concede that the proposed enactment might still take months rather than weeks to legislate.

Rice and other advocates have sought to hard-sell the deal as a major strategic and economic gain for the USA. India, they said, would draw closer to the USA and was likely to buy from American contractors at least two of the eight 1000MWe reactors it intends to import over the next decade. The critics do not dispute these claims but they do contest the administration’s claims that the deal is a “net gain” for non-proliferation. They claim that once a significant number of Indian facilities are kept out of safeguards, any nuclear imports, especially of uranium, would boost India’s weapons programme because domestically mined uranium would no longer need to be used as feedstock for civilian nuclear power plants.

Both the Bush administration and the Indian government have rejected this argument by pointing to the large number of power reactors which would no longer be available for potential military use once they are placed under IAEA safeguards.

According to the Indian separation plan, which was tabled by prime minister Manmohan Singh on 7 March, a total of eight as-yet unidentified 220MWe PHWRs will go under international safeguards by 2014. These would be in addition to the six reactors that have already been committed to safeguards. “Phasing of specific thermal power reactors, being offered for safeguards, would be indicated separately by India,” the plan says. Since all future civilian reactors, including civilian fast breeder reactors, would automatically be safeguarded, the Bush administration said that the proportion of Indian facilities – as measured by power generating capacity – would rise from the currently proposed level of 65% to over 90% in the decades ahead.

Anticipating the criticism from non-proliferation quarters that the separated civilian sector is not large enough, the Indian government says the “unique” nature of India’s nuclear programme poses a challenge to the separation process. India, it notes, “is the only state with nuclear weapons not to have begun with a dedicated military programme.” As a result, “the strategic programme is an offshoot of research on nuclear power programme and consequently, it is embedded in a larger undifferentiated programme.” This meant “the national security significance of materials and the location of facilities” would have to be taken into account in undertaking the separation process, and that safeguards could only be accepted in phases.

In a major concession to the USA, Canada and France, the plan commits India to shut down the Canadian-supplied 40MWt Cirus research reactor and shift the French-supplied fuel core of the 1MWt Apsara reactor to a new research facility outside the sensitive Bhabha Atomic Research Centre so that it may be placed under safeguards in 2010. Cirus, recently renovated, has been involved in the Indian strategic programme and its premature retirement will entail costs as the government eventually builds a replacement reactor that would be entirely in the military domain.

The other facilities to be placed on India’s civilian list are the three heavy water production plants at Thal, Tuticorin and Hazira (by 2009), the ‘away from reactor’ spent nuclear fuel storage pools in Tarapur and Rajasthan (already safeguarded), and nine research facilities, including the Tata Institute of Fundamental Research, the Variable Energy Cyclotron Centre and the Saha Institute of Nuclear Physics. The Indian government has said all these facilities are “safeguards-irrelevant.”

One decision that appears to have been put off is the fate of the fuel fabrication plants located within the Nuclear Fuel Complex (NFC) in Hyderabad. “The list of those specific facilities in the NFC, which will be offered for safeguards by 2008, will be indicated separately,” the plan states. Among the facilities located here are the Ceramic Fuel Fabrication Facility, the new Uranium Fuel Assembly Plant, the new Zirconium Sponge Plant, the Special Materials Plant and the Zirconium Fabrication Plant.

In another concession to the USA, which had insisted that the Indian safeguards agreement could not be of the ‘voluntary offer’ type that the five established nuclear weapons states have with the IAEA, the Indian separation plan commits its civilian facilities to safeguards in perpetuity. This is a compromise the Indian government said it is willing to make in exchange for guaranteed international supply of nuclear fuel. In addition, India said it will be willing to place the Power Reactor Fuel Reprocessing plant in Tarapur under safeguards in ‘campaign’ mode after 2010. This means the facility will be safeguarded only when spent fuel passes through it, something that already occurs for spent fuel from the Rajasthan and Tarapur reactors.

Though the separation document does not name the facilities to be kept off the civilian list other than the 500MWe Prototype Fast Breeder Reactor (PFBR) and the Fast Breeder Test Reactor (FBTR), it provides the logic for why some facilities will remain off-limits to international inspections. India, it says, has included in the civilian list “only those facilities offered for safeguards that, after separation, will no longer be engaged in activities of strategic significance.” At the same time, “a facility will be excluded from the civilian list if it is located in a larger hub of strategic significance, notwithstanding the fact that it may not be normally engaged in activities of strategic significance.”

Thus, all facilities and reactors in the two strategic hubs — the Bhabha Atomic Research Centre and the Indira Gandhi Centre for Atomic Research in Kalpakkam — belong to this category, including their fuel fabrication, reprocessing and uranium and boron enrichment facilities, as well as the Beryllium Machining Facility. The uranium enrichment facilities at Rattehalli will similarly remain unsafeguarded as will the heavy water plants at Baroda, Thalcher, Nangal, Manuguru and Kota.

The Centre for Advanced Technology, Indore, where research work on lasers and accelerators is conducted, has also not been placed in the civilian pool. As for India’s naval reactor project and its uranium enrichment facilities (the Rare Materials Plant at Rattehalli), these too would remain beyond the purview of safeguards and inspections.

Significantly, the separation plan emphasises that “concepts such as grid connectivity are not relevant to the separation exercise.” Even after separation is effected, therefore, this would necessitate grid connectivity “irrespective of whether the reactor concerned is civilian or not civilian.” Officials say this was an important point to emphasise since in the USA, no military reactor other than Hanford (until it was shut down) had generated power for the civilian grid.

Nine months after it was first conceived and signed, the roadmap for implementation of the India-US nuclear deal is still difficult and complex. The ball gets rolling only once the Bush administration gets Congress to give the president a waiver authority for India. Once that happens, the IAEA and India will conclude an “India-specific” safeguards agreement which will enter into force once the NSG amends its guidelines to allow nuclear exports to India. And only once that happens, would India be free to buy reactors and fuel from NSG members. Interestingly, the Indians are also amending their Atomic Energy Act, 1962, to improve regulatory practices and prepare for the inflow of foreign technology and plants after a gap of more than two decades. According to some reports, private players will also be allowed to set up nuclear power plants.

However, US contractors like Westinghouse have to cross one final hurdle. Armed with his waiver authority, President Bush will present to Congress a nuclear cooperation agreement (‘Section 123’ agreement) with India. Unless both Houses strike it down, the agreement will get automatically ratified after a waiting period of 90 days. The Indian nuclear sector would then be open for American sales.


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