About Chellaney

Professor, strategic thinker, author and commentator

A Backfiring Nuke Deal

Posted on July 11, 2008 by Chellaney

Travails of a nuclear deal

By BRAHMA CHELLANEY

The Japan Times

In the twilight of George W. Bush’s presidency, there is an unseemly rush in Washington and New Delhi to seal a contentious but far-from-complete civil nuclear deal, even as that issue has landed India in a political crisis.

To help secure a much-needed feather for the empty caps of President Bush and Indian Prime Minister Manmohan Singh, moves are afoot to ram through the approvals the deal still needs from the International Atomic Energy Agency, the 45-nation Nuclear Suppliers’ Group and — at the very end — the U.S. Congress, which has to ratify the final package.

Yet, three years after it was unveiled with fanfare as an epoch-making accord, the deal’s final shape remains unclear and its future uncertain. Little time is left for the deal to win the remaining approvals during the Bush presidency. But rather than leave the final say to a future Barack Obama or John McCain administration — and a new Indian government — the two lame-duck heads of government, Bush and Singh, are seeking to make a final dash to wrap up the deal.

Singh had pledged that after returning home from the G8 meeting in Japan, he will take the deal to the next stage by sending the safeguards accord to the IAEA’s governing board for approval.

Bush, pressing Singh hard to move the deal forward, has promised an extraordinary NSG plenary meeting to consider a rule-change for India. In fact, by raising the phantom of rushed approvals, the Bush administration has not only lead Singh up the garden path but also emboldened him to precipitate a political crisis at home over the deal.

The showdown has seen Singh dump leftist groups for a new alignment with a prickly regional party to keep his shaky coalition in power. India has had weak governments but never a weaker leader than Singh. But today, Singh has promoted shadowy horse-trading to prevent his government’s collapse over his deal-related obsession.

At a time when Bush is set to exit the world stage and Singh’s 10-month remainder term could be cut shorter by political events at home, the deal is hardly the weighty issue that should merit urgency or determine any government’s future.

With or without the deal, the U.S.-India relationship is set toward closer engagement. This geopolitical direction was established long before the deal was unveiled in July 2005. The mistake has been to politically over-invest in the deal, going to the extent of meretriciously presenting it as the centerpiece of an emerging Indo-U.S. strategic partnership. No major relationship can afford to rise and fall on the strength of a single issue.

Also, with or without the deal, nuclear energy will continue to play a modest role in India’s energy mix. Even with an ambitious program involving reactor imports, the share of nuclear power in India’s total electricity generation is unlikely to significantly rise above the current 2.8 percent. Not only is the share of other energy sources rising faster in India, but new imported power reactors — because of the long lead time required for construction and commissioning — will start to produce electricity only after the mid-2010s at the earliest.

Although the original agreement- in-principle was embedded in a larger strategic framework — with the nuclear-related portion constituting only four paragraphs in a long joint statement — Singh sought to sell the deal principally as an arrangement to help meet India’s burgeoning energy needs. His energy spiel has contrasted starkly with the deal’s portrayal by the Bush administration as a means to advance U.S. strategic and commercial objectives in India.

Still, Bush and Singh continue to recite a major myth — that greater nuclear-generated electricity will help reduce India’s oil-import dependence and thereby pressures on world oil prices. With little overlap today in the oil and nuclear global-market structures, nuclear power competes principally against coal and natural gas, while oil is primarily used for transportation.

Reactor imports, far from cutting India’s oil needs, will only increase the already-wide domestic price differential between nuclear energy and coal-generated electricity and hydropower.

Power reactors also involve high up-front capital costs and drawn-out amortization periods that discourage private investors. The present electricity-market liberalization trends indeed spell trouble for the global nuclear-power industry because they threaten the state support on which it survives. As a 2005 IAEA study warns, "nuclear power’s market share might indeed follow a downward trajectory" if state subsidies abate and more cost-effective reactors are not designed.

However well-intentioned, a deal limited to one narrow area — commercial nuclear power — can hardly serve as a suitable framework to build a broad-based, enduring partnership between the most powerful and most populous democracies. Depicting the deal as a central element, if not the touchstone, of the U.S.-India partnership only suggests that the base of this relationship is still too small.

In fact, a deal touted as heralding a new era between the U.S. and India has actually succeeded in infusing controversy and complexity into that relationship.

While U.S. critics have worried the deal could dent the nonproliferation regime, no issue has proven more divisive in India in modern times than this accord. The progressive U.S. attachment of tougher conditions to make the deal more palatable to the nonproliferation constituency has only provoked an Indian backlash.

Singh repeatedly promised to build "the broadest possible consensus within the country to enable the next steps to be taken." But having failed to do that, he now is moving forward on his own.

In contrast, the much-maligned Bush administration has handled the deal domestically by forging an impressive political consensus. The law passed by Congress in December 2006 to govern the deal was the product of such consensus-building and political co-option, with the administration holding closed-door briefings for lawmakers and allowing its 3 1/2-page bill to be turned into a 41-page, conditions-stacked legislation. Bipartisan support also holds the key to the deal eventually winning congressional ratification.

In India, the growing partisan rancor does not augur well for the deal because it will have to be implemented well after the Singh has faded into history.

If the bilateral relationship is not to be weighed down by a political albatross, Washington and New Delhi need to ensure that the deal does not foster disputes that embitter and set back ties. A deal that is more about symbolism than substance, in any event, does not warrant a rush.

Brahma Chellaney, a professor of strategic studies at the privately funded Center for Policy Research in New Delhi, is the author, among others, of "Nuclear Proliferation: The U.S.-India Conflict."

The Japan Times: Thursday, July 10, 2008

A Factsheet on the India-IAEA Safeguards Accord

Posted on July 10, 2008 by Chellaney

A Flawed Safeguards Accord

Brahma Chellaney, Asian Age, July 11, 2008

It must have been doubly embarrassing for New Delhi that the Vienna-based International Atomic Energy Agency let the cat out of the bag even before Prime Minister Manmohan Singh had returned home from the G-8 summit. By revealing that “at the request of the Government of India” it had circulated the safeguards accord’s text to its board members and begun the process for an extraordinary board meeting, the IAEA belied New Delhi’s assurance to the nation not to approach the Agency before Dr. Singh had won a vote of confidence in Parliament.

Also, in helping to make the text public, the IAEA only mocked New Delhi’s claim that it cannot share the text even in confidence with “third parties”, like the Left, which had been propping up the governing coalition. In fact, after the text had appeared on various international websites since Wednesday night, New Delhi claimed credit on Thursday afternoon for “unveiling” it!

Now we know why the accord was shrouded in such secrecy. A careful reading of its text raises several red flags:

■ Far from it being an India-specific agreement, the accord resembles IAEA agreements with non-nuclear-weapons states. With the exclusion of the first two pages that contain the preamble, the accord starting from Section I, “General Directions,” on Page 3 to the very end, is largely modelled on IAEA safeguards agreements with non-nuclear-weapons state. In fact, there is no direct reference in this accord to the existence of an Indian nuclear military programme or an acknowledgement of India’s special status — a nuclear-weapons state uniquely doing what no other nuclear power has done: putting its entire civilian nuclear programme under permanent, legally irrevocable international inspections.

All the accord contains is a oblique reference in the preamble in the following words: “Noting the relevance for this Agreement of the understandings between India and the United States of America expressed in the India-U.S. Joint Statement of 18 July 2005, in which India, inter alia, has stated its willingness: to identify and separate its civilian and military nuclear facilities and programmes in a phased manner”. In fact, the accord lays the ground for IAEA inspectors to enforce safeguards with the same stringency applicable to non-nuclear-weapons states.

■ It carries a cosmetic reference to “corrective measures” in the preamble, but gives India no actual right to take corrective measures. The earlier 123 agreement with the US, instead of granting India the right to take corrective measures in response to a fuel-supply disruption, merely recorded that New Delhi will seek such a right in the IAEA accord. But in the India-IAEA accord, no such right has been secured in definable terms. There is only one reference to “corrective measures” in the entire text of the India-IAEA accord, and that reference occurs in the preamble. That reference reads: “India may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies”. The use of the term “may” instead of “shall” shows there is no legal entitlement.

Moreover, far from “corrective measures” being defined, the accord explicitly forecloses that option by making it clear that, under no circumstance, will India be allowed to withdraw from its safeguards obligations, which are legally immutable.

■ Not only is there no guaranteed fuel supply, but the accord also discredits what Dr. Singh had pledged in Parliament — to link perpetual IAEA inspections to perpetual fuel supply. Put simply, India has willingly forfeited the right to enforce lifelong fuel supply for safeguarded reactors by agreeing to remain powerless in a Tarapur-style fuel cut-off situation.

Indeed, the only reference to fuel supply occurs in the preamble, in the form of a note by India. It reads: “An essential basis of India’s concurrence to accept Agency safeguards under an India-specific safeguards agreement (hereinafter referred to as “this Agreement”) is the conclusion of international cooperation arrangements creating the necessary conditions for India to obtain access to the international fuel market, including reliable, uninterrupted and continuous access to fuel supplies from companies in several nations, as well as support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors”. There is, however, no reference in the body of the text to “fuel supply” or to a “strategic reserve of nuclear fuel”.

The ornamental reference in the preamble was inserted to save face because its language makes explicit that India is not tying the IAEA to assured fuel supply but merely recording that the safeguards accord follows the “conclusion of international cooperation arrangements creating the necessary conditions for India to obtain access” to assured fuel supply and to receive support to build a strategic fuel supply. But the harsh truth is that no such international arrangements have thus far been concluded.

This attempt to pull the wool on public eyes flows from India’s failure to secure its rights in the 123 agreement, which confers enforceable powers only on the supplier-state. In fact, the Indian fuel supply-related claims about the 123 agreement have bordered on comedy: The US assurances in Article 5.6 are all prospective, not present-day, with the US “committed to seeking agreement from the U.S. Congress to amend its domestic laws” and “prepared to take” additional steps.

■ The safeguards accord, like the 123 agreement, is consistent with the provisions of the Hyde Act. Section 104(b)(2) of the Hyde Act stipulates that the US Congress can consider ratifying the final deal only after, inter-alia, “India and the IAEA have concluded all legal steps required prior to signature by the parties of an agreement requiring the application of IAEA safeguards in perpetuity in accordance with IAEA standards, principles and practices (including IAEA Board of Governors Document GOV/1621 (1973)) to India’s civil nuclear facilities, materials, and programmes…”

The safeguards accord, as mandated by the Hyde Act, is firmly anchored in the GOV/1621 (1973) document. For example, the safeguards accord’s Clause 29 reads: “The termination of safeguards on items subject to this Agreement shall be implemented taking into account the provisions of GOV/1621 (20 August 1973).”

Although the text of the GOV/1621 document is not public, its stipulation is well-known — that facility-specific safeguards shall be “in perpetuity”, allowing for no suspension of international safeguards and shutting out room for corrective measures.

Clause 29, however, raises the question whether India, faced with a fuel cut-off, will have the right to withdraw from safeguards the eight indigenous power reactors it is opening to outside inspection. According to papers published by two legal experts on GOV/1621, Antonio F. Perez and Laura Rockwood, the answer may be yes, if India first removes, to IAEA’s satisfaction, supplied fissionable material used or processed in those reactors.

■ India will not only open its entire civil programme to external safeguards, but also help pay for such inspections. India additionally has agreed to protect the Agency and its inspectors against “third-party liability, including any insurance or other financial security, in respect of a nuclear incident”, even though the IAEA is to vet the design of new facilities.

The accord lays out the cost of inspection of each Indian facility at 1.2 million euro annually. India is to place more than two dozen facilities under safeguards in a phased manner. Without making clear what will be New Delhi’s share, Clause 101 says: “India and the Agency shall each bear any expense incurred in the implementation of their responsibilities under this agreement”. But with the Hyde Act mandating “fallback US safeguards” in case “budget or personnel strains in the IAEA” render it “unable” to fully enforce inspections, India may be compelled to pick up most of the IAEA expenses to avoid parallel US inspections.

The costs of IAEA inspections will be high because, under the accord, India has agreed to be subject to rigorous safeguards, not the token inspections the Agency carries out in nuclear-weapons states.

India indeed has granted the IAEA the right to carry out “special inspections” at will. While civil nuclear research institutions bereft of atomic material will escape inspection, commercial power reactors, reprocessing and other facilities with an annual throughput of more than 60 kilograms of nuclear material are to be subject to “continuous inspection”, with the IAEA having the right of access at all times. The Agency, however, has agreed to implement the accord in a manner not to hamper “India’s economic or technological development, and not to hinder or otherwise interfere with any activities involving the use by India of nuclear material, non-nuclear material, equipment, components, information or technology produced, acquired or developed by India independent of this agreement for its own purposes”.

Contrast the accord’s provisions with Dr. Singh’s solemn assurances to Parliament on several occasions. For example, speaking in Parliament on March 7, 2006, the PM had given the following assurance: “In essence, an India-specific safeguards would … permit India to take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies. Taking this into account, India will place its civilian nuclear facilities under India-specific safeguards in perpetuity and negotiate an appropriate safeguards agreement to this end with the IAEA”.

The deal has progressively picked up such tougher conditions that today few remember that the July 18, 2005, agreement-in-principle had promised India “the same benefits and advantages” as the US. What is on offer now is restricted cooperation tied to intrusive conditions, to the extent that the G-8, in its chair’s summary this week, put the focus on advancing “India’s non-proliferation commitments and progress so as to facilitate a more robust approach to civil nuclear cooperation…” The deal is the means to tether India to the non-proliferation regime.

The India-IAEA safeguards accord compounds the mistakes Indian diplomacy made on the civil-military separation plan and the 123 agreement. Its operative parts mirror the clauses found in the IAEA agreements with non-nuclear-weapons states.

Official Text of India-IAEA Safeguards Agreement Part I

Posted on July 10, 2008 by Chellaney

GOV/2008/30

Date: 9 July 2008

Restricted Distribution

Original: English

For official use only

Nuclear Verification

The Conclusion of Safeguards Agreements and Additional Protocols

An Agreement with the Government of India for the Application of

Safeguards to Civilian Nuclear Facilities

Recommended Action

• It is recommended that the Board authorize the Director General to conclude with the

Government of India, and subsequently implement, the draft Safeguards Agreement reproduced in the Attachment hereto.

GOV/2008/30

Nuclear Verification

The Conclusion of Safeguards Agreements and

Additional Protocols

An Agreement with the Government of India for the Application of

Safeguards to Civilian Nuclear Facilities

1. Referring to its desire to expand civil nuclear cooperation with other Member States of the Agency and to the relevance in this context of the understanding between India and the United States of America expressed in the India-U.S. Joint Statement of 18 July 2005, the Government of India requested the Agency to conclude with it an agreement for the application of safeguards with respect to its civilian nuclear facilities.

2. A draft safeguards agreement was accordingly negotiated with India (attached) using the relevant guidance documents that have been adopted by the Board of Governors for the purposes of concluding INFCIRC/66-type safeguards agreements.

3. The draft agreement provides for the application of safeguards to facilities, nuclear material, nonnuclear material, equipment and components as set out in paragraph 11 of the agreement.

4. At the request of India the draft text includes provisions for the use of the agreement as an “umbrella agreement”. Paragraph 14 thereof provides that any facility notified by India to the Agency will become subject to safeguards under this agreement. Such facilities will be listed on the Annex to the agreement, which will be published, and updated, as India notifies the Agency of additional facilities. In addition, paragraph 22 provides for the possibility of safeguarding under the agreement items that are already subject to safeguards under other Safeguards Agreements concluded by India with the Agency, subject to agreement by the parties to such other Safeguards Agreements. As a consequence, the application of safeguards under those Safeguards Agreements would be suspended for so long as this agreement remains in force.

5. Paragraph 99 provides that India shall take all suitable measures for the physical protection of facilities and nuclear material subject to the agreement, taking into account the recommendations made in INFCIRC/225/Rev.4, as may be amended from time to time.

6. In paragraph 100 of the draft agreement India undertakes to establish and maintain a system of accounting for and control of all items subject to safeguards under the agreement, in accordance with provisions to be set out in the Subsidiary Arrangements.

7. It will be also noted that the draft agreement includes an undertaking by India and the Agency that in the event that India decides to offer an enrichment plant in the future as a facility subject to the agreement, India and the Agency shall consult and agree on the application of the Agency’s safeguards procedures before any such facility is subject to the agreement (paragraph 86).

8. When safeguards are applied to new facilities under this agreement, the Agency will incur additional expenses. On the assumption that 2009 will be the first year that the Agency will start implementing this agreement at new facilities, a supplementary appropriation to the regular budget will be requested as agreed by the Board of Governors at its 9 July 2007 session. The estimated cost for the first year for one new facility would be in the order of € 1.2 million.

GOV/2008/30

DRAFT

AGREEMENT BETWEEN THE GOVERNMENT OF INDIA

AND THE INTERNATIONAL ATOMIC ENERGY AGENCY

FOR THE APPLICATION OF SAFEGUARDS TO CIVILIAN

NUCLEAR FACILITIES

RECOGNIZING the significance India attaches to civilian nuclear energy as an efficient, clean and sustainable energy source for meeting global energy demand, in particular for meeting India’s growing energy needs;

WHEREAS India is committed to the full development of its national three-stage nuclear programme to meet the twin challenges of energy security and protection of the environment;

WHEREAS India has a sovereign and inalienable right to carry out nuclear research and development activities for the welfare of its people and other peaceful purposes;

WHEREAS India, a State with advanced nuclear technology, wishes to expand civil nuclear cooperation for its national development;

WHEREAS India is desirous of further expanding cooperation with the International Atomic Energy Agency (hereinafter referred to as “the Agency”) and its Member States with the objective of the full development and use of nuclear energy for peaceful purposes, on a stable, reliable and predictable basis;

WHEREAS India supports the role of the Agency in the promotion of the safe and peaceful uses of nuclear energy as set forth in the Statute of the Agency (hereinafter referred to as the “Statute”);

WHEREAS India and the Agency have long standing cooperation in various aspects of the Agency’s activities;

RECOGNIZING that such cooperation between India and the Agency must be carried out with full respect for the objectives of the Statute and with due observance of the sovereign rights of India;

WHEREAS the Statute authorizes the Agency to apply safeguards, at the request of the parties, to any bilateral or multilateral arrangement, or at the request of a State to any of the State’s activities in the field of atomic energy and, in this context:

Noting the relevance for this Agreement of the understandings between India and the United States of America expressed in the India-U.S. Joint Statement of 18 July 2005, in which India, inter alia, has stated its willingness:

• to identify and separate its civilian and military nuclear facilities and programmes in a phased manner;

• to file with the Agency a declaration regarding its civilian nuclear facilities (hereinafter referred to as “the Declaration”);

• to take a decision to place voluntarily its civilian nuclear facilities under Agency safeguards;

Noting also for the purposes of this Agreement that:

• India will place its civilian nuclear facilities under Agency safeguards so as to facilitate full civil nuclear cooperation between India and Member States of theAgency and to provide assurance against withdrawal of safeguarded nuclear material from civilian use at any time;

• An essential basis of India’s concurrence to accept Agency safeguards under an India-specific safeguards agreement (hereinafter referred to as “this Agreement”) is the conclusion of international cooperation arrangements creating the necessary conditions for India to obtain access to the international fuel market, including reliable, uninterrupted and continuous access to fuel supplies from companies in several nations, as well as support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors; and

• India may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies;

WHEREAS India is desirous of expanding civil nuclear cooperation with other Member States of the Agency;

WHEREAS the conclusion of this Agreement is intended to facilitate the broadest possible cooperation between India and Member States of the Agency in the peaceful uses of nuclear energy and ensure international participation in the further development of India’s civilian nuclear programme on a sustained and long–term basis;

RECALLING that the Agency in accordance with its Statute and safeguards system must take into account, in the implementation of safeguards in India, the need to avoid hampering the peaceful uses of nuclear energy, economic and technological development or international cooperation in the field of peaceful uses of nuclear energy; respect health, safety and physical protection and related security provisions in force in India; and take every precaution to protect commercial, technological and industrial secrets as well as other confidential information coming to its knowledge;

WHEREAS the frequency and intensity of activities described in this Agreement shall be kept to the minimum consistent with the objective of effective and efficient Agency safeguards;

WHEREAS India has requested the Agency to apply safeguards with respect to items subject to this Agreement;

WHEREAS the Board of Governors of the Agency (hereinafter referred to as the "Board") acceded to that request on …………;

NOW THEREFORE, taking into account the above, India and the Agency have agreed as follows:

I. GENERAL CONSIDERATIONS

A. BASIC UNDERTAKINGS

1. India undertakes that none of the items subject to this Agreement, as defined in paragraph 11, shall be used for the manufacture of any nuclear weapon or to further any other military purpose and that such items shall be used exclusively for peaceful purposes and shall not be used for the manufacture of any nuclear explosive device.

2. The Agency undertakes to apply safeguards, in accordance with the terms of this Agreement, to the items subject to this Agreement, as defined in paragraph 11, so as to ensure, as far as it is able, that no such item is used for the manufacture of any nuclear weapon or to further any other military purpose and that such items are used exclusively for peaceful purposes and not for the manufacture of any nuclear explosive device.

B. GENERAL PRINCIPLES

3. The purpose of safeguards under this Agreement is to guard against withdrawal of safeguarded nuclear material from civilian use at any time.

4. The application of safeguards under this Agreement is intended to facilitate implementation of relevant bilateral or multilateral arrangements to which India is a party, which are essential to the accomplishment of the objective of this Agreement.

5. Bearing in mind Article II of the Statute, the Agency shall implement safeguards in a manner designed to avoid hampering India’s economic or technological development, and not to hinder or otherwise interfere with any activities involving the use by India of nuclear material, non-nuclear material, equipment, components, information or technology produced, acquired or developed by India independent of this Agreement for its own purposes.

6. The safeguards procedures set forth in this document shall be implemented in a manner designed to be consistent with prudent management practices required for the economic and safe conduct of nuclear activities.

7. In implementing safeguards, the Agency shall take every precaution to protect commercial and industrial secrets. No member of the Agency’s staff shall disclose, except to the Director General and to such other members of the staff as the Director General may authorize to have such information by reason of their official duties in connection with safeguards, any commercial or industrial secret or any other confidential information coming to his knowledge by reason of the implementation of safeguards by the Agency.

8. The Agency shall not publish or communicate to any State, organization or person any information obtained by it in connection with the implementation of safeguards in India, except that:

(a) Specific information relating to such implementation in India may be given to the Board and to such Agency staff members as require such knowledge by reason of their official duties in connection with safeguards, but only to the extent necessary for the Agency to fulfil its safeguards responsibilities;

(b) Summarized lists of items being safeguarded by the Agency may be published upon decision of the Board; and

9. In the light of Article XII.A.5 of the Statute, safeguards shall continue with respect to produced special fissionable material and to any materials substituted therefor.

10. Nothing in this Agreement shall affect other rights and obligations of India under international law.

II. CIRCUMSTANCES REQUIRING SAFEGUARDS

A. ITEMS SUBJECT TO THIS AGREEMENT

11. The items subject to this Agreement shall be:

(a) Any facility listed in the Annex to this Agreement, as notified by India pursuant to

paragraph 14(a) of this Agreement;

(b) Any nuclear material, non-nuclear material, equipment and components supplied to India which are required to be safeguarded pursuant to a bilateral or multilateral arrangement to which India is a party;

(c) Any nuclear material, including subsequent generations of special fissionable material, produced, processed or used in or by the use of a facility listed in the Annex or in or by the use of any nuclear material, non-nuclear material, equipment and components referred to in paragraph 11(b);

(d) Any nuclear material substituted in accordance with paragraph 27 or 30(d) of this Agreement for nuclear material referred to in paragraph 11(b) or 11(c) of this Agreement;

(e) Any heavy water substituted in accordance with paragraph 32 of this Agreement for heavy water subject to this Agreement;

(f) Any facility other than a facility identified in paragraph 11(a) above, or any other location in India, while producing, processing, using, fabricating or storing any nuclear material, non-nuclear material, equipment or components referred to in paragraph 11(b), (c), (d) or (e) of this Agreement, as notified by India pursuant to paragraph 14(b) of this Agreement.

12. The scope of this Agreement is limited to the items subject to this Agreement as defined in paragraph 11 above.

Declaration

13. Upon entry into force of this Agreement, and a determination by India that all conditions conducive to the accomplishment of the objective of this Agreement are in place, India shall file with the Agency a Declaration, based on its sovereign decision to place voluntarily its civilian nuclear facilities under Agency safeguards in a phased manner.

Notifications

14.

(a) India, on the basis of its sole determination, shall notify the Agency in writing of its decision to offer for Agency safeguards a facility identified by India in the Declaration referred to in paragraph 13, or any other facility to be determined by India. Any facility so notified by India to the Agency will be included in the Annex, and become subject to this Agreement, as of the date of receipt by the Agency of such written notification from India.

(b) Should India, on the basis of its sole determination, decide to import or transfer any nuclear material, non-nuclear material, equipment or components subject to this Agreement to any facility or other location in India provided for in paragraph 11(f) of this Agreement, it shall so notify the Agency. Any such facility or location so notified by India pursuant to this sub-paragraph shall become subject to this Agreement as of the date of receipt by the Agency of such written notification from India.

15. India shall notify the Agency of the receipt of any nuclear material, non-nuclear material, equipment and components referred to in paragraph 11(b) of this Agreement within four weeks of the arrival in India of such nuclear material, non-nuclear material, equipment and components.

Provision of Information to the Agency

16. In the event that India’s notification pursuant to paragraph 14(a) of this Agreement relates to a facility subject to Agency safeguards under another Safeguards Agreement or Agreements in India at the time of entry into force of this Agreement, India shall provide the Agency, along with the relevant notification, such information as is required pursuant to the other Safeguards Agreement or Agreements as relates to any nuclear material, non-nuclear material, equipment and components subject to safeguards thereunder.

17. With respect to any other facility listed in the Annex pursuant to paragraph 14(a) of this Agreement, India shall provide the Agency, within four weeks of the relevant notification, with:

(a) a list of all nuclear material at each such facility; and

(b) where relevant, and if required pursuant to a bilateral or multilateral arrangement to which India is party, information relating to:

(i) Any nuclear material, non-nuclear material, equipment and components supplied to India for production , processing, storage or use in such facility;

(ii) Any nuclear material, including subsequent generations of special fissionable material, produced, processed or used in or by the use of such facility or in or by the use of any nuclear material, non-nuclear material, equipment and components supplied to India for production, processing or use in such facility.

18. Each notification pursuant to paragraph 15 of the Agreement shall include all information relevant to the nuclear material, non-nuclear material, equipment and components so notified, including the facility or location where the nuclear material, non-nuclear material, equipment and components so notified will be received.

19. The information provided by India pursuant to paragraphs 16, 17 and 18 of this Agreement shall specify, inter alia, to the extent relevant, the nuclear and chemical composition, physical form and quantity of the nuclear material; the date of shipment; the date of receipt; the identity of the consigner and the consignee; and any other relevant information, such as the type and capacity of any facility (or parts thereof), components or equipment; and the type and quantity of non-nuclear material. In the case of a facility or other location subject to this Agreement, the information to be provided shall include the type and capacity of that facility or location, and any other relevant information.

20. India shall thereafter notify the Agency by means of reports, in accordance with this Agreement, of any nuclear material, non-nuclear material, equipment and components referred to in paragraph 11(b), (c), (d) or (e) of this Agreement. The Agency may verify the calculations of the amounts and/or quantities of such nuclear material, non-nuclear material, equipment and components, and appropriate adjustments shall be made by agreement between India and the Agency.

21. The Agency shall maintain an inventory of items subject to this Agreement. The Agency shall send a copy of the inventory it maintains with respect to such information to India every twelve months and also at any other times specified by India in a request communicated to the Agency at least two weeks in advance.

B. SAFEGUARDS UNDER OTHER AGREEMENTS

22. The application of Agency safeguards under other Safeguards Agreements concluded by India with the Agency and in force at the time of entry into force of this Agreement may, subject to agreement by the Parties to such other Safeguards Agreements and following notification by India of the relevant facilities pursuant to paragraph 14(a), be suspended while this Agreement is in force. The application of safeguards under this Agreement to nuclear material, non-nuclear material, equipment or components subject to safeguards under such other Agreements shall commence as of the date of receipt by the Agency of India’s notification. India’s undertaking not

to use items subject thereto in such a way as to further any military purpose, and its undertaking that such items shall be used exclusively for peaceful purposes and shall not be used for the manufacture of any nuclear explosive device, shall continue to apply.

C. EXEMPTIONS FROM SAFEGUARDS

General Exemptions

23. Nuclear material that would otherwise be subject to safeguards shall be exempted from safeguards at the request of India, provided that the material so exempted in India may not at any time exceed:

(a) 1 kilogram in total of special fissionable material, which may consist of one or more of the following:

(i) Plutonium;

(ii) Uranium with an enrichment of 0.2 (20 %) and above, taken account of by multiplying its weight by its enrichment;

(iii) Uranium with an enrichment below 0.2 (20 %) and above that of natural uranium, taken account of by multiplying its weight by five times the square of its enrichment;

(b) 10 metric tons in total of natural uranium and depleted uranium with an enrichment above 0.005 (0.5 %);

(d) 20 metric tons of thorium.

Exemptions Related to Reactors

24. Produced or used nuclear material that would otherwise be subject to safeguards because it is being or has been produced, processed or used in a reactor which has been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement; or because it is being or has been produced in or by the use of safeguarded nuclear material, shall be exempted from safeguards if:

(a) It is plutonium produced in the fuel of a reactor whose rate of production does not exceed 100 grams of plutonium per year; or

(b) It is produced in a reactor determined by the Agency to have a maximum calculated power for continuous operation of less than 3 thermal megawatts, or is used in such a reactor and would not be subject to safeguards except for such use, provided that the total power of the reactors with respect to which these exemptions apply in any State may not exceed 6 thermal megawatts.

25. Produced special fissionable material that would otherwise be subject to safeguards only because it has been produced in or by the use of safeguarded nuclear material shall in part be exempted from safeguards if it is produced in a reactor in which the ratio of fissionable isotopes within safeguarded nuclear material to all fissionable isotopes is less than 0.3 (calculated each time any change is made in the loading of the reactor and assumed to be maintained until the next such change). Such fraction of the produced material as corresponds to the calculated ratio shall be subject to safeguards.

D. SUSPENSION OF SAFEGUARDS

26. Safeguards with respect to nuclear material may be suspended while the material is transferred, under an arrangement or agreement approved by the Agency, for the purpose of processing, reprocessing, testing, research or development, within India or to any other Member State or to an international organization, provided that the quantities of nuclear material with respect to which safeguards are thus suspended in India may not at any time exceed:

(a) 1 effective kilogram of special fissionable material;

(b) 10 metric tons in total of natural uranium and depleted uranium with an enrichment 0.005 (0.5 %);

(d) 20 metric tons of thorium.

27. Safeguards with respect to nuclear material in irradiated fuel which is transferred for the purpose of reprocessing may also be suspended if the State or States concerned have, with the agreement of the Agency, placed under safeguards substitute nuclear material in accordance with paragraph 30(d) of this Agreement for the period of suspension. In addition, safeguards with respect to plutonium contained in irradiated fuel which is transferred for the purpose of reprocessing may be suspended for a period not to exceed six months if the State or States concerned have, with the agreement of the Agency, placed under safeguards a quantity of uranium whose enrichment in the

isotope uranium-235 is not less than 0.9 (90%) and the uranium-235 content of which is equal in weight to such plutonium. Upon expiration of the said six months or the completion of reprocessing, whichever is earlier, safeguards shall, with the agreement of the Agency, be applied to such plutonium and shall cease to apply to the uranium substituted therefor.

28. Under conditions specified in the Subsidiary Arrangements, the Agency shall suspend safeguards with respect to any parts of the facilities listed in the Annex which are removed for maintenance or repair.

E. TERMINATION OF SAFEGUARDS

29. The termination of safeguards on items subject to this Agreement shall be implemented taking into account the provisions of GOV/1621 (20 August 1973).

30. Nuclear material shall no longer be subject to safeguards under this Agreement after:

(a) It has been returned to the State that originally supplied it (whether directly or through the Agency), if it was subject to safeguards only by reason of such supply and if:

(i) It was not improved while under safeguards; or

(ii) Any special fissionable material that was produced in it under safeguards has been

separated out, or safeguards with respect to such produced material have been terminated; or

(b) The Agency has determined that:

(i) It was subject to safeguards only by reason of its use in a principal nuclear facility which has been supplied wholly or substantially under a project agreement, submitted to

safeguards under a safeguards agreement by the parties to a bilateral or multilateral

arrangement or unilaterally submitted to safeguards under a safeguards agreement;

(ii) It has been removed from such a facility; and

(iii) Any special fissionable material that was produced in it under safeguards has been

separated out, or safeguards with respect to such produced material have been terminated; or

(c) The Agency has determined that it has been consumed, or has been diluted in such a way that it is no longer usable for any nuclear activity relevant from the point of view of safeguards, or has become practicably irrecoverable; or

(d) India has, with the agreement of the Agency, placed under safeguards, as a substitute, such amount of the same element, not otherwise subject to safeguards, as the Agency has determined contains fissionable isotopes:

(i) Whose weight (with due allowance for processing losses) is equal to or greater than the weight of the fissionable isotopes of the material with respect to which safeguards are to terminate; and

(ii) Whose ratio by weight to the total substituted element is similar to or greater than the

ratio by weight of the fissionable isotopes of the material with respect to which safeguards are to terminate to the total weight of such material; provided that the Agency may agree to the substitution of plutonium for uranium-235 contained in uranium whose enrichment is not greater than 0.05 (5.0 %); or

(e) It has been transferred out of India under paragraph 33(d) of this Agreement, provided that such material shall again be subject to safeguards if it is returned to India; or

(f) The terms of this Agreement, pursuant to which it was subject to safeguards under this Agreement, no longer apply, by expiration of this Agreement or otherwise.

31. If India wishes to use safeguarded source material for non-nuclear purposes, such as the production of alloys or ceramics, it shall agree with the Agency on the circumstances under which the safeguards on such material may be terminated.

32. Safeguards shall be terminated on a facility listed in the Annex after India and the Agency have jointly determined that the facility is no longer usable for any nuclear activity relevant from the point of view of safeguards. Safeguards on non-nuclear material, equipment and components subject to this Agreement may be terminated as and when the non-nuclear material, equipment or components have been returned to the supplier or arrangements have been made by the Agency to safeguard the non-nuclear material, equipment or components in the State to which it is being transferred, or when India and the Agency have jointly determined that the non-nuclear material, equipment or component in question has been consumed, is no longer usable for any nuclear

activity relevant from the point of view of safeguards or has become practicably irrecoverable. Safeguards may be terminated on heavy water upon India’s placing under safeguards as substitute the same amount of heavy water of equivalent or better heavy water concentration.

F. TRANSFERS

33. No safeguarded nuclear material shall be transferred outside the jurisdiction of India until the Agency has satisfied itself that one or more of the following conditions apply:

(a) The material is being returned, under the conditions specified in paragraph 30(a) of this Agreement, to the State that originally supplied it; or

(b) The material is being transferred subject to the provisions of paragraph 26 or 27 of this Agreement; or

(c) Arrangements have been made by the Agency to safeguard the material in the State to which it is being transferred; or

(d) The material was not subject to safeguards pursuant to a project agreement and will be subject, in the State to which it is being transferred, to safeguards other than those of the Agency but generally consistent with such safeguards and accepted by the Agency.

34. India shall notify the Agency of its intention to transfer within its jurisdiction any nuclear material, non-nuclear material, equipment or component subject to this Agreement to any facility or location in India to which paragraph 11(f) applies and shall provide to the Agency, before such transfer is effected, the necessary information to enable the Agency to make arrangements for the application of safeguards to such nuclear material, non-nuclear material, equipment or component after its transfer. The Agency shall also be given the opportunity as early as possible in advance of such a transfer to review the design of the facility for the sole purpose of determining that the

arrangements provided for in this Agreement can be effectively applied. India may transfer the nuclear material, non-nuclear material, equipment or component only after the Agency has confirmed that it has made such arrangements.

35. India shall notify the Agency of its intention to transfer any nuclear material, non-nuclear material, equipment or component subject to this Agreement to a recipient which is not under the jurisdiction of India. Except as provided for in paragraph 30(a) of this Agreement, such nuclear material, non-nuclear material, equipment or component shall be so transferred only after the Agency has informed India that it has satisfied itself that Agency safeguards will apply with respect to the nuclear material, non-nuclear material, equipment or component in the recipient country. Upon receipt by the Agency of the notification of transfer from India and the confirmation of receipt by the recipient country, safeguards on such nuclear material, non-nuclear material, equipment or component shall be terminated under this Agreement.

36. The notifications referred to in paragraphs 34 and 35 of this Agreement shall be made to the Agency sufficiently in advance to enable it to make the arrangements required before the transfer is effected. The Agency shall promptly take any necessary action. The time limits for and the contents of these notifications shall be set out in the Subsidiary Arrangements.

III. SAFEGUARDS PROCEDURES

A. GENERAL PROCEDURES

Introduction

37. The safeguards procedures to be applied by the Agency are those specified in this Agreement, as well as such additional procedures as result from technological developments, and other procedures as may be agreed to between the Agency and India. The safeguards procedures set forth below shall be followed, as far as relevant, with respect to any item subject to this Agreement.

38. The Agency shall conclude with India Subsidiary Arrangements concerning the implementation of the safeguards procedures referred to above. The Subsidiary Arrangements shall also include any necessary arrangements for the application of safeguards to any item subject to this Agreement, including such containment and surveillance measures as are required for the effective implementation of safeguards. The Subsidiary Arrangements shall enter into force no later than six months after entry into force of this Agreement.

Design Review

39. The Agency shall review the design of principal nuclear facilities, for the sole purpose of satisfying itself that a facility will permit the effective application of safeguards.

40. The design review of a principal nuclear facility shall take place at as early a stage as possible. In particular, such review shall be carried out in the case of:

(a) An Agency project, before the project is approved;

(b) A bilateral or multilateral arrangement under which the responsibility for administering

safeguards is to be transferred to the Agency, or an activity or facility unilaterally submitted by India, before the Agency assumes safeguards responsibilities with respect to the facility;

(c) A transfer of safeguarded nuclear material to a principal nuclear facility whose design has not previously been reviewed, before such transfer takes place; and

(d) A significant modification of a principal nuclear facility whose design has previously been reviewed, before such modification is undertaken.

41. To enable the Agency to perform the required design review, India shall submit to it relevant design information sufficient for the purpose, including information on such basic characteristics of the principal nuclear facility as may bear on the Agency’s safeguards procedures. The Agency shall require only the minimum amount of information and data consistent with carrying out its responsibility under this section. It shall complete the review promptly after the submission of this information by India and shall notify the latter of its conclusions without delay.

42. If the Agency wishes to examine design information which India regards as sensitive, the Agency shall, if India so requests, conduct the examination on premises in India. Such information should not be physically transmitted to the Agency provided that it remains readily available for examination by the Agency in India.

Records

43. India shall arrange for the keeping of records with respect to principal nuclear facilities and also with respect to all safeguarded nuclear material outside such facilities. For this purpose India and the Agency shall agree on a system of records with respect to each facility and also with respect to such material, on the basis of proposals to be submitted by India in sufficient time to allow the Agency to review them before the records need to be kept.

44. All records shall be kept in English.

45. The records shall consist, as appropriate, of:

(a) Accounting records of all safeguarded nuclear material; and

(b) Operating records for principal nuclear facilities.

46. All records shall be retained for at least two years.

Reports

General Requirements

47. India shall submit to the Agency reports with respect to the production, processing and use of safeguarded nuclear material in or outside principal nuclear facilities. For this purpose, India and the Agency shall agree on a system of reports with respect to each facility and also with respect to safeguarded nuclear material outside such facilities, on the basis of proposals to be submitted by India in sufficient time to allow the Agency to review them before the reports need to be submitted. The reports need include only such information as is relevant for the purpose of safeguards.

48. All reports shall be submitted in English.

Routine Reports

49. Routine reports shall be based on the records compiled in accordance with paragraphs 43 to 46 of this Agreement and shall consist, as appropriate, of:

(a) Accounting reports showing the receipt, transfer out, inventory and use of all safeguarded nuclear material. The inventory shall indicate the nuclear and chemical composition and physical form of all material and its location on the date of the report; and

(b) Operating reports showing the use that has been made of each principal nuclear facility since the last report and, as far as possible, the programme of future work in the period until the next routine report is expected to reach the Agency.

50. The first routine report shall be submitted as soon as:

(a) There is any safeguarded nuclear material to be accounted for; or

(b) The principal nuclear facility to which it relates is in a condition to operate.

Progress in Construction

51. The Agency may request information as to when particular stages in the construction of a principal nuclear facility have been or are to be reached.

Special Reports

52. India shall report to the Agency without delay:

(a) If any unusual incident occurs involving actual or potential loss or destruction of, or damage to, any safeguarded nuclear material or principal nuclear facility;

(b) If there is good reason to believe that safeguarded nuclear material is lost or unaccounted for in quantities that exceed the normal operating and handling losses that have been accepted by the Agency as characteristic of the facility; or

(c) Disruption of operation of facilities listed in the Annex on account of material violation or breach of bilateral or multilateral arrangements to which India is a party.

53. India shall report to the Agency, as soon as possible, and in any case within two weeks, any transfer not requiring advance notification that will result in a significant change (to be defined by the Agency in agreement with India) in the quantity of safeguarded nuclear material in a principal nuclear facility. Such report shall indicate the amount and nature of the material and its intended use.

Amplification of Reports

54. At the Agency’s request, India shall submit amplifications or clarifications of any report, in so far as relevant for the purpose of safeguards.

Official Text of India-IAEA Safeguards Agreement Part II

Posted on July 10, 2008 by Chellaney

Inspections

General Procedures

55. The Agency may inspect any items subject to this Agreement.

56. The purpose of safeguards inspections under this Agreement shall be to verify compliance by India with this Agreement and to assist India in complying with this Agreement and in resolving any questions arising out of the implementation of safeguards.

57. The number, duration and intensity of inspections actually carried out shall be kept to the minimum consistent with the effective implementation of safeguards, and if the Agency considers that the authorized inspections are not all required, fewer shall be carried out.

58. Inspectors shall neither operate any facility themselves nor direct the staff of a facility to carry out any particular operation.

Routine Inspections

59. Routine inspections may include, as appropriate:

(a) Audit of records and reports;

(b) Verification of the amount of safeguarded nuclear material by physical inspection, measurement and sampling;

(c) Examination of principal nuclear facilities, including a check of their measuring instruments and operating characteristics; and

(d) Check of the operations carried out at principal nuclear facilities.

60. Whenever the Agency has the right of access to a principal nuclear facility at all times, it may perform inspections of which notice as required by paragraph 4 of the Inspectors Document need not be given, in so far as this is necessary for the effective application of safeguards. The actual procedures to implement these provisions shall be agreed upon between India and the Agency.

Initial Inspections of a Principal Nuclear Facility

61. To verify that the construction of a principal nuclear facility is in accordance with the design reviewed by the Agency, an initial inspection or inspections of the facility may be carried out:

(a) As soon as possible after the facility has come under Agency safeguards, in the case of a facility already in operation; and

(b) Before the facility starts to operate, in other cases.

62. The measuring instruments and operating characteristics of the facility shall be reviewed to the extent necessary for the purpose of implementing safeguards. Instruments that will be used to obtain data on the nuclear materials in the facility may be tested to determine their satisfactory functioning. Such testing may include the observation by inspectors of commissioning or routine tests by the staff of the facility, but shall not hamper or delay the construction, commissioning or normal operation of the facility.

Special Inspections

63. The Agency may carry out special inspections if:

(a) The study of a report indicates that such inspection is desirable; or

(b) Any unforeseen circumstance requires immediate action.

The Board shall subsequently be informed of the reasons for and the results of each such inspection.

64. The Agency may also carry out special inspections of substantial amounts of safeguarded nuclear material that are to be transferred outside the jurisdiction of India, for which purpose India shall give the Agency sufficient advance notice of any such proposed transfer.

B. SPECIAL PROCEDURES FOR REACTORS

Reports

65. The frequency of submission of routine reports shall be agreed between the Agency and India, taking into account the frequency established for routine inspections. However, at least two such reports shall be submitted each year and in no case shall more than 12 such reports be required in any year.

Inspections

66. One of the initial inspections of a reactor shall if possible be made just before the reactor first reaches criticality.

67. The maximum frequency of routine inspections of a reactor and of the safeguarded nuclear material in it shall be determined from the following table:

____________________________________________________________________

Whichever is the largest of: Maximum number

(a) Facility inventory (including loading); of routine inspections

(b) Annual throughput; manually

(c) Maximum potential annual production of special

fissionable material

(Effective kilograms of nuclear material)

Up to 1 0

More than 1 and up to 5 1

More than 5 and up to 10 2

More than 10 and up to 15 3

More than 15 and up to 20 4

More than 20 and up to 25 5

More than 25 and up to 30 6

More than 30 and up to 35 7

More than 35 and up to 40 8

More than 40 and up to 45 9

More than 45 and up to 50 10

More than 50 and up to 55 11

More than 55 and up to 60 12

More than 60 Right of access at all times

68. The actual frequency of inspection of a reactor shall take account of:

(a) The fact that India possesses irradiated fuel reprocessing facilities:

(b) The nature of the reactor; and

C. SPECIAL PROCEDURES RELATING TO SAFEGUARDED NUCLEAR

MATERIAL OUTSIDE PRINCIPAL NUCLEAR FACILITIES

Nuclear Material in Research and Development Facilities

Routine Reports

69. Only accounting reports need be submitted in respect of nuclear material in research and development facilities. The frequency of submission of such routine reports shall be agreed between the Agency and India, taking into account the frequency established for routine inspections; however, at least one such report shall be submitted each year and in no case shall more than 12 such reports be required in any year.

Routine Inspections

70. The maximum frequency of routine inspections of safeguarded nuclear material in a research and development facility shall be that specified in the table in paragraph 67 of this Agreement for the total amount of material in the facility.

Source Material in Sealed Storage

71. The following simplified procedures for safeguarding stockpiled source material shall be applied if India undertakes to store such material in a sealed storage facility and not to remove it therefrom without previously informing the Agency.

Design of Storage Facilities

72. India shall submit to the Agency information on the design of each sealed storage facility and agree with the Agency on the method and procedure for sealing it.

Routine Reports

73. Two routine accounting reports in respect of source material in sealed storage shall be submitted each year.

Routine Inspections

74. The Agency may perform one routine inspection of each sealed storage facility annually.

Removal of Material

75. India may remove safeguarded source material from a sealed storage facility after informing the Agency of the amount, type and intended use of the material to be removed, and providing sufficient other data in time to enable the Agency to continue safeguarding the material after it has been removed.

Nuclear Material in Other Locations

76. Except to the extent that safeguarded nuclear material outside of principal nuclear facilities is covered by any of the provisions set forth in paragraphs 69 to 75 of this Agreement, the following procedures shall be applied with respect to such material (for example, source material stored elsewhere than in a sealed storage facility, or special fissionable material used in a sealed neutron source in the field).

Routine Reports

77. Routine accounting reports in respect of all safeguarded nuclear material in this category shall be submitted periodically. The frequency of submission of such reports shall be agreed between the Agency and India, taking into account the frequency established for routine inspections; however, at least one such report shall be submitted each year and in no case shall more than 12 such reports be required in any year.

Routine Inspections

78. The maximum frequency of routine inspections of safeguarded nuclear material in this category shall be one inspection annually if the total amount of such material does not exceed five effective kilograms, and shall be determined from the table in paragraph 67 of this Agreement if the amount is greater.

D. PROVISIONS FOR REPROCESSING PLANTS

Introduction

79. Additional procedures applicable to the safeguarding of reprocessing plants are set out below.

Special Procedures

Reports

80. The frequency of submission of routine reports shall be once each calendar month.

Inspections

81. A reprocessing plant having an annual throughput not exceeding 5 effective kilograms of nuclear material, and the safeguarded nuclear material in it, may be routinely inspected twice a year. A reprocessing plant, having an annual throughput exceeding 5 effective kilograms of nuclear material, and the safeguarded nuclear material in it, may be inspected at all times. The arrangements for inspections set forth in paragraph 60 of this Agreement shall apply to all inspections to be made under this paragraph. It is understood that for plants having an annual throughput of more than 60 effective kilograms, the right of access at all times would be normally be implemented by means of continuous inspection.

82. When a reprocessing plant is under Agency safeguards only because it contains safeguarded nuclear material, the inspection frequency shall be based on the rate of delivery of safeguarded nuclear material.

83. India and the Agency shall cooperate in making all the necessary arrangements to facilitate the taking, shipping or analysis of samples, due account being taken of the limitations imposed by the characteristics of a plant already in operation when placed under Agency safeguards.

Mixtures of Safeguarded and Unsafeguarded Nuclear Material

84. India and the Agency may agree on the following special arrangements in the case of a reprocessing plant which has not been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement, and in which safeguarded and unsafeguarded nuclear materials are present:

(a) Subject to the provisions of sub-paragraph (b) below, the Agency shall restrict its safeguards procedures to the area in which irradiated fuel is stored, until such time as all or any part of such fuel is transferred out of the storage area into other parts of the plant. Safeguards procedures shall cease to apply to the storage area or plant when either contains no safeguarded nuclear material; and

(b) Where possible, safeguarded nuclear material shall be measured and sampled separately from unsafeguarded material, and at as early a stage as possible. Where separate measurement, sampling or processing are not possible, the whole of the material being processed in that campaign shall be subject to the safeguards procedures set out in Part III.D of this Agreement. At the conclusion of the processing the nuclear material that is thereafter to be safeguarded shall be selected by agreement between India and the Agency from the whole output of the plant resulting from that campaign, due account being taken of any processing losses accepted by the Agency.

E. PROVISIONS FOR CONVERSION PLANTS, ENRICHMENT PLANTS AND

FABRICATION PLANTS

Introduction

85. Additional procedures applicable to conversion plants and fabrication plants are set out below. This terminology is synonymous with the term “a plant for processing or fabricating nuclear material (excepting a mine or ore-processing plant)” which is used in paragraph 117 of this Agreement.

86. In the event that India decides to offer an enrichment plant in the future as a facility subject to this Agreement, the Agency and India shall consult and agree on the application of the Agency’s safeguards procedures for enrichment plants before any such facility is added to the Annex.

Special Procedures

Reports

87. The frequency of submission of routine reports shall be once each calendar month.

Inspections

88. A conversion plant or a fabrication plant which has been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement, or unilaterally submitted to safeguards under a safeguards agreement, and the nuclear material in it, may be inspected at all times if the plant inventory at any time, or the annual input, of nuclear material exceeds five effective kilograms. Where neither the inventory at any time, nor the annual input, exceeds five effective kilograms of nuclear material, the routine inspections shall not exceed two a year. The arrangements for inspections set

forth in paragraph 57 of this Agreement shall apply to all inspections to be made under this paragraph. It is understood that, for plants having an inventory at any time, or an annual input, of more than 60 effective kilograms, the right of access at all times would normally be implemented by means of continuous inspection. Where neither the inventory at any time nor the annual input exceeds one effective kilogram of nuclear material, the plant would not normally be subject to routine inspection.

89. When a conversion plant or a fabrication plant which has not been supplied wholly or

substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement contains safeguarded nuclear material, the frequency of routine inspections shall be based on the inventory at any time and the annual input of safeguarded nuclear material. Where the inventory at any time, or the annual input, of safeguarded nuclear material exceeds five effective kilograms the plant may be inspected at all times. Where neither the inventory at any time, nor the annual input, exceeds five effective kilograms of safeguarded nuclear material, the routine inspections shall not exceed two a year. The arrangements for inspection set forth in paragraph 60 shall apply to all inspections to be made under this paragraph. It is understood that, for plants having an inventory at any time, or an annual input, of more than 60 effective kilograms, the right of access at all times would normally be implemented by means of continuous inspection. Where neither the inventory at any time nor the annual input exceeds one effective kilogram of nuclear material, the plant would not normally be subject to routine inspection.

90. The intensity of inspection of safeguarded nuclear material at various steps in a conversion plant or a fabrication plant shall take account of the nature, isotopic composition and amount of safeguarded nuclear material in the plant. Safeguards shall be applied in accordance with the general principles set forth in paragraphs 4 to 8 of this Agreement. Emphasis shall be placed on inspection to control uranium of high enrichments and plutonium.

91. Where a plant may handle safeguarded and unsafeguarded nuclear material, India shall notify the Agency in advance of the programme for handling safeguarded batches to enable the Agency to make inspections during these periods, due account being also taken of the arrangements under paragraph 92 of this Agreement.

92. India and the Agency shall cooperate in making all the necessary arrangements to facilitate the preparation of inventories of safeguarded nuclear material and the taking, shipping and/or analysis of samples, due account being taken of the limitations imposed by the characteristics of a plant already in operation when placed under Agency safeguards.

Residues, Scrap and Waste

93. India shall ensure that safeguarded nuclear material contained in residues, scrap or waste created during conversion or fabrication is recovered, as far as is practicable, in its facilities and within a reasonable period of time. If such recovery is not considered practicable by India, India and the Agency shall cooperate in making arrangements to account for and dispose of the material.

Safeguarded and Unsafeguarded Nuclear Material

94. India and the Agency may agree on the following special arrangements in the case of a conversion plant or a fabrication plant which has not been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement, and in which safeguarded and unsafeguarded nuclear material are both present:

(a) Subject to the provisions of sub-paragraph (b) below, the Agency shall restrict its safeguards procedures to the area in which safeguarded nuclear material is stored, until such time as all or any part of such nuclear material is transferred out of the storage area into other parts of the plant. Safeguards procedures shall cease to be applied to the storage area or plant when it contains no safeguarded nuclear material; and

(b) Where possible, safeguarded nuclear material shall be measured and sampled separately from unsafeguarded nuclear material, and at as early a stage as possible. Where separate measurement, sampling or processing is not possible, any nuclear material containing safeguarded nuclear material shall be subject to the safeguards procedures set out in Part III.E of this Agreement. At the conclusion of processing, the nuclear material that is thereafter to be safeguarded shall be selected, in accordance with paragraph 96 of this Agreement when applicable, by agreement between India and the Agency, due account being taken of any processing losses accepted by the Agency.

Blending of Nuclear Material

95. When safeguarded nuclear material is to be blended with either safeguarded or unsafeguarded nuclear material, India shall notify the Agency sufficiently in advance of the programme of blending to enable the Agency to exercise its right to obtain evidence, through inspection of the blending operation or otherwise, that the blending is performed according to the programme.

96. When safeguarded and unsafeguarded nuclear material are blended, if the ratio of fissionable isotopes in the safeguarded component going into the blend to all the fissionable isotopes in the blend is 0.3 or greater, and if the concentration of fissionable isotopes in the unsafeguarded nuclear material is increased by such blending, then the whole blend shall remain subject to safeguards. In other cases, the following procedures shall apply:

(a) Plutonium/plutonium blending: The quantity of the blend that shall continue to be

safeguarded shall be such that its weight, when multiplied by the square of the weight fraction of contained fissionable isotopes, is not less than the weight of originally safeguarded plutonium multiplied by the square of the weight fraction of fissionable isotopes therein, provided however that:

(i) In cases where the weight of the whole blend, when multiplied by the square of the

weight fraction of contained fissionable isotopes, is less than the weight of originally

safeguarded plutonium multiplied by the square of the weight fraction of fissionable

isotopes therein, the whole of the blend shall be safeguarded; and

(ii) The number of fissionable atoms in the portion of the blend that shall continue to be

under safeguards shall in no case be less than the number of fissionable atoms in the

originally safeguarded plutonium;

(b) Uranium/uranium blending: The quantity of the blend that shall continue to be safeguarded shall be such that the number of effective kilograms is not less than the number of effective kilograms in the originally safeguarded uranium, provided however that:

(i) In cases where the number of effective kilograms in the whole blend is less than in the

safeguarded uranium, the whole of the blend shall be safeguarded; and

(ii) The number of fissionable atoms in the portion of the blend that shall continue to be

under safeguards shall in no case be less than the number of fissionable atoms in the

originally safeguarded uranium;

(c) Uranium/plutonium blending: The whole of the resultant blend shall be safeguarded until the uranium and the plutonium constituents are separated. After separation of the uranium and plutonium, safeguards shall apply to the originally safeguarded component; and

(d) Due account shall be taken of any processing losses agreed upon between India and the Agency.

IV. AGENCY INSPECTORS

97. The provisions of paragraphs 1 to 10 and 12 to 14, inclusive, of the Inspectors Document shall apply to Agency inspectors performing functions pursuant to this Agreement. However, paragraph 4 of the Inspectors Document shall not apply with regard to any facility or to nuclear material to which the Agency has access at all times. The actual procedures to implement paragraph 60 of this Agreement shall be agreed to between the Agency and India.

98. The relevant provisions of the Agreement on the Privileges and Immunities of the Agency (INFCIRC/9/Rev.2) shall apply to the Agency, its inspectors performing functions under this Agreement and to any property of the Agency used by them in the performance of their functions under this Agreement.

V. PHYSICAL PROTECTION

99. India shall take all suitable measures necessary for the physical protection of the facilities and nuclear material subject to this Agreement, taking into account the recommendations made inAgency’s document INFCIRC/225/Rev.4, as may be amended from time to time.

VI. SYSTEM OF ACCOUNTING AND CONTROL

100. India shall establish and maintain a system of accounting for and control of all items subject to safeguards under this Agreement, in accordance with provisions to be set out in the Subsidiary Arrangements.

VII. FINANCE

101. India and the Agency shall each bear any expense incurred in the implementation of their responsibilities under this Agreement. The Agency shall reimburse India for any special expenses, including those referred to in paragraph 6 of the Inspectors Document, incurred by India or persons under its jurisdiction at the written request of the Agency, if India notified the Agency before the expense was incurred that reimbursement would be required. These provisions shall not prejudice the allocation of expenses attributable to a failure by either India or the Agency to comply with this Agreement.

102. India shall ensure that any protection against third party liability, including any insurance or other financial security, in respect of a nuclear incident occurring in a facility under its jurisdiction shall apply to the Agency and its inspectors when carrying out their functions under this Agreement as that protection applies to nationals of India.

VIII. NON-COMPLIANCE

103. If the Board determines in accordance with Article XII.C of the Statute of the Agency that there has been any non-compliance by India with this Agreement, the Board shall call upon India to remedy such non-compliance forthwith, and shall make such reports as it deems appropriate. In the event of failure by India to take full remedial action within a reasonable time, the Board may take any other measures provided for in Article XII.C of the Statute. The Agency shall promptly notify India in the event of any determination by the Board pursuant in this regard.

IX. COOPERATION, INTERPRETATION AND APPLICATION OF

THE AGREEMENT AND SETTLEMENT OF DISPUTES

104. The Agency and India shall cooperate to facilitate the implementation of this Agreement.

105. At the request of either India or the Agency, there shall be consultations about any question arising out of the interpretation or application of this Agreement. India and the Agency shall endeavour to settle by negotiation any dispute arising from the interpretation or application of this Agreement. India shall have the right to request that any question arising out of the interpretation or application of the Agreement be considered by the Board. The Board shall invite India to participate in the discussion of any such question by the Board.

106. In the event of any question or questions arising from the implementation of this Agreement, the Agency shall provide India with an opportunity to clarify and facilitate the resolution of such questions. The Agency shall not draw any conclusions in connection with the question or questions until India has had an opportunity to provide clarifications.

X. FINAL CLAUSES

107. India and the Agency shall, at the request of either of them, consult about amending this Agreement.

108. This Agreement shall enter into force on the date on which the Agency receives from India written notification that India’s statutory and/or constitutional requirements for entry into force have been met.

109. This Agreement shall remain in force until, in accordance with its provisions, safeguards have been terminated on all items subject to this Agreement, or until terminated by mutual agreement of the parties to this Agreement.

XI. DEFINITIONS

110. “Agency” means the International Atomic Energy Agency.

111. “Board” means the Board of Governors of the Agency.

112. “Campaign” means the period during which the chemical processing equipment in a

reprocessing plant is operated between two successive wash-outs of the nuclear material present in the equipment.

113. “Conversion plant” means a facility (excepting a mine or ore-processing plant) to improve unirradiated nuclear material, or irradiated nuclear material that has been separated from fission products, by changing its chemical or physical form so as to facilitate further use or processing. The term conversion plant includes the facility’s storage and analytical sections. The term does not include a plant intended for separating the isotopes of nuclear material.

114. “Director General” means the Director General of the Agency.

115. “Effective kilograms” means:

(i) In the case of plutonium, its weight in kilograms;

(ii) In the case of uranium with an enrichment of 0.01 (1 %) and above, its weight in kilograms multiplied by the square of its enrichment;

(iii) In the case of uranium with an enrichment below 0.01 (1 %) and above 0.005 (0.5 %), its weight in kilograms multiplied by 0.0001; and

(iv) In the case of depleted uranium with an enrichment of 0.005 (0.5 %) or below, and in the case of thorium, its weight in kilograms multiplied by 0.00005.

116. “Enrichment plant” means a plant for separating the isotopes of nuclear material.

117. “Facility” means, for the purposes of this Agreement:

(i) A “principal nuclear facility”, which means a reactor, a plant for processing nuclear material irradiated in a reactor, a plant for separating the isotopes of a nuclear material, a plant for processing or fabricating nuclear material (excepting a mine or ore-processing

plant) or a facility or plant of such other type as may be designated by the Board from

time to time, including associated storage facilities, as well as a critical facility or a

separate storage installation;

(ii) A research and development facility as defined in paragraph 127 of this Agreement;

(iii) Any location where nuclear material in amounts greater than one effective kilogram is customarily used;

(iv) A plant for the upgrading of heavy water or a separate storage installation for heavy water.

118. “Fabrication plant” means a plant to manufacture fuel elements or other components containing nuclear material and includes the plant’s storage and analytical sections.

119. “Improved” means, with respect to nuclear material, that either:

(i) The concentration of fissionable isotopes in it has been increased; or

(ii) The amount of chemically separable fissionable isotopes in it has been increased; or

(iii) Its chemical or physical form has been changed so as to facilitate further use or processing.

120. “Inspector” means an Agency official designated in accordance with the Inspectors Document.

121. “Inspectors Document” means the Annex to the Agency’s document GC(V)/INF/39.

122. “Nuclear material” means any source or special fissionable material as defined in Article XX of the Statute.

123. “Produced, processed or used” means any utilization or any alteration of the physical or chemical form or composition, including any change of the isotopic composition, of nuclear material;

124. “Project agreement” means a safeguards agreement relating to an Agency project and containing provisions as foreseen in Article XI.F.4.(b) of the Statute.

125. “Reactor” means any device in which a controlled, self-sustaining fission chain-reaction can be maintained.

126. “Reprocessing plant” means a facility to separate irradiated nuclear materials and fission products, and includes the facility’s head-end treatment section and its associated storage and analytical sections. This term is synonymous with the term “a plant for processing nuclear material irradiated in a reactor” which is used in paragraph 117 of this Agreement.

127. “Research and development facility” means a facility, other than a principal nuclear facility, used for research or development in the field of nuclear energy.

128. “Statute” means the Statute of the Agency.

129. “Throughput” means the rate at which nuclear material is introduced into a facility operating at full capacity.

130. “Unilaterally submitted” means submitted by India to Agency safeguards.

DONE at Vienna, on the day of 2008, in duplicate, in the English language.

For the GOVERNMENT OF INDIA: For the INTERNATIONAL ATOMIC ENERGY AGENCY

Pouring hot oil on nuclear power

Posted on July 4, 2008 by Chellaney

Too much hot air in nuke deal

The Indo-U.S. nuclear deal is largely about selling dreams, but a major myth propagated is that greater nuclear-generated electricity will help reduce India’s oil-import dependency, writes Brahma Chellaney

The Economic Times

July 4, 2008

The partisan rancour over the Indo-U.S. nuclear deal has helped obscure facts, allowing shibboleths and fantasies to substitute for an informed debate on a critical issue. Several myths continue to be repeated untiringly. The biggest of them draws a meretricious link between nuclear energy and soaring oil prices to justify the proposed import of high-priced, foreign fuel-dependent power reactors.

What does nuclear power have to do with the price or import requirements of any transportation fuel? Thanks to the oil price shocks in the 1970s and 1980s and the advent of new energy technologies, the share of global electricity produced from oil has shrunk from 25 per cent in 1973 to barely 4 per cent. The remaining oil-fired power plants — of which India has only a handful — will be phased out, or refitted to run on gas. Oil now is primarily used for transportation, while the reactor-import option is about electricity generation.

The link between nuclear power and oil is specious. In the years ahead, the world could move toward electric vehicles and even use grid power to make hydrogen for the fuel-cell vehicles of the future. In another futuristic scenario, nuclear energy may indirectly serve as a substitute to some oil use in the commercial and industrial sectors. But today, greater nuclear-generated electricity is not going to really reduce any country’s oil needs, certainly not India’s. In fact, with little overlap in the oil and nuclear global-market structures, nuclear power now competes principally against coal, natural gas and maybe renewables.

If global oil demand is threatening to outstrip supply, so is the case with uranium. Current concerns associated with oil’s price volatility, supply security and geopolitical risks are no different than uranium’s. And if global oil reserves are finite, so are uranium resources, with proven uranium reserves likely to last barely 85 years, according to the Red Book published jointly by the OECD and IAEA. In fact, in the past five years, the international spot price of uranium has risen faster than that of crude oil, with uranium today trading six times above its $10 a pound historical average. Oil and uranium prices are likely to stay volatile, but the long-term trend for both is surely up.

Just as cheap oil now appears fanciful, cheap nuclear power for long has been a mirage. More than half a century after then U.S. Atomic Energy Agency Chairman Lewis Strauss claimed that nuclear energy would become “too cheap to meter”, the nuclear power industry everywhere subsists on generous state subsidies, which do not reflect in the published costs of generation. The current electricity-market liberalization trends spell trouble for the global nuclear-power industry because they threaten the state support on which it survives. As a 2005 IAEA study by Ferenc Toth and Hans-Holger Rogner warns, “nuclear power’s market share might indeed follow a downward trajectory” if state subsidies abate and more cost-effective reactors are not designed.

Other international studies have shown that nuclear power, although a long-matured technology, has demonstrated the slowest rate of learning in comparison to other energy technologies, including newer sources like wind and combined-cycle gas turbines. Instead of the price declining with nuclear power’s maturation, the opposite has happened. Power reactors also remain very capital-intensive, with high up-front capital costs, long lead times for construction and commissioning, and drawn-out amortization periods that discourage private investors. In the US, two separate studies by the University of Chicago (2004) and MIT (2003) showed new nuclear power remaining comparatively more expensive.

That explains why the U.S. industry has yet to receive its first domestic power reactor order in more than three decades, despite the Bush administration offering among the world’s most-attractive tax sops and other state incentives. But in India there has been little debate on the nuclear deal’s premise — that the way to meet burgeoning energy demands is to import power reactors. While nuclear power certainly deserves a place in a diversified energy portfolio, reactors imports will be a path to external-fuel dependency and exorbitant plant costs.

India ought not to confuse its electrical generation problem with transportation fuel problem. Also, India cannot correct its oil-import dependency on the Gulf region by fashioning a new dependency on a tiny nuclear-supply cartel made up of a few state-guided firms. While oil is freely purchasable on world markets, the global nuclear reactor and fuel business is the most monopolized and politically regulated commerce in the world, with no sanctity of contract. Without having loosened its bondage to oil exporters, should India get yoked to the nuclear cartel?

With few reactors being built in the West or Russia, this cartel has aggressively sought export markets. In a bizarre spectacle, after having castigated Iran’s pursuit of civil nuclear technology as unsuited to its energy wealth, France and the US have competed to sign up reactor deals with oil-rich Arab countries. Yet, even at the current slack rate of construction of reactors, bottlenecks are becoming a serious problem for key components. There are just a few manufacturers for many components. For example, at least nine reactor components, including giant pressure vessels and steam generators, are made only in one facility owned by Japan Steel Works. A recent study by the U.S.-based Keystone Center reported a six-year lead time for some parts.

The harsh truth is that reactor imports, far from cutting India’s oil imports, will increase the already-wide price differential between nuclear energy and thermal power. While all the Indian power reactors built since the 1990s have priced their electricity at between 270 and 285 paise per kilowatt hour or higher, despite inbuilt state subsidy, the coal-fired Sason plant project in central India has contracted to sell power at 119 paise per kWh. Of the three countries lobbying to sell power reactors to India, the United States has little record to show while France’s record stands blemished by a two-year time overrun and $2.1 billion cost escalation in building Finland’s Olkiluoto-3 plant. The third, Russia, is struggling to complete its already-delayed twin reactors in Kundakulam. Wishful thinking ought not to cloud India’s options.

(The author is professor, Centre for Policy Research)

The way forward for India on an increasingly divisive nuclear deal with the U.S.

Posted on June 28, 2008 by Chellaney

Emulate America’s bipartisan handling

Brahma Chellaney

The Hindu newspaper

June 28, 2008

The way forward on the nuclear deal is not through disinterest in bipartisan consensus but by emulating the example set by the much-maligned Bush administration at home.

The political drama and uncertainty in India triggered by partisan wrangling over the civil nuclear deal cannot shroud a key fact: Three years after the deal was unveiled as a “historic” breakthrough in U.S.-India relations, its final shape remains unclear and its future uncertain. Several developments have only increased the odds that finalising and implementing the deal will be a long, arduous challenge for both sides.

The most prominent of these developments is that time has run out for the deal to be approved during U.S. President George W. Bush’s term in office. Given the extended requirements for congressional ratification set by the U.S. Atomic Energy Act and Hyde Act, it will be a Barack Obama or John McCain administration — and a new U.S. Congress — that will have the final say on the deal. While acknowledging this reality, the Bush administration, however, continues publicly and privately to prod New Delhi to play its last card by taking the safeguards accord to the International Atomic Energy Agency’s governing board for approval.

With no role to play in the subsequent stages, India may see more conditions being tagged to the deal by the Nuclear Suppliers’ Group and the U.S. Congress. Considering how the deal picked up tougher terms with each stage it crossed, there is a distinct possibility that it would attract more conditions in the remaining phases. Take the NSG process, which promises to be drawn-out in view of the impending change of administration in Washington. Although Prime Minister Manmohan Singh voiced hope in Parliament on August 13, 2007 that the NSG rule-change for India would occur “without conditions,” an unconditional waiver now looks fanciful. The Bush team is loath to share with New Delhi its revised draft proposal to the NSG.

In fact, one of the Hyde Act’s prerequisites for the deal’s congressional approval is that any NSG rule-change must mirror the conditions that legislation has set for nuclear commerce with India — from a permanent test ban and tightly regulated uranium access, to a continued prohibition on all civil nuclear fuel-cycle technologies and the right to demand the return of transferred items and materials. The Act requires that an NSG exemption should neither be less stringent nor take effect before congressional ratification of the deal. Its clause-by-clause explanatory notes state that no NSG decision should “disadvantage U.S. industry by setting less strict conditions … than those embodied in the conditions and requirements of this Act.”

The concern is that if the NSG fails to replicate U.S.-style conditions, New Delhi would do an end-run around America to buy power reactors from Russia and France. Indeed, Secretary of State Condoleezza Rice assured Congress barely four months ago that the NSG exemption will be “completely consistent with the obligations of the Hyde Act.” The Act asserts the U.S. has the “necessary leverage” in a group it founded to “ensure a favourable outcome.”

Given these realities, there ought to be neither hurry nor heat in evolving India’s strategy and options on the deal. This is an issue that needs to be discussed dispassionately, in a bipartisan spirit, without succumbing to contrived deadlines. After all, the deal centres on the very future of the country’s nuclear programme. Once India has invested billions of dollars in importing power reactors, the congressionally enforced conditions, with cyclic presidential certifications of Indian “compliance,” will effectively bear it down. Even when Washington walked out midway from a binding 30-year bilateral pact over just one plant, the U.S.-built Tarapur nuclear power station, New Delhi continued to honour the accord’s terms till the end — and even beyond to this day.

Declassified U.S. documents show that the CIA had correctly assessed that India would not end its obligations even after America had broken its word, but instead would seek U.S. help to find a substitute fuel supplier to keep electricity flowing from Tarapur. That is exactly what happened. But in return, to this day, India has exacerbated its spent-fuel problem at Tarapur by granting the U.S. a right it didn’t have even if it had not walked out of that accord — a veto on Indian reprocessing of the accumulating discharged fuel. Yet, even in the latest deal, India has inexplicably agreed to forego reprocessing until it has, in the indeterminate future, won a separate, congressionally vetted agreement.

The political passions the deal is generating make it all the more important that spin should not be allowed to obfuscate facts. Both America and China stand to gain from the qualitative and quantitative fetters the deal imposes on India’s deterrent, including the test prohibition and the forced shutdown of Cirus — one of the two research reactors producing weapons-grade plutonium. Yet vicious attacks have been orchestrated on the Left for allegedly acting at China’s behest. Disinformation has been planted to sow confusion in the BJP ranks and break the party’s steadfast opposition to the deal. Can slogans and taunts serve as a substitute to an informed debate on an increasingly complex and technical deal?

One would have expected greater transparency in a deal between the world’s most-populous and most-powerful democracies. In one telling example, the Bush administration, through a gag order on its written responses to congressional questions, has sought to keep the Indian public in the dark on the larger implications, lest the deal should run into rougher weather. In another example, New Delhi continues to shy away from explaining why it agreed to certain glaring provisions in the 123 agreement, such as its grant of an open-ended right to the supplier to suspend supplies forthwith simply by issuing a one-year termination notice on any ground, or the conspicuous absence of any dispute-resolution mechanism.

Citing the newfound support to the deal by A.P.J. Abdul Kalam or Brajesh Mishra can hardly lay to rest nagging questions. Cryptic personal opinions of individuals, however distinguished, will not obscure hard facts. After having been a party to all the Atal Bihari Vajpayee-led pronouncements against the deal since 2005, Mr. Mishra has suddenly gone solo to find virtue in the accord. All he says is that he was officially briefed and now “hopes” and “believes” the deal is no longer injurious to Indian interests. But why not share with the public any new material facts he may know?

Mr. Kalam, as scientific adviser in 1999, publicly supported the then government’s U.S.-instigated but abortive move to sign the Comprehensive Test Ban Treaty. Now, in lending support to a deal that drags India through the backdoor into the CTBT, Mr. Kalam says: “If at any time there was a fear that national security would be compromised … we can withdraw.” This shows he hasn’t studied the deal, because the one common thread running through the Hyde Act, the 123 agreement, and the safeguards accord is that India is to be barred from ever halting international inspection of its entire civil nuclear programme, even if the U.S. unilaterally terminated cooperation.

Let’s be clear: the deal has divided India like no other strategic issue. The rancorous divisiveness ought to give pause to those who may think the deal can be rammed through. Indeed, through political over-investment, the deal has been meretriciously presented as the centrepiece, if not the touchstone, of a new Indo-U.S. partnership. To depict the deal as critical to U.S.-India ties is to suggest the base of that relationship is still narrow. Any bilateral relationship cannot rise or fall on the basis of a single issue.

New Delhi’s best option today is to let the deal enter a period of suspended animation and await the new political line-up in Washington. A critical matter like this, which is going to tie India to legally irrevocable international inspections, demands a broad consensus at home. To ignore the widespread misgivings and to precipitously proceed ahead will set a treacherous and damaging precedent.

Dr. Singh had assured the nation on several occasions that he would build a broad political consensus in the deal’s favour. Just two days after signing the original deal on July 18, 2005, he said: “It goes without saying that we can move forward only on the basis of a broad national consensus.” On August 17, 2006, he told the Rajya Sabha: “Broad-based domestic consensus cutting across all sections in Parliament and outside will be necessary.” Subsequently, he reassured Parliament that he will “seek the broadest possible consensus within the country to enable the next steps to be taken.”

That is exactly the wise course he needs to follow today. The partisan acrimony needs to be defused.

New Delhi should learn from the way the much-maligned Bush administration has handled the deal domestically — by forging an impressive political consensus. The Hyde Act was the product of such consensus-building and political co-option, with the administration holding closed-door briefings for lawmakers and allowing its three-and-a-half-page bill to be turned into a 41-page, conditions-stacked legislation. Bipartisan support also holds the key to the deal eventually winning congressional ratification. In India, the deal ought not to be turned into a partisan issue, for it will have to be implemented well after the present government’s term.

Growing partisan rancor over the Indo-U.S. nuclear deal

Posted on June 27, 2008 by Chellaney

Nuclear Deal: Questions That Baffle

Why is Prime Minister Manmohan Singh in a hurry to approach the IAEA Board when he knows the deal cannot be sealed during the Bush presidency? The best way to proceed is to do what he had promised — build a broad political consensus in favour.

Brahma Chellaney

Asian Age, June 27, 2008

The civil nuclear deal with America, although steeped in growing partisan rancour, is hardly the weighty issue that should determine any government’s future. Indeed, it is an issue of little long-term import to India’s great-power ambitions or energy needs. For the U.S., the deal offers substantive benefits. But for India the benefits are largely symbolic.

Yet the costs the still-uncertain deal is exacting on India can be gauged from the self-induced federal paralysis, with a sulking prime minister withdrawing into a shell and senior ministers deferring important work. The defence minister, for instance, called off a trip to Japan intended to add strategic content to a bilateral relationship pivotal to power equilibrium in Asia. Such government disruption from the top has no parallel in the annals of independent India.

The ungainly political stagecraft on display raises several unanswered questions. The first relates to Dr. Manmohan Singh’s obsession with a deal that has begun to warp his priorities. Many are asking the same question: Why is he willing to stake his government’s future on a single issue of questionable long-term strategic weight? Can he fashion a legacy by choosing deal-making over deterrent-building?

What is mystifying is that Dr. Singh has landed the country in a political logjam over a deal he knows cannot be completed during the remainder term of U.S. President George W. Bush. Time has simply run out. Even in an overly optimistic scenario, the deal cannot be ratified by the present U.S. Congress.

In addition to New Delhi’s insistence on taking its safeguards accord with the International Atomic Energy Agency to the latter’s governing board at this stage — an action that will gratuitously tie the country’s hands even before the final deal is clear — an extraordinary plenary meeting of the Nuclear Suppliers’ Group will need to be held to consider a rule-change by consensus. An NSG waiver will neither be easy nor swift, with the U.S. itself seeking to attach conditions that mesh with its Hyde Act. In the last stage, the deal will come up for congressional ratification, but only after three documents — the so-called 123 agreement, a presidential determination that India has met all the stipulated preconditions, and a “Nuclear Proliferation Assessment Statement” — have been placed before the U.S. Congress “for a period of 60 days of continuous session”.

Given the limited number of days left in the present U.S. legislative calendar to let a ratification process run its full course, why this tearing hurry on the part of India to take the safeguards accord to the IAEA Board? Washington — whose almost-daily statements have sought to egg on New Delhi to play that very card, even if it led to the collapse of Dr. Singh’s government — acknowledged this week that, “obviously, the next U.S. government will have to look at this [deal] and make their own decisions on it”. In fact, as early as last month, Senate Foreign Relations Committee Chairman Joseph Biden had said the deal is unlikely to be approved in Bush’s term.

Before knowing how the NSG will condition cooperation with India or the attitude of the next U.S. administration, why is New Delhi willing to part with its last remaining card by taking the safeguards accord to the IAEA Board? That accord, at any rate, ought to be taken to the Board only after the contours of the Additional Protocol with the IAEA have been firmed up. Otherwise, a leverage-stripped India could face more-stringent and wider inspections when it returns for Additional Protocol negotiations.

Like the 123 agreement, India has already finalized and “frozen” the safeguards accord. But unlike the former, which was made public days after it was initialled, the latter text has not been shown even to coalition allies, underscoring the creeping official opacity.

There are other mysteries, too. One centres on Dr. Singh’s metamorphosis from being anti-nuclear to becoming a fervent votary of commercial nuclear power. As finance minister in the first half of the 1990s, Dr. Singh starved the nuclear programme of funds, disabling new projects and halting uranium exploration.

The uranium crunch India confronts today is rooted in the fact that the actions Dr. Singh set in motion then were not reversed until several years after he left office. That Dr. Singh’s newfound interest in nuclear power relates merely to reactor imports has been underscored by his recent action in cutting the Department of Atomic Energy’s 2008-09 budget by more than half a billion dollars.

Another unexplained action — one that demolishes the official contention that the deal has no bearing on the strategic programme — is the U.S.-dictated decision to permanently shut down Cirus, one of India’s two bomb-grade plutonium-production reactors. As Paul Nelson, T. V. K. Woddi and William S. Charlton of the Texas A&M University point out in a U.S. government-funded study, much of India’s cumulative historic production of weapons-grade plutonium has come from Cirus, operating since 1960.

As a completely refurbished reactor, Cirus is as Indian a facility as any. The prime minister’s baffling decision to shut down Cirus two years from now, without approving a replacement reactor, will leave a major production shortfall in military-grade plutonium.

No less troubling is the fact that solemn promises made in Parliament were not kept. After the U.S. House of Representatives and Senate Foreign Relations Committee had approved separate versions of an India-specific bill, the prime minister declared on August 17, 2006: “I had taken up with President Bush our concerns regarding provisions in the two bills. It is clear if the final product is in its current form, India will have grave difficulties in accepting the bills. The U.S. has been left in no doubt as to our position”. When Congress disregarded Dr. Singh’s red lines and passed the Hyde Act by amalgamating the toughest elements from the Senate and House bills, the prime minister admitted on December 18, 2006, that “there are areas which continue to be a cause for concern”.

Yet India negotiated a 123 agreement that complies with the Hyde Act, with the U.S. stating publicly, “We have the Hyde Act, and we kept reminding the Indian side, and they were good enough to negotiate on this basis…” Of all the 123 agreements the U.S. currently has with partner-states, the one with India stands out for conferring enforceable rights only on the supplier-state.

The prime minister’s assurances on ““removal of restrictions on all aspects of cooperation”, lifetime fuel stockpiles, linking perpetual international inspections with perpetual fuel supply through “India’s right to take corrective measures”, securing an operational consent to reprocess spent fuel, etc. today lie in tatters.

The government’s secrecy on the safeguards accord springs from the fact that its text release will expose the manner it has yielded further ground. For example, the 123 agreement, instead of granting the right to take corrective measures, just records that India will seek such a right in the IAEA accord. But the IAEA accord, in its preamble, merely cites the 123 agreement’s reference to corrective measures!

It is manifest from this record that if the deal attracts more onerous conditions during the NSG and congressional approvals, the prime minister will go along, as he has in the past, after making some perfunctory noises. Indeed, it is this record that is likely to embolden NSG members and U.S. lawmakers to tag on more conditions in the next stages to constrain India’s nuclear leeway.

As it nears its third anniversary, the deal has become an emblem of how not to conduct Indian diplomacy. The deal also symbolizes the manner it has been sought to be thrust on the nation through media management, instead of by political co-option.

Public relations alone cannot sell an initiative. Can it be forgotten that the deal’s current cheerleaders were the drumbeaters to get India to send an army division into Iraq in 2003? How more vulnerable would India have been today had that campaign succeeded?

Just as in 2003, today’s campaign is centred on overstatement — that the concerned issue holds the key to a strategic partnership with America. There is also gross exaggeration about the utility of high-priced, foreign fuel-dependent reactors from overseas.

The deal’s collapse will neither alter the direction of the U.S.-Indian relationship, which is set toward closer strategic cooperation, nor affect the modest role nuclear power will play in India’s energy mix, with or without reactor imports. The deal, contrary to the propaganda, does not offer India unfettered access to uranium imports. India’s uranium crunch, in any event, is set to ease in two years’ time as new mines and mills open, according to nuclear chief Anil Kakodkar.

In that light, how justifiable is Dr. Singh’s action in turning the conditions-laden deal into a make-or-break issue of personal prestige and upping the ante to the extent that the nation has been plunged into a political crisis? Instead of wanting to precipitously approach the IAEA Board and step into a firestorm of national furore, shouldn’t the prime minister seek to achieve what he pledged in Parliament — “the broadest possible consensus within the country to enable the next steps to be taken”?

Once the IAEA Board seals the safeguards accord, India will have little role to play in the next stages, other than as a bystander anxiously monitoring from afar what additional conditions the deal attracts in the NSG and congressional-ratification processes. So why throw nuclear caution to the winds and buoy up non-proliferation literalists in the NSG and Congress in their resolve to sculpt the final deal?

The Hype on the Rise of China and India

Posted on June 22, 2008 by Chellaney

Is the India and China hype true?

By BRAHMA CHELLANEY

Japan Times

Today it has become commonplace to speak of India and China in the same breadth as two emerging great powers challenging the two-century-old Western domination of the world.

How justifiable is the hype on their rise? The future will not belong to China and India merely because they have a huge landmass and together make up more than a third of humanity. Being large in size and population is not necessarily an asset.

In history, small, strategically geared states have wielded global power. The colonial powers that emerged in the 18th and 19th centuries were led by small Britain and included tiny Portugal and the Netherlands.

For analysts, it is tempting to make long-term linear forecasts on the basis of current trends. But such projections in the past have rarely come right. Remember the popular concerns in the United States in the 1980s that a fast-rising Japan threatened America’s industrial might?

The reason why such predictions have come wrong is that statistical probability — the sole tool in forecasting — has little application in strategic analyses.

The straight-line projections on the economic growth of China and India may be too one-dimensional.

Goldman Sachs, for instance, forecasts that China’s economy will surpass the U.S. economy around 2035 and that India will do so a decade later.

This could happen but it is hardly certain. To be sure, economic growth is essential to underpin political and social stability. It is doubtful the Chinese Communist Party’s monopoly on power will survive without it continuing to deliver high economic growth. But such growth in any country hinges on several factors, endogenous and exogenous. One factor beyond the control of policymakers in India and China that could slow economic growth and create major policy challenges for them in the years ahead, for example, is climate change.

China and India, of course, have history on their side. These two were the world’s largest economies for centuries up to 1820, after which they went into sharp decline due to their failure to catch up with the industrial revolution and by making themselves easy prey for European colonial interventions.

But world history is replete with instances of small states made powerful by farsighted policies and big states unraveled by weak, unimaginative leaders.

China certainly has a more forward-looking leadership than India, even though Chinese leaders, lacking popular legitimacy, tend to be more insecure. India has to pay a "democracy tax" that weighs down its decision-making and slows its economic development.

When one examines natural endowments — such as arable land, water resources, mineral deposits, hydrocarbons and wetlands — the picture that emerges is not exactly gratifying for India and China in order for them to achieve enduring great-power capacity. Bounteous natural capital is critical for a country to sustain national strength over the long run.

India and China together have more than 35 percent of the global population — or eight times the number of inhabitants in the U.S. — but just 60 percent more usable arable land than America.

The two giants would have had a better balance between land size, population and natural resources had their populations been much smaller. But even as India still adds nearly a million people a month despite a slowing fertility rate, some Indians cheer the "demographic dividend" that awaits their youthful country while the developed world ages. Failure has come to be identified as a success.

At a time when the world is confronting an energy crisis — symbolized both by the spiraling price of crude oil and gas, and the buildup of planet-warming greenhouse gases in the atmosphere — India and China stick out for their fast-rising dependency on energy imports and growing contribution to carbon-dioxide emissions. Their energy dilemma causes a growing burden and threatens to slow down their economic rise.

Constraints on resources are likely to become pronounced as more and more Indians and Chinese gain income to embrace modern comforts in everyday life — from gasoline-fueled transport to water-guzzling gadgets like washing machines and dishwashers.

The global demand for resources is set to soar, along with their prices. But unlike the choices that the old economic giants had in their path of development — such as the one exemplified by the shift from scarce timber to abundant coal in 18th-century Britain — the emerging economic giants can avail themselves of no substitutes for some of the resources whose present demand is beginning to lag availability.

Of all the resources, the one with the greatest strategic bearing on the future prospects of India and China is fresh water.

Climate change will have a significant impact on the availability and flow of river waters from the Himalayas and Tibetan highlands, making water a key element in the national-security calculus of China and India. The Himalayan snow melt that feeds Asia’s great rivers is likely to be accelerated by global warming.

China and India already are water-stressed economies. The spread of irrigated farming and water-intensive industries and a rising middle class are drawing attention to their serious struggle over water resources.

Having entered an era of perennial water shortages that are likely to parallel, in terms of per capita water availability, the scarcity in the Middle East, India and China face the prospect that their rapid economic modernization could stall due to inadequate water resources. This prospect will become a reality if their industrial, agricultural and household demand for water continues to grow at the present frenetic pace.

Even though India’s usable arable land is larger than China’s — 160.5 million hectares compared to 137.1 million hectares — the source of all the major Indian rivers except one is the Chinese-held Tibetan plateau. While the Ganges originates on the Indian side of the Himalayas, its two main tributaries flow in from Tibet.

China’s ambitious interbasin and inter-river water transfer projects in the vast Tibetan plateau, and its upstream damming of the Brahmaputra, Sutlej and other rivers, threaten India’s well-being. If President Hu Jintao — a hydrologist by training who has served as party secretary in Tibet — begins China’s long-pending project to divert the waters of the Brahmaputra northward to the parched Yellow River, it would constitute the declaration of a water war on lower-riparian India and Bangladesh.

Water is likely to become a cause of Sino-Indian tensions, reopening old wounds and bringing Tibet to center stage.

Asia’s economic rise and the ensuing shifts in international power equations foreshadow a world characterized by a greater distribution of power. But the hype on China and India needs to be tempered by geopolitical realism centered on a careful assessment of their long-term potential to build and sustain comprehensive power.

Brahma Chellaney, a professor of strategic studies at the privately funded Center for Policy Research in New Delhi, is the author, most recently, of the best-selling "Asian Juggernaut: The Rise of China, India and Japan."

The Japan Times: Wednesday, June 18, 2008

India’s U.S.-Influenced Decision to Shut Down Cirus Research Reactor

Posted on June 22, 2008 by Chellaney

Cirus: A Testament to the Prime Minister’s Double Talk

Brahma Chellaney

Covert magazine, July 1-15, 2008

One of the great mysteries still begging for illumination is Prime Minister Manmohan Singh’s embrace of nuclear energy. No week or month passes without Singh alluding to the benefits of nuclear power for India. But as finance minister during the 1991-95 period, Singh starved the nuclear programme of funds, disabling new projects and halting uranium exploration.

The uranium crunch India confronts today is rooted in the fact that the actions Singh set in motion were not reversed until several years after he left office. The nation today has a right to know whether Singh’s new-found interest in nuclear power is centred on imports — a concern reinforced by his government’s 2008-09 budget, which slashes the Department of Atomic Energy’s funding by $529 million.

Another baffling mystery is Singh’s decision, as part of the controversial nuclear deal with the United States, to permanently shut down by 2010 one of the country’s two bomb-grade plutonium-production reactors. The prime minister has offered no explanation to the nation for overruling the nuclear establishment and agreeing to shut down the Cirus research reactor, located at the Bhabha Atomic Research Centre.

Much of India’s cumulative historic production of weapons-grade plutonium has come from Cirus, operating since 1960. In fact, Cirus had been refurbished at a cost of millions of dollars and reopened for barely two years when Singh made the surprise announcement to close down the reactor. Speaking in the Lok Sabha on March 10, 2006, the prime minister claimed that, “while the Cirus reactor was refurbished recently, the associated cost will be more than recovered by the isotope [production] and the research we will be conducting before it is closed”.

But Singh still hasn’t answered the key question: Why did he succumb to U.S. pressure over a reactor that remains crucial to India’s strategic programme? Not only does the country still lack a credible minimal nuclear deterrent against its main challenge, China, but also current international estimates of India’s weapons-grade fissile material stockpile put its quantity just marginally higher than Pakistan’s. Given that Singh is now committed to “work with the U.S.” for the early conclusion of a Fissile Material Cut-off Treaty (FMCT), India needs to sharply accelerate its rate of weapons-grade plutonium production as it doesn’t have time on its side. Singh’s action, however, throws a larger spanner in the works.

The shutdown of Cirus two years from now, if the nuclear deal goes through, will deprive the nuclear military programme of almost one-third of its current supply of weapons-grade plutonium. Of course, India could build a replacement reactor. But the long lead time needed to build a research reactor, and the government failure thus far to sanction such a facility, will leave a major production shortfall.

The fuel burn-up in large, electricity-generating reactors produces plutonium of a quality far less desirable for weapons. Therefore, for military-grade plutonium, India has relied on its research reactors, Cirus and Dhruva. But Dhruva — commissioned in 1985 — faced major start-up problems that took several years to rectify. That is why the 40-MWth Cirus has contributed the larger share of India’s cumulative historic production of weapons-grade plutonium — a point noted by Paul Nelson et al in a 2006 paper funded by the U.S. Department of Energy. In having insisted that New Delhi dismantle Cirus, America’s aim, needless to say, was to crimp India’s nuclear-deterrent plans — an objective the deal seeks to serve also by enforcing a permanent test ban.

Cirus — the source of plutonium for the 1974 nuclear test — was built with Canadian technical assistance and received US heavy water under two separate 1956 contracts that predated the 1957 establishment of the International Atomic Energy Agency (IAEA) and the 1968 finalization of the Non-Proliferation Treaty (NPT) text. Because the concept of international “safeguards” (inspections) had not yet been devised, India gave no explicit undertaking to abjure nuclear-explosive uses.

Indeed, just after Cirus came on line, Prime Minister Jawaharlal Nehru openly declared: “We are approaching a stage when it is possible for us … to make atomic weapons”. Decades later, the shutdown decision has given the non-proliferation lobby in the U.S. and Canada much to celebrate: India is tacitly conceding its 1974 test was born in sin and, to atone for it, it will shut down Cirus. Singh’s action, besides compromising the strategic programme, mocks various international (and even official American) legal opinions clearing India of any Cirus-related wrongdoing.

Brahma Chellaney is Professor of Strategic Studies at the Centre for Policy Research, New Delhi.

China-India-Japan Power Struggle in Asia

Posted on June 22, 2008 by Chellaney

Dragon, Tiger and Samurai

Rivals: How the Power Struggle Between China, India and Japan Will Shape Our Next Decade

by Bill Emmott

Allen Lane

Price: Rs. 795

Book review by Brahma Chellaney

Pioneer, June 22, 2008

A fundamental reordering of power in Asia is challenging the equations between the continent’s three major powers that hold the key to Asian stability. As they maneuver for strategic advantage, China, India and Japan are transforming relations between themselves in a way that portends closer strategic engagement between New Delhi and Tokyo to help parry Beijing’s moves to dominate Asia. The present actions of the three players offer a peep into the future power relations in Asia.

A year-and-a-half after this reviewer published Asian Juggernaut: The Rise of China, India and Japan, a HarperCollins publication that was a runaway bestseller, Bill Emmott has done a book on the same Sino-Indian-Japanese theme. Emmott, a former editor of The Economist, is a specialist on Japan, having served as a correspondent there and published six books on that country. Not surprisingly, the sections on Japan in his latest book are the most interesting. Emmott doesn’t display the same depth of understanding when analyzing India and China.

He is, however, right about the emergence of the new Asia that is today the world’s main creditor and economic locomotive. “Today’s Asia has been shaped by economics, and it is an Asia of increasing prosperity, of interdependence and of global financial influence,” he writes. “This is the first time since the Mongol empire established by Genghis Khan in the 13^th century that Asia has become truly connected together across 6,000 kilometers that separate Japan in the east from India in the west, or even as far as Iran”.

Asia does not end at Iran’s western borders but extends all the way to Turkey, 97 per cent of which is in the Asian hemisphere. The largest and most populous continent by far, Asia also includes 72 per cent of the Russian Federation. It encompasses very different and distinct areas — from the sub-arctic, mineral-rich Siberian plains to the subtropical Indonesian archipelago; and from oil-rich desert lands to fertile river valleys.

Asia is a highly diverse continent. It has countries with the highest and lowest population densities in the world — Singapore and Mongolia, respectively. It has some of the wealthiest states in the world, like Japan and Singapore, and also some of the poorest, such as North Korea, Burma and Afghanistan. It has tiny Brunei, Bhutan and the Maldives and demographic titans like China, India and Indonesia.

Asia is bouncing back after a relatively short period of decline in history that had been partly precipitated by European colonial interventions over two centuries. Asia’s share of the world’s economy totalled 60 per cent in 1820, at the advent of the industrial revolution, according to an Asian Development Bank study. It then went into sharp decline over the next 125 years.

Today, it already accounts for 40 per cent of global production — a figure that could, according to some projections, rise to 60 per cent by 2050, when three of the world’s four largest economies (China, India, the U.S. and Japan) would be Asian.

This suggests that Asia is merely seeking to regain the preeminence it had for most of 2,000 years before the industrial revolution allowed the West to vault ahead. As British historian Angus Madison has brought out, China and India were the world’s largest economies for centuries up to 1820. According to Kishore Mahbubani’s new book, The New Asian Hemisphere, “The past two centuries of Western domination of world history are the exception, not the rule, during 2,000 years of global history”.

It is against this background that one should view the power struggle between China and Japan, and China and India. Modern Japan, as Emmott notes, is the product of the 1868 Meiji Restoration, which set in motion its rapid rise. Japan first defeated China in 1895 and then Russia in 1905, “the first time an Asian country had defeated one of the Western imperialist powers”, in Emmott’s words. Japan was also Asia’s first economic success story.

Such is the international hype about China’s rise that it is often forgotten that Japan remains the world’s second largest economic powerhouse, with an economy that is still larger than China’s, with only a tenth of the population. Tokyo may not share Beijing’s obsession with measures of national power, but Japan’s military, except in the nuclear sphere, is the most sophisticated in Asia.

A strong Japan, a strong China and a strong India need to find ways to reconcile their interests in Asia so that they can peacefully coexist and prosper. Never before in history have all three of these powers been strong at the same time. China’s emergence as a global player, however, is dividing, not uniting, Asia.

More anecdotal than forward-looking, Emmott, unfortunately, shies away from the power issues. In fact, the question the book carries in its subtitle, How the Power Struggle Between China, India and Japan Will Shape Our Next Decade, is left largely unanswered.

When Emmott does dare to make a prediction, such as the Dalai Lama’s death prompting China to “use brutal methods to suppress an uprising by Buddhist monks in Tibet”, recent events prove him wrong. It did not need the Dalai Lama’s demise for a Tibetan uprising to break out or for China to employ naked repression against monk-led protestors. The Dalai Lama indeed has emerged as China’s enemy No. 1, reflected in the epithets Beijing has hurled at him in recent weeks, including “a wolf with a human face and heart of a beast” and “a serial liar”.

Emmott has little to say about how China is driving Japan and India closer. Tokyo, as if to make up for decades of neglect, is beginning to enthusiastically discover India as an investment destination and a potential strategic partner. Reversing a long-standing pattern, it now provides more development loans to India than to China.

Every action has a reaction. China’s officially scripted anti-Japanese mob protests of 2005 — a testament to the manner nationalism has begun to shape an increasingly assertive Chinese foreign policy — set in motion a Japanese reaction that will take long to concretize. But its signs so far suggest that Japan will not allow China to call the shots in East Asia. China, for its part, is fiercely opposing its two Asian peers, Japan and India, from joining it in the United Nations Security Council as permanent members. In the emerging Asia, the two major non-Western democracies, Japan and India, are set to become close partners.

In that light, a key challenge for Tokyo and New Delhi is to manage their increasingly intricate relationship with an ascendant China determined to emerge as Asia’s dominant power. Yet it makes sense for Japan and India to play down the competitive dynamics of their relationship with Beijing and put the accent on cooperation. An emphasis on cooperation also suits China because it is in accord with its larger strategy to advertise its “peaceful rise”.

Emmott believes, in his optimistic scenario, “China, India and Japan, encouraged by the Americans and Europeans, would work together to build pan-Asian institutions within which to manage their disputes and differences”. But his nine recommendations — half of them addressed to what he calls “the poor old United States of America, the world’s chief bearer of burdens and payer of prices” — provide little clue to how this scenario will be realized.

Stagecraft and Statecraft

Author Archives: Chellaney

About Chellaney

A Backfiring Nuke Deal

A Factsheet on the India-IAEA Safeguards Accord

Official Text of India-IAEA Safeguards Agreement Part I

Official Text of India-IAEA Safeguards Agreement Part II

Pouring hot oil on nuclear power

The way forward for India on an increasingly divisive nuclear deal with the U.S.

Growing partisan rancor over the Indo-U.S. nuclear deal

The Hype on the Rise of China and India

India’s U.S.-Influenced Decision to Shut Down Cirus Research Reactor

China-India-Japan Power Struggle in Asia