The nuclear deal, from first principles

March 31, 2008

The nuclear deal: reconsidering it from first principles – Part I

Rajeev Srinivasan on the deal that refuses to die

The discussions about the proposed nuclear deal between India and the United States are much in the news because of several reasons:

  • the apparent preparations being made by the UPA to sign the treaty
  • the continuing ritualistic mating dance between the UPA and the Communists about “will they pull support, won’t they?”, and noises being made by the UPA about general elections
  • the increasing urgency on the American side, which went so far as to declare that it would be satisfied by an endorsement by a minority/caretaker government in India!

The deal has been analyzed to death in India over the last three or four years, and so you, gentle reader, may legitimately wonder why I write about it yet again. The reason is that the situation is so complex, with the impenetrable Hyde Act and the 123 Agreement, and the inflexible positions taken by so many experts, that I felt it was appropriate to step back and look at the thing from first principles.

In my humble opinion, there are three aspects to the deal:

  1. Energy security. High interest for India, moderate interest for the US
  2. Non-proliferation and weaponization. Non-proliferation of high interest to the US; weaponization of high interest to India
  3. Strategic partnership. Moderate to high interest for both countries

After considering these three in turn, I have come to the unfortunate conclusion that India does not gain an advantage in any of them individually if it proceeds with the so-called deal. Therefore it is beyond comprehension how, mysteriously, when you put all three negatives together, you get a wonderfully positive overall deal.

The complexity of the deal and the interminable Hyde Act and 123 Agreement tend to obscure what India actually gains. Add to this the opaqueness with which the UPA government has tried to shove it down the throats of the Indian public – the secrecy implies they have a lot to hide.

The skeptical observer is left with the inescapable conclusion that something stinks. It is a bad deal for India, period.

1. Energy Security

This is an extremely important issue for India. Given the large and growing – and very young — population, India needs to maintain a growth rate like the 8+% real growth rate of the past couple of years. This is the only way the rising aspirations of the middle and lower classes can be maintained. There is surely a lot of momentum, even though prosperity is yet to reach a large segment of the citizenry.

All this growth, of course, consumes a lot of energy. Oil and natural gas are the most easily consumed, but India is short of hydrocarbons on its own territory, and therefore has to import some 80% of its needs. Given current consumption trends and the near-certainty that the world is close to ‘peak-oil’, India is in urgent need of doing one or more of the following:

  1. attempt to acquire the hydrocarbons it needs
  2. improve the efficiency and effectiveness with which it uses energy
  3. seek non-traditional sources of energy
  4. live with reduced growth

First, India’s fitful attempts to enter into long-term agreements with major hydrocarbon producers, both in petroleum and natural gas, have met with only partial success. This is partly because of a lack of ruthless focus (compare to the Chinese who have wooed nations like Angola and Sudan – despite human rights issues). The other part is geographical and geo-political: Bangladesh and Burma have both declined to provide gas; and pipelines like the Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan links are fraught with political risk for India.

Unfortunately, India has been fixated on pipelines, instead of developing the more expensive but supplier-neutral mechanism of liquefied gas and ports capable of handling it. Pipelines are co-specialized assets that tie India to the supplier; whereas LPG terminals enable the import of gas from any supplier.

Second, another issue – which never gets much consideration – is that of improving the system so that the massive waste is reduced. These are policy issues that will have a long lead-time but also long-term value. For one thing, building codes in India (even when they are enforced) are utterly inadequate; most Indian structures are copies of glass-skinned Western buildings. These are grossly inappropriate for India’s climate as they let in enormous amounts of heat which then has to be removed via air-conditioning. It would be worthwhile to bring in by fiat a requirement that ‘green’ technologies be used to reduce energy usage. Similarly, the mandatory manufacture and use of compact fluorescent lamps could conserve electricity.

The other major loss comes from congestion. India’s burgeoning population of motorized vehicles, and the congestion caused by both poor implementation of road rules as well as the lack of adequate roads leads to an extraordinary wastage of fuel. Gridlock at junctions based simply on poor prosecution of rule violators is one such problem.

The building of good roads and interchanges has significant benefits, although these have to be well-designed for the smooth flow of traffic. The title of the world’s most bizarre interchange must go to one at Richmond Circle in Bangalore where you drive up a flyover ramp, stop, wait for cross traffic to pass, and then proceed. I thought the whole point of the overpass was that you did not have to wait for cross-traffic!

Whereas the elected leaders of the country should set an example, they are in fact the worst offenders in profligate waste of fuel. Particularly egregious is the use of motorcades by politicians. A single politician on a trip may bring along a fleet of 50 cars; this is not for security, but for show. A rule that puts a ceiling on this sort of ostentation would go a long way.

Third, renewable energy sources such as solar and wind have enormous potential. Given India’s climate, once solar energy becomes viable – even if it is in niches such as for household electricity use – it would be of enormous benefit. Indian should be putting billions of dollars into research into solar (and other alternative) technologies, as they are on the verge of becoming viable, pending one or two technical breakthroughs.

In addition, what would India’s billions buy if spent on American reactors? Not a single reactor has been built in the US since Three Mile Island blew up in 1979. On what basis is India thinking of buying nuclear reactors from the US? What guarantees can they provide that these things are not a) obsolete designs, b) untested new designs that will melt down and kill Indians and destroy the countryside a la Chernobyl? Oh, and what about the possibility that all this radioactive stuff will easily be stolen by terrorists? Not to mention the problem of disposing of radioactive waste?

Fourth, there is a fundamental question that seems to have fallen by the wayside: What is the consequence of not having enough energy sources? What is the worst-case scenario? Can India live with it? What will happen if, heaven forbid, this were to come true?

The worst-case scenario is one in which GDP growth slows from the current 7+%, to, say 3-4%. This would be a disaster, especially as the Indian economy is at the take-off stage. On the other hand, India has endured slow growth for fifty years as a consequence of foolish political and economic decisions (the Nehruvian Rate of Growth of 2-3%); therefore, the Congress Party are past masters at dealing with meager growth. They know there is not going to be a revolution: the urban elite will grumble, but nothing much else will happen. Shouting a few slogans about the “common man” and “remove poverty” and “bread, clothing and housing” will suffice to keep the masses quiescent.

Finally, does nuclear fission really give India energy security? Alas, it does not, at all. The most optimistic estimates are that 7% of India’s energy needs will come from nuclear fission. What about the other 93%? Instead of being held hostage only by the hydrocarbon-rich (OPEC, Russia, Iran, etc.), India will just be held hostage by the uranium-rich (Australia, US, etc.) as well. Thorium-based fast-breeder technology would be an exception to this, as India has 31% of the world’s reserves, but the technology is far from being commercially viable.

Thus, the nuclear deal is not going to give India the much-touted energy independence. Even if the nuclear deal were to be signed, that still leaves a very large gap between supply and demand. And, given past experience with uranium suppliers (eg. the US reneged on its treaty obligations to supply India with fuel for Tarapur, Australia’s China-friendly Labor government has declared that it would never sell India uranium unless it signs the NPT), it is hard to treat them as dependable.

Comments welcome at my blog at

1450 words

End of Part I.

The nuclear deal: reconsidering it from first principles Part II

Now let us consider the other two legs of the triumvirate of reasons posited to justify the deal.

2. Non-proliferation and weaponization

In an ideal world, there would be no nuclear weapons, and no nuclear powers. Unfortunately, such a world doesn’t exist, so India has to deal with the reality of two bellicose nuclear-armed predators in its vicinity: China and Pakistan. The entire edifice of American non-proliferation, remarkably enough, has winked at the ongoing and massive proliferation between China and Pakistan, and the related A Q Khan nuclear Wal-Mart that has offered all sorts of nuclear goodies to every dangerous nation in the world.

For some unfathomable reason, the Americans have been hell-bent on denying India nuclear weapons. It may well have something to do with their annoyance with all the past posturing and holier-than-thou NAM sermons, which India did in full measure in the 1950s and 1960s. In any case, almost all the nuclear weapon-related multilateral treaties have targeted India as a special case: the NPT, the CTBT, the FMCT, etc. This is especially ironic considering that China, which is far more belligerent, has had a free ride.

By grandfathering the NPT to its 1960’s cutoff date, India has been deliberately singled out to be a non-nuclear power in perpetuity. The (rather circular) argument goes: you have not signed the NPT, therefore we cannot co-operate with you. But if you want to sign the NPT, sorry, you did not become a weapons power before the cut-off date, so you have to give up your weapons. Fortunately, Indian diplomats have resisted this facile argument for a long time. But the resistance appears to be breaking down.

A major portion of the resistance among a section of India’s analysts has been focused on the fact that the nuclear deal in essence gets India to de-nuclearize in perpetuity and be the one major world power that does not have nuclear weapons. All others, such as the US, Russia, and China, and some European nations, have nuclear weapons. This would be an unacceptable situation from India’s security perspective.

There is the legitimate fear that an India that is thus defanged is a sitting duck for China or Pakistan. The only thing that will deter China from running rampant in Asia, doing things like diverting the Brahmaputra, is the threat that India could cause it some real damage with its own nuclear weapons and missiles: ie the famous “credible deterrent”. Given China’s cavalier attitude to its own citizens, “real damage” would be defined as killing 100 million Chinese; that would make China “lose face”; anything less would be considered a mere pinprick. To do this, India needs to have an arsenal of 1,000 warheads and sound delivery vehicles like ICBMs and IRBMs.

To see the logic behind this, consider: would the Americans ever have dropped a nuclear bomb on Hiroshima if Japan had the capability to retaliate in kind? Of course not.

According to strategic affairs expert Brahma Chellaney, who has consistently and with considered arguments opposed the ‘deal’ from the beginning, there are several constraints that would in effect kill off India’s strategic independence. Chellaney says in an article in the Asian Age, March 15th, “The truth Talbott hides”,

that these are the four constraints:

  1. A permanent test ban (which is CTBT by other means)
  2. Restraint on fissile-material production (FMCT by other means; and India has already, and unilaterally, committed to shut down the Cirus research reactor)
  3. Strategic restraint (limits India’s missile capability and encourages dependence on America. In other words, no ICBMs and no teeth against foes like China: sort of where the Americans now have the British, a weak and dependent power)
  4. Export controls (permanent vassaldom to the NSG and the MTCR)

In short, with these, India is forever constrained to be a second-rate military power. In addition to the above, there is the back-door accession to the NPT, not only as a non-nuclear-weapon-state, but one that is “blessed” with the Additional Protocol, which means India is more constrained than rogue states like North Korea, Pakistan, Libya, China, and Saudi Arabia. How very thoughtful of the UPA government to enter into voluntary servitude!

In anticipation of the thrilling prospect of this nuclear slavery, the UPA government has already agreed to subject 35 Indian reactors to intrusive inspection (note that all the P-5 powers put together only allow 9, out of several hundred, of theirs to be inspected), and have made massive cuts already in the budgets of the Department of Atomic Energy (“Allocation for N-programme cut sharply”, Times of India, March 24th, thanks to reader San for the pointer – from Rs. 2,333 crore last year to Rs. 889 crore this year, surely to wild cheers of applause from the Americans. If this is happening during the courtship, then we can expect far more along these lines after the deal is consummated.

Thus, the so-called deal not only does nothing for India as far as its national security is concerned, it actively hurts its ability to defend itself. It certainly achieves the goal of the nuclear non-proliferation ayatollahs of the US, which explains their eagerness to complete the deal.

3. Strategic Partnership

There is a good question whether America, given its perilous economic situation, is worth getting into a partnership with at all. The entire financial system is hanging by a thread, and the country is an inch away from a full-scale panic (see the desperate rate-cutting, that too on weekends, by the Federal Reserve) and a possible Great Depression. Is this the time to enter into any partnership with them? After all, the Indian economy is booming, and therefore the longer India waits, the greater its bargaining power is going to be. So delay, India’s usual tactic anyway, may actually be the right answer here.

Maybe that is too negative a view. So what about the real benefits of an Indo-US strategic partnership?

It would be wonderful if, as the marketing brochures and the photo-opportunities suggest, India and the US, two large democracies, become like estranged brothers re-discovering each other; of course they will walk off hand-in-hand into the sunset. Unfortunately, this is not the case if you read the fine print.

As pointed out by A N Prasad, former BARC director and former member of the Atomic Energy Commission, (“Nuclear Dilemma: The Road Ahead” on, March 14th), the accession to the 123 Agreement makes India subject to domestic American laws. This is a grossly one-sided situation to be in, because India can be held hostage to the whims and fancies of the party in power in the US. This is not an idle threat: it happened in the case of the Tarapur reactor – Americans weaseled their way out of their international treaty obligations with India by claiming that new domestic legislation overruled it.

Furthermore, the nuclear deal does nothing about the various embargos imposed on Indian scientists and engineers in a whole variety of other fields, including aerospace. Thus the Americans, despite all their rosy assurances, are not really letting India enter into meaningful co-operation with them. Apartheid continues.

As a particularly egregious example, the fine print (“US clauses restrict India from using warship”,, March 15th – thanks to reader Mita for the pointer)

in the Indian purchase of the US amphibious warship Trenton, now renamed Jalashwa, says that it is not to be used for “offensive purposes”, plus it allows that American favorite, “intrusive inspections” (remember Iraq and the alleged WMDs, anyone?)! As reader Ramesh commented, a warship meant for delivering troops for amphibious assaults on foreign shores, if it is not to be used for ‘offensive purposes’, will end up being a glorified cruise ship for UPA bigwigs!

Along the same lines, despite all the nice talk, America shows no intention of letting go of their “international condom”, as Tariq Ali once called Pakistan – a country that is used and then discarded by America. Only this time the use seems to be going on and on and on, and it is not entirely clear who’s using whom. Given that the Pakistanis’ murky role in 9/11 certainly does not exonerate them, they have been remarkably clever to milk something like $26 billion from the US since the World Trade Center was attacked.

Similarly, China, despite large-scale and explicit proliferation of missile and nuclear parts to North Korea and Pakistan – and there is plenty of evidence that this was done with the full knowledge if not blessings of American security agencies – continues to be treated as a respected ally, whereas India is being bullied into all sorts of tight spots.

These are India’s most immediate threats, both predatory and dangerous nations. America’s coziness with them does not lead the neutral observer to believe that America is serious about a strategic alliance with India. These are not the acts of someone who is proceeding in good faith.

In addition, there are the strong-arm tactics used by sundry Americans just in one month from Feb 10th to March 10th. These are the kinds of shake-down techniques used by Al Capone and friends in Chicago, where they offer you “protection” for a fee. Consider:

  1. Feb 10. Ambassador Mulford says “it is now or never”
  2. Feb 20. Senators Biden, Kerry and Hagel tells Manmohan Singh that the deal must conclude by May. Or else
  3. Feb 26. Defense Secretary Gates warns that “the clock is ticking”
  4. Feb 28. Retiring Under Secretary of State Burns says “the IAEA agreement must be made within a week or so”, so that “India is to be given this great victory” [sic]. Victory against what Burns was not clear about
  5. Mar 1. Former Deputy Secretary of State Strobe Talbott says that the BJP government would have been prepared to accept “half” of what Bush is offering the UPA
  6. Mar 3. State Department spokesman Casey says the US wanted the agreement “concluded as quickly as possible.”
  7. Mar 4. Assistant Secretary of State Boucher arrives in India to mount further pressure

This, in just four weeks, and the waltz has continued well into March, with more worthies crawling out of the woodwork and offering their advice. Where have you seen this sort of high-pressure sales tactics before? Normally among snake-oil salesmen. Does this sound like the kind of thing you’d do to a friend? Not at all, this is the moral equivalent of “I’ll break your knees if you don’t do xyz”.

I wish all these dignitaries who are so touchingly concerned about India getting great “victories” had shown this level of interest in India when the Pakistanis were invading Kargil. Since they didn’t, it is really hard to believe that they have anything other than America’s interests in mind.

Indians have an unfortunate tendency to be easily flattered and the Americans are using that to the hilt. All the American nostrums about how the deal would suddenly lead to a new Millennium, and how India would be “an important power in the 21st century”, and how this deal would be “India’s passport to the world” – this is just lip service. As in the movie, Jerry Maguire, “Show me the money!” first. Yeah, then we can talk.

I wouldn’t put it past the Indian government to walk into this honey-trap with its eyes open. India’s netas have done worse before. But let us be clear about it: this is no strategic partnership, it’s eternal servitude that India is signing up for.

America wants India to be its flunkey as a way of containing China. There is a price for such a thing; the Americans figure that they can get this without paying the price. They should remember those great mantras: “There’s no such thing as a free lunch”. Or, “if you throw peanuts, you get monkeys”. A relationship based on deceit is worth little.

Thus, from the point of a strategic relationship too, the deal doesn’t do anything good for India.


Taking three bad things and packaging them together and saying it suddenly and miraculously becomes a good thing – that is really a little hard to believe. The alternative therefore is likely to be true: this is a disaster for India. As in the case of Tibet, where India signed away its substantial treaty rights in exchange for nothing more than vague noises about brotherhood, we may be seeing another huge debacle in the making: a strategic surrender. In perpetuity.

27 March 2008


2 Responses to “The nuclear deal, from first principles”

  1. […] unknown wrote an interesting post today onHere’s a quick excerptThe discussions about the proposed nuclear deal between India and the United States are much in the news because of several reasons: the apparent preparations being made by the UPA to sign the treaty the continuing ritualistic […] […]

  2. […] deal that refuses to die The discussions about the proposed nuclear deal between India and the Uni America Holdings, Inc. Reports Record Year End Operating Results Business Wire via Yahoo! […]

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: