Nuclear Dividends?

The Bush-Singh deal was momentous in both symbolic and material importance. It implicitly recognized India as a nuclear weapons state, a gesture New Delhi very much wanted but one that the Clinton administration refused to make. And by promising to end a decades-long embargo on nuclear energy technology against India, the Bush administration committed to overturning U.S. laws and global non-proliferation norms for New Delhi’s singular benefit.

At the time, U.S. advocates spoke of portentous opportunities in the strategic and commercial realms. A high-ranking U.S. official described the deal as “the big bang” designed to consummate a broad strategic relationship with a rising India that was aimed at balancing China’s burgeoning power. Ron Somers, the head of the U.S.-India Business Council, argued that “history will rank this initiative as a tectonic shift equivalent to Nixon’s opening to China.”  Leading U.S. corporations quickly lined up, expecting that a grateful Indian government would reward them with lucrative contracts in the nuclear power generation and defense systems fields. Estimates were floated that access to India’s expanding nuclear energy sector would alone generate some 250,000 U.S. jobs.

Have the promised gains materialized? According to Michael Krepon (here and here), a prominent critic of the accord, they have not. Pointing to India’s recent elimination – in the face of heavy U.S. lobbying – of Boeing’s and Lockheed Martin’s bids in its $11 billion fighter aircraft competition, as well as New Delhi’s failure to support U.S. diplomacy on the Libya and Syrian issues, he contends that the significant U.S. concessions made in the agreement have netted little in terms of a strategic or diplomatic return. Likewise, he notes the tough nuclear liability law adopted by India last year has the effect of all but blocking the involvement of U.S. companies in the country’s nuclear energy sector.

The accord’s advocates contended at the time that by granting India a special position in the global nuclear order, the nonproliferation regime would ultimately be strengthened. But Krepon believes the reverse has occurred. By bending the rules for India’s sole benefit, a pernicious precedent was set, one that China has just exploited in justifying its sale of two more reactors to Pakistan. And the failure to extract meaningful restrictions on India’s nuclear-weapon capacity has only spurred a paranoid Pakistan to undertake a significant expansion its own arsenal.

Krepon does not deny that bilateral diplomatic and economic ties have improved measurably in the last six years. But much of this, in his opinion, would have occurred even in the accord’s absence. From his vantage, the accord’s actual benefits are far from what was pledged, while the costs critics warned about have been substantiated.

Krepon’s critique arrives at a time of widespread disappointment in Washington that bilateral ties continue to fall far short of the promises that seemed so glistening just a few years ago. In an interview prior to his departure from New Delhi, U.S. Ambassador Timothy J. Roemer chided the Indian government for failing to live up to its side of the bilateral relationship, adding that “There’s no doubt this needs to be a two-way street.”

There are many reasons for this sense of letdown, with fault lying both in Washington and New Delhi. Nonetheless, U.S. champions of the Bush-Singh deal were under no illusion that India’s signature registered its enlistment as America’s junior partner in global affairs or the surrender of its foreign policy independence. For example, Nick Burns, who as Under Secretary of State for Political Affairs in the last administration played a key role in crafting the new U.S.-India relationship, cautioned at the time that “the United States must adjust to a friendship with India that will feature a wider margin of disagreement than [Washington is] accustomed to.”

And even as the deal was proceeding, the two governments were at loggerheads in multilateral trade talks, an impasse that helped bring about the Doha Round’s collapsed. Paradoxically, the U.S. Congress gave its preliminary assent to the nuclear deal in December 2006 at the same moment that frustrations with New Delhi’s position in the Doha negotiations caused legislators to cut some of India’s trade privileges under the Generalized System of Preferences. And in the months prior to Congressional approval of the implementing “123 Agreement,” a high-ranking Bush administration official publicly accused New Delhi of stymieing negotiations and “working behind the scenes for Doha’s demise.”

India’s decision on fighter aircraft was a sharp disappointment to an Obama administration that lobbied strenuously on behalf of the U.S. contestants – so much so that the decision may have even hastened Ambassador Roemer’s resignation. And it undoubtedly deepens the perception in Washington that New Delhi has not lived up to its side of the bargain by reciprocating the huge commitment the United States has made over the past decade to bolster India’s great power prospects. But as Ashley J. Tellis demonstrates in a superb piece of analysis, the decision was sui generis, involving the Indian air force’s rigid application of technical desiderata, rather than the anti-U.S. move some have described it as.

The proliferation-related arguments Krepon reiterates formed the core of the criticism against the accord when it was originally announced. But these points were difficult to sustain at the time in view of the strong support Mohamed ElBaradei, then director general of the International Atomic Energy Agency, gave to the deal. He called the agreement a “win-win” as well as “a milestone, timely for ongoing efforts to consolidate the non-proliferation regime, combat nuclear terrorism and strengthen nuclear safety.” He has reaffirmed this view in his new book. And in case anyone missed the significance of ElBaradei’s endorsement, this is the same man who butted heads with the Bush administration over nuclear weapon allegations regarding Iraq and Iran – actions that helped earn him the Nobel Peace Prize in 2005. In the end, most nations were persuaded by his view that it was better to welcome New Delhi into the nuclear clubhouse, even if somewhat awkwardly, than to continue leaving it out in the cold.

It should also be noted that as the nuclear accord was being debated by the international community, Beijing explicitly assured Washington that it would not exploit India’s special carve-out in the nonproliferation regime to provide more reactors to Pakistan. It is also unclear how large a factor the deal looms in the rapid expansion of Pakistan’s nuclear weapon capabilities. Most likely, Islamabad’s anxiety about India’s “Cold Start” military doctrine – which focuses on deterring Pakistan’s use of jihadi proxies by holding out the threat of swiftly-mounted but calibrated military offensives against Pakistani territory – plays at least as significant a role.

While Krepon accuses India of failing to live up to the broad spirit of the Bush-Singh deal, Indian observers are presently charging Washington with an outright breach of faith. Specifically, they see restrictions just promulgated by the 46-nation Nuclear Suppliers Group (NSG), an informal cartel regulating global nuclear commerce, as undercutting the privileged perch the accord gave India in the international nuclear hierarchy. The NSG prohibitions are designed to prevent the spread of uranium-enrichment and spent-fuel reprocessing technology to countries, like India, that have not signed on to the Non-Proliferation Treaty.

Technically speaking, the provisions, which were advanced by the Obama administration, are not country-specific. However, there is little question they are aimed squarely at India, and this has revived cries about American perfidy that were at fever pitch in New Delhi’s tumultuous debate over the nuclear accord three years ago. Once again, the Communist Party of India and the Bharatiya Janata Party are making allegations about Mr. Singh’s lack of candor in revealing the agreement’s details.

Anil Kakodkar, a former chairman of the Indian Atomic Energy Commission who played a major role in drafting the nuclear deal, has also joined the present fray, characterizing the NSG move as a “betrayal,” while G. Parthasarathy, a leading light in the foreign policy establishment, concludes that “we cannot trust the US as a long-term and reliable partner on nuclear issues.” The Hindu newspaper exclaims that “the Indian side has scrupulously adhered to its side of the broad bargain and has assumed the U.S. and the NSG would do the same. But if the latter are going to cherry-pick which of their own commitments they will adhere to and which they will not, India may well be tempted to examine its own options.” Indeed, the Indian government has threatened to withhold coveted reactor contracts from any country enforcing the new rules.

Beyond the perceived affront to national honor, made all the more palpable since the NSG was founded in response to India’s first nuclear detonation in 1974, it is unclear whether the restrictions will have any practical effect. India already can reprocess material from its fast-breeder reactor program to supply its nuclear arsenal. And the country’s chief nuclear partners – the United States, France and Russia – have rushed to assure New Delhi that the restrictions will in no way impinge upon their previous commitments. Still, it is curious why the Obama administration chose to press the new restrictions at the very same moment it was championing New Delhi’s membership in the NSG (read the U.S. paper on India’s candidacy here).

The growing irritations on both sides will be aired out at the mid-July convening of the U.S.-India Strategic Dialogue in New Delhi. The confab was originally scheduled for April but was postponed, ostensibly at least, because Defense Minister A.K. Antony had to campaign in the Kerala state elections. More likely, Antony and others in the Indian leadership were looking for an excuse to dodge the Obama administration’s full-court press on the fighter aircraft decision. As it turns out, the meeting will now take place with both sides nursing grievances.

(An earlier version of this post appeared at http://www.usinpac.com)