The India - US Nuclear Deal Saga

Quite recently we saw the topsy-turvy Trust vote happening, which was viewed by a lot of people worldwide to decide the fate of the N-deal between India and The United States, from India’s end, and now with that settled from one end, we would probably see the deal go thru smoothly. But after all this hype, few people know what exact variables would this deal affect and so here’s a bit of insight on the background and after-effects of this deal.

The History – Why was this deal needed?

The history unfolds with the fact that in 1970-78 when US sponsored NPT (Nuclear Proliferation Treaty) and its subsequent laws, they set a date of 1967 as criteria for inclusion in the select group. France and China were gleeful; as they had exploded their bomb before the reference date, and hence found their berth in this group automatically. Since India had done the tests in 1974, India was punished and hence excluded from the list. For decades India has been subjected to tough sanctions, and it has endured its exclusion for not signing the NPT and was barred from any civilian use nuclear technology and materials. This had also led to another bomb testing in 1998 and more sanctions and a lot of other after effects.

But with the phenomenal growth and development that the country has achieved over the years, and considering the fact that India has guarded its nuclear technology safely, the Bush administration feels that to exclude India with over a fifth of human population, just due to a bomb test decades ago was a mistake. So they are willing to go ahead with the deal, giving India an exemption from the NPT (Nuclear Proliferation Treaty), and providing India with the required Civilian Nuclear fuel and technology, amending Section 123 of Atomic act in the United States legislation.

The US Side of the Bill Passing:

Ever since 2005, when the deal was first brought up, the US congress has had a lot of pain it getting it passed. The lobbyists and politicians look into this exemption as a breach to the NPT and hence were trying to oppose the deal. But with the full backing of the Bush Administration and the efforts of able Secretary of the State, Condi Rice, the Henry J. Hyde US-India Peaceful Atomic Energy Cooperation Act of 2006 was ratified by both houses of Congress and signed into law by President Bush in December 2006.


The Indian Side of the Bill Passing:

Like in the US, the Indian government had a hard time getting the bill passed as well. The Congress failed to get support from its biggest ally “Left-parties” and so the deal got postponed for almost 2 years, with the government trying its best to convince the other parties “For the Deal”. Even the opposition parties, though not against the deal, did not provide the UPA government with the support it needed.

Finally in mid-2008, PM Manmohan Singh put his foot down and said, Congress will go ahead with the deal even if others are against it. This was followed by a dramatic trust-vote, which the government won, thanks to support from Amar Singh and Samajwadi Party, who replaced the Left and led the trust vote to victory with 275-254, thus the Indian Government will get the required support and the things will start rolling.

Benefits of the deal to the United States:

A lot of critics of the deal said that the United States proposed for this deal not for India’s good, but for its own good. While I am not sure if it harms India, all I want to say is, whenever any country proposes a new deal, it would look for its own benefits, or the share of the pie that it will get and there is nothing wrong with that thinking, as long as the other party is not pressurized into agreement.

1. Economic Benefits to the US
   India is one of the fastest growing economies in the world today. With the nuclear deal done, India is planning to open around 10 big nuclear power plants in the next 15 years or so. Considering that each plant is worth $ 4 bn, and half the orders and technology go to the US, we are talking of an investment to the tune of around $30 bn.
   This will also set the right tune for the lot of other Indian industries which are closely woven with the US companies and ensure that the extra goodwill will improve the trade ties between the countries.
2. Political Benefits to the US
   The United States has been perceived with a bully image in the world today in a lot of Asian countries, but India is looked upon as a “peacemaker” third world country. This deal will make Indian foreign policy aligned to the United States and give the US a little say in countries like Iran with which India is on good terms. Another unstated benefit for US appears to be their assessment that, with an unstable Pakistan, a fast developing India could be a counter weight to a “rising China” in the region.

Benefits of the deal to India:

Just like the benefits to the United States are not limited to one domain, there are a lot of benefits to India from this deal, some which are directly visible, the others need to be read between the lines.

1. Economic Benefits to India
   The Indian economy will also be benefited drastically due to this deal. Most of our nuclear power plants are working at half-capacity or below because of the shortage of fuel. This deal will ensure that the fuel shortage is solved for the good.
   Apart from this, being closely aligned to the United States has its own benefits in terms of higher Foreign Direct Investment and Technological know-how which will improve India’s progress by leaps and bounds.
2. Political Benefits to India:
   The stripping off of the sanctions will make India have a better position in the International Organizations around the globe. A closer tie-up with the United States will make India’s presence in the United Nations feel stronger. Like Bush and McCain, the United Nations will also support India’s entry into the larger G-8. The Indo – US Nuclear deal is in fact dumping the past, when people took India for granted and unlocking the hidden potential of the future.
3. Military Benefits to India:
   This deal will also open the United States as a new supplier of arms to India and reduce our dependence on Russia. With the war-against-Terror still going on, the deal would also ensure that the United States would help reduce terrorism in India, and the new alliance of India with the US might also pressurize Pakistan to change their policies with India.

The After-math of the Saga as per the critics:

• There is a lot of criticism on the point that, India is supposed to have 22 Nuclear facilities of which it has declared that 14 are civilian and hence will be under the surveillance of International Atomic Energy Agency (IAEA), but the critics say that providing fuel to these 14 facilities will make the making of Nuclear weapons at other facilities easier.
• The deal also allows the United States to cut the flow of fuel in case India does any more nuclear tests, which might make it a sitting duck for sometime if the neighboring countries like Pakistan and China do some tests.
• The deal also refuses the use of reprocessing technology, and hence India which has ample Thorium, cannot use it after reprocessing and will have to use the Uranium fuel which it can import from the United States due to this deal.
• The other issue is that American domestic law (Hyde Act) Section 102 part 6 (a) states: "The country has a functioning and uninterrupted democratic system of government, has a foreign policy that is congruent to that of America." Thus, this deal will make our foreign policy congruent to the United States policy, which may not be completely true, like India does not support imperialistic attacks as made on Afghanistan or Iraq.

The Final Word:

Like any deal, there are various pros and cons of this deal as well and the things may not be as rosy as they appear. But all said and done, though the deal contains many loopholes when it comes to national security, at the same time helps to satisfy India’s growing need for power, which is absolutely necessary for the growth and further development.

As is known, History is laden with roads not taken, and so, ten years from now when electricity supply situation in India’s households, industry and farms is significantly better, we will have to thank both George Bush and Manmohan Singh.
Thanks to the deal, India will not be struck with in one sided, Iran - Pakistan - India pipeline deal, which would have held India permanently hostage to Pakistan.