The US-India nuclear agreement

US entices India with nuclear bribe


The US is making a determined effort to draw India into its geopolitical orbit.  The carrot it is offering to India is access to nuclear materials and equipment for the expansion of its nuclear power programme, access which is at present almost entirely denied.  It reverses a 30-year old US policy of denying nuclear materials and equipment to India, which was prompted by India’s first nuclear weapons test in 1974.


This was a key element of an agreement signed by President Bush and Prime Minister Manmohan Singh in Washington on 18 July 2005.  The US is making this offer, but there is little doubt that other states with nuclear materials and equipment to sell will follow suit, since to do otherwise would deny their nuclear industries business in India.


In effect, India is going to acquire the status, and the privileges, of a “nuclear-weapon” state like the five official “nuclear-weapon” states (the US, the UK, Russia, France and China) recognised by the Nuclear Non-Proliferation Treaty (NPT).  This is going to happen, even though India has never signed the NPT and isn’t going to sign it now.  Can Israel and Pakistan be far behind?


This is not to say that the US will be acting contrary to the NPT in exporting civil nuclear materials and equipment to India.  The NPT does not explicitly forbid such exports by signatories to a non-signatory state, whether it has nuclear weapons or not, and nor does any other international treaty to which the US is a signatory.


Not that India is in a position to sign the NPT now.  A state has to sign the NPT, in its present form, either as a “nuclear weapon” state or as a “non-nuclear-weapon” state.  India cannot sign as a “nuclear-weapon” state, even though it has nuclear weapons, because the NPT itself defines a “nuclear-weapon” state as one “which has manufactured and exploded a nuclear weapon or other nuclear explosive device prior to 1 January 1967” (Article IX(3)), and India didn’t explode a device until 1974.  And, it cannot sign as a “non-nuclear-weapon” state, because it’s not going to give up its nuclear weapons.


India a “rogue state”

For nearly 40 years, India has been a “rogue state” in nuclear affairs, defying “the international community” by refusing to sign up to the NPT on the grounds that it was discriminatory against states that didn’t possess nuclear weapons in 1967 (which was manifestly true) and refusing to accept that the possession of nuclear weapons should be limited to those states.  It then proceeded to develop nuclear weapons of its own and its own delivery systems.  Yet it is now being rewarded for this “rogue” behaviour, by being allowed to trade freely in nuclear materials and equipment and to continue to engage in whatever nuclear activities, civil or military, it chooses within its boundaries – like the five “official” members of the nuclear weapons club.


By contrast, Iran, which signed the NPT in 1968 during the Shah’s rule and has never withdrawn from it, is not only banned from developing nuclear weapons under the terms of the NPT, but is also being pressurised by the US/EU into abandoning uranium enrichment for civil nuclear purposes, which is its “inalienable right” under the NPT. 


It may be that, if the pressure on it continues, Iran will withdraw from the NPT, as it is allowed to do by Article X(1) of the NPT itself, and, like India, be free from any international treaty constraints on its domestic nuclear activities, civil or military.  In which case, if the US applied the same standards to it as it has applied to India for the past 35 years, Iran would be left alone to develop a nuclear power programme and nuclear weapons and when it became a grown up “nuclear-weapon” state like India has now, it would be offered a nuclear deal by the US, which would make it the 7th member of nuclear weapons club (or perhaps the 8th or 9th, since by then the US may have offered Israel and/or Pakistan the same nuclear deal that it has offered India).


Of course, the US will not apply the same standards to Iran as to India.  Iran’s sin is not its nuclear activities, but that it refuses to bow the knee to the US and is an avowed enemy of Israel, whereas India is potentially an ally of the US – so different standards apply.


Full civil nuclear energy cooperation

A joint statement issued by President Bush and Prime Minister Manmohan Singh on 18 July 2005 sets out the agreement.  The part which is concerned with nuclear matters begins as follows:


“Recognizing the significance of civilian nuclear energy for meeting growing global energy demands in a cleaner and more efficient manner, the two leaders discussed India's plans to develop its civilian nuclear energy program.


“President Bush conveyed his appreciation to the Prime Minister over India's strong commitment to preventing WMD proliferation [unlike Pakistan - DM] and stated that as a responsible state with advanced nuclear technology, India should acquire the same benefits and advantages as other such states. The President told the Prime Minister that he will work to achieve full civil nuclear energy cooperation with India as it realizes its goals of promoting nuclear power and achieving energy security.


“The President would also seek agreement from Congress to adjust U.S. laws and policies, and the United States will work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India, including but not limited to expeditious consideration of fuel supplies for safeguarded nuclear reactors at Tarapur. In the meantime, the United States will encourage its partners to also consider this request expeditiously.”


As I have said, there is nothing in the NPT to prevent the US, or any other signatory to the Treaty, exporting civil nuclear materials and equipment to non-signatory states.  Under Article III(1) of the Treaty, “non-nuclear-weapon” state parties to the Treaty (that is, all signatories bar the US, the UK, Russia, France and China) undertook to make their nuclear facilities subject to IAEA safeguards to verify that they aren’t being used for weapons development.


Under Article III(2), all signatories agreed not to provide nuclear materials or equipment unless the recipient state has such safeguards in place.  Article III(2) reads:


Each State Party to the Treaty undertakes not to provide: (a) source or special fissionable material, or (b) equipment or material especially designed or prepared for the processing, use or production of special fissionable material, to any non-nuclear-weapon State for peaceful purposes, unless the source or special fissionable material shall be subject to the safeguards required by this Article.”


This principle has been applied to the supply of nuclear material and equipment to India, a non-signatory state with nuclear weapons, even though it’s not obvious that it falls within the set of importing states covered by Article III(2).


Nuclear Suppliers Group

Shortly after the NPT came into force, international guidelines were established (by the Zangger Committee) specifying a “trigger list” of materials and equipment falling within the ambit of Article III(2).  In 1975, in response to India’s explosion of a nuclear device the previous year, a Nuclear Suppliers Group (NSG) of states was set up, which now has 44 members, including all the major nuclear powers within the NPT (see Arms Control Association website here).


Under the auspices of this Group, these states have voluntarily agreed guidelines regulating the export of nuclear materials and equipment, the objective being to prevent them being used for weapons development.  NSG members are supposed to agree to put these guidelines into their domestic law on export controls.  However, because the guidelines are voluntary and not enshrined in any international treaty, ultimately they may export any materials and equipment they wish to whom they wish.  Equally, they may refuse to export materials and equipment permitted under the guidelines.


The key feature of the latest guidelines agreed in 1995 (see IAEA website here) is that they require the recipient state to subject their nuclear facilities as a whole, and not just individual facilities, to IAEA safeguards:


“Suppliers should transfer trigger list items or related technology to a non-nuclear-weapon State only when the receiving State has brought into force an agreement with the IAEA requiring the application of safeguards on all source and special fissionable material in its current and future peaceful activities. [my emphasis]” (paragraph 4(a))


India’s nuclear facilities as a whole are not subject to IAEA safeguards, merely a few isolated facilities, for example, two Boiling Water Reactors (BWRs) at Tarapur, supplied by the US under an agreement first signed in 1963.  This is why India is unable at present to import nuclear materials and equipment, except in very limited circumstances.


In the agreement signed with India on 18 July 2005, the US administration has committed itself to reverse this, not just in respect of imports from the US, which requires a change in US law and therefore the consent of Congress, but in respect of imports from all supplier states.  This is what is meant by the following in the joint statement:


The President would also seek agreement from Congress to adjust U.S. laws and policies, and the United States will work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India …”


Earlier NSG guidelines

The NSG guidelines used to be less onerous, allowing the export of nuclear material and equipment if the receiving nuclear facility, but not all of a state’s nuclear facilities, was under IAEA safeguards.  The discovery in 1991 that Iraq had a nuclear weapons programme was the trigger for the tightening of the guidelines.


The earlier, less onerous, guidelines allowed India to import enriched uranium to fuel its Boiling Water Reactors (BWRs) at Tarapur, albeit with great difficulty.  These reactors, which are subject to IAEA safeguards, became operational in 1969.  However, because of the Indian nuclear test in 1974, the US refused to supply additional fuel when it was required in 1976.  Eventually, France (in 1983), China (in 1995) and later still Russia (in 2001) supplied fuel, the latter after the more comprehensive NSG guidelines came into force and therefore widely regarded as contrary to these new guidelines.  The new guidelines have a safety exemption, and Russia tried to justify its action re Tarapur on the grounds that safety considerations required the enriched uranium to be supplied.


The new guidelines also have an exemption for exports under a contract signed before the guidelines came into force.  Under this exemption, Russia is supplying India with a pair of large Pressurised Water Reactors (PWRs) (aka VVERs), which are being installed at Koodankulam in Tamil Nadu.  These use enriched uranium fuel, which is also to be supplied by Russia.  This project is said to qualify as an exemption because it originates from a general agreement on nuclear cooperation signed between India and the Soviet Union during a visit to India by Gorbachev in 1988.


(India has indigenous uranium but, unlike its neighbour, Pakistan, it hasn’t developed the capability of enriching uranium to fuel these reactors.  The fissile material for its weapons is plutonium derived from spent reactor fuel, not highly enriched uranium like Pakistan.)


Importing difficulties

These examples illustrate India’s difficulties in importing nuclear materials and equipment in present circumstances, difficulties which were destined to become impossibilities as exemptions from the new guidelines can no longer be justified.  Without the deal proposed by the US, India could end up being unable to import enriched uranium to fuel some of its power plants – which is an immediate reason why the deal is attractive to India.  Part of it is “expeditious consideration” by the US “of fuel supplies for safeguarded nuclear reactors at Tarapur”, to quote from the joint statement, leading, presumably, to a guaranteed supply of fuel for Tarapur from the US.


It is true that the bulk of India’s nuclear power programme is home grown, based on Pressurised Heavy Water Reactors (PHWRs) using indigenous natural uranium.  Two of these were supplied by Canada in the 70s and early 80s (and are under IAEA safeguards) and the rest are of Indian design based on the Canadian model.  India has the technical ability to expand nuclear power generation at will without recourse to the import of nuclear-related materials equipment, given a sufficient supply of indigenous uranium.  However, there is some doubt if the quantities of uranium available are sufficient to fuel the proposed, very large, expansion in India’s nuclear power programme, which makes the ability to import uranium essential.


Generation IV & ITER

The agreement signed on 18 July 2005 will also lead to India’s participation in international research projects on nuclear and thermo-nuclear energy.


The first is the Generation IV International Forum on nuclear energy (see here), established by the US Department of Energy.  Argentina, Brazil, Canada, France, Japan, South Africa, South Korea, Switzerland and the UK participate in this, along with the US.  It is seeking to identify more efficient reactor types, and is therefore of immediate interest to India, as it seeks to expand its nuclear power generation.  In the joint statement, the US promises to “consult with the other participants in the Generation IV International Forum with a view toward India's inclusion”.


The second is ITER, the International Thermonuclear Experimental Reactor (see here), which is to be built in Cadarache in France and is planned to begin operations in 2016.  The entities currently involved are China, the EU and Switzerland (represented by Euratom), Japan, South Korea, Russia, and the US.  Obviously, this project is not going to bear fruit immediately, and maybe won’t bear fruit at all.  Of it, the joint statement said “the United States will consult with its partners considering India's participation”.  India has the support of the EU for its participation in ITER: at the India-EU summit on 7 September 2005, it was agreed that they would “work to secure India’s membership in the ITER nuclear fusion project” (see joint declaration here). 


What India has to do

What has India to do in order to get access to nuclear materials and equipment?  In general terms, it has to separate out its military and civilian and nuclear facilities and put the latter under IAEA safeguards.  To quote from the joint statement:


“The Prime Minister conveyed that for his part, India would reciprocally agree that it would be ready to assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States. These responsibilities and practices consist of identifying and separating civilian and military nuclear facilities and programs in a phased manner and filing a declaration regarding its civilians facilities with the International Atomic Energy Agency (IAEA); taking a decision to place voluntarily its civilian nuclear facilities under IAEA safeguards; signing and adhering to an Additional Protocol with respect to civilian nuclear facilities; …”


However, the requirement is not as comprehensive as it seems.  The key element of it is India’s expressed willingness “to assume the same responsibilities and practices ... as other leading countries with advanced nuclear technology, such as the United States”.   Clearly, the arrangements between the IAEA and India foreshadowed in the agreement are similar to those the IAEA has with the US and the other official “nuclear-weapon” states.


The distinguishing feature of such an agreement is that it is voluntary – the official IAEA name for it is “voluntary offer safeguards agreements” – and the materials and facilities falling within the scope of the agreement are chosen by the “nuclear-weapon” state, and can be withdrawn by the “nuclear-weapon” state at any time.  Needless to say, materials and facilities connected in any way with their weapons programmes are not offered for inspection.  As the IAEA Safeguards Statement for 2002 explains:


“Voluntary offer safeguards agreements have been concluded with the five nuclear-weapon States. Each State offers some or all of its civilian nuclear material and/or facilities from which the Agency may select some for the application of safeguards.”


This is a far cry from what Iran is subject to today as a “non-nuclear-weapon” state, which under Article III(1) of the NPT is required to subject all its nuclear facilities to IAEA safeguards, and the IAEA monitor all of them.  The purpose of this is supposed to be to verify that “non-nuclear-weapon” states aren’t developing nuclear weapons – which makes the implementation of IAEA safeguards a pointless exercise in states that already possess nuclear weapons.


IAEA safeguards no big deal

Criticism of the agreement with the US has been voiced in India on the grounds that opening its nuclear industries to IAEA inspection would compromise its nuclear deterrent.  The Indian Express carried a well-informed rebuttal of this in an article by C Raja Mohan on 28 July 2005.  It began:


“Contrary to assertions here that the separation of India’s civilian and military nuclear programmes and placing the former under international [IAEA] safeguards will undermine India’s nuclear deterrent, a reading of similar agreements by other nuclear weapon states suggests the government will retain full operational flexibility under any such arrangement.

“Besides choosing which facilities of the nuclear programme it wants to designate as civilian and place under international safeguards, India will have the option of removing facilities from the list it would eventually submit to the International Atomic Energy Agency.

“In addition, India, like the five other nuclear weapon states, would also retain the option of withdrawing nuclear material, if national security reasons so demand, from the facilities on which it voluntarily accepts IAEA safeguards.”

The article ends:

“To forgo the opportunity of expansive civilian nuclear cooperation with the world, that the nuclear pact with US promises, by raising abstract fears about long overdue separation of civil and military programmes would involve stupendous short-sightedness on the part of India’s nuclear managers.”


Indian regularisation?

Why do “nuclear-weapon” states enter into “voluntary offer safeguards agreements”?  The IAEA Safeguards Glossary says that they do so “inter alia, to allay concerns that the application of IAEA safeguards could lead to commercial disadvantages for the nuclear industries of non-nuclear-weapon States”.  I can’t judge if that makes any sense.  But my guess is that these voluntary agreements are entered into mainly for appearances sake – to give the impression that the “nuclear-weapon” states are prepared to submit their nuclear industries to the same scrutiny as the “non-nuclear-weapon” states, when in fact they never will, because their nuclear industries have a military component.


However, it can be guaranteed that India’s willingness to enter into such an agreement with the IAEA will be trumpeted by the US as bringing Indian nuclear facilities under international supervision for the first time.  Having denied India access to nuclear materials and equipment for over 30 years since its first nuclear test, a plausible reason has to be advanced to Congress and the Nuclear Suppliers Group for this policy volte face.  It’s not possible to advance the real reason in public – that the US wants to make India a reliable ally in world affairs – so a pretence has to be made that what is happening is a regularisation of India’s position within the world nuclear order.


This was the theme of the administration’s message to Congress, when Nicholas Burns and Robert Joseph from the State Department gave evidence on the agreement to the International Relations Committee of the House of Representatives on 8 September 2005.  Burns, who is Under Secretary of State for Political Affairs, played a leading role in the negotiating the agreement and is now overseeing its implementation.  He told the Committee:


“We sought this agreement because India’s nuclear weapons program and its status outside the nonproliferation regime has proven to be a longstanding stumbling block to enhanced U.S.- India relations, as well as a problem for the global nonproliferation regimes. …


“Although India has demonstrated a strong commitment to protecting fissile materials and nuclear technology more generally, it is in both Indian and American interests that New Delhi’s isolation be brought to an end and that India be made part of a stable global nonproliferation order.


“The agreement between President Bush and Prime Minister Manmohan Singh does this in a fair and equitable way. It contemplates both countries taking serious steps toward achieving the goal of strengthening the international nonproliferation regime, while also meeting India’s very real energy needs in a way that contributes to a clean global environment.”


In his opening statement, Robert Joseph, who is the Under Secretary for Arms Control and International Security in the State Department, made a similar point:


“… India has agreed to take on key nonproliferation commitments that will bring it for the first time into the mainstream of the international nuclear nonproliferation community. This is a major positive move for India. While more can and will be done, India's implementation of its agreed commitments will, on balance, enhance our global nonproliferation efforts, and we believe the international nuclear nonproliferation regime will emerge stronger as a result.”


Without prompting, Joseph specifically denied that Israel and Pakistan were next in line for this treatment:


“We view India as an exceptional case, and see civil nuclear cooperation as a mechanism to deepen further India's commitment to international nonproliferation. Some have asked whether it might be possible to extend such cooperation to Israel and Pakistan - the only two other states that did not join the NPT. India, Israel, and Pakistan are each unique and require different approaches. Neither Pakistan nor Israel has a civil nuclear energy program that approximates that of India. The United States has no plans to seek full civil nuclear cooperation with Israel or Pakistan.”


But, if this treatment will bring Indiafor the first time into the mainstream of the international nuclear nonproliferation community”, why not apply the same treatment to Israel and Pakistan and bring them “for the first time into the mainstream of the international nuclear nonproliferation community”?


Will deal go through?

Will Congress amend US law to allow the export of nuclear materials and equipment to India?  Will the Nuclear Suppliers Group (NSG) collectively agree that IAEA safeguards on facilities of India’s choosing is sufficient to meet NSG guidelines for the export of nuclear materials and equipment?


To address the latter first, it appears that surprise, surprise, the UK is already onside.  Robert Joseph told the International Relations Committee on 8 September 2005:


“Mr. Chairman, many of our international partners have recognized the need to treat India differently and some have indicated their outright support. The United Kingdom, for instance, welcomed the initiative and noted its pleasure at India's willingness to take these steps as outlined in the Joint Statement.”


To the best of my knowledge, the British Parliament and people have yet to be told of the UK’s welcome for this initiative.


A meeting of the NSG took place on 19 October 2005.  A Reuters report in the Indian Express on 21 October 2005 began:


Key nuclear-supplier nations have put off action on a U.S. proposal to lift restraints on transferring nuclear technology to India, U.S. officials said …


“At the meeting, Britain, France, and Canada were generally supportive, but Sweden asked ‘hard questions’ and Japan seemed wary of the India deal, officials said.”


The next scheduled meeting of the NSG is in May 2006.


In reality, there is no chance of NSG member states refusing to sell nuclear materials and equipment to India if the US does, since to do so would be deny their nuclear industries Indian business.  So, the only significant stumbling block in the way of the deal bearing fruit is the US Congress.


It is not beyond the bounds of possibility that Congress will block the deal.  Senior foreign policy figures in Congress, both Republican and Democrat, are miffed that the administration did not follow the usual practice and consult them before doing the deal on this controversial issue.  The Republican chairmen of the House International Relations Committee and the Senate Foreign Relations Committee, Henry Hyde and Richard Lugar, and the senior Democrats in the Committees, Tom Lantos and Joseph Biden, have now formally written to Secretary of State, Condoleeza Rice, asking that the administration consult with them before proposing legislation to implement the agreement (see, for example, Reuters report, Congressmen press Rice on India nukes deal, 19 October 2005).


It has been widely reported that many members of Congress are less than enthusiastic about the substance of the deal also.  For example, this Reuters report says:


“Many members of Bush’s Republican party, which controls Congress, and also many Democrats fear the deal excessively benefits India and undermines international efforts to halt the spread of nuclear weapons.”


It’s a fair bet that if India proved to be a reliable ally of the US in international affairs, and particularly over Iran, these objections would melt away like snow off a ditch.  However, should India maintain its present public stance that Iran should not be referred to the Security Council, then Congress may very well refuse to pass the necessary legislation to implement the agreement.


India didn’t make any commitment in the agreement, as published, to foreign policy changes that the US would approve of, but the joint statement on the agreement does say:


“The two leaders state their expectations that India and the United States will strengthen their cooperation in global forums.”


Including the IAEA, presumably.


(The statement also said:


“In light of this closer relationship, and the recognition of India's growing role in enhancing regional and global security, the Prime Minister and the President agree that international institutions must fully reflect changes in the global scenario that have taken place since 1945. The President reiterated his view that international institutions are going to have to adapt to reflect India's central and growing role.”


This gives general US support to India in its quest to be recognised as a heavyweight in world affairs.  But it stops short of specific support for India’s quest for a permanent seat on the Security Council.  Japan is the only state which enjoys US support for this, though without a veto.)


Lantos: reciprocity expected

At the International Affairs Committee hearing on 8 September 2005, Tom Lantos, the senior Democrat on the Committee, made it clear what he expected India to do, in order to gain the approval of Congress for the agreement (see here):


“When the administration called me asking for my support for the issue we are now about to discuss, I gave it, and I continue to do so. But there is a degree of reciprocity we expect of India, which has not been forthcoming.


“The policy of India towards Iran is a matter of great concern to many of us, as is the policy of Russia towards Iran. [T]he United Kingdom, France and Germany, along with us, are prepared to refer the issue to the United Nations Security Council for action. Russia has publicly stated they will object to that.


“I would not like to see a similar set of developments with respect to India whereby we agree to undertake a tremendous range of path-breaking measures to accommodate India, while India blithely pursues what it sees should be its goal and policy vis-ŕ-vis Iran. There is quid pro quo in international relations. And if our Indian friends are interested in receiving all of the benefits of U.S. support we have every right to expect that India will reciprocate in taking into account our concerns.


“So to repeat in a nutshell, I support the policy … but I expect India to recognise that there is reciprocity involved in this new relationship, and without reciprocity, India will get very little help from the Congress. If we are turning ourselves into a pretzel to accommodate India, I want to be damn sure that India is mindful of U.S. policies in critical areas such as U.S. policy towards Iran. India cannot pursue a policy vis-ŕ-vis Iran which takes no account of U.S. foreign policy objectives.”


Tom Lantos is not a representative figure in Congress – he is a holocaust survivor and his support for Israel, and opposition to its enemies, is visceral – but if India fails to support the US over Iran the deal may come unstuck in Congress.


The administration is due to make proposals on the necessary legislative changes in early 2006.  Before then, an IAEA Board meeting is scheduled for November, at which the US/EU will make another effort to have the Iran issue referred to the Security Council.  If India fails to back the US wholeheartedly on that occasion, who knows what will happen to the deal.


Domestic constraints

There are domestic constraints on the Indian Government shifting its ground to do what the US wants in foreign policy.


The Congress-led Government relies on a Left Front of parties, including the Communist Parties, to keep it in power.  Congress has only 145 seats in the 545-member Lok Sabha, not many more than the main opposition, Bharatiya Janata Party (BJP), which has 138.


After India voted with the US on a resolution in the IAEA Board on 24 September 2005, which found Iran to be in “non-compliance” with its obligations under its Safeguards Agreement with the IAEA, there was an outcry from the leaders of its left allies.  Quite reasonably, they interpreted this shift away from India’s normal independent position in foreign policy to a quid pro quo for the nuclear deal, and sought a meeting with Prime Minister Manmohan Singh to seek an explanation for India’s vote and to demand a reversal of the vote at the IAEA Board meeting in November.  After the meeting, they declared themselves to be unhappy with the Prime Minister’s response.  If India votes with the US in November to refer Iran to the Security Council, there is a possibility that the Government will no longer command a majority in the Lok Sabha.


When in government, the BJP began the process which led to the agreement of 18 July 2005.  In November 2001, in the wake of 9/11, the then Prime Minister, Atal Bihari Vajpayee, and President Bush agreed to expand US-India co-operation on a wide range of issues and develop what was termed a “strategic partnership”.  In October 2001, the US had removed the remaining sanctions against India (and Pakistan), imposed as a consequence their nuclear tests in May 1998. 


(Military co-operation, which began in 1995, was interrupted after these tests.  It was resumed after 9/11 also, under the auspices of the India-US Defense Policy Group, which meets regularly and, as a result, the US has sold India military equipment and joint military exercises has been held.)


In January 2004, Bush and Vajpayee agreed on further co-operation under the banner of “Next Steps in Strategic Partnership” (NSSP), which came to fruition with the agreement of 18 July 2005.  By this time the BJP had lost power to a Congress-led coalition in an election in April 2004.  The US feared that a Congress-led Government relying on left wing support would be a less enthusiastic partner, but their fears have been proved groundless.


The BJP’s reaction to the agreement was guarded, neither supporting it nor opposing it outright (which would have been difficult given the BJP’s part in the process leading to it), but BJP leader Vajpaye expressed concern that the splitting of India’s nuclear facilities into civil and military would reduce India’s freedom to develop its nuclear weapons (see press statement here).


It also criticised the Government over India’s vote in the IAEA Board, accusing it of being “surreptitiously engaged in a major recast of policy on this important issue, which directly affects our national security, too”, and saying that there was a strong belief that “this has been done under international pressure, particularly of the US” and that the “government has effected this major policy shift on the quiet, without adequate democratic consultations” (see press statement here).


While it is likely that the Indian Government will survive a vote in the IAEA Board in November in favour of referring Iran to the Security Council, it cannot be taken for granted.


There remains a doubt as to whether India’s vote with the US in the IAEA Board in September represented a significant shift in policy or merely a gesture to please the US.  In explaining its vote, India insisted that its policy hadn’t changed: that it wanted the matter resolved by the IAEA, not referred to the Security Council, and that declaring Iran to be in “non-compliance” with its obligations under its Safeguards Agreement with the IAEA was not justified – having just voted for a resolution declaring Iran to be in “non-compliance” (see my article The US/EU fails on Iran at the IAEA).  This sort of ambiguity is unlikely to survive through the November meeting of the IAEA Board.


Constraints re Iran

Another constraint on India blindly siding with the US against Iran is that the latter is a major supplier of oil and gas to India, and plans are afoot for this to grow sharply.


For example, in January 2005 India signed a deal with Iran, said to be worth $40bn in total, to ship 7.5 million tonnes of liquefied natural gas annually over a 25 year period from 2009 (see BBC report here).


A plan is also afoot to build a gas pipeline from Iran through Pakistan, supplying both Pakistan and India, as a result of which Pakistan would earn substantial transit fees.  This plan has been around for a long time, but never came to fruition because of India’s fears about security of supply via a pipeline through Pakistan.  But, now that relations between India and Pakistan have improved, so have the prospects of the pipeline being built.  On a visit to Pakistan to discuss the pipeline on 6 June 2005, Indian oil minister, Mani Shankar Aiyar, described the project as a “certainty” (see BBC report here)


The US is opposed to India (or any other country) having dealings with Iran, but is particularly opposed to this pipeline, which would bind India (and Pakistan) to Iran for a generation – and has threatened that parties to the pipeline project may be subject to sanctions under US law.  In an interview with The Hindu newspaper on 2 September 2005, the US Ambassador to India, David Mulford, said:


“What we have done with the Indian government is that we have advised them, when this project became known, that we have legislation - the Iran-Libyan Sanctions Act – on our books which requires the administration to look at investments that appear to help develop and monetise that development of Iranian natural resources. And, to impose sanctions on parties that participate in that process.”


(The Libya-Iran Sanctions Act seems to bear a resemblance to the Helms-Burton Act, which, contrary to WTO rules, attempts to penalise non-US companies that trade with Cuba.)


With its requirements for oil and gas growing rapidly, and relatively little indigenous supply, India cannot risk endangering its oil or gas imports, now or in the future, from any of its suppliers.  A political clash with Iran, as a result of siding with the US at the IAEA, might lead to Iran’s restricting supply now, or reducing future commitments to supply – since world demand for oil and gas is high and rising, there are plenty of other customers out there.


This is obviously an outcome India would wish to avoid.  The nuclear deal with the US has the potential to assist India’s overall energy supply in, perhaps, ten years time, but Iran has the capability of affecting India’s oil and gas supply now.  So, India has to think twice about blindly siding with the US against Iran.


David Morrison

Labour & Trade Union Review


27 October 2005