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Indias Nuclear Deal is Nuclear Nonproliferation Treaty

By: Dr.Dipak Basu
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(The author is a Professor in International Economics in Nagasaki University, Japan)

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Although the Indian media and the government wants to promote the Vienna Treaty with the Nuclear Supplier"s Group (NSG) and the Indo-US 123 deal in terms of power generation, the deal has very little to do with power generation. After signing these treaties India will not be able to import technology or materials for the military part of the nuclear sector from any of the countries of the NSG, including Russia. Thus, India"s nuclear weapons programme will disappear. This is the real aim of the Vienna Treaty and the Indo-US 123 Deal.

The Treaty of Surrender:

The Vienna Treaty with NSG has clearly pointed out the following that would cripple India"s nuclear weapons programme. The Treaty says:

(1) "Participating Governments may transfer trigger list items and/or related technology to India for peaceful purposes and for use in IAEA (International Atomic Energy Agency) safeguarded civil nuclear facilities."

(2) "Participating Governments may transfer nuclear-related dual-use equipment, materials, software, and related technology to India for peaceful purposes and for use in civil nuclear facilities under IAEA safeguards."

(3) "At each Plenary, Participating Governments shall notify each other of approved transfers to India. Participating Governments are also invited to exchange information, including about their own bilateral agreements with India."

Thus, only for the facilities under the control of IAEA India can import fuel, materials and technology. It cannot import even from Russia, as Russia is a member of NSG and it has to consult NSG to export any nuclear materials or technology to India particularly anything related to India"s Nuclear Weapons Programme. That would practically means Fast Breeder Reactors and Reprocessing plants, being built by Russia, would be under the IAEA controls, otherwise Russia cannot supply any materials or technology for these from now on. Thus, India"s nuclear weapons programme or the reactors in the military sector will be lame ducks for the foreseeable future unless and until Russia will come out of NSG.

123 Deal puts further restrictions. The Bush administration"s January 2008 letter to the House Foreign Affairs Committee, made public recently, brings out the following.
USA has given no legally binding fuel-supply assurance of any kind and there is no US consent to stockpiling of fuel reserves. India will not be allowed to build such stocks to avoid if US re-impose sanctions. US civil nuclear cooperation is explicitly prohibiting further nuclear tests by India even if warranted by Indian national security concerns. All cooperation will cease immediately if India conducts a test.

The US has retained the right to suspend or terminate supplies at its own discretion.
The 123 Agreement has granted India no right to take corrective measures in case of any fuel-supply disruption. Rather, India"s obligations are legally irrevocable and perpetual.
The Bush administration"s letter states that the 123 Agreement fully conforms to the Hyde Act provisions. "US government will not assist India in the design, construction or operation of sensitive nuclear technologies." Under the 123 Agreement, India has agreed to forego reprocessing until it has, in future, won a separate agreement.

123 Agreement Article 5(2) that, "Sensitive nuclear technology, heavy water production technology, sensitive nuclear facilities, heavy water production facilities and major critical components of such facilities may be transferred under this Agreement pursuant to an amendment to this Agreement." The Bush administration"s letter to Congress states that the US government had no plan to seek to amend the deal to allow any sensitive transfers.

Already the US senate has imposed a new clause in the Hyde Act that in future national security organizations of USA, which means CIA and FBI, would now collaborate with India regarding nuclear non-proliferation. This in effect would imply that US organizations would make sure India will not be able to gain any advantage to use its nuclear facilities to create nuclear weapons.

Section 104(d) (2) of the Hyde Act is related to the supply of nuclear fuel to the plants in India, which would be used to produce nuclear weapons, by using end-use monitoring of spent fuel by the IAEA and the US organizations. There are provisions in the legislation, which would putt a cap on fissile material production. These would end India"s nuclear weapons programme.

Nuclear Energy will not benefit India:

Let us consider the capital costs of various types of energy. Natural Gas will cost $600/kW with 4-10cents/kWh in fuel costs given the current price. Coal will cost $1135/kW and 4cent /kWh in fuel costs. Nuclear Fission will cost $3000/kW and 8cent/kWh in fuel costs (kWh= Kilo Watt Hour). Thus, nuclear power is not commercially a viable option at all, as mentioned by Dr.Meghnad Saha long ago in his argument against the import of nuclear plants from the Western countries ( Meghnad Saha in the Lok Sabha, May 10, 1954).

Nuclear power contributes about 2 percent of the current electricity generations in India. At present, India was producing 3,300 MW. According to the Planning Commission and the Prime Minister, the capacity of nuclear power would be 20,000 MW in the year 2020. In order to get there India will possibly buy second-hand reactors from the U.S. India will have to spend at least $5 Billion for reactors and another $ 2 Billion to set them up with fuel facilities to achieve that goal (Source: World Nuclear Association, The Economics of Nuclear Power).

The Indian budget is only about $ 1.6 Billion last year at the exchange rate of Rs.40 for one Dollar. India went bankrupt in 1990 only for $2 Billion. Thus the question is where this money will come from. Again, India will spend two times more than the country"s annual budget on setting up these vintage reactors only. The cost of power will jump to Rs.7 a unit (according to some revised estimate after deducting the public subsidies it can be Rs.15), which is double the present cost of nuclear power. Even if India will achieve that by some miracle (which is unlikely) such a step would only increase India"s overall electricity output by one percent at most, and would only increase India"s overall energy output by a fraction of one percent. Even if India needs nuclear power plants to supplement it energy requirement in future, India does not need nuclear power plants from USA. Russia can still supply whatever India needs at a much lower price. Thus, 123 Deal and the Vienna Treaty with NSG are not needed for India"s nuclear power generations.

Alternative was available:

India was not a "Pariah" in the world of nuclear energy since 1974, as the media is suggesting, but India has become nearly self sufficient due to the help from the USSR and Russia. For the Tarapur plant, after 1978 the U.S. did not supply any fuel but allowed France, USSR and China (in 1995) to supply fuel to India for that plant. USSR has started for India the construction of the first FBTR (Fast Breeder Test Reactor) of capacity of 40 MWt (million watts thermal) in Kalapakkan in 1985. In 2008 Russia has started the construction of a Prototype Fast Breeder Reactor( FBR) of capacity 500 MWE (million watts electrical) in Kalapakkan. Associated Reprocessing plants in Kalapakkan were first built by USSR in 1985 and then in 1998 by Russia. Without the nuclear deal with NSG and USA India could be able to maintain its nuclear plants by using reprocessed plutonium as a fuel in the FBRs and using its own uranium in the conventional plants. It would continue to get both onshore and offshore nuclear plants from Russia, as it could honour the Indo-Soviet Treaty of 1985. This is exactly what former President Putin and former Prime Minister Fradkov have suggested during their last visits to India, but India was not interested. In that case India would be at liberty to test and develop nuclear weapons any time it likes without any restrictions using plutonium from its FBRs and enriched Uranium from other nuclear plants. Indo-US Nuclear Deal and the Vienna Treaty with NSG on the other hand will increase both real and perceived restrictions on India that would in reality destroy any credible nuclear deterrent for India against possible attacks from either China or Pakistan.


Section 103 of the Hyde Act suggests that the US would oppose development of a capability to produce nuclear weapons by any non-nuclear weapon state within or outside the Nuclear Non-Proliferation Treaty regime. The section requires the US to work with the 45-nation Nuclear Suppliers Group to further restrict transfers of equipment and technologies related to uranium enrichment, reprocessing of spent nuclear fuel and production of heavy water to all countries, including India. The legislation also requires the US government to seek to prevent transfer of these equipment and technologies from other members of NSG or from any other source if the transfers are suspended or terminated. Section 104(d) (2) stipulates that transfers to India cannot begin without the NSG guidelines. Also there are provisions in the legislation, which would putt a cap on fissile material production.

International situation is rapidly changing. A new cold war has already started when USA wants to expand NATO to the doorsteps of Russia by including Georgia and Ukraine. USA already has cancelled its 123 Deal with Russia and will not allow Russia to do any nuclear trade with USA. It is quite possible that in retaliation Russia may withdraw itself from the NSG and start supplying sensitive nuclear technology to Iran and Syria. India can certainly wait for a few months rather than signing its surrender to USA.

By accepting the Vienna Treaty with NSG and the Indo-US 123 Deal, India is accepting a subordinate position in relation to USA and the Western countries. The result will make Pakistan, which receives every nuclear weapons and missiles from China, much stronger than India in very near future. That serves the geo-political interest of the United States with Pakistan as the bridge to the Islamic world. The unfolding scenario will ruin India in the process when India will be forced to surrender also to the demands of Pakistan, a NATO ally of USA, and China, the most important business partner of the U.S corporations and on whom the fate of the US Dollar depends. This is the real issue, which Indian political establishment is ignoring.

Dr.Dipak Basu

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