India & the U.S. changed Geo-Politics of Asia

Posted in India | 09-Mar-06 | Author: Siddharth Srivastava

Siddharth Srivastava is WSN Editor India: "The historic nuclear deal has changed the geo-politics of South Asia and the broader…
Siddharth Srivastava is WSN Editor India: "The historic nuclear deal has changed the geo-politics of South Asia and the broader Asian region forever."
NEW DELHI: The historic nuclear deal signed between India and USA during the three-day visit of President George W Bush has changed the geo-politics of South Asia and the broader Asian region forever. By refusing to sign a similar deal with Pakistan, Washington has made it apparent that it has permanently moved away from the cold war prism through which it viewed the region, wherein India was seen to be aligned with the erstwhile Soviet Union.

Washington’s definitive shift towards India as well as the de-hyphenation of US-India-Pakistan relationship is due to a number of factors ---- neutralizing the omnipresence of China in the region and providing a petrol-guzzling nation such as India an alternative to fossil fuels given the global spiraling prices of crude oil. Equally important is the aspect that India is fast emerging as a powerful economy offering a big market, whether for American arms, aero planes, gadgets and luxury products. The big daddy of American consumer fare WalMart has been strongly lobbying for the opening up of India’s retail sector to foreign direct investment. Needless to say, politics has changed to suit business interests.

The Nuclear Deal

After endless rounds of discussions between officials Washington has finally accepted the nuclear separation plan proposed by India. Prime Minister Manmohan Singh and US President George W Bush, who began the process together last year, brought it to a fruition when the two signed the pact in New Delhi, which was the highlight of Bush’s three-day visit to India. ``We have concluded an historic agreement today on nuclear power,’’ Bush told a joint news conference with Manmohan.

Bush said that the plan that separates civilian from nuclear military facilities ``has been successfully completed. Now it is for the US government to go to the Congress and make necessary amendments to the laws (for implementing the deal) and to approach the Nuclear Suppliers Group (NSG) for working the deal,’’ he said. India would also work with the International Atomic Energy Agency (IAEA) to workout the India-specific safeguards for its civilian nuclear facilities, he said.

``We have made a very satisfactory progress and I thank President Bush without whose initiative it would not have been possible,’’ Manmohan said.

In a statement Mohamed El Baradei, director of IAEA welcomed the agreement saying it would boost non-proliferation efforts. ``This agreement is an important step towards satisfying India's growing need for energy, including nuclear technology and fuel, as an engine for development,’’ Baradei said.

As per the deal Washington has accepted India's contention that the Fast Breeder Reactors (FBRs) will be kept out of the civilian list, though US under secretary of state for political affairs Nicholas Burns later said ‘‘future civilian breeder reactors’’ will be under safeguards. At the same time it will be entirely India's sovereign right to decide whether to keep new indigenously built plants in the civilian or military list Nuclear reactors that generate about 65 % of India's atomic power will be open to international scrutiny. Of India's 22 nuclear reactors, 14 will have safeguards, while the rest will be devoted to the military programme.

In exchange of the ``safeguards in perpetuity’’ clause that doesn't allow India to shift any civilian facility back into the military list as the five nuclear weapons powers are allowed, India has managed an ``in built’’ assurance of uninterrupted fuel supply for plants on the civilian list. It has been decided that the US would not impede Indian efforts to procure nuclear fuel from other countries. This addresses concerns about India’s experience with Tarapur reactors when supplies were stopped due to US sanctions.

The Indian Express comments: ``The most successful visit to New Delhi by an American President in the last 60 years marks the debut of India as a great power on the world stage. Bush has also addressed one of India’s long-standing strategic objectives—parity with China and political differentiation from Pakistan (Washington has made clear that there will be no nuclear deal with Islamabad). By offering India the same access that China has for international nuclear markets and denying it to Pakistan, Bush has in one stroke torn up the long-standing geopolitical premises about this region. And Bush’s emphasis on democracy separates India from both China and Pakistan. Bush’s visit to India will long be remembered as a bow to India’s rise, at once peaceful and democratic.’’

On the eve of Bush's trip to India, Newsweek’s cover story was on ``The New India.’’ International editor Fareed Zakaria said: ``the world, and particularly the United States, is courting India as it never has before. Fascinated by the new growth story, perhaps wary of Asia's Chinese superpower, searching to hedge some bets, the world has woken up to India's potential. India is a noisy democracy that has finally empowered its people economically. In this respect India, one of the poorest countries in the world, looks strikingly similar to the world's wealthiest country, the United States of America. In both places, society has triumphed over the state.’’ (More about India click here: WSN Global Editor Dieter Farwick: "India - an emerging world power")

India's geopolitical environment and its energy posture.
India's geopolitical environment and its energy posture.
India’s nuclear thinking

India, a nuclear weapon state, has not signed the nuclear non-proliferation treaty (NPT) as it feels it discriminates between the nuclear have and have nots, with no obligation on the adherents of NPT to rein their nuclear program. New Delhi cites the examples of Iran, North Korea and Pakistan to illustrate the failure of the NPT.

India believes the NPT is a flawed document as it gives the right to a few countries to possess and pile nuclear weapons that can work against the national interests of other countries. The strains had come into focus since India and Pakistan tested their nuclear devices in 1998, thereby completely flouting the existent global nuclear order. India uses indigenous uranium as it is outside the NPT and hence excluded from trade in nuclear plant or materials, which has hampered development of civil nuclear energy.

India’s largely indigenous nuclear power program aims to generate 20,000 MWe nuclear capacity by 2020, from the current levels of close to 3,500 MWe.

Last year, the country’s largest and totally indigenously built reactor of 540 MWe capacity at Tarapur reached criticality. The Tarapur Atomic Power Project (TAPP)-4 is the first time that a reactor of such dimension has been built in the country, highlighting India’s indigenous capability to harness nuclear power (enrich natural uranium on one’s own) in the face of sanctions. With this addition of 540 MW into the Western Grid, the total nuclear power generated in the country is 3310 MW compared to Pakistan’s modest nuclear power program, with 425 MWe capacity, though China is way ahead. Both India and Pakistan use indigenous uranium as they are outside the NPT.

However, it is also true that the department of atomic energy (DAE), controlled by the federal government, has soaked millions of dollars to deliver an abysmal 2.5 % of India’s electricity-needs with a host of safety problems. According to analyst Praful Bidwai: ``It (DAE) claims its programme is largely indigenous. But it has borrowed/bought technology from the UK, US, Canada, USSR, Russia, France, China, even Norway. It loathes international safeguards. In general, the DAE resists accountability. It was dragged, kicking and screaming, into endorsing the nuclear deal.’’

The thinking in the establishment is that while there are enough domestic resources to make India’s nuclear weapons programme completely self-sufficient, imports of fuel, technology and reactors could help accelerate India’s civilian nuclear programme. Access to state-of-the art technologies with high safety standards from countries such as USA and France with substantial reliance on nuclear power would be a plus. New Delhi realizes that bulk of commercial electricity generation from the indigenous breeder reactors of the second stage are at least two decades away while thorium (which is in abundant supply in India) breeders are three decades down the road. The energy needs of a growing Indian economy are, meanwhile, rising exponentially.

Around the world, 16 % of electricity comes from nuclear power. Seventeen countries depend on nuclear power for at least a quarter of their electricity. France and Lithuania get around three quarters of their power from nuclear, while Belgium, Bulgaria, Hungary, Slovakia, South Korea, Sweden, Switzerland, Slovenia and Ukraine get one third or more. Japan, Germany and Finland get more than a quarter of their power from nuclear energy, while the US gets one-fifth.

The bulk of nuclear power plants are being built in Asia, with China and India pursuing ambitious plans with estimates suggesting that China is aiming for a total of 30 plants in 15 years and 18 of 30 new nuclear plants being built in Asia. These moves contrast sharply with nuclear power not being the preferred source of energy in the western world with most reactors having been set up in the 70s and 80s and only three new reactors commissioned between 1998 and 2003. Though the US operates 104 plants, nearly a quarter of the global total of 442, it did not issue a new building permit for more than two decades since the 1979 accident at Three Mile Island. The story is similar in Western Europe where the 1986 Chernobyl disaster engendered fear and only one new plant is now being built, while several countries are phasing out nuclear power or rejecting it altogether.

What the US believes

For all the differences in treatment of Pakistan and India that US President George W Bush made apparent during his recent visit, there was one similarity --- the commitment of Washington to buttress alternate sources of energy for both the countries in order to reduce the pressure on fossil fuels. Indeed, in this Washington is driven as much by its own selfish interests, given the domestic distress due to spiraling price of crude oil.

Given Pakistan’s dubious nuclear proliferation record, Bush could not have signed a deal similar to India, but he did take the next best option --- he made it apparent that Washington would not oppose Pakistan’s attempts to procure gas from Iran. This is being seen as a significant change in American thinking as Washington has been opposing the 1,700-mile Iran-Pakistan-India (IPI) pipeline till now.

Indeed, while being cold on all other issues, Washington should have warmed hearts in Islamabad due to gas. Perhaps, feeling slighted by the nuclear deal in India, Pakistan President Pervez Musharraf and his team has not noticed the major concession. New Delhi can only be happy at the development as this could translate into a double bonanza of alternate fuels in the form of gas and nuclear energy, provided of course Pakistan continues its commitment of extending the pipeline to India.

In the new paradigm of Indo-US synergies and a definite de-hyphenation of the relationship, there is a possibility that Islamabad may try and snub New Delhi and insist upon an Iran-Pakistan pipeline not extending up to India. Tehran could play ball given New Delhi's siding with western powers at the IAEA to refer Iran to the UN for sanctions due to an independent nuclear programe.

But, Pakistan will also stand to lose over $ 700 million in annual transit fees, while Tehran will have to do without substantial revenues. It remains to be seen how the interests of business will be balanced against geo-strategic power maneuvers, which will become apparent when the IPI working group meets next week.

Having slighted Musharraf on Kashmir, the nuclear deal with India and lectured him on the virtues of democracy, perhaps it was incumbent on Bush to show some flexibility on other matters. ``Buddy’’ Musharraf remains an important cog in US’s ``war on terror.’’

US President George W.Bush and India's Prime Minister Mammahan Singh seal the nuclear deal.
US President George W.Bush and India's Prime Minister Mammahan Singh seal the nuclear deal.
At the joint news conference with Musharraf, Bush made it apparent that a nuclear deal with Pakistan was never on. Bush said: `I explained that Pakistan and India are different countries with different needs and different histories and these differences would be taken into account as the strategy moved forward.’’ However, Bush acknowledged Pakistan’s growing energy needs and made it clear that the United States would not oppose a natural gas pipeline to Iran. ``Our beef with Iran is not the pipeline. Our beef with Iran is the fact that they want to develop a nuclear weapon,’’ Bush said.

``He (Musharraf) explained to me the natural gas situation here in the country. We understand you need to get natural gas in the region, and that's fine,’’ Bush said.

Bush knows what he is talking about. It is estimated that by 2025, today's global demand for 84 million barrels of oil per day will have grown to 121 million to 130 million barrels a day. The United States is the world's largest energy consumer. US demand for oil is about 21 million barrels per day, compared with 7.4 million barrels per day projected this year for China, according to the US Energy Department. India's oil consumption was 2.2 million barrels per day in 2003 and is projected to grow to 2.8 million by 2010, according to the department. No amount of digging domestic resources in Alaska will yield the US requirements. China and India too will have to import considerable quantities of crude oil to make-up for gasoline guzzling automobiles. India imports 70 % of its crude.

The Conflicts

However, both Bush and Manmohan have to contend with domestic opprobrium to the pact. Bush needs the approval of the US Congress, a task which he has admitted to be “difficult. Non-proliferation advocates in the US have said that Bush has given away too much in the nuclear agreement and have accused him of destroying the established nuclear order only for India. ``It's a sweetheart deal for India ... The administration told Congress the agreement would be about the growth of India's electricity and not the growth of Indian bomb making potential and that standard clearly has not been met,’’ Michael Krepon of the Henry L Stimson Center, has been quoted while referring to the FBR’s being kept out. Democratic Rep. Edward Markey of Massachusetts has said the accord ``undermines the security not only of the United States, but of the rest of the world.’’

Bush knows that he has his task cut out. At the press conference after meeting Manmohan, he said: “The first thing I will say to our Congress is that our relationship is changing for the better...You know, sometimes it’s hard to get rid of history...What this agreement says is things change, times change, that leadership can make a difference, and sending the world a different message (from) what used to exist in people’s minds.”

Manmohan has to deal with the querulous left allies, without whose support his government cannot survive. The high of the nuclear deal has sidelined the massive protests by Muslims and left parties that have marked the Bush visit, against US actions and decisions regarding Iraq, Iran (India voted against Tehran at the IAEA) and Afghanistan. Other regional parties such as the Samajwadi Party that relies on Muslim support and has a powerful presence in the largest state Uttar Pradesh have joined the fray. Assembly elections are due in five states this year and if the Congress, the party to which Manmohan belongs, does not do well, there will be pressure to dilute the strong pro-US approach. The left parties have said that they are seriously re-thinking their support to the Manmohan government and also want foreign policy decisions so far the preserve of the executive to be legislated in Parliament.

There were murmurs of protest by the Indian scientific community prior to the deal. Thankfully, most scientists in the country have said that India has sufficiently protected its interests by keeping the fast breeder reactors out of international safeguards as well as maintaining a minimum deterrence programme completely indigenous.

But, experts also say that the dark horse could yet be China, which is not comfortable with the growing synergies between India and USA and could create problems for India at the NSG. Beijing and Islamabad known to keep close military ties will also not be happy with the US defense department statement during the Bush visit that Washington has also agreed to sell India more sophisticated fighter aircrafts and other high-tech arms. After a studied silence, following the Indo-US nuclear pact last year, Beijing had made it clear that it was not very happy with it.

Displaying the misgivings once more, a spokesman for China's foreign ministry, Qin Gang, has been quoted by the Reuters news agency, following the New Delhi agreement, as saying that the current international safeguards on nuclear weapons were the hard-won product of many countries' efforts and should not be weakened by exceptions. ``China hopes that concerned countries developing cooperation in peaceful nuclear uses will pay attention to these efforts. The cooperation should conform with the rules of international non-proliferation mechanisms (India is a non-signatory to the nuclear proliferation treaty, the NPT),’’ he said.

The way ahead

Most analysts agree that there will be pressure to implement the Indo-US nuclear deal given the lucrative market that India offers. Experts say the hurdles will surely be overcome at the US Congress before May this year when the NSG is likely to look to change the rules. No country wants to lose out on the nuclear contracts that are likely to follow.

Despite the opposition by nuclear hawks within Congress, there is support for the nuclear deal within business houses in USA. According to reports, the US business community sees $100 billion worth of new opportunities in India's energy sector alone. American companies have mounted a multimillion-dollar campaign to sell the nuclear deal to the US Congress that has to finally ratify the agreement. It is being emphasized that the deal promises a ``bounty of opportunity.’’ The lobbying drive is the most expensive ever mounted by business, Ron Somers, president of the US-India Business Council of the US Chamber of Commerce, has said.

High Tech industry - India's source of strength.
High Tech industry - India's source of strength.
US officials have made an extended briefing on the new Global Nuclear Energy Partnership (GNEP) in New Delhi. Officials said that the Bush administration plans to formally invite India as soon as the current Indo-US nuclear deal is signed. The GNEP envisages a new worldwide nuclear system in which a core of supplier nations will provide nuclear fuel and technology to a set of user nations. The partnership has received strong endorsement from Russia and other nuclear nations like Japan and China.

There is support from other nations as well. Russia sees India as a major market and has been keen on expanding nuclear links with India. France, Britain and Canada have supported the deal. However, India will have to contend with considerable resistance from China, which has criticized the nuclear deal.

A reflection of the way nation are thinking could be gauged at the October meeting of the NSG in Vienna that put off action on the US proposal to lift restraints on transferring nuclear technology to India. At the meeting, Britain, France, Germany, Russia, Czech Republic and Canada were generally supportive, while China, Brazil, South Korea, Austria were among the countries that opposed any nuclear supplies to India. South Africa, Brazil and Argentina that voluntarily dismantled their nuclear weapons programme to join the non-proliferation regime are against any move to grant a special status to India.

France has been the most positively inclined towards India's nuclear programme, with Paris only mildly reprimanding New Delhi when it conducted nuclear tests in 1998, unlike other Western powers. French President Jacques Chirac has been the first international leader to speak of the need to accommodate India into the global nuclear order. British Prime Minister Tony Blair has endorsed the US decision while Canada’s move to renew civil nuclear energy cooperation following India’s vote against Iran at the IAEA in September has been a big bonus. India will be closely watching the reaction of China that has recently become a member of the NSG.

Dealing with China will be a delicate issue. In this context, analysts have said that it is not as much as the nuclear agreement (India has been a nuclear weapons power on its own steam for a while) but the future firming up of deeper security relations between India and USA that will worry China. Beijing has been rapidly strengthening its entry to the Indian Ocean region and component sea-lanes of trade, has been wary of the near conclusion of the Indo-US Maritime Security Framework announced during the Bush visit. Beijing will also be not happy with the US defense department statement during the Bush visit that Washington has agreed to sell India more sophisticated fighter aircrafts and other high-tech arms.

Observers say that it will thus be in New Delhi’s interest to assure Beijing that the deepening of its relationship with USA will in no way harm the importance of Sino-Indian relationship. New Delhi will also be aware of the tendency of Beijing to seek Islamabad each time it feels insecure about India.

But, there will be plenty of opportunity for New Delhi to assure Beijing of the need to look at India in isolation. Circa 2006 has been declared the India-China friendship year with more than 40 events and meetings to celebrate the occasion. Following up on the Chinese Premier Wen Jiabao’s visit to India last year, both countries are firming up another round of high-level visits with Chinese President Hu Jintao to arrive soon, and Prime Minister Manmohan Singh likely to visit Beijing later in the year. The second phase of the three-phase talks on the boundary question is scheduled to begin this Friday in which top ranking officials will be involved.

There are still problems to be ironed out before India can actually access nuclear fuel from other nations. However, even getting so far is quite creditable.

In a recent column, Shekhar Gupta, editor of Indian Express argues: ``the latest turn in our nuclear policy is the Indo-US engagement. By helping Indian’s still shy and suspicious nuclear establishment towards its much deserved coming-out party, Manmohan Singh is only taking to its logical conclusion a process initiated by Nehru, nurtured by Indira and then strengthened by Vajpayee. Just because it might involve a handshake with Bush or just because some of our scientists suddenly show stage-fright, is no reason why India should lose this opportunity. With a minimum credible deterrent in place, and future capability intact, there is no percentage for India to keep its nuclear establishment in the same shadowy domain as North Korea or Pakistan. After four decades of ambiguity we took the big risk in Pokharan II and it worked. This is the time to enjoy its rewards.’’

Indeed, for Manmohan, handling the left parties and Muslims will be a daunting task, given the compulsions of domestic politics. In the end, the problems could be more within than outside.