Saturday 02 Jul 2022 | 10:43 | SYDNEY
Saturday 02 Jul 2022 | 10:43 | SYDNEY

US-India nuclear deal: Too early to tell?


Fiona Cunningham

2 August 2010 11:54

Last week The Guardian reported that the UK Government has changed its policy on nuclear commerce with India, and will now supply civil nuclear technology and expertise to India.

Since the US agreed to do the same in 2005 (obtaining a waiver from Nuclear Suppliers' Group guidelines prohibiting nuclear transfers to countries which are not members of the Nuclear Nonproliferation Treaty), the world's nuclear supplier nations have been all to keen to sell their wares. The UK is the latest among civil nuclear suppliers to pave the way to nuclear business with Delhi – following the US, Russia, France, Canada, South Korea and, in the past month, Japan. Australia remains firmly off this list after Kevin Rudd cancelled the Howard Government's plans to sell uranium to India.

Nuclear cooperation deals are interesting creatures, motivated as much by politics as economics, and this is certainly the case with India. The Bush Administration argued that the US-India deal would help to bring India into the nonproliferation regime, implicitly questioning the central role played by the NPT in determining who was inside the tent and who was out.

Critics argued that the US should have extracted more concessions from India. If India was going to get the same access to technology as NPT members, it should have to make the same commitments as a Nuclear Weapon State under the NPT – why should other states stay in the treaty regime if a non-member gets the benefits without the responsibilities?

A bit like Zhou Enlai's famous quip that it was too early to tell the impact of the French Revolution two centuries after it occurred, it is still to early to tell the consequences of the US-India nuclear deal for the non-proliferation regime.

India's precedent has certainly contributed to the failure of the NSG to agree upon guidelines for the sale of sensitive nuclear technology. It has altered non-Nuclear Weapon States' hopes for the extent of nuclear cooperation and the prospect of assistance in developing enrichment and reprocessing capabilities. It has emboldened China to pursue plans to build two more power reactors in Pakistan, in violation of NSG guidelines (Pakistan is not an NPT member, nor does it have a waiver like India). It has probably annoyed some countries whose major motivation for signing the NPT was access to peaceful nuclear assistance. So far there is no confirmation that the deal has assisted India's military nuclear program, but equally, India is no better a non-proliferation citizen for it either.

The economic consequences are similarly murky. As Dr Charles Ferguson, President of the Federation of American Scientists, noted when he spoke at the Lowy Institute recently, the greatest US winner from the deal has been Boeing, not the nuclear industry, as the deal cleared the way for defence cooperation more broadly. Nuclear commerce still has to jump through a number of painstaking legal hoops.

This is largely because India and the US have had to agree on terms permitting India to reprocess spent nuclear fuel imported from the US, and because India's parliament is yet to pass legislative protection for US companies' civil liability, should an accident occur. So the economic benefit to the US is dependent on the Indian parliament, while French and Russian companies, underwritten by their own governments, can proceed unhindered with their nuclear business in India.

The jury is certainly still out as to the consequences for the non-proliferation regime of India's new status. It clearly has not (yet) 'destroyed' the non-proliferation regime, as some feared. It has, however, reduced the NPT's centrality to the regime, which could destroy it, or prompt a more creative, layered regime capable of including NPT outsiders. Or, most likely, the international community will just bumble through.

The Nuclear Reactions column is supported by the Nuclear Security Project of the Nuclear Threat Initiative, as part of a wider partnership between the NSP and the Lowy Institute.

Photo by Flickr user, used under a Creative Commons license.