India stands to gain from nuclear talks

The facts as presented by the media appear to be disheartening. The government’s official stand that India does not face any threat lacks conviction. There are contracts and policy statements, business and bilateral tie-ups, and the issue of global protection. In a bundle, it’s the future of nuclear India – on which the last government and the present Prime Minister had staked their survival, to remove the trade and technology isolation.

From a legal perspective, the facts are that on August 1, 2008, the International Atomic Energy Agency (IAEA) approved the safeguards agreement with India under an umbrella agreement, not reactor-specific, applicable to all declared civilian projects, and to apply to future reactors as well. However, India’s defence/strategy programmes were excluded. The permanence of the safeguards is linked to the perpetuity of the fuel supply. What if there is a default – would it close the gate for fuel supplies? Partly that would depend on the bilateral agreement with the supplier, but also on the global regime.

 

On the above basis, the 45-nation Nuclear Suppliers’ Group (NSG) granted an unconditional waiver to India permitting access to civilian nuclear technology, the international fuel market, and uninterrupted continual supply without signing the Nuclear Non-Proliferation Treaty (NPT). Though the waiver had to be and is unanimous, there was a perception that this nation-specific first ever exemption has eroded the credibility of global efforts to make access to peaceful nuclear trade available only to signatories of the Comprehensive Test Ban Treaty (CTBT). US and India went on to sign the historic 123 treaty, and India has since inked agreements for purchase of reactors/technology with Russia and France.

The apprehension arises out of the G-8 Summit declaration last week, claiming to be based on the “clear text” which the NSG Consultative Group had “developed” in restricting the sale of “enriched and processed” nuclear (ENR) technology to India by the NSG member states. The inclusion of ENR in the deal was a matter of principle, positioning and money for India when the bargaining of the 123 agreement was on. While this would not affect supply of reactors and fuel, but effectively nullify the cost effectiveness of enrichment and reprocessing operations. .

This has been interpreted as a message to India to sign the NPT or else be back in the doghouse. Media reports suggest that India had voluntarily agreed to abide by future decisions, which includes its guidelines, but this is not reflected in the text of the waiver, which requires “committing to sign and adhere to an Additional Protocol with respect to India’s civil nuclear facilities”. Accordingly, the NSG member governments had formally adopted the IAEA safeguarded Indian civil nuclear programme.

The final text of the waiver was “based on India’s commitment and actions”, i.e. if it conducts a nuclear test, then the exemption would certainly stand nullified.

There is no reason why India would lose out by doing so in such a win-win situation. This is also the understanding with the US government. However, there is a reference in the Waiver Declaration that to facilitate India’s adherence to the proposed to the amendments to the guidelines the NSG Chair would be reviewing these with the Indian government. This clearly envisages that no amendment can be imposed without engaging in a consultative process with India. The Waiver Declaration also does not provide for automatic termination. Therefore just as the waiver itself required consensus, its revocation can actually be blocked by any one nation.

As on date the way things stand, the ‘clean’ text which originated in November 2008 is expected to be in place next year. Tactically this gives India ample time to do a fast forward in its negotiations with the interested nations for bilateral tie ups.

Much depends on the conditions of these bilateral treaties particularly with those nations which have declared their stated position, even while consenting to the exemption. To give an example, Japan has already indicated that in case India resumes its nuclear tests thereby breaching its moratorium pledge, the bilateral agreement will stand terminated. Others, such as Germany had expressed the expectation that India would comply with the CTBT and may well insist if the situation arises this to be performance obligation even if at a future date.

So India will now have to take the initiative to reap the benefits, instead of complacently expecting only the vendors to make the moves.

Kumkum Sen is a Partner at Rajinder Narain & Co.,and can be reached at kumkumsen@rnclegal.com