Sunday, June 26, 2011

No More 'Clean' Waiver


With the adoption of a so-far 'secret' resolution, the Nuclear Suppliers' Group, a 46-member cartel, changed its rules and ended India's 'clean' waiver for nuclear commerce obtained after some hard bargaining in 2008 during the Bush Administration in the US.

The bone of contention is the same as it was in 2008: Enrichment and Reprocessing (ENR) Technology. Back then, the Americans were able to bulldoze all opposition as the Bush Administration staked its entire foreign policy on the 123 Agreement. However, for all its statements to the contrary, the Obama Administration is not so forthcoming.

The real problem is not ENR itself: given the decades of nuclear isolation India faced, our scientists have already been working on ENR. The technology itself is not the problem, the problem is the fact that India was promised and received a full waiver subject to no conditions and exceptions. Now, the new rules take back that clean waiver when it comes to ENR. Of course, it's not direct: these are disguised simply as new rules, the very first of which (NPT signatory) is aimed straight at India because the only NPT non-signatory that the NSG can deal with in the first place is India - this rule is designed to remove the clean waiver and for no other purpose.

What can India do now? The Obama administration, forewarned by Indian diplomats, has already announced that it would remain fully committed to the 123 Agreement and the Hyde Act. How exactly this will happen is not clear, because it seems unlikely that the US is going to disregard NSG guidelines. France declared sometime before that its commitments on ENR made to the NSG and at G8 Summits do not apply to India, and a similar thing was said by Russia - India must ask for a strong reiteration of these.

Furthermore, India must make use of its most powerful asset - its demand for nuclear energy, which is even more essential for the nuclear industry after several countries terminated their nuclear energy programmes after Fukushima. India is not one among many potential buyers -India is virtually the only big-ticket buyer that can sustain the industry for decades to come. India must make it clear that for nuclear agreements, ENR is a necessary part of the package. That would add immense pressure on Western governments to disregard the NSG guidelines. It's a risk because the companies could actually face a firm 'No,' but the most likely scenario is that governments will bend in order to protect their companies.

In addition, India must speed up the process of joining export-control regimes (NSG, Wassenar Group, Australia Group and MTCR). Had India been a member of the NSG, this sort of backdoor upturning would have been impossible since the NSG works by consensus. It is no longer enough for us to work with these regimes, we have to work inside them. A great deal of political and diplomatic capital will be required for this but it is well worth it. Already, the US has circulated a thought-paper on Indian membership at the NSG, but India must not consider this to be an American-led initiative like the 2008 waiver.

The new guidelines are definitely a setback to what has been the UPA's only major foreign policy success. A dent on this would be another huge blot on the UPA. It is necessary for India to proactively take up this issue with all friendly nations and work towards ensuring that such a thing never happens again.

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