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After the NSG Debacle, Here Comes the Spin

The claims made by apologists for the government about why India needs to rush its membership of the NSG simply don’t add up

Udta Modi. Credit: Reuters

See how I spin. Credit: Reuters

The Nuclear Suppliers Group plenary in Seoul was a debacle for India. Countries of our standing in the world rarely suffer such public humiliation, because they have skilled diplomatic services, as India does, which assess the importance of an international objective to national interests, gauge very carefully the likelihood of success, prepare the ground without fanfare, and commit national prestige to a public pursuit only when nothing has been left to chance. Exceptions are made only when what is at stake is of such supreme importance or urgency that a gamble is worth the risk. These precepts, which all mature nations follow in their foreign policy, were abandoned in the government’s strange and sudden infatuation with the NSG. We were, as Shakespeare said of lust, mad in pursuit; it ended, as he said it does, with the expense of spirit in a waste of shame.

This was a scandal, but though the prime minister gave his first television interview in office soon after to a programme that is usually the last refuge of scandals, he was not even asked the obvious and crucial questions. Why was membership of the NSG so important? If it was, why did we rush into it, expecting a decision to be taken within weeks of asking for it? What were we doing over the six years since the United States gave India its benison for the NSG, as well as the MTCR, the Australia Group and the Wassenaar Arrangement? And why, when China refused to budge, in the company of others, did we single it out for public criticism in official statements, not once but repeatedly, turning this now into a tussle between them and us, a win for one down the line an inevitable loss of face for the other. This is the nightmare scenario that diplomats try to avoid. The more powerful the country that loses, the more certain that it will exact a price, then or later. Does joining the NSG justify getting into a showdown with China over it?

Tall claims on ENR

In articles of absolutely mesmerising spin, apologists for the government now argue that the 2011 amendment to the NSG guidelines – which excluded countries outside the NPT from trade in enrichment and reprocessing (ENR), and therefore qualified what had been an unconditional waiver for India – was a “wake-up call”; unless India was in, other changes could be made to the waiver in the future which it could not block. Secondly, that membership became urgent because the principal suppliers wanted it, and it was essential to move forward on contracts after India committed, as part of its Intended Nationally Determined Commitments (INDC) in the context of the Paris summit on climate change in 2015, to generate 63 GWe from nuclear power by 2032.

On the first argument, the insinuation is that those on the watch in 2011 were sleeping on the job, and snored through the wake-up call, forcing their more alert successors into the unedifying running of the Brahma bull into the china shop that we have seen now. This would have been plausible if this government had not taken office in 2014: two years is a long time for wise virgins, not least because Obama the bridegroom twice tried to shake India out of its slumber. The joint statements issued in September 2014 and January 2015 reiterated his support for India’s “early application and eventual membership” in the NSG, as well as the other three groups. This was not enough to break our torpor. The “early application” came a year and a half later.

Secondly, the 2011 amendments to the NSG guidelines were sui generis. As was reported extensively when negotiations in the NSG on the waiver came down to the wire, a group of NPT purists – Austria, Ireland, The Netherlands, New Zealand, Norway and Switzerland – held out for three conditions: there would be a periodic review of India’s compliance with its non-proliferation pledges, the waiver would not cover trade in enrichment and reprocessing, and it would lapse if India resumed nuclear tests. India accepted a review, since it had nothing to hide, the purists accepted our voluntary moratorium on testing, and were coerced into backing off on ENR, since we insisted that the waiver should be unconditional or “clean”.

ENR therefore was the only reservation these countries still harboured, and they took the first opportunity they had to amend the guidelines, so that what India got from the waiver was taken away by the revision. They could not have done this without the consent of all the others in the NSG, even those who later said that they would honour the original terms of the waiver, ignoring the change. That remains to be seen. We have incorporated the other changes made between 2011 and 2013 to the NSG guidelines in our own laws, so clearly we have no difficulties with them.

The crucial difference now is that over the last five years, we have signed agreements for the supply of fuel with Australia, Canada and Kazakhstan, three out of the ten largest producers in the world, and either have awarded contracts for reactors, or are negotiating them, with Russian, US and French companies. A minimum of five major members of the NSG now have enormous stakes in ensuring that the terms of the waiver are not changed in any way that could jeopardise their interests. A chance of any further revision that is India-specific is now remote, apart from the fact that there is no area of trade with India, other than ENR, on which any member of the NSG has reservations.

Equally, however, given the negotiating history, we would be unable to get a consensus in the group to turn the guidelines on ENR back to accommodate us. Membership, therefore, gives us nothing. It means that India would be the only member of the group not allowed to trade as of right with all others in all aspects of the nuclear cycle. That is a second-class membership.

Faulty maths on climate change 

The second argument, that membership was essential because of India’s commitments in the Paris agreement on climate change, was first put out as a veiled threat in the official statement issued after the NSG plenary ended.  It made the astonishing claim that India’s application for membership had “acquired an immediacy” after we set a target of “40% non-fossil power generation capacity by 2030” in our INDC, and an “early positive decision by the NSG would have allowed us to move forward on the Paris Agreement”. In other words, without being members of the NSG, we might have to renege on our commitments.

This petulance did not become a country like India. And the special pleading since then has been very frugal with the truth. The fact is that in our INDC, presented by this government, it had said that its plans for nuclear power would go forward “if supply of fuel is ensured.” That is not now a constraint. None of the major suppliers with which India now has agreements has made membership of the NSG a condition for continuing contracts. So supply of fuel is ensured, and that was the principal proviso the government placed on meeting the target it announced.

The other problem, stated elliptically elsewhere in the INDC, is of course finance, and that would be massive. Price negotiations for the six Westinghouse AP1000 reactors we have agreed to buy have not yet begun, but there were huge overruns on the two now being built in the US. They were contracted for in 2008 for $8 billion, rose to $14 billion, and current estimates are that they will end up costing $21 billion. Given escalation of costs by the time our contract is finalised, and the padding that will be inevitable to cater for the provisions of our Nuclear Liability Act, even in the most giddily optimistic scenario, the six reactors will cost India a minimum of $63 billion to produce 6000 MW. However, the US think-tank Institute for Energy Economics and Financial Analysis did a study in March this year in which it estimated that the six units would cost India between $95 and $170 billion, the first unit would start to produce power by 2029 at the earliest, and the tariffs would be insupportable for the consumer.

If the government plans to contract with foreign suppliers for new reactors to generate 30 GWe, as its apologists claim, and the estimates of the think-tank are realistic, the outlay will be between $475 and $850 billion. Not more than one or two would be ready by the target date of 2032, and the financial burden, for the government and the consumer, would be back-breaking. These, therefore, are the real problems that the government must confront and place before the people: is nuclear power, generated on this scale from imported plants, fiscally responsible or even sustainable? Even if the government finds the money, the imposition in tariffs on the consumer would be huge and unfair. And since the target of 63 GWe cannot possibly be met by 2032, how does it plan to honour its INDC? None of these problems will be solved by membership of the NSG. It simply is not germane.

Satyabrata Pal is a former Indian high commissioner to Pakistan

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