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February 17, 2015



A great deal of instability

During President Obama’s recent visit to India, it was announced that the US and India had revived the hamstrung nuclear deal that was first conceived in Washington in July 2005, and enacted in the US Congress as law in the 123 Agreement of the Hyde Act in 2008, but had remained moribund since then.
Thus, nearly ten years later the two countries agreed on two important steps to resuscitate the dying accord, one was a concession by the US side whereby Article 5(d) of Section 104 of the Hyde Act would be relaxed, and the other was an Indian commitment to create a liability insurance fund to cover US firms in case of a nuclear accident. It needs to be examined as to what the implications of the US concession are, which is popularly dubbed as the ‘tracking’ relaxation. For this a brief recall of the nuclear deal as first contracted has to be undertaken.
The global nuclear order, which is based on the International Atomic Energy Agency Statute of 1957 and the Non-Proliferation Treaty of 1968, was crafted in view of the fact that materials, technology and know-how relevant to the manufacture of nuclear weapons were bound to spread internationally. Indeed, some capabilities would have to spread if the benefits of civil nuclear power were to be realised. However, nuclear knowledge would eventually diffuse and with it the ability to manufacture nuclear weapons.
The primary objective of the global nuclear order has, therefore, been to prevent the proliferation of nuclear weapons as a by-product of nuclear cooperation for the promotion of peaceful use of nuclear technology. The Indo-US nuclear deal undermined and weakened the global nuclear order as it allowed India, a non-signatory of the NPT, free access to civilian nuclear technology from the United States, and even from other NPT nuclear states, like Russia, France, Japan and Australia. This free access granted to India under the 2008 deal was in blatant violation of Articles I and III(a) of the NPT. The

country-specific exemption given to India did not go unnoticed by the rest of the international community. Many wondered why they were prohibited from acquiring weapons technology when a country that had not adhered to the NPT had been given the same benefits that signatory states enjoyed.
In the May 2010 NPT Review Conference, Brazil, Egypt and South Africa refused to agree to tougher inspections for conduct of nuclear commerce, perhaps angered by the Indo-US deal. Nuclear experts feared that the deal would, in time, encourage some NPT signatory states to opt out of the NPT and embark upon nuclear weapon programmes, and the world would have a plethora of nuclear weapon states. The global effort to prevent nuclear proliferation was thus severely undermined.
On the other hand, as it turned out, the Indo-US nuclear deal failed to provide US industry with the benefit of opening up the Indian market, the original reason for the US to offer the deal, due to the enactment of a nuclear liability law by the Indian Parliament that was not acceptable to US industry. It was to break this log-jam that President Obama offered new concessions to India under the deal. Under section 104 Article 5(d) the administration is required ‘to ensure that all appropriate measures are taken to maintain accountability with respect to nuclear materials, equipment (given) to India’, which means tracking the supply and end-use of US supplied nuclear material to Indian nuclear power plants. By a relaxation of the tracking of such material, India will be at liberty to use all its domestic uranium resources as it wants, and could divert them to weapons use.
While the original provision of the Indo-US nuclear deal that allowed the supply of nuclear fuel – low enriched uranium, was in violation of the NPT articles I and III(A), the tracking requirement under the Hyde Act was a sort of palliative, but that too has now been removed by President Obama, in the hope that India would feel impelled to promote the entry of US industry. On its part, the Modi government has announced plans for the creation of an insurance liability fund to assure US industry of a cover against liability claims ensuing from any accident taking place in the operation of the envisaged power plants that US companies may set up in India.
By these measures, both the US and Indian governments hope to create conditions whereby US industry would venture forth into India to mutual benefit of the two countries. However, whether these steps would bring this about would remain to be seen. There is the old proverb that you can take the horse to the water, but you cannot make it drink. Meanwhile, the implications of the US decision of relaxing the tracking requirement of the Hyde Act could well sound the death knell of the NPT, which is already labouring under the negative impact of the Indo-US nuclear deal, and may be in terminal decline.
The time may come when NPT signatory states may pursue their best national interests, irrespective of their treaty obligations. In any case, not all NPT signatories are acquiescent with Obama’s wooing of India. This is manifest in the Nuclear Suppliers’ Group, which has not accepted India’s bid, despite US support for its membership, as the group works by consensus and many members are not willing to allow India entry, principally because it is not a NPT signatory.
Finally, the grave implications of the deal for the South Asia region are obvious; it has created asymmetry that can only cause serious strategic instability that may be difficult to rectify and the balance restored.
The writer is a former ambassador.
Email: [email protected]