India: The Global Bridge-Builder on the Ganges

Brückenbauer am Ganges 

Beitrag von Brahma Chellaney

Erschienen in: Ausgabe Juli/August 2008

Auf dem Weg zu einer multipolaren Weltordnung tun sich Brüche auf: Die ressourcenhungrigen Schwellenländer beuten die wirtschaftlich Abgehängten aus. In Asien verbünden sich demokratische Staaten gegen autokratische Regime. Indien kann dank seiner demokratischen, konsensgeprägten Traditionen helfen, diese Spaltungen zu überwinden.

…ie Weltordnung ist noch nicht multipolar und nicht mehr unipolar. Amerika hat es in dem Jahrzehnt seit dem Zusammenbruch der Sowjetunion bis zum Ende der neunziger Jahre verpasst, unter seiner Ägide eine liberale Weltordnung zu etablieren. Das mag die Vermutung nahe legen, die heutige sei eine nichtpolare Ordnung, in der vielfältige Bündnisse zwischen verschiedenen Akteuren der strategische Imperativ sind. Aber durch das Auftreten neuer Protagonisten auf der geopolitischen Bühne ist es nur eine …

http://www.internationalepolitik.de/archiv/jahrgang-2008/die-ohnmacht-der-machtigen/bruckenbauer-am-ganges.html

English version:

Bridge-builder on the Ganges

India’s Ascent in a Rapidly Changing Global Order

Brahma Chellaney | New global fault lines are evident as power — economic and political — has shifted eastward. Yet, the current international structures shun this reality — to their own peril. As a conduit between the East and West, India can help promote collaboration and consensus.

Internationale Politik, Vol. 7-8 (2008)

While the world is not yet multipolar, it is no longer unipolar, as it had been from the time of the Soviet Union’s collapse to at least the end of the 1990s — a period in which America failed to fashion a new liberal world order under its direction. What we have today is a world still in transition. This may appear to some as a nonpolar world in which multiple engagements between and among different actors have become a strategic imperative. But with the emergence of new players in the geopolitical marketplace, it is only a matter of time before multipolarity begins to characterize the international order.

The ongoing power shifts are primarily linked to Asia’s phenomenal economic rise, the speed and scale of which has no parallel in world history. Seat of ancient civilizations and home to the majority of the world’s population, Asia is bouncing back after a relatively short period of decline. Asia’s share of the world’s economy totaled 60 percent in 1820 at the advent of the industrial revolution. It then went into sharp decline over the next 125 years. Today, it already accounts for 40 percent of global production — a figure that could, according to some projections, rise to 60 percent within the next quarter of a century.

The shifts in economic and political power foretell a much different world — a world characterized by a greater distribution of power, but also by new uncertainties. As history testifies, tectonic shifts in power are rarely quiet. Such shifts usually create volatility in the international system, even if such instability is short-lived. The new international divisiveness may reflect such a reality. Indeed, with the revolution in technology over the past 25 years, we live in a world of rapid change. But unlike in past history, the qualitative reordering of power now underway is due not to battlefield victories or military realignments but to a peaceful factor unique to the modern world: rapid economic growth.

The paradox is that the power shifts are happening even as the United States remains the world’s sole superpower and thus militarily preeminent. Yet the reality is that after the triumphalism of the 1990s, this decade has helped underscore an erosion of US soft and hard power, with many seeing Iraq, Afghanistan, Hurricane Katrina, and the Middle East muddle as symbols of such decline. In an era of greater international fluidity as well as political and financial turbulence, as US Secretary of State Condoleezza Rice admitted, “Whenever Americans start talking about idealism and optimism, international audiences groan.”[1]

Today’s international divisiveness, in part, mirrors the reality that power and influence are no longer one and the same in international relations. Despite its preeminence, the United States’ influence has been on the decline — a trend unlikely to be reversed even with a new administration in Washington. It is becoming increasingly difficult for the United States to set the international agenda on its own or just with its traditional allies. To secure issue-based support, the United States now has to reach out to states beyond its network of traditional allies. At the same time, one must concede that, for the foreseeable future, the United States is likely to remain the most decisive force in international politics and security.

Another factor has also contributed to the divisiveness: While we know the world is in transition, we still do not know what the new order will look like. The impasse or lack of movement on key international issues, therefore, should not come as a surprise. These issues include climate change, nuclear disarmament, international terrorism, global pandemics, and the Doha round of world trade talks. The most pressing challenges today are international in nature and thus demand international responses or solutions. Yet the existing international institutions, including the United Nations, are proving inadequate to deal with such global challenges, in part because such institutions no longer reflect the prevailing power structure. Their representational deficit, and the ensuing impact on their capacity to play an effective, forward-looking role, have become glaring.

The more the world changes, however, the more it remains the same in some critical aspects. The information age and globalization, despite spurring profound changes in polity, economy and security, have not altered the nature of international relations. In fact, the rapid pace of technological and economic change is itself a consequence of nations competing fiercely and seeking relative advantage in an international system based largely on national security.

Nearly a century after chemical arms were introduced in World War I and more than six decades following the nuclear incineration of Hiroshima and Nagasaki, the world is at the threshold of new lethal and precision weapons, as underlined by the ongoing research on lasers, information weapons, space-based platforms, anti-satellite weapons, and directed energy systems. Technological forces are now shaping geopolitics and power equations in ways unforeseen before in history.

We live in a Hobbesian world, with power coterminous with national security and success. The past century was the most momentous in history technologically, with innovations fostering not just rapid economic change, but bringing greater lethality to warfare. Consequently, the 20th century was the bloodiest. Weapons of mass destruction and missiles came to occupy a central military role. In the new century, the advance of technology and the absence of relevant safeguards or regimes evoke possible scenarios of deadly information and space warfare. Such are the challenges from the accelerated weaponization of science that instead of disarmament, rearmament today looms large on the horizon, with the arms race being extended to outer space.

Once the economic power structure changes internationally, shifts in military power will inevitably follow, even if in stages. Seen against the ongoing changes, the transatlantic order of the past 60 years will have to give way to a truly international order. The new order, unlike the current one founded on the ruins of a world war, will have to be established in an era of international peace and thus be designed to reinforce that peace. That means it will need to be more reflective of the consensual needs of today and have a democratic decision-making structure.

Until that happens, the new global fault lines will continue to signal rising geopolitical risks. The tensions between internationalism and nationalism in an era of a supposed single “global village,” for instance, have raised troubling questions about international peace and stability. With greater public awareness from advances in information and communications technologies encouraging individuals and even some states to more clearly define that identity in terms of religion and ethnicity, a divide has emerged between multiculturalism and artificially enforced monoculturalism. The rise of international terrorism shows that increased access to information is both an integrating and dividing force.

The political, economic, and security divides are no less invidious. The world is moving beyond the North-South divide to a four-tier economic division: the prosperous West; rapidly growing economies like those in Asia; countries that have run into stagnation after reaching middle-income nation status; and a forgotten billion people living on the margins of globalization in sub-Saharan Africa. These marginalized people have no stake in globalization. The international neglect of Africa has created a vacuum that China has sought to exploit by aggressively building commercial and political links with a number of African states.

There is also a global resource divide, with the resource-hungry employing aid and arms exports as a diplomatic instrument for commodity outreach. As the specter of resource conflict has grown, the contours of a 21st-century version of the Great Game have emerged in Asia, Africa, and Latin America. Competition over oil and gas resources, driven by rapid economic growth in Asia, indeed constitutes one key dimension of the emerging Great Game.

The ongoing global shifts in economic power are manifest from the changes occurring in the energy and materials sectors, with the growth in demand moving from the developed to the developing world, principally Asia. Energy prices are going to stay high and volatile for the foreseeable future, given these shifts and the soaring demand in countries like China and India, which together are projected to double their oil demand between 2003 and 2020. However, despite the total consumption of energy in the Asia-Pacific having grown by 70 percent between 1992 and 2005, per capita energy consumption is still relatively low by international standards: 749 kilogram of oil equivalent in 2005, compared with the global average of 1,071. Not only will per capita consumption grow sharply in Asia, “on the supply side, Asia’s strong demand environment for energy and basic materials, coupled with its low labor costs, means that the region will increasingly become a global producer of aluminum, chemicals, paper, and steel.”[2]

Slaking the tremendous thirst of the fast-growing Asian economies and meeting the huge demands of the old economic giants in the West are at the core of the great energy dilemma facing the world in the 21st century. Finding an energy “fix” has become imperative if the Asian and other emerging economies are to continue to grow impressively and if the prosperous countries are to head off a slump. Such a fix would have to be rooted in three essential elements: low-cost, preferably renewable alternatives to fossil fuels; greater energy efficiency; and minimizing or eliminating greenhouse-gas emissions. The ongoing structural shifts in global energy markets carry important long-term political and economic implications, in addition to challenging the stability of these markets.

Also, with the rise of unconventional transnational challenges, a new security divide is mirrored both in the failure to fashion a concerted and effective international response to such threats, including transnational terrorism, and the divisiveness on issues like climate change. Efforts are needed to bridge the divide between the traditional security threats and the new unconventional threats that are increasingly the focus of international attention and concern.

Yet another global divide is centered on political values. At a time when a qualitative reordering of power is reshaping international equations, major players are playing down the risk that contrasting political systems could come to constitute the main geopolitical dividing line, potentially pitting an axis of autocracies against a constellation of democracies. The refrain of the players is that pragmatism, not political values, would guide their foreign-policy strategy. Yet the new Great Game under way plays up regime character as a key element.

Ordinarily, the readiness to play by international rules ought to matter more than regime form. But regime character often makes playing by the rules difficult. In modern history, the fault line between democrats and autocrats has at times been papered over through a common geopolitical interest. But today the failure to build greater political homogeneity by defining shared international objectives carries the risk that, in the years ahead, political values could become the main geopolitical dividing line.

It is well established that democracies rarely go to war with each other, even though democratic governments may not be more wedded to peace than autocracies. What role outsiders can play to help democracy take root, however, remains a difficult issue internationally. Yet that issue looms large in relation to Asia. Unlike Europe where democracy has become the norm, only 16 of Asia’s 39 countries surveyed by Freedom House are really free.[3] And as shown by the World Press Freedom Index by the Paris-based international rights group, Reporters Without Borders, a number of Asian countries are among the worst suppressors of freedom, with North Korea ranked at the very bottom of the 167-nation list, Burma 163rd, China 159th, Vietnam 158th, Laos and Uzbekistan 155th, Bangladesh 151st, Pakistan 150th, Singapore 140th and the Philippines 139th.[4]

With the Asia-Pacific region becoming more divided in the face of conflicting strategic cultures, major democracies are likely to be increasingly drawn together to help advance political cooperation and stability through a community of values. It can hardly be overlooked that China’s best friends are fellow autocracies, including pariah states, while those seeking to forestall power disequilibrium in the Asia-Pacific happen to be on the other side of the values-based divide. In that light, political values could easily come to define a new geopolitical divide.

What may seem implausible globally, given America’s lingering tradition of propping up dictators in the Arab-Islamic world, is thus conceivable in the Asia-Pacific theater as a natural corollary to the present geopolitics. It was China that took the lead in 2001 to form the Shanghai Cooperation Organization (SCO) to help unite it with Eurasian strongmen in a geopolitical alliance. Designed originally to bring the Central Asian nations under the Chinese sphere of influence, the SCO is today shaping up as a potential “NATO of the East.” Yet, when Australia, India, Japan, and the United States started the exploratory Quadrilateral Initiative in 2007,[5] Beijing was quick to cry foul and see the apparition of an “Asian NATO.” A Chinese diplomatic protest to each Quad nation followed.

The Quad, founded on the historically valid hypothesis of democratic peace, was supposed to serve as an initial framework to promote security dialogue and interlinked partnerships among major Pacific Rim democracies. Such collaboration is already being built. As an idea, the Quad will not only survive the current vicissitudes, but it also foreshadows what is likely to come. But for the divergent geopolitical interests at play, the differing political values would not matter so much.

More broadly, there is need to improve global geopolitics by building cooperative political approaches that transcend institutions whose structure is rooted in a world that no longer exists. The reality is that just as the G-8, to stay relevant, has initiated the so-called Outreach for dialogue with the emerging powers, the five unelected yet permanent members of the UN Security Council can no longer dictate terms to the rest of the world and need to share executive authority with new powers.

It was a mistake to believe that greater economic interdependence by itself would improve geopolitics. In today’s market-driven world, trade is not constrained by political differences, nor is booming trade a guarantee of moderation and restraint between states.

Better politics is as important as better economics. That requires several major steps whose initiation so far has been frustrated: institutional reforms; greater transparency in strategic doctrines and military expenditures; and cooperative approaches on shared concerns. No international mission today can yield enduring results unless it comes with consistency and credibility and is backed by consensus — the three crucial “Cs.”

Against this background, what role can India play? India’s growing geopolitical weight, high GDP growth rate, and abundant market opportunities have helped increase its international profile. It is widely perceived to be a key “swing state” in the emerging order.

Given the greater political and financial volatility in the world, geopolitical risks today are higher. As a “swing” geopolitical factor, India has the potential to play a constructive role to help mitigate those risks by promoting collaborative international approaches. It is obvious that new thinking and approaches are needed to bridge the global fault lines and build great international cooperation and consensus on the larger geopolitical issues.

India has important advantages that it could exploit to play the role of a bridge between the East and West. Not only is it the world’s largest democracy, India also is the most diverse country. With a sixth of humanity living within its borders, India is more linguistically diverse than even Europe. India is where old traditions go hand-in-hand with post modernity, epitomized by the image of electronic voting machines being carried to a village balloting station atop an elephant.

India also has its constraints. Its neighborhood is more combustible than ever, with an arc of failing or problem states posing serious security-related challenges. Democracy may be India’s biggest asset. But Indian democracy tends to function by the rule of parochial politics. Putting a forward-looking national agenda ahead of parochial short-term politics is not easy. Furthermore, partly due to its historical experiences, the Indian state is intrinsically cautious and shy rather than proactive.

Yet India has a long, historical record of playing a mainstream, cooperative role in international affairs. With its wealth of philosophy and a culture emphasizing compromise, conciliation, and creativity, India views the world as a stage not for civilizational wars but for building bridges and meeting common challenges. Over the centuries, Indian civilization has thrived on synthesis. This ability to synthesize is one of the great strengths that India needs to employ internationally.

It is such traditions that explain, for example, why India lacks the US zeal to export democracy. Instead it looks at democracy in practical terms, as “the most effective means to reconcile the polyglot components of the state,” according to former US Secretary of State Henry Kissinger. He notes: “India, striving neither to spread its culture nor its institutions, is thus not a comfortable partner [of the United States] for global ideological missions.”[6]

Yet India will continue to pride itself as a model of a non-Western democracy. While the concepts of democracy, human rights, and the rule of law are normally associated with the West, India can claim ancient traditions bestowing respect to such values. As the 1998 Nobel economics laureate, Amartya Sen, has said, “A good example is the Emperor Ashoka in India, who during the 3rd century B.C. covered the country with inscriptions on stone tablets about good behavior and wise governance, including a demand for basic freedoms for all — indeed he did not exclude women and slaves as Aristotle did…”[7] According to economist Sen, “The claim that the basic ideas underlying freedom and tolerance have been central to Western culture over the millennia and are somehow alien to Asia is, I believe, entirely rejectable.”

Another issue relates to India’s role in helping shape a stable balance of power. At a time of warming US-Indian relations, too much is made about America’s desire to use India to hold China in check. A durable US-Indian partnership can be built not on strategic opportunism but on shared national interests. Shared interests mean far more than shared democratic values. It appears unlikely that India would allow itself to be used as a foil against another power.

In the coming years, India will increasingly be aligned with the West economically. But, strategically, it can avail of multiple options, even as it moves from the nonalignment of its first prime minister, Jawaharlal Nehru, to a contemporary, globalized practicality. Given the new international equations and power shifts, nonalignment in its original form holds no relevance today. But many Indians believe that the concept of following an independent foreign policy is still relevant.

In keeping with this long-standing preference for policy independence, India is likely to retain the option to forge different partnerships with varied players to pursue a variety of interests in diverse settings. That means that from being nonaligned, it is likely to become multialigned, while tilting more towards Washington even as it preserves the core element of nonalignment — strategic autonomy. In other words, India is likely to continue to chart its own course and make its own major decisions. A multialigned India pursuing omnidirectional cooperation for mutual benefit with key players will be better positioned to advance its interests and promote cooperative international approaches in the changed world.

In the Asian context, India’s interests lie in ensuring that strategic competition among the key players does not deteriorate into a major geopolitical confrontation. The deepening mistrust and nationalistic chauvinism in Asia threaten to create conditions that could seriously harm the interests of all the states. The common challenge thus is to find ways to minimize mutual mistrust and maximize avenues for reciprocally beneficial cooperation. But this can be done not by shying away from the contentious issues in Asia but by seeking to tackle them in a practical way.

India cannot but be concerned about the way the energy competition is beginning to make Asian geopolitics murkier. What is striking is that the new flurry of alliance formation or partnerships in Asia is being led by Asia’s rising powers, not by the United States, which has policed Asia since the end of World War II. In that light, Asian cooperation and security will be very much influenced by the equations between and among the major players. The need to secure stable energy supplies will drive the major players to increasingly integrate their energy policy with foreign policy, as they consciously promote diplomatic strategies geared toward seizing energy-related opportunities overseas.

Energy-driven competition must not be allowed to aggravate interstate rivalries. Mercantilist efforts to assert control over oil and natural gas supplies and transport routes certainly risk fuelling tensions. Given the lack of regional institutions in Asia to avert or manage conflict, the sharpening energy geopolitics makes the need for Asian energy cooperation more pressing. A challenge for India, China, and the other important Asian economies is to manage their energy needs through more efficient transport and consumption and more cooperative import policies. Multinational cooperation on the security of sea lanes is essential to avert strategic friction in Asia. Where maritime claims overlap, the answer to any such dispute cannot be unilateral drilling or production by one side. Disputes over what are legitimate zones of energy exploration in open seas need to be managed through an agreed code of conduct.

In an increasingly interdependent Asia, the interests of India, China, Japan and other players can hardly be advanced if they are seen as engaged in efforts to reduce the promotion of security to a zero-sum game. In fact, as the three main Asian powers, India, China, and Japan can set a model for other states in Asia by establishing stable political relationships that put the accent on mutually beneficial cooperation. Without these powers taking the lead, it may not be possible to deal with the increasingly complex security, energy, and development challenges facing Asia. Deterrence, stability, and peace have been at the heart of Asia’s growing dynamism and prosperity. These elements need to be preserved and strengthened to help fully ripen the Asian renaissance.

The challenges the world confronts today are unique. The issues are new — ranging from accelerating global warming to uncontained international terrorism — and their reach is truly global. In past history, the competition for a balance of power was centered on Europe. Even the Cold War was not really an East-West rivalry but a competition between two blocs over Europe. For the first time, we are facing the task of building power equilibrium across the world while simultaneously having to both adjust to new power shifts and deal with transnational challenges.

Brahma Chellaney is professor of strategic studies at the privately funded Center for Policy Research in New Delhi. His latest book is Asian Juggernaut: The Rise of China, India and Japan.


[1] US Secretary of State Condoleezza Rice, Keynote Address at the World Economic Forum meeting, Davos, January 23, 2008, http://www.state.gov/secretary/rm/2008/01/99624.htm.

[2] Ivo J. H. Bozon, Warren J. Campbell, and Mats Lindstrand, “Global Trends in Energy,” The McKinsey Quarterly, Number 1 (2007), p. 48.

[3] Freedom in the World (Freedom House, 2006).

[4] Reporters Without Borders, “World Press Freedom Index,” http://www.rsf.org/rubrique.php3?id_rubrique=554.

[5] The Quadrilateral Initiative was not intended to be a formal institution. However, the Republican presidential nominee, Senator John McCain, in an article has said: “As president, I will seek to institutionalize the new quadrilateral security partnership among the major Asia-Pacific democracies: Australia, India, Japan, and the United States.” McCain also has larger ambitions: A “worldwide League of Democracies” that could be a “unique handmaiden of freedom.” John McCain, “An Enduring Peace Built on Freedom,” Foreign Affairs (November/December 2007).

[6]Henry A. Kissinger, “Anatomy of a Partnership,” Tribune Media Services, March 10, 2006.

[7] Amartya Sen, “East and West: The Reach of Reason,” The New York Review of Books, July 20, 2000.

(Internationale Politik is Germany’s leading foreign-affairs monthly published by the German Council on Foreign Relations.)

Official Text of India-IAEA Safeguards Agreement Part I

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

(c) Additional information may be published upon decision of the Board and if all States directly concerned agree.

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 %);

(c) 20 metric tons of depleted uranium with an enrichment of 0.005 (0.5 %) or below; and

(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 %);

(c) 20 metric tons of depleted uranium with an enrichment of 0.005 (0.5 %) or below; and

(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

 

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) The nature and amount of the nuclear material produced or used in the reactor.

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

Fashioning a Forward-Looking Approach on Burma Part I

Promoting Political Freedoms in Burma:
International Policy Options

Brahma Chellaney[*]

(Prepared for presentation at the Burma workshop of the Swedish Institute of International Affairs, Stockholm, May 8-9, 2008.)

In a year that marks the 60th anniversary of Burma’s independence, the country’s junta is holding a national referendum on a new Constitution, as part of a touted seven-step “roadmap to democracy.” With the military ensconced in power for 46 long years, few believe it will hand over power to civilians after promised elections in two years’ time. It took the military more than 14 years just to draft a new Constitution,[1] which grants wide-ranging powers and prerogatives to the military, including 25 percent of the seats in the federal and provincial legislatures.

U.S. President George W. Bush has not only denounced the Constitutional process as fatally flawed, but also on May 1, 2008, slapped yet more sanctions on Burma. The latest sanctions are targeted at state-owned companies that produce timber, pearls and precious gem — firms that are, in Bush’s words, “major sources of funds that prop up the junta.”[2] The United States earlier had imposed sanctions on companies controlled by private individuals in the airline and hotel businesses in an effort to smother foreign tourism flow to Burma.

Such is the tragedy that Burma symbolizes that, in one week, it has been battered both by new sanctions and a tropical cyclone from the Bay of Bengal that reportedly killed thousands of residents along the southeastern coast. On the one hand, impoverished Burma is economically vulnerable and thus seemingly susceptible to outside pressure. On the other hand, Burma has proven to be a complex and exceedingly difficult case on what the outside world can do.

What role external actors can play in promoting a democratic transition, however, is an issue not limited to Burma. Autocratic rule abounds in the world, including around Burma. International principles and policies deemed appropriate to help bring about democratic transition in Burma should ideally be such that they permit application in other settings, if promotion of democracy is not to be seen as a political tool to target bad autocracies while shielding those that are perceived in one’s self-interest to be good autocracies.

Yet the temptation to look at Burma in isolation, as if it uniquely exists in a tight compartment, has been so overpowering that the country has been held to special standards and subjected to unrelenting demands that are rarely invoked against stronger, more-entrenched autocracies that still flout near-universal human-rights norms. These other autocracies, unlike Burma, actually pose a challenge to the liberal international order. But such selective targeting may be one reason why international efforts to demilitarize Burma’s polity have been a signal failure. It is helpful to look at Burma in a larger regional and Asian context.

Today, a qualitative reordering of power in Asia is challenging strategic stability and reshaping major equations. A new Great Game is underway, centered on building new alliances, ensuring power equilibrium, gaining greater market access, and securing a larger share of energy and mineral resources. From war-games on the high seas to the establishment of exploratory enterprises like the Shanghai Cooperation Organization and the Quadrilateral Initiative, the ongoing developments are a reminder of that high-stakes game. With the center of gravity in international relations clearly moving toward the Asia-Pacific, this Great Game could indeed determine the future world order.

Asia has almost 60 percent of the world’s population spread across a 43.6 million-square-kilometer area. Geographically, Asia comprises 48 separate nations, including 72 percent of the Russian Federation and 97 percent of Turkey, although in popular perception it seems to comprise only the area from the Japanese archipelago to the Indian subcontinent. Asia 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 also very diverse. 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 Burma, North Korea and Afghanistan. It has tiny Brunei, Bhutan and the Maldives and demographic titans like China, India and Indonesia. The smallest country in Asia in terms of population, the Maldives, also happens to be the flattest state in the world. In sharp contrast to the low-lying states like the Maldives, the Philippines and Bangladesh that are threatened by the potential rise of ocean levels due to global warming, Asia has mountainous nations like Nepal, Afghanistan and Kyrgyzstan.

Parts of continental Asia are extraordinarily resource-rich. The desert lands of West Asia, the barren wastes of Central Asia, the Russian shelf in Asia and the Burma’s Bay of Bengal coast together hold nearly 60 per cent of the world’s proven oil and gas reserves. Burma, rich in natural resources, sits on potentially vast quantities of natural gas. There are vast coal reserves in China and the Russian Far East. Siberia holds ores of almost all economically valuable metals, including some of the world’s largest deposits of nickel, gold, lead, molybdenum, diamonds, silver and zinc. The belt running down from the Malay Peninsula to Indonesia contains huge deposits of tin.

Asia, however, is largely a water-stressed continent. Large parts of Asia depend on monsoon precipitation and on the glacially sourced water reserves of the Himalayas and Tibetan highlands, the riverhead of Asia’s waters. Climate change will have a significant impact on the availability and flow of water resources in Asia and thus become an important factor in the national-security calculus of several states, including the world’s two most populous countries — China and India. The geopolitical importance of the Tibetan plateau, whose forcible absorption in 1950 brought the new Chinese state to the borders of India, can be seen from the fact that most of the great Asian rivers originate there. If the demand for water in Asia continues to grow at the current rate, the interstate and intrastate disputes over water resources could potentially turn into conflicts in the years ahead.

Another area of sharpening Asian geopolitics is energy. Competition over oil and gas resources, driven by rapid economic growth in Asia, indeed constitutes one key dimension of the emerging Great Game. The ongoing global shifts in economic power are manifest from the changes occurring in the energy and materials sectors, with the growth in demand moving from the developed to the developing world, principally Asia. Energy prices are going to stay high and volatile for the foreseeable future, given these shifts and the soaring demand in countries like China and India, which together are projected to double their oil demand between 2003 and 2020.

Despite the total consumption of energy in the Asia-Pacific having grown by 70 percent between 1992 and 2005, per capita energy consumption is still relatively low by international standards: 749 kg of oil equivalent in 2005, compared with the global average of 1,071 kgoe. Not only will per capita consumption grow sharply in Asia, “on the supply side, Asia’s strong demand environment for energy and basic materials, coupled with its low labor costs, means that the region will increasingly become a global producer of aluminum, chemicals, paper, and steel.”[3]

Slaking the tremendous thirst of the fast-growing Asian economies and meeting the huge demands of the old economic giants in the West are at the core of the great energy dilemma facing the world in the 21st century. Finding an energy “fix” has become imperative if the Asian and other emerging economies are to continue to grow impressively and if the prosperous countries are to head off a slump. Such a “fix” would have to be rooted in three essential elements: low-cost, preferably, renewable alternatives to fossil fuels; greater energy efficiency; and minimizing or eliminating greenhouse-gas emissions. The ongoing structural shifts in global energy markets carry important long-term political and economic implications, besides challenging the stability of these markets.

Employing their large oil and gas resources, energy-rich countries have positioned themselves as key players in the Asian Great Game. Russia, for example, has used its oil and gas exports to revive its fortunes, succeeding in becoming an important geopolitical player again. But for its huge oil and gas wealth, Iran would not have been able to play its nuclear card in defiance of the United Nations Security Council resolutions. In a more modest way, Burma has been able to use gas deals with Thailand and China to earn hard cash in the face of tightening international sanctions. External players like the United States, the European Union and Turkey have sought to influence the pipeline politics in Asia. The United States has not only strengthened its military arrangements in West Asia, but also set up new bases or strategic relationships stretching from the oil-rich Caspian Sea basin to Southeast Asia. In this larger picture, southern Asia (of which Burma is a part) is a strategic gateway between the Gulf and the Far East, and between Central Asia and the Indian Ocean rim.

In the coming years, the voracious appetite for energy supplies in Asia is going to make the geopolitics murkier. The present geopolitical maneuvering is an indicator of that. What is striking is that the new flurry of alliance formation or partnerships in Asia is being led by Asia’s rising powers, not by the United States, which has policed Asia since the end of World War II. In this larger context, Asian cooperation and security will be very much influenced by the equations between and among the major players. The need to secure stable energy supplies will drive the major players in Asia to increasingly integrate their energy policy with foreign policy, as they consciously promote diplomatic strategies geared toward seizing energy-related opportunities overseas.

Energy-driven competition should not be allowed to aggravate interstate rivalries in Asia. Mercantilist efforts to assert control over oil and natural gas supplies and transport routes certainly risk fuelling tensions. Given the lack of regional institutions in Asia to avert or manage conflict, the sharpening energy geopolitics makes the need for Asian energy cooperation more pressing. A challenge for states in Asia is to manage their energy needs through more efficient transport and consumption and more cooperative import policies. Multinational cooperation on the security of sea-lanes is essential to avert strategic friction in Asia. Where maritime claims overlap, the answer to any such dispute cannot be unilateral drilling or production by one side. Disputes over what are legitimate zones of energy exploration in open seas need to be managed through an agreed code of conduct.

Multilateral energy cooperation in Asia indeed can pave the way for establishing a common Asian market and distribution network for petroleum products, with an Asian benchmark crude oil (similar to Europe’s Brent blend) to serve as a pricing yardstick for other types of crude. Multilateral cooperation can also help to both regulate the competition to buy foreign energy assets and to hedge risks in the event of any supply disruption, whether politically induced or accidental, like a major refinery fire. And just as Europe wants Russia to open its energy industry to European investment to create a two-way relationship, the major oil-and-gas exporters and the major Asian importers should invest in each other’s energy infrastructure.

It is against the larger Asian landscape that one should examine Burma because no country or sub-region can be tightly compartmentalized and seen in isolation. Energy-rich states almost everywhere tend to have non-democratic governments, many of them repressive autocracies. In that sense, Burma is not an exception.

Even though it has significant gas reserves that are coveted by its neighbors, a sanctions-hit Burma has not reaped the energy dividends that most other autocratically ruled energy-rich states have. Also, it is nobody’s case that Burma’s curtailment of basic rights is worse than Saudi Arabia’s.

While it is easy to criticize Thailand for boosting the Burmese junta’s revenues through gas imports and to condemn China for signing a 30-year gas deal with Burma, it should be remembered that no democracy has compunction in buying oil from Saudi Arabia, even though such purchases help fatten the House of Saud, which played a lead role in fanning the spread of Islamist ideology in the world. It bankrolled jihad as part of its aggressive export of the medieval theology of Wahhabism, named after the revivalist movement founded by Muhammad Ibn’Abd al-Wahhab in 1744.

Burma’s resources and vantage location

Burma is a significant state in size and strategic importance. Bordered by Bangladesh, China, India, Laos and Thailand and by the Andaman Sea and the Bay of Bengal, Burma comprises an area of 678,000 square kilometers, making it the country with the largest landmass in the Indochina belt. It currently has a population of nearly 58 million, with a large and capable workforce.

Few can overlook Burma’s strategic location. It forms the strategic nucleus between India, China and Southeast Asia. In other words, Burma is where Asia’s main regions converge — South Asia, Southeast Asia and East Asia.

Projects to establish an ‘Asian Highway Network’ and a ‘Trans-Asian Railway’ have only underlined Burma’s strategic-bridge role. It is a country that geographically bridges Asia’s major economies. In the Asian highway project, Burma will help connect five important countries – India, China, Bangladesh, Laos, and Thailand. The Asian Development Bank has been negotiating a cross-border transport agreement among the six Mekong River-linked countries – China, Thailand, Laos, Cambodia, Vietnam and Burma.

Burma’s bounteous natural resources include natural gas, precious metals and gems, high-quality tropical hardwoods, and marine fisheries. Given that profile and position, Burma can hardly be ignored.

With major rivers and bountiful rainfall, Burma has fertile soil. But for recurrent flooding and cyclones, shortages of fertilizers and pesticides, and general mismanagement by the military-run government, its agricultural output could be much higher. Agriculture, including fisheries, forestry, livestock, rice and sugarcane, made up almost 57 percent of its GDP in 2005.[4] In the past decade, Burma has emerged as a major exporter to India, for instance, of lentils, which — rich in protein — are an integral part of the diet of vegetarians. India has the world’s highest concentration of vegetarians. Last year, Burma supplied around one million tons of lentils, or half of India’s total imports, according to official data.

Burma is a significant producer of antimonial lead, copper matte, nickel speiss, and precious gemstones. Much of the copper exports go to Japan. It also produces barite, carbonate rocks, chromite, clays, coal (lignite), copper, feldspar, gold, gypsum, lead, natural gas, nickel, silver, tin, tungsten and zinc. Among processed mineral products, Burma produces polished precious gemstones, refined gold, refined lead, petroleum products and crude steel. Minerals, however, constitute a tiny fraction of its GDP.

With its exports totaling $3.1 billion and imports adding up to $3.5 billion in 2005, Burma’s main trading partners are its neighbors — Thailand, China, India, Singapore and Malaysia. In merchandise trade, Thailand ranks No. 1. But if the opaque arms trade (for which no reliable figures are available) and services are included, China is perhaps Burma’s largest trading partner.

Through sanctions and officially encouraged disengagement, Burma has become marginal to the foreign-policy interests of the West, thus reinforcing the Western approach emphasizing high-minded principles over strategic considerations, and isolation over engagement. Today, the West has little financial stake left in Burma. About 95 percent of Burma’s trade in fiscal 2007-08 was with other Asian countries. The West also doesn’t have to live with the consequences of its actions. Burma’s neighbors, however, will not escape the effects of an unstable Burma. The imperatives of proximity thus dictate a different policy logic. That has spurred criticism that Asia is helping Burma beat sanctions. [5]

Rich in natural gas, Burma — according to one estimate by Alexander’s Gas & Oil Connections (a site for the gas, oil and affiliated industry) — has recoverable onshore and offshore reserves of 2.46 trillion cubic meters. But with greater foreign investment in exploration, more rich gas deposits could be discovered, especially in Burma’s offshore areas in the Bay of Bengal.

In January 2008, the state-owned China National Petroleum Corp (CNPC) signed production-sharing contracts with the Burmese Ministry of Energy covering deep-sea blocks off Burma’s western Rakhine coast. CNPC is about to begin construction of a trans-Burma pipeline to take the gas from the Shwe field in Rakhine to China’s Yunnan province and beyond. Burma is already exporting natural gas worth $1.2 billion a year to neighboring Thailand from the Gulf of Martaban.

Daewoo International, the South Korean company, is the largest investor in the Shwe gas site. Two Indian energy firms, ONGC Videsh Ltd. and Gas Authority of India Ltd. (GAIL), own a minority stake in that Burmese field, A-1, and in the adjacent A-3 block. This Indo-Korean consortium of Daewoo, ONGC Videsh and GAIL had earlier discovered additional gas deposits in the Shwe site, and consequently revised the Block A1’s total gas estimates to 566 billion cubic meters.

Burma, however, took India unawares by signing an accord with CNPC to export gas to China from the A-1 and A-3 fields over a 30-year period. To New Delhi’s acute embarrassment, Burma first disclosed its intent to sell the gas to China no sooner than India had announced an agreement-in-principle with Beijing to jointly cooperate on securing energy resources overseas, so as to prevent the Sino-Indian competition from continuing to drive up the international price of such assets in third countries.

In recent years, Burma has stepped up piped gas exports to Thailand from its two offshore fields in the Gulf of Martaban — Yadana and Yetagun. But the new rich gas finds in the Bay of Bengal will help generate far more revenue for Burma than the current gas flow from the Gulf of Martaban. According to provisional data, gas exports to Thailand from the Gulf of Martaban fields were estimated to be worth $1.2 billion in fiscal 2007-08 that ended March 31. But because the official exchange rate pegs the kyat, Burma’s currency, to an artificially low rate of 6 to 1 against the U.S. dollar (when the black-market rate is in the vicinity of nearly 1,000 kyat to a dollar), the gas-export earnings are much underreported in the public accounts in kyat — nearly 200 times below the unofficial exchange rate.[6]

France’s Total S.A. (with a 31.24 percent holding) is the main operator at the Yadana gasfield, and its other partners are Chevron Corp. of USA (with a 28.26 percent stake), Thailand’s PTT Exploration and Production Public Company Limited (25.5 percent), and the state-run Myanmar Oil and Gas Enterprise (MOGE) (15 percent).

In the Yetagun gasfield, the main operator is Malaysia’s Petronas (40.91 percent), with MOGE (20.45 percent) and Thailand’s PTTEP and Japan’s Nippon Oil Exploration (19.32 percent each) as its partners. Gas imports from Burma are critical to Thailand’s power generation, with one-fifth of Bangkok’s electricity supply coming from that source.

Interestingly, the United States, while prohibiting new investment by American citizens or entities, has protected the business interests of Chevron Corp., which acquired a stake in the Yadana gas project in Burma when it bought Unocal Corp. in 2005. Because Unocal’s investment in the project predated the imposition of U.S. sanctions, Chevron has used a grandfather clause to stay put in Burma — one of the few large Western companies left there.

On the gas front, Burma has shown that interstate pipeline politics can be played not only by strong states but also by weak states. The junta in Burma has deftly played pipeline politics to keep the veto-empowered China on its side at the United Nations Security Council. Since the early 1990s, the junta has relied on China’s veto power to shield itself from international intervention. It was China that helped beat back an early 2007 U.S.-led attempt to impose a Security Council diktat on the junta to improve its human-rights record.[7]

The junta then proceeded to thank Beijing for torpedoing that sanctions move by withdrawing the status of India’s GAIL as the “preferential buyer” on the A-1 and A-3 blocks, and signing production-sharing contracts with China’s CNPC instead. For India, this was a discomforting diplomatic setback for two reasons: (i) it had sought to sweeten the deal both with a US$20 million “soft credit” and by proposing to construct a power plant in Burma; and (ii) the A-1 and A-3 are partly owned by two Indian state-run companies.[8]

Burma also has some onshore and offshore oilfields, with reserves estimated to be 3.2 billion barrels of recoverable crude oil. It produced 8.133 million barrels of crude oil in 2005, compared with 7.160 million barrels in 2004.[9] At least three oil companies from neighboring countries, including India’s privately owned Essar, are presently exploring for additional oil finds in Burma by conducting feasibility studies involving collection and analysis of geologic and seismic data.

Foreign investment in Burma’s energy sector, however, has not been too significant compared to the sector’s actual potential. Had Burma not been an isolated, sanctions-hit country, the picture would have been different, with international oil majors seeking exploration and production rights there. Sanctions have actually prevented Burma (like Iran) from accessing liquefaction technology to become a major exporter of liquefied natural gas (LNG). That has left Burma largely with one choice: to export natural gas by pipeline. And to whom can it sell natural gas by pipeline? Naturally, to its immediate neighbors, as it is currently doing to Thailand and is going to do to China once the new pipeline is complete. India till date has failed to secure a single production-sharing contract to buy Burmese gas.

Burma’s vantage location has also added its energy-related importance in a different way — at least for China. In addition to importing Burmese gas, China is setting up an energy corridor through Burma involving an oil pipeline to transship crude oil it imports from the Middle East and Africa. In other words, Burma is both a source of energy as well as a transshipment route for China. China presently is finalizing technical details for the construction of the oil pipeline, which — running the length of Burma — will go at least up to Chongqing, a new province carved out of Sichuan, according to one report.[10]

This energy pipeline is part of a strategic corridor — the Irrawaddy Corridor — that China is setting up to link its southwestern provinces with the Bay of Bengal and the Indian Ocean through Burma. The corridor establishes road, river, rail and energy links from China’s Yunnan and Chongqing provinces to Burma’s Chinese-built harbors at Kyaukypu and Thilawa. Along with Beijing’s onshore and offshore strategic assets in Burma, this corridor signifies an enlarging Chinese footprint in that country.

The energy pipeline and strategic corridor through Burma need to be seen in the context of the other Chinese moves and actions in southern Asia that have far-reaching strategic implications for India, Japan, the United States, Australia and other players in the Indian Ocean rim region. Besides the intent to transfer Gulf and African oil for its consumption by cutting the transportation distance and minimizing its exposure to U.S.-policed sea-lanes, China has important strategic objectives in mind in fashioning new transportation routes.[11] A fourfold Chinese strategy is currently being implemented:

1. The north-south strategic trail that the Irrawaddy Corridor represents, granting China access to the Bay of Bengal and the Indian Ocean.

2. A second strategic corridor in a north-south axis being fashioned in southern Asia is the trans-Karakoram corridor stretching from western China down to Pakistan’s new, Chinese-built Gwadar port, at the entrance to the Strait of Hormuz, through which 40 percent of the world’s oil supply passes. Opened in the spring of 2007, the deepwater port at Gwadar represents China’s first strategic foothold in the Arabian Sea. China’s plan is to make Gwadar a major hub transporting Gulf and African oil by pipeline to the Chinese heartland via Xinjiang. Such piped oil would not only cut freight costs and supply time but also lower China’s reliance on shipping lanes through the Malacca and Taiwan Straits. Pakistan has already signed a memorandum of understanding with Beijing for “studies to build the energy corridor to China.”

3. China is shoring up an east-west strategic corridor in Tibet across India’s northern frontiers, as illustrated by the $6.2 billion China-Tibet railway from Gormu to Lhasa that opened in July 2006. Beijing is now extending the Tibetan railway to the Nepalese capital of Katmandu and also to two other points: the tri-junction of the India-Bhutan-Tibet frontiers (in the Chumbi Valley) and the intersection of the India-Burma-Tibet borders.

4. China’s incremental efforts to build a “string of pearls” along the Indian Ocean rim symbolize Beijing’s desire for a fourth strategic corridor. It seeks to assemble this “string of pearls” — a term first used in a report for the Pentagon by U.S. defense contractor Booz Allen Hamilton — through forward listening posts, naval-access agreements and Chinese-built harbors stretching from Pakistan and Sri Lanka to Bangladesh and Burma. The Chinese interest in the Indian Ocean rim now extends to the Seychelles.

For China, Burma is a critical entryway to the Bay of Bengal and the Indian Ocean. Chinese strategic positioning in Burma also needs to be seen against the backdrop of Burma overlooking vital sea lanes of communication through the Strait of Malacca. Not unsurprisingly, the Irrawaddy Corridor has brought Chinese security personnel to Burmese sites close both to India’s eastern strategic assets and to the Strait of Malacca. With the Irrawaddy Corridor stretching to the Bay of Bengal, Chinese security agencies have positioned personnel at several Burmese coastal points, including the Chinese-built harbors.

These security agencies already operate electronic-intelligence and maritime-reconnaissance facilities on the two Coco Islands in the Bay of Bengal. India transferred the Coco Islands to Burma in the 1950s, and Burma then leased the islands to China in 1994. Today, despite denials by the Burmese junta, there is documented evidence, including satellite imagery, showing that China operates a signals intelligence (SIGINT) collection facility from the Great Coco Island.

The Irrawaddy Corridor holds important strategic implications for several players in the Indian Ocean rim region. Such transportation and strategic links, for example, give China leeway to strategically meddle in India’s restive northeast, including the state of Arunachal Pradesh, which China claims to be Chinese territory. Operating in India’s northeast through the plains of Burma (which was part of the British Indian empire) is much easier than having to operate across the mighty Himalayas.[12] It is no wonder that during World War II, both the Allied and the Axis powers classified Burma as the “back door to India.” The potential for Chinese strategic interference has to be viewed against the background that the tribal insurgencies in India’s northeast were all instigated by Maoist China, which trained and armed these rebels partly by exploiting the Burma route. Today, India has an 850-kilometer-long porous border with Burma, with insurgents operating on both sides with the help of shared ethnicity.[13] (Continued below)

Fashioning a Forward-Looking Approach on Burma Part II

Promoting Political Freedoms in Burma:
International Policy Options

Understanding international options

Promotion of democracy in Burma is a justifiable goal because that ethnically fractious country cannot indefinitely be held together by brute force. The empowerment of its masses is imperative to create a grassroots stake in Burma’s unity and territorial integrity. Genuine participatory processes are also necessary to promote ethnic reconciliation in a country internally scarred from long years of sectarian strife.

Yet, even among those who share this goal, one sees an interesting, even if nuanced, split: Europeans and Americans tend to emphasize the primacy of principles over strategic considerations, while Asians seem to favor engagement and a softer approach. To be sure, there is no common Asian approach. Differences over Burma are subtle yet eye-catching among the Asian players, with some states (like India and Japan) gently pushing the junta toward political reconciliation and democratic opening, and some others (such as China) viewing democracy advocacy by the West as national-interest promotion by other means. Still, the imperatives of proximity impel states in the neighborhood not to rely on an approach centered on penal action against and the isolation of Burma. Similarly, the U.S. and the European Union have far from a common approach. The U.S., under President George W. Bush, has moved to a sanctions-only approach toward Burma, while the EU, despite widening its own sanctions since last year, is keen to keep open channels of dialogue and humanitarian assistance.

Distance from Burma has been a crucial factor in determining major players’ approach toward that country. The greater a state’s geographical distance from Burma, the more ready for action it has been on Burma. And the shorter a state’s distance from Burma, the greater the caution and tact in its policy.

Burma’s present problems (and impoverishment) can be traced back to the politically cataclysmic events of 1962, when the military under General Ne Win ousted an elected government and thereafter sought to introduce autarky by cutting off the country from the rest of the world. If Burma has gone from being Asia’s rice bowl to becoming a virtual pauper state, the blame has to fall on the 1962 coup and what it introduced. Ne Win, a devotee of Marx and Stalin, banned most external trade and investment, nationalized companies, halted all foreign projects and tourism, and kicked out expatriates engaged in business. Yet the West, not unhappy that the military had ousted a founding leader of the non-alignment movement, Prime Minister U Nu, imposed no sanctions on Burma. Over the subsequent years, Ne Win fashioned a virtual one-man dictatorship under his authority.

More than a quarter-century later, even the bloodbath of 1998 that left several thousand student-led demonstrators dead or injured did not invite Western sanctions. That bloodbath coincided with the numerology-dedicated Ne Win’s public announcement of retirement on the ‘most auspicious’ day of August 8, 1988 (8.8.88). Time will tell whether China, also addicted to the power of number 8, is courting trouble 20 years later by launching the Beijing Olympics on 8.8.08 at 8.08 am. In Burma, for the democratic opposition, 8.8.88 symbolized the launch of the democracy movement. Its 20th anniversary thus will be commemorated on the same day the Beijing Olympics kick off with an opening ceremony that some world leaders are threatening to boycott over the brutal repression in Tibet.

In fact, the events of 1988 triggered a stronger response from India and Japan than from the West. India, with missionary zeal, began cutting off all contact with the junta in the post-1988 period and started giving sanctuary to Burmese dissidents. Such righteous activism, heightened by the junta’s subsequent July 1989 detention of Burmese opposition leader Aung San Suu Kyi, who has had close ties with India since her student days,[14] however, cost India dear. By the mid-1990s, China had strategically penetrated Burma, opening a new flank against India. The sobering lessons from a decade of foreign-policy activism on Burma post-1988 has helped instill greater geopolitical activism in India’s approach in recent years.

Japan, for its part, suspended its Overseas Development Assistance to Burma, following the 1988 developments. And when in 1992 Japan adopted an ODA charter espousing human rights and democracy, that provision was first invoked against Burma to slash ODA. Since then, Japanese ODA has been limited largely to humanitarian and technical assistance. While Japanese ODA to Burma had averaged $154.8 million a year during the period 1978-88, it has fallen to an average of $36.7 million a year between 1996 and 2005, according to official Japanese figures. With China eclipsing Japan as the largest aid provider, Tokyo has seen its traditional influence in Burma wane.

The military has been in power in Burma for 46 long years.[15] But the Western penal approach toward Burma began shaping up only in the 1990s. In fact, it was not until this decade that Burma became a major target of U.S. sanctions, reflected in the congressional passage of the 2003 Burma Freedom and Democracy Act and the enforcement of several subsequent punitive executive orders dating up to May 1, 2008.[16] 

Some U.S. measures put in place against the junta before 2003 included a ban on new investment and an American veto on any proposed loan or assistance by international financial institutions. That ban on new U.S. investments was imposed as far back as 1997 — the same year the Association of South-East Asian Nations (ASEAN) admitted Burma as a member. The Clinton administration could take that decision in 1997 because at that time the United States had minimal trade with Burma and a total investment of only $225 million.[17] Apart from Burma’s opium produce having a bearing on U.S. counternarcotics policy, that country was not a serious foreign-policy concern in Washington.

Indeed, until the advent of the Bush administration, Burma was not among the key targets of sanctions, with the broadest U.S. sanctions being directed at countries identified as supporting terrorism: Cuba, Iran, Libya, North Korea, Syria and Sudan. In a September 1998 report to the U.S. House of Representatives, for example, the U.S. International Trade Commission (USITC) had identified 142 provisions in 42 federal laws applying unilateral economic sanctions against some countries. Some of the provisions were directed against Burma, but that country wasn’t among the key U.S. targets.[18]

Even though there was considerable evidence through the 1990s that the unilateral sanctions approach introduced by the Clinton administration wasn’t helping to loosen the military’s grip on Burma,[19] the U.S. considerably broadened its penal actions in this decade under Bush. The bilateral and multilateral measures mandated by the 2003 Burma Freedom and Democracy Act[20] have led to the U.S. imposition of a ban on all imports from that country, combined with an array of other sanctions. But as the State Department has admitted, the U.S. “import ban implemented in 2003 would be far more effective if countries importing Burma’s high-value exports (such as natural gas and timber) … would join us in our actions.”[21]

While a number of nations have slapped sanctions on Burma, especially after the brutal way the September 2007 monk-led protests were suppressed, the blunt fact is that no nation thus far has emulated the extent to which United States has gone in imposing penal actions. In fact, the history of U.S. sanctions against Burma since 1997 has followed a now-familiar pattern in U.S. policy — first imposing an array of unilateral sanctions against a pariah regime, then discovering that the sanctions aren’t working and, therefore, turning to allies and partners to join in the penal campaign, and finally threatening sanctions against firms from third countries if those nations refuse to toe the U.S. line.

As far as the Burma-related international sanctions are concerned, their history underscores the manner the penal approach got shaped not by a cause — bringing an end to the military rule — but by the political travails of an iconic personality, Aung San Suu Kyi, the daughter of Burma’s founding father, Aung San, the Japanese-trained commander of the Burmese Independence Army. Suu Kyi, having been accidentally thrown into the vortex of national politics in autumn 1988,[22] has helped inspire and mold the Western punitive approach toward Burma.

The junta’s detention of her from July 1989 onward and its refusal to honor the people’s verdict in the May 1990 national elections brought Suu Kyi to the center of world attention, with she receiving several international awards in quick succession — the Rafto Human Rights Prize in October 1990; the European Parliament’s Sakharov Human Rights Prize in July 1991; and the Nobel Peace Prize in October 1991. A major trigger in galvanizing international opinion was clearly the junta’s brazen refusal to cede power despite the May 1990 national elections, which gave the detained Suu Kyi’s National League for Democracy (NLD) party 59 percent of the votes but 82 percent of the seats in Parliament. By keeping her in detention for nearly 13 of the past 19 years, the junta has itself contributed to building Suu Kyi as an international symbol of the Burmese struggle for political freedoms.

The personality-shaped nature of the sanctions approach can also be explained by the fact that before Suu Kyi, there was no unifying figure to challenge the military’s domination in all spheres of the state and to lead a national movement for the restoration of democracy. The Nobel prize greatly increased her international profile and domestic clout. Western aid cutoffs and other penal actions thus began only in the period after the junta refused to honor the results of the 1990 elections.

How a personality can help shape the sanctions approach was further underlined by the way Suu Kyi’s personal rapport with U.S. Secretary of State Madeleine Albright helped spur President Bill Clinton to reluctantly impose a ban in 1997 on new American investments to develop Burma’s resources. That ban was slapped even though international pressure, and the Clinton administration’s own intervention, had made the junta to release Suu Kyi in July 1995 after six years in house detention.

Not only has the sanctions approach been personality-driven, but also a personality hue has been put even on the internal struggle in Burma. That struggle has been portrayed, simplistically, as a battle between Aung San Suu Kyi and the junta’s reclusive chairman, General Than Shwe, a fight between good and evil, and a tussle between the forces of freedom and the forces of ruthlessness. While such a portrayal is useful to draw international attention to a remote country that is peripheral to the interests of all except its neighbors, it helps obscure the complex and multifaceted realities on the ground.

Despite Suu Kyi’s central role in shining a constant international spotlight for 19 years on the military’s repressive and illegitimate rule, the grim reality is that years of tightening sanctions against Burma haven’t helped loosen the military’s vise on polity and society. If anything, the sanctions have only worsened the plight of ordinary Burmese. Far from the people gaining political freedoms, an again-detained Suu Kyi’s personal freedom has remained an outstanding issue. While the ordinary Burmese have been the main losers, the international approach has proven a strategic boon for China, creating much-desired space for it to expand its interests in and leverage over Burma. That has happened largely at the expense of the interests of democratic states, which, in any event, have continued to pursue varying, and at times conflicting, policies on Burma. Against this background, what should be a realistic, yet productive, approach toward Burma?

Burma now ranks as one of the world’s most isolated and sanctioned nations — a situation unlikely to be changed by the Constitutional process and other steps in the junta-touted “roadmap to democracy,” unless the international community under the U.S. leadership adopts a fresh approach toward that country.

There has been a proliferation in recent years of indexes developed by research institutions that seek to rank countries in terms of their comparative vulnerabilities and weaknesses, including state failure, repression, corruption and disparities. What is striking about Burma is that it ranks in all the indexes as among the most corrupt and dysfunctional states. And yet its state machinery seems strong enough to wage unrelenting political repression and persecution of ethnic minorities.

The annual Failed States Index (FSI) prepared by the independent, Washington-based group, The Fund for Peace, for example, employs 12 social, economic, political and military indicators to rank 177 states in order of their vulnerability to violent internal conflict and societal deterioration. It is based on the capacities of core state institutions to mitigate adverse trends promoting state instability. The 2007 index ranks Burma among the top 20 unstable states prone to violent conflict and societal dysfunction.[23] Sudan tops the rankings as the state most at risk of failure. But four states in southern Asia figure in the top 20 dysfunctional states: Afghanistan at No. 8, Pakistan (No. 12), Burma (No. 14) and Bangladesh (No. 16). That shows that symptoms of state failure are acute in this part of the world.

Similarly, the Brookings Institution’s new Index of State Weakness in the Developing World ranks Burma as the 17th weakest state among the 141 countries it assessed, with Somalia, at the No. 1 position, symbolizing an utterly failed state and the Slovak Republic (at the top of the ladder, No. 141) representing a successful democracy.[24] Burma was identified as one of five critically weak states outside sub-Saharan Africa.

In the World Press Freedom Index, [25] Burma ranks No. 163 in the 167-nation list. Without freedom of expression, no process of democratization can begin. Burma’s leaders are not just autocrats; like other repressive rulers in Asia, they believe in the indispensability and virtues of autocracy.

They have used the threat of Balkanization to justify their stranglehold on politics. The military sees itself as the only institution that can keep Burma united. Preventing the splintering of the country, however, has come at a heavy price. It was the military’s autarkic policies and gross economic mismanagement post-1962 that spurred widespread poverty and the flight of capital from the country.

According to Transparency International, Burma and Somalia are on par as the most corrupt countries in the world.[26] The Berlin-based Transparency International, as part of its annual survey of corruption (which it defines as the abuse of public office for private gain), publishes an index of countries ranked from the least corrupt to the most corrupt, on a scale of 10 to 0, with 10 representing no corruption and 0 signifying total sleaze and bribery. Its 2007 Corruption Perceptions Index brings out the growing problem of corruption in Asia. Among the most corrupt states in the index was Burma’s neighbor, Bangladesh. That the poorest states of Asia like Bangladesh and Burma are also the most corrupt only shows that corruption is both a cause of poverty as well as a hindrance to the amelioration of the conditions of the impoverished people.

The key point arising from the various indexes is that Burma is a pretty dysfunctional state with corroding institutions and an oversized military that dominates all spheres of national activity. Since the September 11, 2001, terrorist attacks in the United States, it has been increasingly recognized that the threats to international peace and security now emanate more and more from the world’s weakest states. Tellingly, two of the world’s critically weak states, North Korea and Pakistan, are members of the nuclear club. It has become routine for the major players and the United Nations to reiterate their commitment to pull critically weak nations back from the precipice of state failure.

It is that argument — to stabilize a failing state — that the Bush administration has applied to pour some $11 billion as aid since 9/11 into terror-exporting Pakistan, ranked No. 33 in the Brookings’ Index of State Weakness in the Developing World. Reinforcing that argument, it is now considering throwing its weight behind Senator Joseph Biden’s call for a $2.5 billion package of additional nonmilitary aid to improve the lives of citizens in a country where the military has dominated all walks of life almost since Pakistan’s creation in 1947.

Can a different logic or argument be applied to Burma, one of the world’s weakest and most dysfunctional states that potentially poses a serious transnational security threat unless steps are taken to help stabilize its economy? Or should the stabilization of a failing state only begin when that country actually starts posing — like Pakistan — a threat to international security?

It is obvious that the international responses to separate cases of failing states need not be cut from the same cloth because every nation’s situation tends to be different from the others. Still, the undeniable fact is that Burma represents a case of grave state corrosion, with international sanctions having had the effect, however unintended, to lower the living standards of ordinary Burmese.

Another question relates to the extent to which sanctions should be employed? Should punitive actions preclude engagement? Without the Bush administration engaging Pyongyang, to give just one example, would it have been possible to achieve the progress, however tentative it might seem at this stage, on the North Korean nuclear program? It is nobody’s case that Burma is worse than North Korea.

Sanctions by themselves do not usually promote political freedoms and indeed, by ignoring humanitarian concerns, may help a regime to instill a sense of victimhood and shore up domestic support. Nor can just engagement be the answer. The notion that democracy is sure to follow if a country is integrated with the global economy has been disproved by China. The more economic and military power China has accumulated, the more sophisticated it has become in repressing at home, including through electronic surveillance and intimidation.

If freedom is to bloom in more countries, it is imperative to fashion a more principled, coherent, forward-looking international approach that objectively calibrates sanctions and engagement, and allows outside actors to actively influence developments within.

So what are the international options?

Despite its predatory military elite continuing to monopolize power, Burma does exhibit severe state weaknesses. Those vulnerabilities make continued international sanctions against it attractive, in order that its military is compelled to return to the barracks. Yet, years of sanctions have helped underscore the limits of securing significant results through punitive pressures alone.

Options still available to the international community will become clearer if we clinically assess our successes and failures vis-à-vis Burma thus far.

· Have economic disengagement from Burma and other punitive actions helped improve human rights in Burma?

· Has outside role helped, directly or indirectly, to improve the living conditions of the ordinary Burmese or to loosen the military’s political grip?

· By targeting vital sectors of the Burmese economy, to what extent have international sanctions helping choke the flow of funds to the military?

· What objective is served when disengagement blocks the flow of liberal ideas as well as investment and technology to improve working conditions?

· As shown in China, doesn’t foreign investment help build private institutions, boost employment and wages, aid civil-society development and exert a pro-reforms influence on a regime?

· Has the sanctions approach helped increase or decrease external influence over the Burmese regime?

· Given the waves of sanctions in recent years, what additional room is left to step up pressure on a recalcitrant junta? Have most cards already been played out?

· Does the current approach centered on the primacy of sanctions provide the junta a convenient scapegoat for its own gross mismanagement of the economy?

· By isolating Burma and forcing its regime to turn increasingly for succor to more-entrenched autocracies, are we promoting a regional power balance or imbalance?

· To what extent will a weaker, more dysfunctional Burma pose transnational security threats or cause difficulties in international counternarcotics and counterterrorist efforts?

In addition to our options being shaped by our answers to the aforesaid questions, there is also one larger issue that needs to be factored in. International options on Burma not only need to be realistic, but also be based on principles and positions valid for promotion of a transition to democracy in other autocratic settings.

What role outsiders can play to help democracy take roots remains a difficult issue internationally. Yet that issue looms large in relation to Asia. Unlike Europe where democracy has become the norm, only 16 of Asia’s 39 countries surveyed by Freedom House are really free.[27]

As shown by the World Press Freedom Index by the Paris-based international rights group, Reporters Without Borders, a number of Asian countries are among the worst suppressors of freedom. In the 167-nation list, North Korea ranked at the very bottom, Burma 163rd, China 159th, Vietnam 158th, Laos and Uzbekistan 155th, Bangladesh 151st, Pakistan 150th, Singapore 140th and the Philippines 139th.[28]

Bringing in comparative assessments will also help sculpt down-to-earth international options. Let’s look at one revealing comparative picture. Until the September 2007 protests in Rangoon and other Burmese cities and the March 2008 Tibetan uprising, Burma and China had been free of any major pro-freedom protests for about two decades. The previous major pro-freedom demonstrations occurred in Burma in 1988, and in China in 1989.

In 2007, in a two-month period, fuel price increases were announced first in Burma and then in China. The junta’s announcement on August 15, 2007, to double the price of gasoline, diesel fuel and compressed gas hit the ordinary Burmese hard by forcing up the price of public transport and triggering a knock-on effect on staples such as rice and cooking oil. That triggered protests, which became bigger by the day, with monks gradually joining in from early September and the demonstrations acquiring increasingly a political color as an expression of the grassroots anger against military rule. So, it was the rise in energy prices that paradoxically triggered the biggest protests since the 1988 uprising in an energy-rich country.[29] By contrast, the fuel price increases in China — announced just eight weeks after Burma — sparked only a few sporadic incidents of violence, with one person killed in Hainan Island, but spurring no pro-freedom protests.

Why fuel price increases triggered mass protests in one state but not in the other owes a lot to the fact that China had transformed itself radically in the past two decades since the Tiananmen Square massacre, while Burma remains isolated, impoverished and battered by sanctions. The post-Tiananmen international trade sanctions against China did not last long on the argument that they were hurting ordinary Chinese and that engagement was a better way to bring about political change. That was the correct approach. Had an approach pivoted on widening punitive actions been pursued, would China have emerged to the same degree as a dynamic economy that today serves as a growth locomotive for the world? Through its economic transformation, China has made its political modernization inescapable, although no one can predict when and in what form that would happen.

The same principle, however, was never applied to impoverished Burma, creating an unhealthy impression that promotion of freedom has become a diplomatic instrument to target not the world’s biggest autocracies but weak, unpopular, isolated states.[30] Sanctions against a jihad-bankrolling Saudi Arabia or a Tibet-repressing China would bring economic pain in the form of higher oil prices or job losses. So “it is the small or economically vulnerable kids on the global bloc, like Burma and Cuba … that will continue to be the targets of sanctions,” even if “innocent civilians living in those countries” suffer.[31]

While the military has ruled Burma for 46 years, the Chinese Communist Party has monopolized power for 59 years. Neither model is sustainable. The longest any autocratic system has survived in modern history was 74 years in the Soviet Union. At issue, though, is the role the free world can play in promoting a democratic transition in such states.

This issue has again been highlighted in comparative terms by the contrasting international responses to the monk-led freedom protests in Tibet and Burma. In fact, there are striking similarities between Tibet and Burma — both are strategically located, endowed with rich natural resources, suffering under long-standing repressive rule, resisting hard power with soft power, and facing an influx of Han settlers. Yet the international responses to the brutal crackdowns on monk-led protests in Tibet and Burma have been a study in contrast.

When the Burmese crackdown on peaceful protestors in Rangoon last September left at least 31 people dead — according to a UN special rapporteur’s report[32] — it ignited international indignation and a fresh wave of U.S.-led sanctions. More than seven months later, the tepid global response to China’s ongoing harsh crackdown in Tibet has raised the question whether that country has accumulated such international power as to escape even censure over actions that are more repressive and wide-ranging than what Burma witnessed.[33] Despite growing international appeals to Beijing to respect Tibetans’ human rights and cultural identity and begin true dialogue with the Dalai Lama, there has been no call for any penal action, however mild, against China.

When the Burmese generals cracked down on monks and their pro-democracy supporters, the outside world watched vivid images of brutality, thanks to citizen reporters using the Internet. The photograph of a Japanese videographer fatally shot on a Rangoon street was flashed across the world; it is a picture that defined the events of that month when police used baton charges and tear gas on monks and fellow protesters and then opened fire. On the worst day of violence — September 27, 2007 — authorities admitted nine deaths while unofficial figures were higher.

In contrast, China employs tens of thousands of cyberpolice to censor Web sites, patrol cybercafes, monitor text and video messages from cellular phones, and hunt down Internet activists. As a result, the outside world has yet to see a single haunting image of the Chinese use of brute force against Tibetans. The only images released by Beijing are those that seek to show Tibetans in bad light, as engaged in arson and other attacks.

The powerful Internet poses a bigger threat to repressive governments than pro-democracy demonstrations on the streets, if such protests are allowed at all. Seeking to fight fire with fire, some authoritarian regimes have clamped down on the Internet, closing blogger sites and employing sophisticated filtering software to block Web sites that carry references to ‘subversive’ words. Such regimes have proven that a country can blend control, coercion and patronage to stymie the politically liberalizing elements of market forces, especially when the state still has a hold over large parts of the economy.

The important parallels between Burma and Tibet begin with the fact that Burma’s majority citizens — the ethnic Burmans — are of Tibetan stock. But the Han demographic invasion of the Tibetan plateau is spilling over into Burma, with the Chinese presence conspicuous in Mandalay city and the areas to the northeast. Because of the growing Chinese commercial interests in Burma, the September 2007 street protests indeed had an underlying anti-Chinese tenor.

It is significant that the resistance against repressive rule in both Tibet and Burma is led by iconic Nobel laureates, one living in exile in India and the other under house detention for long in Rangoon. The Dalai Lama and Aung San Suu Kyi received the Nobel peace prize in quick succession for the same reason: for leading a non-violent struggle, in the tradition of Mahatma Gandhi. Each, a symbol of soft power, has built such moral authority as to command wide international respect and influence.

It has been announced that President Bush would soon sign legislation conferring Congress’s highest civilian honor to Suu Kyi, just months after he had personally presented the same prize — the Congressional Gold Medal — to the Dalai Lama. Suu Kyi, in fact, married a scholar in Tibetan and Himalayan studies, Michael Aris. With Aris, a Briton, Suu Kyi edited a book on Tibetan studies in honor of Hugh Richardson, an expert on Tibetan Buddhism.[34]

Yet another parallel is that heavy repression has failed to break the resistance to autocratic rule in both Tibet and Burma. If anything, growing authoritarianism has begun to backfire, as the popular revolts in Tibet and Burma have highlighted. More than half a century after Tibet’s annexation, the Tibetan struggle stands out as one of the longest and most-powerful resistance movements in modern world history. The latest Tibetan revolt, significantly, coincided with the Chinese legislature re-electing as president Hu Jintao, who as Tibet’s martial-law administrator suppressed the last major Tibetan uprising in 1989.

Similarly, despite detaining Suu Kyi for nearly 13 of the past 19 years, the Burmese junta has failed to muzzle the grassroots democracy movement, as last September’s bloody events showed. Democracy offers the only path to bringing enduring stability to ethnically troubled Burma. Indeed, ethnic warfare there began no sooner than General Aung San had persuaded the smaller nationalities to join the union.

The importance of Tibet and Burma also comes from their strategic location and rich natural resources. The Tibetan plateau makes up one-fourth of China’s landmass. Annexation has given Beijing access to that region’s immense mineral wealth and water resources. Tibet’s vast glaciers and high altitude have endowed it with the world’s greatest river systems. Most of Asia’s major rivers originate in the Tibetan plateau and their waters are a lifeline to 47 percent of the global population living in South and Southeast Asia and China.

The key difference between Tibet and Burma is that the repression in the former is by an occupying power. Months after the 1949 communist takeover in Beijing, China’s People’s Liberation Army entered what was effectively a sovereign nation in full control of its own affairs. Instead of granting the promised autonomy to Tibetans, Beijing has actually done the opposite: It has broken up Tibet as it existed before the annexation and sought to reduce Tibetans to a minority in the truncated Tibet through the state-supported relocation of millions of Han Chinese. It has gerrymandered Tibet by making Amdo (the present Dalai Lama’s birthplace) as the Qinghai province and merging eastern Kham into its provinces of Sichuan, Yunnan and Gansu.

The contrasting international responses to the repression in Burma and Tibet highlight an inconvenient truth: the principle that engagement is better than punitive action to help change state behavior is applied just to the powerful autocratic countries, while sanctions are a favored tool to try and tame the weak. While animpoverished Burma reels under tightening sanctions, a booming China openly mocks the Universal Declaration of Human Rights. The fact is that the more you punish the weak renegade states, the more the big autocracies tend to gain commercially and strategically. With its ability to provide political protection through its UN veto power, Beijing, in recent years, has signed tens of billions of dollars worth of energy and arms contracts with pariah regimes — from Burma and Iran to Sudan and Venezuela.

As resource-rich Burma remains mired in abject poverty under a brutal military regime that refuses to loosen its political grip despite widening international sanctions, it has become necessary to fashion a forward-looking international approach that allows outside actors, far from shutting themselves off from Burma, to seek to influence developments within. The present disjointed international approach (if it can be called an “approach”) underscores the need both for greater multilateral coordination on Burma and for engagement aimed at increasing external influence within Burma.

Today, under the cumulative weight of sanctions, Burma is coming full circle: Its 74-year-old junta head, the delusional Senior General Than Shwe, has amassed powers to run a virtual one-man dictatorship in Ne Win-style. Also, in the period since the free world began implementing boycotts, trade bans, aid cutoffs and other sanctions, it has seen its leverage over Burma erode. The situation thus calls for a more calibrated approach that entails refining the sanctions tool to achieve better-targeted sanctions and to create space to influence developments through engagement. Even as it has become fashionable to talk about better-targeted sanctions, the sanctions instrument, in reality, has become blunter against Burma.

Sanctions were intended to help the people of Burma, yet today it is the ordinary people that bear the brunt of the sanctions. The stepped-up punitive actions in the face of a deteriorating humanitarian situation are holding the Burmese people “economic hostage,” as Burmese author Ma Thanegi told Stanley A. Weiss in an interview.[35]

As far back as 2003, then U.S. Deputy Assistant Secretary of State Matthew Daley had warned in congressional testimony that many female garment workers made jobless by sanctions were being driven into prostitution. Yet, in its 2004 report to Congress, the State Department actually boasted that U.S. actions had shut down more than 100 garment factories in the previous year alone, with “an estimated loss of around 50,000 to 60,000 jobs.”[36] In the international effort to help build democracy in Burma — believe it or not — the big losers have been those on whose behalf the free world supposedly has been fighting.

While refining the sanctions approach to help spare the Burmese, international pressure must not be eased against the junta. But for international pressure, the junta would not have unveiled a timetable for a supposed transition to democracy. Earlier, it was due to mounting external pressure that it moved Suu Kyi from prison to house detention in September 2003 and then freed seven of the NLD’s most senior leaders. More recently, such pressure also explains why the junta facilitated UN special envoy Ibrahim Gambari’s three visits to Burma in six months, permitting him to meet with Suu Kyi, and also allowed Paulo Sérgio Pinheiro, a special rapporteur to the United Nations Human Rights Council, to come to Rangoon and investigate the September 2007 violence, including the number of casualties and detentions.

Yet, if there is to be progress on the “roadmap to democracy,” the military cannot be excluded from engagement. As visiting Singapore Senior Minister Goh Chok Tong said in Washington in April 9, 2008: “On Myanmar, I told the President (Bush) that while the army is the problem, the army has to be part of the solution. Without the army playing a part in solving problems in Myanmar, there will be no solution.”[37]

Building democracy in Burma is vital not only to end repression and to empower the masses, but also to facilitate ethnic conciliation and integration in a much divided society that has been at war with itself since its 1948 independence. There is, therefore, a need to build greater unity and coordination among the major democracies on a pragmatic Burma strategy. A good idea would to build a concert of democracies working together on Burma, serving as a bridge between the U.S., European and Asian positions and fashioning greater coordination in policy actions.

Without a structured and more progressive international approach, Burma will stay on the present deplorable path, with the military continuing to call the shots. As one analyst has put it, “economic sanctions on Myanmar may feel right, but they have helped produce the wrong results. Encouraging Western investment, trade and tourism may feel wrong, but maybe — just maybe — could produce better results. That might be politically incorrect, but at least it wouldn’t be politically futile.”[38] In an era of a supposed global village, why deny the citizens of Burma the right to enjoy the benefits of globalization and free trade? A more dysfunctional Burma is not in the interest of anyone.

The priority should be to carve out more international space in Burma, rather than shut whatever space that might be left there. International pressure without constructive engagement and civil-society development will not bring enduring results. To avert a humanitarian catastrophe in Burma, the same international standard applicable to autocratic, no-less-ruthless regimes in neighboring states must apply to Burma — engage, don’t isolate.


[*] The author is Professor of Strategic Studies at the privately funded Center for Policy Research in New Delhi.


[1] After the failed 1993-1996 National Convention to draft a new Constitution, the junta did nothing until international pressure intensified during 2003-04. It then issued invitations to a National Convention starting in May 2004 to take up the drafting of the Constitution where the earlier convention had left off. But the democratic opposition did not participate in that convention.

[2] President Bush’s statement of May 1, 2008, stated: “Today, I’ve issued a new executive order that instructs the Treasury Department to freeze the assets of Burmese state-owned companies that are major sources of funds that prop up the junta.”

[3] Ivo J. H. Bozon, Warren J. Campbell, and Mats Lindstrand, “Global Trends in Energy,” The McKinsey Quarterly, Number 1 (2007), p. 48.

[4] International Monetary Fund, 2006.

[5] See, for example, Alan Sipress, “Asia Keeps Burmese Industry Humming: Trade, Both Legal and Illegal, Blunts Effect of U.S. Economic Sanctions,” Washington Post, January 7, 2005, p. A11.

[6] Sean Turnell, “The Rape of Burma: Where Did the Wealth Go,” Japan Times, May 2, 2008.

[7] On January 12, 2007, China and Russia torpedoed a United Nations Security Council (UNSC) draft resolution tabled by the United States and Britain that called on the Burmese regime to halt military attacks against ethnic minorities, release Aung San Suu Kyi and other political prisoners, and promote a democratic transition.

[8] The actual holding in the two blocks is: Daewoo International (60 percent), ONGC Videsh (20 percent), GAIL (10 percent) and Korea Gas Corporation (10 percent). This Indo-Korean consortium is currently engaged in a new exploration drilling program in Block A3.

[9] Yolanda Fong-Sam, “The Mineral Industry of Burma,” in 2005 Minerals Yearbook (Washington, DC: U.S. Geological Survey, 2006).

[10] International Energy, at: http://en.in-en.com/

[11] John W. Garver, “Development of China’s Overland Transportation Links with Central, South-West and South Asia,” China Quarterly, No. 185 (March 2006), pages 1-22.

[12] Mohan Malik, “China’s Peaceful Ruse: Beijing Tightens Its Noose Round India’s Neck,” Force, December 10, 2005.

[13] Martin Smith, Burma: Insurgency and the Politics of Ethnicity (London: Zed Books, 1999).

[14] Suu Kyi accompanied her mother, Ma Khin Kyi, to India in 1960 when she was appointed Burma’s ambassador there. Suu Kyi studied at a high school in New Delhi and then at the undergraduate Lady Shri Ram College, also in New Delhi. Then, in the mid-1980s, Suu Kyi and her British husband, Michael Aris, were fellows at the Indian Institute of Advanced Studies at Simla.

[15] In September 1988, following Ne Win’s resignation, the military’s State Law and Order Restoration Council (SLORC) formally took power. SLORC was officially rechristened the State Peace and Development Council (SPDC) in November 1997.

[16] The 2003 Burma Freedom and Democracy Act prohibits the importation into the United States of any article that is a product of Burma until the president determines and certifies to Congress that Burma has taken certain democratic and counternarcotics actions. The Act directs the secretary of the treasury to direct any U.S. financial institution holding funds of the Burmese regime or the assets of individuals who hold senior positions in the regime to freeze them. It also requires that the executive seek to persuade international financial institutions to oppose any extension of a loan or financial or technical assistance to Burma until the requirements of the Act have been met. Burma’s neighbors are to be persuaded to “restrict financial resources” to Burma and Burmese companies. And, finally, the Act authorizes the president to assist Burmese democracy activists.

[17] The May 20, 1997, executive order issued by President Bill Clinton banned most new U.S. investment in the “economic development of resources in Burma.” Steven Erlanger, “Clinton Approves New U.S. Sanctions against Burmese,” New York Times, April 22, 1997.

[18] United States Information Service (USIS) Washington File, “USITC Report on Unilateral U.S. Trade Sanctions,” September 11, 1998.

[19] See, for example, Leon T. Hadar, U.S. Sanctions Against Burma: A Failure on All Fronts, Trade Policy Analysis Paper No. 1 (Washington, DC: Cato Institute, 1998). It argued: “U.S. policy toward Burma is an irresponsible moral posturing. Supporters of sanctions want to feel good that they are doing something to improve political and economic conditions in Burma by forcing someone else–American businesses, the ASEAN nations, and the Burmese people–to bear the costs. The result will be reduced access of the Burmese people to American products, people, and ideas; worsening economic conditions; and potential political and regional instability. It is indeed ironic that some members of America’s cosmopolitan knowledge class, who are the main beneficiaries of the process of economic globalization, are supporting policies that run contrary to free trade and open markets and deny the Burmese people the ability to enjoy the fruits of the global economy.”

[20] To be sure, the 2003 Burma Freedom and Democracy Act flowed from years of mounting congressional pressure on the executive branch to take a tougher approach toward that country. After the junta refused to honor the results of the 1990 polls, the U.S. Congress passed the Customs and Trade Act enabling the president to impose sanctions on Burma — an authority then-President George H.W. Bush declined to exercise. In 1993, the U.S. Senate, seeking to force the release of Aung San Suu Kyi, passed a nonbinding resolution calling on the president to work for a UN embargo against Burma. In 1995, Sen. Mitch McConnell introduced the Free Burma Act. Another similar legislation, with a name akin to the subsequent 2003 law, the Burma Freedom and Democracy Act, was introduced in 1996 by Rep. Dana Rohrabacher.

[21] Department of State, Report on U.S. Trade Sanctions Against Burma, Congressionally mandated report submitted to Congress on April 28, 2004.

[22] Suu Kyi was in Rangoon to take care of her stroke-stricken mother when Burma was battered by the cataclysmic events of August 1998.By August 26, 1998, she had plunged herself into politics, addressing her first public meeting outside the Shwedagon Pagoda that called for a democratically elected government. And less than a month later, she formed her National League for Democracy (NLD) party on September 24, 1998.

[23]The Failed States Index 2006 of The Fund for Peace is available at:

http://www.foreignpolicy.com/story/cms.php?story_id=3865

It is also available at:

www.ForeignPolicy.com

[24] Susan E. Rice and Stewart Patrick, Index of State Weakness in the Developing World (Washington, DC: Brookings Institution, 2008).

[25]World Press Freedom Index by Reporters Without Borders at:

http://www.rsf.org/rubrique.php3?id_rubrique=554

[26]Transparency International, Corruption Perceptions Index 2007, available at:

http://ww1.transparency.org/

[27] Freedom House, Freedom in the World (Washington, DC: Freedom House, 2006).

[28] World Press Freedom Index by Reporters Without Borders at:

http://www.rsf.org/rubrique.php3?id_rubrique=554

[29] Even the 1988 protests were triggered by an economic decision of the government — the 1987 action devaluing the currency that wiped out many people’s savings. Like in 2007, the 1988 demonstrations began among students before gradually spreading to monks and the public, culminating in the national uprising on August 8, 1988, when hundreds of thousands of people marched to demand a change of government. At least 3,000 people were believed killed when troops opened fire on protesters on that day.

[30] In Jimmy Carter’s words, “A counterproductive Washington policy in recent years has been to boycott and punish political factions or governments that refuse to accept United States mandates.” Jimmy Carter, “Pariah Diplomacy,” New York Times, April 28, 2008.

[31] Hadar, U.S. Sanctions Against Burma.

[32] After his investigations in Burma into the September 2007 violence, Paulo Sérgio Pinheiro, a special rapporteur to the United Nations Human Rights Council, released a report in Geneva which said that at least 31 people were killed in the protests in Rangoon — twice the death toll the regime had reported — and that 500 to 1,000 people were still being detained for involvement in the protests. The report also said that 74 people were listed as missing in the aftermath of the clashes. In addition, it reported that 1,150 political prisoners held before the September 2007 protests had not been released.

[33] The Tibetan government-in-exile said April 29, 2008, that at least 203 people, most of them Tibetans, had thus far died in the Chinese crackdowns in Tibet. But China’s official death toll — 22 — is almost 10 times lower.

[34] Michael Aris and Aung San Suu Kyi (eds.), Tibetan Studies in Honour of Hugh Richardson (New Delhi: Vikas, 1979).

[35] Interview published on website, New Mandala, at:

http://rspas.anu.edu.au/rmap/newmandala/

[36] Department of State, Report on U.S. Trade Sanctions Against Burma, Congressionally mandated report submitted to Congress on April 28, 2004.

[37] AFP, April 9, 2008.

[38] Stanley A. Weiss, “Burma: Are Sanctions the Answer?” International Herald Tribune, February 8, 2008

Potential risks and gains of China’s ambitious strategy

Assessing Regional Reactions to China’s Peaceful Development Doctrine 

Volume 18 Number 5
April 2008
Brahma Chellaney, Jae Ho Chung, Carlyle A. Thayer

China’s peaceful development doctrine is a broad strategy endorsed by the Chinese Communist Party (CCP), whose central goal is the transformation of China into a modern and sustainably developed country through rapid economic growth.The greatest challenge for this strategy is that Beijing must reassure regional neighbors that China’s increasing economic, military, and political power do not pose a threat.This issue of the NBR Analysis reveals unique insights by expert scholars into how India, South Korea, Indonesia, Thailand, and the Philippines perceive the potential risks and gains of China’s ambitious strategy.The assessment of such perspectives provides a valuable opportunity to gauge policy implications in a wide variety of areas, including politics, security, finance, and trade.Such analysis is key both to mitigating the risks of conflict in Asia and to ensuring that China’s rapid development is indeed associated with a peaceful regional environment.The National Bureau of Asian Research (NBR) solicited these papers in an effort to provide a foundation for future research on this issue and to better inform U.S.policy in the region by raising awareness of Indian, South Korean, Indonesian, Thai, and Philippine views.


Southeast Asian Reactions to China’s Peaceful Development Doctrine: Indonesia, the Philippines, and Thailand Carlyle A. Thayer

South Korea’s Reactions to China’s "Peaceful Development" Jae Ho Chung

Assessing India’s Reactions to China’s Peaceful Development Doctrine Brahma Chellaney

Assessing India’s Reactions to China’s “Peaceful Development” Doctrine

Brahma Chellaney

NBR Analysis, Volume 18, Number 5, April 2008

(c) The National Bureau of Asian Research, USA

China’s diplomatic “charm offensive” in Southeast Asia, Central Asia, the Persian Gulf region, and India’s immediate neighborhood has involved major political, economic, and strategic investments that have had the effect of bringing Indian interests under pressure. Such diplomatic penetration has, however, also made some of the courted countries wary of China’s strategic ambitions, leading these countries to search for countervailing influences. That change in turn has helped promote the acceptability of India as a player beyond South Asia. The China factor, for example, motivated the Association of Southeast Asian Nations (ASEAN) to make India a full dialogue partner. That same factor helped India to become a member of the East Asian Summit (EAS), which will design the proposed East Asian Community (EAC).

The Indian navy now conducts joint exercises with other states far beyond India’s shores, including in the South China Sea and in the Pacific. In April 2007 India, Japan, and the United States held their first trilateral naval maneuvers near Tokyo, and five months later the three teamed with Australia and Singapore for major war games on the Bay of Bengal. With U.S. encouragement, India provided naval escort in 2003 to commercial ships passing through the vulnerable, piracy-wracked Strait of Malacca. The undertaking, code-named Operation Sagittarius, was primarily designed to safeguard high-value U.S. cargo shipped from Japan passing through the Strait of Malacca on the way to Afghanistan. Through this operation the Indian navy not only demonstrated patrolling the Strait of Malacca to Southeast Asian states but also gained approval to operate in the ASEAN waters.

In several other respects, however, China’s charm offensive has either reared new strategic challenges for India or affected Indian economic or political interests. For one, China has been aggressively seizing energy-related opportunities overseas, at times to the detriment of India. For example Beijing persuaded Burma’s military junta in 2006 to sell to China gas from the partly Indian-owned A-1 and A-3 offshore blocks via a planned 2,380-kilometer pipeline to Yunnan.[1] Burma took India unawares by signing a memorandum of understanding (MOU) with China’s state-run PetroChina Company in early 2006 to supply gas to China from those same partly Indian-owned fields over a 30-year period.[2] To New Delhi’s acute embarrassment, the Burmese decision came just as India announced that New Delhi had reached an agreement with Beijing to jointly cooperate on securing oil resources overseas, a move designed to prevent Sino-Indian competition from continuing to drive up the price of energy assets. The loss of Burmese gas to China has created some bitterness in New Delhi, which has been eager to import gas from Burma via a pipeline through Bangladesh.[3]

Beijing also has aggressively sought oil and gas contracts in Iran, which is now the largest supplier of foreign oil to China, delivering 14% of China’s total oil imports. China has planned a 386-kilometer oil pipeline from Iran to link up with the Atasu-Alashankou pipeline between Kazakhstan and Xinjiang. China’s state-owned oil company, Sinopec (also known as China Petrochemical Corporation), signed a $100 billion deal in October 2004 to buy 10 million metric tons of liquefied natural gas (LNG) from Iran annually over a 25-year period. In exchange Sinopec secured a 51% stake in the giant Yadavaran oilfield in Iran’s south, leaving a minority 20% stake for a consortium of Indian companies led by the Oil and Natural Gas Company (ONGC) Videsh Limited (OVL).

China’s advantage over India is that, as a permanent member of the UN Security Council, Beijing wields considerable international clout and can provide political protection to renegade regimes. The fact that China can veto any UN sanctions proposal has not been lost either on Iran or on Burma. Beijing’s ability to provide political cover is a fundamental element of China’s thriving commercial ties with a host of problem states.

With the country’s new wealth, China also has been resourcefully building trade and transportation links to further larger Chinese interests in the countries around India.[4] Such links around India’s periphery are already bringing India under strategic pressure on separate flanks on both sides of the Indian peninsula:

1. China is fashioning a north-south trans-Karakoram strategic corridor stretching up to Pakistan’s new, Chinese-built Gwadar port, at the entrance to the Strait of Hormuz. Opened in the spring of 2007, the deepwater port at Gwadar represents China’s first strategic foothold in the Arabian Sea.

2. Another north-south strategic trail China is developing is the Irrawaddy corridor involving road, river, and rail links from Yunnan Province up to the Burmese ports on the Bay of Bengal.

3. China is also shoring up an east-west strategic corridor in Tibet across India’s northern frontiers, as illustrated by the $6.2 billion China-Tibet railway from Gormu to Lhasa that opened in July 2006. Beijing now plans to extend the Tibetan railway to the Nepalese capital of Katmandu and also to two other points: the tri-junction of the India-Bhutan-Tibet frontiers (in the Chumbi Valley) and the intersection of the India-Burma-Tibet borders.

4. China’s incremental efforts to build a “string of pearls” along the Indian Ocean rim symbolize Beijing’s desire for a fourth strategic corridor that would create a challenge to India from the south. China’s seeks to assemble this “string of pearls”—a term first used in a report for the Pentagon by U.S. defense contractor Booz Allen Hamilton—through forward listening posts, naval-access agreements and Chinese-built harbors stretching from Pakistan and Sri Lanka to Bangladesh and Burma. The Chinese interest in the Indian Ocean rim now extends to the Seychelles.[5]

The Irrawaddy corridor has brought Chinese security personnel to Burmese sites close both to India’s eastern strategic assets and to the Strait of Malacca. With the Irrawaddy corridor stretching to the Bay of Bengal, Chinese security agencies have positioned personnel at several Burmese coastal points, including the Chinese-built harbors at Kyaukpyu and Thilawa. These security agencies already operate electronic-intelligence and maritime-reconnaissance facilities on the two Coco Islands in the Bay of Bengal. India transferred the Coco Islands to Burma in the 1950s, and Burma then leased the islands to China in 1994. Today China operates a signals intelligence (SIGINT) collection facility from the Great Coco Island.

Beijing is reinforcing the strategic significance of the new port at Gwadar by linking it with the Karakoram Highway to western China through the Chinese-aided Gwadar-Dalbandin railway, which extends to Rawalpindi. In addition the Chinese-supported Makran Coastal Highway links Gwadar with Karachi, Pakistan’s main port. Gwadar, already home to a Chinese electronic listening post, is a critical link in the emerging chain of Chinese forward-operating facilities that stretch from the Arabian Sea to the Bay of Bengal and then to the Gulf of Siam.

Protected by cliffs from three sides and now being extended into a naval base with Chinese assistance, Gwadar will not only arm Pakistan with critical strategic depth against a 1971-style Indian attempt to bottle up Pakistan’s navy, but the port will also open the way to the arrival of Chinese submarines in India’s backyard. Beijing admits that Gwadar’s strategic significance is equivalent to the Karakoram Highway, which since opening in 1969 has helped underpin the Sino-Pakistan nexus and served as the route for covert Chinese nuclear and missile transfers to Islamabad. Linking the Karakoram Highway with Gwadar will likely to create a strategic-multiplier effect. Furthermore, the completion of the Gwadar project will enable the Chinese navy, with its access in Burma, to operate on both sides of the Indian peninsula.

Beijing is planning to build an energy pipeline from Gwadar to western China as a way to reduce the time and distance for transporting oil to China from the Gulf region. Beijing sees Gwadar as providing a more secure corridor for energy imports from the Gulf states. In the event of a strategic confrontation with the United States this safe corridor would prevent the interdiction of oil shipments to China’s resource-hungry economy. Gwadar, along with Burma’s Sittwe port (from where a separate energy pipeline to Yunnan is to be built), would help reduce China’s reliance on the Strait of Malacca, through which 80% of Chinese oil imports now pass. Given Beijing’s decision to substantially widen the Karakoram Highway and upgrade it to an all-weather passageway, China also has displayed likely plans to export and import goods through Gwadar.

In addition China is stepping up military and economic engagement with India’s other immediate neighbors—Bangladesh, Nepal, and Sri Lanka. Beijing’s broad-based military cooperation agreement with Dhaka—Bangladesh’s first military accord with any country—has four apparent objectives: to bring Bangladesh into the Chinese strategic orbit, to gain naval and commercial access to the strategically important port of Chittagong to connect Bangladesh with Burma, and to secure a doorway to India’s vulnerable northeast.

Far from moderating Indian fears, Beijing’s deepening ties with India’s neighboring states have made New Delhi increasingly concerned over Chinese activities. There is growing recognition in New Delhi that China’s rising power has become the single biggest cause of qualitative change in the geopolitical landscape. Despite New Delhi’s continuing emphasis on cooperation with Beijing, China is unlikely to shy away from investing more resources into activities and capabilities antithetical to Indian interests and security.

Sino-Indian Relations in the Next Five to Ten Years

India and China are old civilizations but new neighbors. The two countries became neighbors only in 1951 when the disappearance of the traditional buffer—Tibet—brought Chinese troops to what is now the 4,057 kilometer-long Sino-Indian frontier. As relatively new neighbors with no historical experience in dealing with each other politically, India and China face a steep learning curve while seeking to build equilibrium in their relations. Today both countries have a stake in maintaining the peaceful diplomatic environment on which the economic modernization and security of both depend. Yet the wounds of the 1962 Chinese invasion of India have been kept open by Beijing’s public and assertive claims to Indian territories. Nonetheless, compared to the troubled state of Sino-Indian relations three decades ago (before full diplomatic ties were restored following Mao Zedong’s death) relations today are more stable and marked by booming trade.

Looking ahead the China-India relationship is likely to remain complex and difficult, marked by cooperation in some areas but by competition, either latent or overt, in other areas. The underlying wariness or even suspicion that each has of the other’s intentions is unlikely to go away. Yet both countries will continue to feel the need to publicly play down the competitive dynamics of their relationship and emphasize cooperation.

It is in India’s interests to stress cooperation while at the same time working to reduce the power disparity with China by building greater stability and equilibrium in Asia through strategic ties with other democracies, including the United States and Japan. For China, a continued emphasis on cooperation would be consistent with Beijing’s larger “peaceful rise” strategy.[6] Indeed China’s choir book has been centered on one ingenious song—that the country’s emergence as a great power is unstoppable and that it is thus incumbent on other nations to adjust to China’s rise.

It is important to bear in mind, however, that the India-China strategic dissonance is rooted not only in their contrasting political ideals and quiet rivalry but also in Beijing’s relentless pursuit of a classical, Sun Tzu–style balance-of-power strategy. While presenting itself as a see-no-evil, do-no-evil state, Beijing is zealously working to build up China’s power capabilities to engage the world on Beijing’s own terms. In order to avert the rise of a peer rival in Asia, China has sought to strategically tie down India south of the Himalayas.

Over the next decade, India and China are likely to remain business partners rather than become friends. Neither side, however, would like to see their quiet competition slide into confrontation. Managed competition is thus likely to define the relationship between these two demographic titans in the coming years.

Trade

Bilateral trade between China and India—which jumped 15-fold from $2.3 billion in 2000 to $38 billion in 2007, with China enjoying a trade surplus of $10.7 billion last year—is likely to continue to expand, positioning China as India’s largest trading partner within the next couple of years.[7] There is, however, no Sino-Indian congruence on geopolitical issues. That is why the proclaimed “India-China strategic and cooperative partnership for peace and prosperity” remains devoid of any content other than a rapidly growing trade relationship.

Although the official Chinese media claims that the rapid development of Sino-Indian trade is due to “sound political relations,” political issues continue to be an obstacle even in trade.[8] New Delhi is not only wary of the idea of a free trade agreement (FTA) with Beijing but also continues to be concerned over Chinese dumping of goods and investments in strategic sectors in India. To Beijing’s loud protest, New Delhi has excluded from Indian contracts some Chinese firms that are tied to the People’s Liberation Army (PLA) or the Chinese Communist Party. For example India blacklisted the state-run China Harbour Engineering Company—which has developed the Gwadar deepwater port in Pakistan—from bidding for any Indian port contract.

Additionally the composition of Indian exports to China is not flattering to India. In the first half of 2007 iron ore comprised 52% of Indian exports to China. Overall, raw materials made up 85% of India’s total exports. India has been increasingly exporting low-cost raw materials while importing value-added Chinese goods—a pattern that is not sustainable. Indeed India must guard against becoming a raw-material appendage of the Chinese economy.

Political problems do not constrain interstate economic ties in today’s market-driven world. Even if Sino-Indian trade overtakes U.S.-Indian trade (which is a likely scenario) political issues will continue to divide Beijing and New Delhi. If growing trade was a barometer of political progress, Japan and China—with a trade volume almost ten times higher than that of India and China—would be allies. Similarly, Japan and South Korea, who engage in a much higher volume of trade than China and India, are finding it hard to manage their prickly bilateral political relationship, despite both being military allies of the United States. History testifies that when strategic animosities remain unaddressed, interdependent commercial ties do not guarantee moderation. Therefore, even as trade with China continues to grow, India’s strategic interests will increasingly lead New Delhi to search for ways to countervail Chinese power.

Territorial Disputes

India and China have continually disputed the border between the two countries since 1981. The two countries came to blows over the issue in 1962, the wounds from which still persist in negotiations over the border today. China’s assertive claims and overall stalemate in the negotiations have impeded the successful resolution of the border issue. As a result, China continues to occupy one-fifth of the original state of Jammu and Kashmir.

China’s recent claim over the entire Indian state of Arunachal Pradesh and aggressive patrolling of the border region signify that China is not interested in maintaining the status quo. As a result more than 300,000 Indian soldiers remain tied down in the region. Negotiations have been rich in symbolism but ultimately unproductive as the two parties have struggled to move past developing “principles,” “concepts,” and a “framework” for an overall settlement. Although the border issue ostensibly could be settled with a fairly straightforward compromise—e.g., India foregoing claims to territories lost to China and China abandoning claims to Indian-held areas—China does not seem interested in a settlement based on the status quo. China’s position, furthermore, is unlikely to change over the next decade.

Geopolitics of Oil and Water

In Asia energy is increasingly intertwined with geopolitics. As a result energy and security are inseparable today. With competition for the world’s oil and gas resources sharpening, Asia faces the specter of a 21st-century version of an energy-related Great Game in which India and China are likely to be major players.

A cash-rich China has shown time and again that the country can nimbly outmaneuver India in bids for energy contracts in third countries. Nonetheless, some in India have imaginatively proposed cooperation with China on energy issues. The reality, however, is that China is a larger and more aggressive player willing to take major risks and has a track record of greater success; China therefore has little to gain from such cooperation with India. Thus in the coming years China and India are likely to continue to compete for energy resources to meet the needs of their rapidly growing economies.

The energy-related Sino-Indian rivalry, however, has obscured another emerging area of competition—water resources. Given Chinese control over the aqua-rich Tibetan Plateau (which is the source of most of Asia’s major rivers), China has a clear competitive edge. Tibet’s vast glaciers and high altitude have endowed the region with the world’s greatest river systems. These glaciers represent a crucial water source not only for China and India but also for numerous countries in Asia, including Bangladesh, Burma, Bhutan, Nepal, Cambodia, Laos, Pakistan, Thailand, and Vietnam.

The internal disputes that arise over water resources could potentially degenerate into interstate conflict. Many of the current water disputes are related to Chinese damming and redirection of Tibetan water. One such project, the gargantuan South-North Water Transfer Project, aims to redirect billions of gallons of water from the Yangtze River in the south to China’s parched Northern Plain where over-intensive farming, increasing urbanization and industrialization, desertification, and a generally drier climate have strained the region’s major river, the Yellow River, to the breaking point. The project’s stillborn western line aims to divert precious water resources from the Tibetan Plateau, thus threatening to diminish the water flows of other countries’ major river systems, including the Indus, Salween, Mekong, Brahmaputra, Karnali, and Sutlej systems. If such a large-scale rerouting were to begin, the action would constitute the declaration of a water war on lower-riparian India and Bangladesh.

Several Chinese projects in west-central Tibet have a bearing on river water flows into India, but Beijing is reluctant to share information. After flash floods occurred in India’s northern state of Himachal Pradesh, however, China agreed in 2005 to supply New Delhi with data on any abnormal rise or fall in the upstream water level of the Sutlej River, on which China has built a barrage. Discussions are ongoing to persuade Beijing to share flood control data during the monsoonal season for two Brahmaputra tributaries—the Lohit and Parlung Zangbo Rivers—as China has done since 2002 on the Brahmaputra River, which China has dammed upstream at several places. When Chinese president Hu Jintao visited India in November 2006, the two countries agreed to set up a joint expert-level mechanism on interstate river waters. Beijing now seems to be having second thoughts on setting up such a mechanism.[9]

India’s Relations with the United States and Japan

Beijing has not hidden its unease over the larger strategic implications of India’s improving relations with the United States and Japan. The direction of the newly launched Quadrilateral Initiative between Australia, India, Japan, and the United States, which is founded on the concept of democratic peace, is still undecided owing to differing perceptions within the group. This quartet, however, represents the likely geopolitical line-up in the Asia-Pacific in the years ahead.

China, India, and Japan represent a strategic triangle in Asia. If China is A, and India and Japan are B and C, the sum of B plus C would be greater than A. India and Japan appear to be natural allies, and China’s accumulation of power will drive the two countries closer together. The relationship between the United States and India is also rapidly changing. In the words of a senior U.S. official, “now that we’ve consummated the civil nuclear trade [agreement] between us [the United States and India], if we look down the road in the future, we’re going to see far greater defense cooperation between the United States and India: training; exercises; we hope, defense sales of American military technology to the Indian armed forces.”[10]

The newly emerging geopolitical equations are likely to reinforce Sino-Indian suspicions and complicate the development of the bilateral relationship between Beijing and New Delhi.

The Economic, Trade, and Security Implications of China’s Peaceful Rise for India

Given the size, ambitions, and proximity of India and China, both countries are naturally concerned by the expansion of each other’s capabilities. India’s greatest concern regarding China’s rapid accumulation of power is not that Beijing would carry out another 1962-style military invasion, but rather that China would employ the threat of such a military invasion to shift the overall regional balance of power in China’s favor. New Delhi wishes to forestall this strategic shift because of the likely adverse implications for India’s security and well-being.

Yet the rapid and wild rise of China is transforming the Asian geopolitical landscape like no other development. Not since Japan’s rise under the Meiji emperor has another non-Western power become as consequential to the future of the international order as China is today. The future of Asian security is likely to be heavily shaped by whether China continues to rise in a linear fashion under an autocratic leadership. For India the implications are stark. Just as India bore the brunt of the rise of international terrorism because of country’s proximity to the Pakistani-Afghan epicenter of global jihad, India will be directly affected by the growing power of an adjacent opaque empire. Therefore, India can ill afford to be complacent.

Despite China’s meteoric rise, conflict between China and India is not inevitable. A peaceful diplomatic environment is essential for the continued economic growth and security of both countries. Furthermore, India and China account for one-third of the world’s population. How their relationship evolves thus will have an important bearing on Asian geopolitics, international security, and globalization.[11]

It has become commonplace to compare the Indian and Chinese economies and project future growth on the basis of the present relative advantage of each country. The comparisons inexorably pit India’s services-driven growth and institutional stability, founded on pluralism, transparency, and the rule of law, against China’s resolute leadership, high savings rate, good infrastructure, and manufacturing strength. Overlooked, however, is that globalization threatens China’s autocracy, not India’s democracy.

Whether China follows a stable or violent path to political modernization will determine the country’s continued unity and strength.[12] In most respects, China knows what is required for becoming a great power. Though India’s emergent realism has yet to overcome traditions of moral posturing, Beijing epitomizes strategic clarity and pragmatism, zealously erecting the building blocks of comprehensive national power.

Although both China and India are ascendant powers, enjoying high GDP growth rates, the conditions for the rise of these countries are different and reflect the relative strengths and weaknesses of each country. That difference in turn underscores the power disparity between the two countries, and points to the economic, trade, and security implications of China’s peaceful rise for India.

India’s white-collar, services-led economic growth contrasts sharply with China’s blue-collar, manufacturing-driven expansion. More striking is that in India the private sector continues to fuel economic growth while China’s economic growth is largely state-driven. India performs poorly wherever the state is involved, while the strength of the Chinese state as the primary catalyst of accumulating power carries significant strategic ramifications.

Most startling is that although both states possess similar competitive advantages, such as a large pool of skilled manpower and low wages, an increasing export surge drives China’s economic growth while India’s import-dependent economy relies primarily on domestic consumption for growth. Indian imports currently exceed exports by as much as 60%. India’s dependency on imports also sets the country apart from the Asian “tiger” economies, which are all export-oriented.

The contrast between India and China is stark in terms of military capabilities as well. India’s weaponry remains subcontinental in range, whereas China’s weaponry is intercontinental. Even when China was poor and less developed, Beijing consciously emphasized building comprehensive national power. China developed its first intercontinental ballistic missile (ICBM), the 12,000-kilometre DF-5, in the 1970s. New Delhi, in contrast, has not yet started development of its first ICBM, even though ICBMs are potent symbols of power and coercion in international relations.

Beijing has sustained double-digit increases in military spending for two continuous decades; in terms of percentage of GDP China’s military spending has risen the fastest in the world. By contrast, in that same two-decade period India’s defense expenditure has declined appreciably as a percentage of the country’s GDP.

Even though the official Chinese military budget—a figure few believe—is double the official level of Indian defense spending, how defense funds are utilized, rather than size, is what makes the contrast between the two states interesting. China’s priority for decades has been twofold: boosting the country’s indigenous capabilities, especially with respect to conventional and nuclear deterrence, and working to shift the military balance in Asia in China’s favor. Today Beijing’s increasingly sophisticated missile force is at the heart of China’s military modernization. Even as Beijing imports high tech conventional weaponry from Russia, China has emerged as one of the biggest arms exporters in the world. Additionally, China’s three biggest arms clients are India’s immediate and troubled neighbors—Pakistan, Burma, and Bangladesh, in that order.

India, in contrast, relies on arms imports for meeting basic defense needs. New Delhi’s addiction to weapon imports ensures that the country’s domestic armament-production base remains weak and underdeveloped. Furthermore, though China apportions 28% of the country’s military budget for defense-related research and development, India apportions just 6% for research and development.

Given China’s deep-rooted authoritarianism, vibrant state-driven economy, growing military might, and unconcealed aim to dominate Asia, India must narrow the power disparity with Beijing through a commitment to the development of economic and military power. That need is further underscored by the likely arrival of Chinese submarines in India’s strategic backyard, the Indian Ocean, which is vital to world trade and the supply of oil. Close to half of the world’s overseas commerce, and one-fifth of global oil and gas supplies, pass through the Indian Ocean rim. The region is also critical for energy-poor India, who imports 75% of the country’s oil and gas supplies by sea. The security of sea lanes in the Indian Ocean rim is thus vital to India’s economic and security interests.

As the growing asymmetry in power with China puts New Delhi at a disadvantage when dealing bilaterally with Beijing, broader security arrangements or initiatives will become increasingly attractive to India. Such arrangements or initiatives can help build the security of vital sea lanes and contribute to wider power equilibrium in Asia.

New Delhi’s ability to avert the emergence of a Beijing-oriented Asia will hinge on India’s success in retaining the country’s major role in the Indian Ocean. A China that expands its presence in the Indian Ocean and exerts increasing influence over the regional waterways—as well as over Burma, Bangladesh, Sri Lanka, Pakistan, and Nepal—will pave the way for a Sino-centric Asia and for a greater strategic squeeze of India.[13]

Events in the Indian Ocean rim as much as in East Asia, therefore, will determine the balance of power in Asia.[14] For India to keep the Chinese navy out of India’s backyard, New Delhi must exert naval power at critical chokepoints. If India does not guard the various gates to the Indian Ocean—for instance, through strategic partnerships with key littoral states—the country will have to confront the Chinese navy in the Bay of Bengal and the Arabian Sea before long. Not surprisingly, India is now seeking to build defense ties, conduct joint military exercises, cooperate on energy, and hold strategic dialogues with countries in the Indian Ocean rim and beyond. For India the maritime arc stretching from the Persian Gulf through the Strait of Malacca to the South China Sea and the Sea of Japan constitutes the “new silk route.” Building maritime security in this arc demands cooperation and strategic partnerships among countries sharing common interests and values.


[1] Two Indian energy firms, ONGC Videsh Limited (OVL) and Gas Authority of India Limited (GAIL), own a combined 30% stake in the adjacent Burmese gas fields A-1 and A-3.

[2] The memorandum of understanding (MOU) was followed by a $84 million soft loan from Beijing and a technical survey by PetroChina for laying the pipeline from the Burmese gas site at Kyaukphyu to Ruili in Yunnan Province. See Sanjay Dutta, “Gas Pipeline: Myanmar Takes India for a Ride,” Times of India, March 27, 2006.

[3] Amitar Ranjan, “Myanmar Gas Bid Lost, MEA and Petroleum in War of Words,” Indian Express, July 30, 2007.

[4] John W. Garver, “Development of China’s Overland Transportation Links with Central, South-west and South Asia,” China Quarterly, no. 185 (March 2006): 1-22.

[5] Brahma Chellaney “China Covets a Pearl Necklace: Dragon’s Foothold in Gwadar,” Asian Age, April 7, 2007, http://chellaney.spaces.live.com/Blog/cns!4913C7C8A2EA4A30!249.entry.

[6] The theory of China’s “peaceful rise” originated in a book published in April 1998 by Chinese strategic scholar Yan Xuetong and three of his colleagues. The book discusses China’s strategy to emerge as a great power without facing Cold War–style containment. The theory was quickly embraced by the communist leadership. Yan Xuetong (ed.), Zhongguo Jueqi: Guoji Huanjin Pinggu [For China to Rise: Assessing the International Environment], (Tianjin, China: Tianjin People’s Publishing House, 1998).

[7] The trade pattern, however, disturbingly shows India as a raw-material appendage to China’s rising industrial might. At the end of fiscal 2006-07, more than 50 percent of Indian exports to China comprised just one item—iron ore. When other primary commodities were added, that figure totaled 85 percent of the exports. In return, India has been importing more and more Chinese processed goods, to the extent that it has become import-dependent on China for steel tubes and pipes.

[8] “China-India Trade to Gear Up,” People’s Daily Online, August 2, 2005.

[9] Brahma Chellaney, “Averting Water Wars in Asia,” International Herald Tribune, June 26, 2007.

[10] R. Nicholas Burns, “On-The-Record Briefing on the Status of the U.S.-India Civil Nuclear Cooperation Initiative and the Text of the Bilateral Agreement for Peaceful Nuclear Cooperation (123 Agreement),” (U.S. Department of State press briefing, July 27, 2007, http://www.state.gov/p/us/rm/2007/89559.htm.

[11] Brahma Chellaney, Asian Juggernaut: The Rise of China, India and Japan (New Delhi: HarperCollins India, 2006).

[12] Joydeep Mukherji, “China, India, and the Fate of Globalization,” Standard & Poor’s, January 3, 2005, http://www2.standardandpoors.com/portal/site/sp/en/ap/page.article/2,1,1,2,1104429838302.html.

[13] Mohan Malik, “China’s Peaceful Ruse: Beijing Tightens Its Noose Round India’s Neck,” Force, December 10, 2005.

[14] Donald L. Berlin, “India in the Indian Ocean,” Naval War College Review 59, no. 2 (Spring 2006): 58–89.

Brahma Chellaney is Professor of Strategic Studies at the Centre for Policy Research in New Delhi. He can be reached at chellaney@gmail.com .

Japan’s leading foreign affairs journal interviews Brahma Chellaney

Japan-India Links Critical for Asia-Pacific Peace and Stability

Brahma Chellaney and Horimoto Takenori

© Gaiko Forum, Fall 2007, Volume 7, Number 2

A top Indian strategic thinker sees the Japan-India relationship as one of the key factors that will determine Asia’s future dynamics, even as China continues its rise to international prominence. With an eye on how the United States, Russia, and other countries fit into the picture, we asked him about India’s view on Japan and Asia in terms of its thinking on establishing long-term mechanisms for strategic cooperation.

Horimoto Takenori: First of all, could you tell us what kind of policies India is developing in the areas of foreign affairs and security, particularly in regard to the situation in the region at this time?

Brahma Chellaney: The situation around India at the moment is posing increasing challenges to its security. The area to the west, between India and Israel, is volatile and constitutes a contiguous arc of extremism and fundamentalism. Then to India’s east we have Bangladesh and Myanmar, both undergoing domestic tumult, and to the north the Central Asian states like Tajikistan and Uzbekistan are internally troubled. Also to the north we have Tibet, where resistance to Chinese rule has continued and where China is actually doing a lot of development that is strategic in orientation and therefore affects India’s security. So in general, India’s neighborhood has become far more difficult and threatening to Indian security than in the past.

In response, India has to have, first of all, a clear strategy to deal with this deteriorating external environment. Second, it needs to have more vigorous engagement with various actors in its neighborhood. India’s foreign policy has to be dynamic and focused on engagement not just with the governments in power in those countries but also with various important elements of civil society in those states, so that India can work with as many key actors as possible. And the third element in this approach is that India has to exercise its “soft power.” These three points are crucial to developing a long-term response.

Horimoto: How would you evaluate Indian foreign policy so far in terms of those three points?

Chellaney: Indian foreign policy has been good on points two and three — engagement with civil society in the neighborhood and projecting soft power. India is currently providing $700 million to Afghanistan for reconstruction, and it provides a lot of other development aid to countries like Nepal, Bhutan, Sri Lanka, Bangladesh, and now even Myanmar. But foreign policy in terms of the first point I mentioned—devising a long-term strategy—is wanting. India still tends to be quite reactive and ad hoc in its responses.

Equal Footing with the United States

Horimoto: I see. Next, I’d like to ask you about the issue of nuclear power, which ties in with the large strides India is taking toward closer relations with the United States. We see that the efforts to finalize and put into force the U.S.-India deal on civil nuclear cooperation have gotten bogged down.

Chellaney: No strategic issue has proven more divisive in India in modern times than this nuclear deal with the United States. The problem is that the two countries entered into this agreement with different expectations of what it will deliver. India hopes the deal will bring about the removal of all sanctions it faces on the import of advanced technologies. Since 1974, when India conducted its first nuclear test, the United States has strictly regulated the flow of advanced technology to India through export controls. The irony is that communist China now has greater access to U.S. high technology than democratic India. So India’s aim is the removal of not only civil nuclear sanctions but also other technology sanctions, including export controls on space technology and on high technology in general. India would like the deal to open the way to such export controls being gradually relaxed and eventually lifted altogether.

America’s aim, on the other hand, is to rope in India as its new strategy ally in Asia. After having penalized New Delhi for its 1974 nuclear test through stringent technology controls, Washington is now ready to promote India’s “normalization” as a nuclear power through this deal, but at a price: India is to bind its interests to America’s. The future of the Indo-U.S. relationship hinges on the resolution of a key issue: will India be a Japan to the U.S. (in other words, an ally), or will it be a strategic partner? An ally has to follow the alliance leader, while in a partnership there is at least the semblance of equality. India would prefer to stay a strategic partner of the U.S. and not get into a Japan-style security dependency on Washington.

Horimoto: Specifically, there are three points on which the nuclear deal has proven controversial in India: no nuclear testing, the issue of reprocessing of spent nuclear fuel, and permanent international inspections (safeguards). Regarding the first of these, you said in a recent article in the American press, in the Wall Street Journal, that this amounts to an attempt to bring India into the Comprehensive Nuclear Test Ban Treaty (CTBT) via the back door.

Chellaney: Well, the United States-India Peaceful Atomic Energy Cooperation Act, passed by the U.S. Congress in December 2006, already has an explicit ban on India testing, and says that if India were to conduct a nuclear test, then all cooperation would cease. But to incorporate that into the bilateral agreement would have been from India’s standpoint, almost a de jure acceptance of the CTBT. In the agreed text of the bilateral agreement, while there is no explicit reference to nuclear testing, a test prohibition against India has been unequivocally built into its provisions through the incorporation of the U.S. right to demand the return of all supplied materials and items if Washington held New Delhi to be in violation of the accord’s terms.

Of India’s 22 commercial nuclear power reactors, 14 are going to be made subject to permanent international inspections by the International Atomic Energy Agency (IAEA), in return for which they are supposed to get permanent fuel supply from overseas. In reality, however, there is no enforceable link between perpetual international inspections and perpetual fuel supply, because the U.S. has an open-ended right in the bilateral agreement to suspend supplies forthwith while issuing a one-year termination notice by citing any reason it wishes.

The next issue is reprocessing. As a country poor in uranium but rich in thorium deposits, India is working to eventually establish a thorium-based fuel cycle as the mainstay of its nuclear power policy, and the second and third phases of its development program depend on reprocessing of spent nuclear fuel. This reprocessing will take place under IAEA safeguards, so India is not seeking exemption from international monitoring, but it does want the operational right upfront to carry out reprocessing. In part, India does not want to repeat its past mistake. In the 1960s, when America built India’s first nuclear power plant at Tarapur under the peaceful nuclear cooperation agreement of 1963, America said that India can reprocess after joint determination with America that the reprocessing facility is adequately safeguarded, but to date no such joint determination has been carried out. Yet, in the latest agreement, the U.S. has granted India only a theoretical to reprocess, with the actual right to be negotiated later.

The nuclear deal the U.S. signed with China is so liberal that the agreement states in one of its provisions that “bilateral safeguards are not required.” To placate Congress over the absence of IAEA or U.S. inspections, the Clinton administration worked out a loose arrangement with Beijing for nominal on-site safeguards. In India’s case, the U.S. is to have its own end-use inspections, in addition to IAEA inspections.

Horimoto: So why did the Indian government accept such terms?

Chellaney: It shows how naive Indian negotiators have been. This deal has been a real foreign policy success for the Bush administration’s second term, but in India it has become the cause of a lot of misgivings, triggering a political crisis.

Horimoto: Under the agreement, India’s uranium imports will increase. Some experts are saying that if India uses that imported uranium for electric power stations, this would enable it to divert its own uranium resources to nuclear weapons.

Chellaney: India will still have eight existing nuclear power plants that will not be subject to IAEA inspections, plus new ones that are still under construction. India’s natural uranium will have to be used for these other reactors, not for nuclear weapons. For weapons, furthermore, India uses plutonium, not uranium. There are only two facilities in India for plutonium production, the Dhruva reactor and the CIRUS reactor, and CIRUS is going to be closed down by 2010 as part of this U.S.-India accord. So, in three years’ time India will lose one-third of its plutonium production capability, and therefore one-third of its ability to make more nuclear weapons.

Horimoto: Japan is being asked by both the United States and India to accept and accommodate this 123 Agreement, but so far it has avoided giving a definite answer. This is basically because, although the Japanese government wants to be accommodating for the sake of good relations with both countries, as the only nation to have suffered atomic attack it must also heed the predominantly anti-nuclear sentiment of the Japanese people.

Chellaney: This nuclear deal still has several stages to cross. After the bilateral agreement between India and the United States, New Delhi has to negotiate a safeguards agreement with the IAEA, after which will come the deliberations by the Nuclear Suppliers’ Group (NSG) for granting India an exemption from its export controls. If the deal does get that far, Japan will have to make up its mind because it won’t be able to still sit on the fence and hedge its bets.

Horimoto: At the moment the Scandinavian countries, especially Sweden, are expressing concerns about the plan.

Chellaney: Also resisting it are Ireland, Italy . . .

Horimoto: And China also. But what do you think China’s true attitude toward this Indian nuclear deal is?

Chellaney: I think China will come on board, eventually. The United States has been keeping China in the loop on this nuclear deal with India, and U.S. Undersecretary of State R. Nicholas Burns has said that in the final decision China will come on board. China has no reason to oppose an agreement that puts some fetters on India’s nuclear weapons program. China, however, may prefer that instead of an India-specific exemption, the NSG makes a criteria-based exemption that Beijing can use to work out similar cooperation with Pakistan.

Balancing vis-à-vis China

Horimoto: Former Beijing bureau chief for the Los Angeles Times James Mann has published a new book titled The China Fantasy (Viking, 2007), in which he says that China’s economic development will not necessarily bring democratization, that China might retain its communist regime for long, and that this could become a major problem for the United States.

Chellaney: China is a real wild card in Asia. I think it’s very important to ensure that China rises in a way that is not destabilizing for Asia or the wider world. If China becomes more high-handed or assertive, then obviously this would create disequilibrium throughout the world. China is politically autocratic but economically open, and even though that is a contradiction, China has been able to manage the contradiction rather well. If it continues to do that, then it will reap the benefits from both ends, which means that by the middle of this century, China will emerge as a truly great power. Under the Hu Jintao government, we see that growing economic prosperity has not created more political openness. On the contrary, the state has become more sophisticated in repressing dissent, as seen from the new curbs on media and scholars, Internet censorship, and so on. So I am concerned about what kind of China we will see 25 years from now. If it continues on the present path, then I think in Asia we will have a power imbalance, and globally we will have an international system in which China will try to change the rules to its advantage, creating a lot of fluidity.

Horimoto: How should India try to cope with that situation?

Chellaney: India needs to bear in mind that China is using classical balance-of-power strategies against it, and India, too, has to take strategic steps to balance China’s rise so that its power does not become high-handed. The only way that balance can be maintained is if India cooperates in building a constellation of democracies in the Asia-Pacific region—a group that would include countries like Japan, India, Australia, the United States, Russia . . .

Horimoto: Russia also?

Chellaney: I think so, because if you leave out Russia you will not get a true counterbalance to China. The most effective approach on China would be a three-way partnership among India, Russia and Japan, although for that there needs to be an improvement in the Japan-Russia relationship. Russia has the same kinds of concerns about China that India and Japan have. And if you look at it geographically, with Japan to the east, Russia to the north, and India in the south, a Japan-Russia-India three-way partnership would effectively contain China from all sides. So, in addition to the quadrilateral partnership involving Australia, Japan, the United States, and India, we need to work on this very innovative and strategic triangle involving Russia, Japan and India. And we need to strengthen the Japan-India bilateral relationship as an important pillar of power equilibrium in Asia. Japan-India strategic collaboration is pivotal to the future makeup of Asia.

Horimoto: A kind of composite approach. But doesn’t that contradict what you said in your book Asian Juggernaut (HarperCollins, 2006), where you stressed the need mainly for cooperation between Japan, India, and China? And also, how do you think China will react to such a multipronged approach?

Chellaney: As my book points out, China is already developing various levers to contain India and Japan. India hasn’t done anything in relation to China, but China is already building the Irrawaddy Corridor down to the Bay of Bengal through Myanmar; they’re building the Trans-Karakoram Corridor down to Gwadar in Pakistan; they’re building an east-west corridor in Tibet, right along India’s northern borders; and then they’re also trying to enter the Indian Ocean region. So, basically, they’re trying to squeeze India from all sides.

To deal with China’s rise, we also need a system of institutionalized cooperation among Japan, India, and China. On issues of trade, international finance, monetary policy, and so on, Japan, China, and India are virtually on the same side and can cooperate productively. Without good relations between Japan and China and also between India and China, we will not be able to understand what China is up to.

India’s Focus on the Seas

Horimoto: You mentioned the Indian Ocean. Sea-lane security is becoming an important issue in Asia, not only for defense but for economic development as well.

Chellaney: In Asia today, the issues of energy and security are inseparable. In fact, Asia faces the specter of a twenty-first-century, energy-focused version of the Great Game, the nineteenth-century rivalry between the British Indian Empire and the Russian Empire for supremacy in Central Asia. Mercantilist efforts to assert control over oil and natural gas supplies and transport routes certainly risk fueling tension and discord. That is why sea-lane security has become more important than ever.

With Japan, China, and India dependent on energy imports by sea, multinational cooperation on the security of sea-lanes has become essential to avert strategic friction in Asia. Asia needs to build a shared interest in viable energy policies, secure sea-lanes, and a stable energy environment. However, such a shared interest can be developed only on the basis of expanded political and security cooperation, as well as increased transparency in military expenditures.

Furthermore, to forestall the passions aroused by maritime boundary disputes, Asia needs an agreed code of conduct on naval and energy exploration activities. For example, the answer to the long-running battle between Japan and China over disputed oil and gas fields in the East China Sea cannot be unilateral drilling or production by either side.

Horimoto: India has been strengthening its navy and expanding the navy’s field of activity beyond the Indian Ocean to the Strait of Malacca, and recently even to the Pacific, through its joint naval exercises with the United States, Japan, and Russia.

Chellaney: It should not be forgotten that India is a peninsular country with a long coastline and a vast exclusive economic zone (EEZ) that measures more than 2 million square kilometers. The fact that 95 percent of India’s external trade moves by sea makes India especially vulnerable to maritime contingencies. Particularly important is the Persian Gulf region, the source of 85 percent of India’s oil and gas imports.

Strategically, this makes the security of sea-lanes vital to India’s economic and security interests, and India’s published maritime doctrine emphasizes the centrality of the Indian Ocean to national security. The Indian Navy, furthermore, has to protect not only sea-lanes but also the country’s large energy infrastructure of onshore and offshore oil and gas wells, liquefied natural gas terminals, refineries, pipeline grids, and oil exploration work within its EEZ. India neglected to modernize its navy for more than 15 years, but in the last few years it has been sharply increasing its naval spending.

The greater Indian emphasis on the seas also springs from China’s incremental efforts to create a network of forward listening posts, naval access agreements, and Chinese-built harbors along the Indian Ocean rim—a network stretching from Pakistan and Sri Lanka to Bangladesh and Myanmar. The Chinese interest in the Indian Ocean rim now extends even as far as the Seychelles.

As I mentioned before, Beijing has been fashioning two vertical strategic corridors, one to the west and another to east of India. The former is the Trans-Karakoram Corridor stretching from western China all the way down to Gwadar at the entrance to the Strait of Hormuz, through which 40 percent of the world’s oil passes. The newly opened, Chinese-built deepwater port at Gwadar represents China’s first strategic foothold in the Arabian Sea.

The latter is the Irrawaddy Corridor from Yunnan province to the Bay of Bengal, which involves road, river, and rail links through Myanmar, including to the Chinese-built harbors at Kyaukypu and Thilawa. Then there is China’s agreement with Sri Lanka to build a port in the Hambantota District, China’s provision of aid to the Bangladeshi port of Chittagong, and its interest in a strategic anchor in the Maldives. All this underscores an emerging Chinese challenge to India’s traditional dominance in the Indian Ocean region.

One component of China’s plan is to make the Gwadar port-cum-naval base a major hub for transporting Persian Gulf and African oil by pipeline to the Chinese heartland via the Xinjiang Uyghur Autonomous Region. This plan to pipe the oil in would not only cut freight costs and supply time but also lower China’s reliance on U.S.-policed shipping lanes through the Malacca and Taiwan Straits.

Besides augmenting its naval capabilities, India is building up its strategic partnerships—in the form of trade accords, military exercises, energy cooperation, and strategic dialogue—with key littoral states in the Indian Ocean region as well as with outside players like the United States, Japan, and Australia. Such cooperation is principally aimed at safeguarding the various “gates” to the Indian Ocean, and so its primary focus is on states adjacent to such chokepoints as the Strait of Hormuz (Iran), the Strait of Malacca (Singapore, Indonesia, and Malaysia), the Bab el Mandeb (Djibouti and Eritrea), the Cape of Good Hope (South Africa) and the Mozambique Channel (Mozambique). India’s defense ties with Iran, the Maldives, Sri Lanka, Myanmar, Singapore, and Thailand—all countries lying along those key sea lanes—reflect India’s new emphasis on strengthening its position in the Indian Ocean.

India’s efforts to play an expanded naval role in its extended neighborhood have been illustrated in recent years by two events. The first was India’s provision of naval escorts to commercial ships passing through the vulnerable, piracy-wracked Strait of Malacca in 2003. The second was the dispatch of the Indian Navy for relief efforts and aid diplomacy after the tsunami that struck southern Asia on 26 December 2004. This was the largest humanitarian relief operation the Indian Navy has ever conducted outside India’s territorial waters.

For India, the maritime arc stretching from the Persian Gulf through the Strait of Malacca to the South China Sea and the Sea of Japan constitutes the “new Silk Road.” Building maritime security in this arc demands cooperation and strategic partnership among countries sharing common interests and values. One of several such initiatives currently being developed is the India-Japan-U.S.-Australia quadrilateral initiative. It is significant that Tokyo pushed for India’s inclusion into this group, turning the existing Japan-U.S.-Australia trilateral security arrangements into a quadrilateral tie-up. Even before becoming Japan’s prime minister, Abe Shinzo wrote in his book Utsukushii kuni e [Towards a Beautiful Country] (Bungei Shunju, 2006)* that it was of “crucial importance to Japan’s national interest that it further strengthen ties with India, and that it would not be a surprise if in another 10 years Japan-India relations overtook Japan-U.S. and Japan-China relations.”

Next Three Years Crucial for Japan-India Relations

Horimoto: To what extent can Japan and India cooperate in the area of sea-lane security?

Chellaney: Given the fact that, of all the major powers in the world, India and Japan are the most vulnerable to any disruption of oil supplies from the Persian Gulf region, they need to build close strategic cooperation centered on maritime security. India and Japan are already developing joint exercises between the Japanese Maritime Self-Defense Force and the Indian Navy, as well as military exchanges and high-level defense dialogue, and it is no surprise that they are exploring various kinds of cooperation in this area. India-Japan strategic cooperation can only contribute to strategic stability in Asia.

At the same time, India and Japan have to build adequate military capabilities to help maintain a stable power equilibrium in Asia. This is why, among other things, India has purchased the 40,000-ton Russian aircraft carrier Admiral Gorshkov. If India does not guard the various gates to the Indian Ocean by strengthening both its own naval power and its strategic partnerships with key players like Japan, it could find itself facing the Chinese navy in its backyard before long.

Such cooperation doesn’t mean that India and Japan intend to jointly counter China. A stable, mutually beneficial relationship with China remains critical to the national interests of both our countries. But China’s growing power puts Delhi and Tokyo at a disadvantage when they deal with Beijing strictly at the bilateral level. So, broader security arrangements or initiatives are attractive for India and Japan to ensure that the rising Chinese power will not slide into arrogance.

Horimoto: The United States is also keen to remain an active player in Asia.

Chellaney: Trying to exclude the United States would only raise other problems, so we need to have initiatives that involve it as well. But we must remember that the United States is pursuing its own interests in Asia, which are to retain its geopolitical preeminence in the Asia-Pacific region, to ensure that no Asian power overtly challenges its interests in the region, and to maintain a balance of power in light of the fact that Asia is becoming increasingly important to the American economy and security. But I think that the U.S. role in Asia is going to decline over the next 50 years because of the rise of China and India and also because of the political rise of Japan, which in my view is the most under-noticed development in the world.

Horimoto: Finally, I’d like to ask you about Japan-India relations. Their economic relationship will no doubt continue to expand, but what kind of developments might they aim for in their political relations?

Chellaney: India and Japan are Asia’s largest and most-developed democracies, and the ties between them constitute the most important relationship in Asia today because it will shape the future strategic landscape of the region. Normally, the best diplomatic relationships are built on the bedrock of security ties. Japan and India have recently been stepping up their military exchanges and visits, and I don’t think there’s been any time since after World War II when the Japanese prime minister and foreign minister have publicly placed India on as high a priority as we see now. I think the next three years are going to be an important opportunity for the two countries to lay the foundation for long-term strategic cooperation. In an Asia characterized by a qualitative reordering of power, the direction of the India-Japan relationship is set towards closer engagement.

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*Forthcoming in October in English under the title Towards a Beautiful Country: My Vision for Japan (Vision, 2007)

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プロフィール [bio]

Brahma Chellaney

Professor of Strategic Studies at the Centre for Policy Research, a private think tank based in New Delhi. A specialist in international security and arms control issues, Chellaney has been an adviser to the Indian government for many years, and is currently a member of the Policy Advisory Group headed by the Indian foreign minister. He is active as a columnist for leading Indian and overseas newspapers and as a television commentator. His recent works include Asian Juggernaut: The Rise of China, India and Japan (HarperCollins, 2006).

Horimoto Takenori

Professor, Shobi University. A graduate of the Chuo University faculty of law, Horimoto received his master’s degree in political science from the University of Delhi. He took up his current position after serving as director general of the Research and Legislative Reference Bureau, National Diet Library. A specialist in international relations in South Asia and U.S. policy on Asia, he is the author of Indo gendai seijishi [A Political History of Modern India], Tosui Shobo, 1997, and Indo: Gurobaruka suru kyozo [India: The Elephant Globalizes], Iwanami Shoten, 2007, among other works. He also translated Stephen P. Cohen’s India: Emerging Power (Brookings Institution Press, 2001) for its Japanese-language publication as Amerika wa naze Indo ni chumoku suru no ka? [Why the United States is Watching India], Akashi Shoten, 2003.

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Translated by Dean Robson from “Indo kara mita Nihon, Ajia,” originally published in the Japanese edition of Gaiko Forum September 2007 issue on the theme “ASEAN Turns Forty.” Some parts have been updated with the interviewee’s consent.

© Gaiko Forum

U.S.-India Bilateral Nuclear Cooperation Agreement (the so-called 123 Agreement)

AGREEMENT FOR COOPERATION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF INDIA CONCERNING PEACEFUL USES OF NUCLEAR ENERGY (123 AGREEMENT)

The Government of India and the Government of the United States of America, hereinafter referred to as the Parties,

RECOGNIZING the significance of civilian nuclear energy for meeting growing global energy demands in a cleaner and more efficient manner;

DESIRING to cooperate extensively in the full development and use of nuclear energy for peaceful purposes as a means of achieving energy security, on a stable, reliable and predictable basis;

WISHING to develop such cooperation on the basis of mutual respect for sovereignty, non-interference in each other’s internal affairs, equality, mutual benefit, reciprocity and with due respect for each other’s nuclear programmes;

DESIRING to establish the necessary legal framework and basis for cooperation

concerning peaceful uses of nuclear energy;

AFFIRMING that cooperation under this Agreement is between two States possessing advanced nuclear technology, both Parties having the same benefits and advantages, both committed to preventing WMD proliferation;

NOTING the understandings expressed in the India – U.S. Joint Statement of July 18, 2005 to enable full civil nuclear energy cooperation with India covering aspects of the associated nuclear fuel cycle;

AFFIRMING their support for the objectives of the International Atomic Energy Agency (IAEA) and its safeguards system, as applicable to India and the United States of America, and its importance in ensuring that international cooperation in development and use of nuclear energy for peaceful purposes is carried out under arrangements that will not contribute to the proliferation of nuclear weapons or other nuclear explosive devices;

NOTING their respective commitments to safety and security of peaceful uses of nuclear energy, to adequate physical protection of nuclear material and effective national export controls;

MINDFUL that peaceful nuclear activities must be undertaken with a view to protecting the environment;

MINDFUL of their shared commitment to preventing the proliferation of weapons of mass destruction; and

DESIROUS of strengthening the strategic partnership between them;

Have agreed on the following:

ARTICLE 1 – DEFINITIONS

For the purposes of this Agreement:

(A) “By-product material” means any radioactive material (except special fissionable material) yielded in or made radioactive by exposure to the radiation incident to the process of producing or utilizing special fissionable material. By-product material shall not be subject to safeguards or any other form of verification under this Agreement, unless it has been decided otherwise by prior mutual agreement in writing between the two Parties.

(B) “Component” means a component part of equipment, or other item so designated by agreement of the Parties.

(C) “Conversion” means any of the normal operations in the nuclear fuel cycle,

preceding fuel fabrication and excluding enrichment, by which uranium is transformed from one chemical form to another – for example, from uranium hexafluoride (UF6) to uranium dioxide (UO2) or from uranium oxide to metal.

(D) “Decommissioning” means the actions taken at the end of a facility’s useful life to retire the facility from service in the manner that provides adequate protection for the health and safety of the decommissioning workers and the general public, and for the environment. These actions can range from closing down the facility and a minimal removal of nuclear material coupled with continuing maintenance and surveillance, to a complete removal of residual radioactivity in excess of levels acceptable for unrestricted use of the facility and its site.

(E) “Dual-Use Item” means a nuclear related item which has a technical use in both nuclear and non-nuclear applications.

(F) “Equipment” means any equipment in nuclear operation including reactor, reactor pressure vessel, reactor fuel charging and discharging equipment, reactor control rods, reactor pressure tubes, reactor primary coolant pumps, zirconium tubing, equipment for fuel fabrication and any other item so designated by the Parties.

(G) “High enriched uranium” means uranium enriched to twenty percent or greater in the isotope 235.

(H) “Information” means any information that is not in the public domain and is transferred in any form pursuant to this Agreement and so designated and documented in hard copy or digital form by mutual agreement by the Parties that it shall be subject to this Agreement, but will cease to be information whenever the Party transferring the information or any third party legitimately releases it into the public domain.

(I) “Low enriched uranium” means uranium enriched to less than twenty percent in the isotope 235.

(J) “Major critical component” means any part or group of parts essential to the operation of a sensitive nuclear facility or heavy water production facility.

(K) “Non-nuclear material” means heavy water, or any other material suitable for use in a reactor to slow down high velocity neutrons and increase the likelihood of further fission, as may be jointly designated by the appropriate authorities of the Parties.

(L) “Nuclear material” means (1) source material and (2) special fissionable material. “Source material” means uranium containing the mixture of isotopes occurring in nature; uranium depleted in the isotope 235; thorium; any of the foregoing in the form of metal, alloy, chemical compound, or concentrate; any other material containing one or more of the foregoing in such concentration as the Board of Governors of the IAEA shall from time to time determine; and such other materials as the Board of Governors of the IAEA may determine or as may be agreed by the appropriate authorities of both Parties. “Special fissionable material” means plutonium, uranium-233, uranium enriched in the isotope 233 or 235, any substance containing one or more of the foregoing, and such other substances as the Board of Governors of the IAEA may determine or as may be agreed by the appropriate authorities of both Parties. “Special fissionable material” does not include “source material”. Any determination by the Board of Governors of the IAEA under Article XX of that Agency’s Statute or otherwise that amends the list of materials considered to be “source material” or “special fissionable material” shall only have effect under this Agreement when both Parties to this Agreement have informed each other in writing that they accept such amendment.

(M) “Peaceful purposes” include the use of information, nuclear material, equipment or components in such fields as research, power generation, medicine, agriculture and industry, but do not include use in, research on, or development of any nuclear explosive device or any other military purpose. Provision of power for a military base drawn from any power network, production of radioisotopes to be used for medical purposes in military environment for diagnostics, therapy and sterility assurance, and other similar purposes as may be mutually agreed by the Parties shall not be regarded as military purpose.

(N) “Person” means any individual or any entity subject to the territorial jurisdiction of either Party but does not include the Parties.

(O) “Reactor” means any apparatus, other than a nuclear weapon or other nuclear explosive device, in which a self-sustaining fission chain reaction is maintained by utilizing uranium, plutonium, or thorium or any combination thereof.

(P) “Sensitive nuclear facility” means any facility designed or used primarily for uranium enrichment, reprocessing of nuclear fuel, or fabrication of nuclear fuel containing plutonium.

(Q) “Sensitive nuclear technology” means any information that is not in the public domain and that is important to the design, construction, fabrication, operation, or maintenance of any sensitive nuclear facility, or other such information that may be so designated by agreement of the Parties.

ARTICLE 2 – SCOPE OF COOPERATION

1. The Parties shall cooperate in the use of nuclear energy for peaceful purposes in accordance with the provisions of this Agreement. Each Party shall implement this Agreement in accordance with its respective applicable treaties, national laws, regulations, and license requirements concerning the use of nuclear energy for peaceful purposes.

2. The purpose of the Agreement being to enable full civil nuclear energy cooperation between the Parties, the Parties may pursue cooperation in all relevant areas to include, but not limited to, the following:

a. Advanced nuclear energy research and development in such areas as may be agreed between the Parties;

b. Nuclear safety matters of mutual interest and competence, as set out in Article 3;

c. Facilitation of exchange of scientists for visits, meetings, symposia and collaborative research;

d. Full civil nuclear cooperation activities covering nuclear reactors and aspects of the associated nuclear fuel cycle including technology transfer on an industrial or commercial scale between the Parties or authorized persons;

e. Development of a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors;

f. Advanced research and development in nuclear sciences including but not limited to biological research, medicine, agriculture and industry, environment and climate change;

g. Supply between the Parties, whether for use by or for the benefit of the Parties or third countries, of nuclear material;

h. Alteration in form or content of nuclear material as provided for in Article 6;

i. Supply between the Parties of equipment, whether for use by or for the benefit of the Parties or third countries;

j. Controlled thermonuclear fusion including in multilateral projects; and

k. Other areas of mutual interest as may be agreed by the Parties.

3. Transfer of nuclear material, non-nuclear material, equipment, components and information under this Agreement may be undertaken directly between the Parties or through authorized persons. Such transfers shall be subject to this Agreement and to such additional terms and conditions as may be agreed by the Parties. Nuclear material, nonnuclear material, equipment, components and information transferred from the territory of one Party to the territory of the other Party, whether directly or through a third country, will be regarded as having been transferred pursuant to this Agreement only upon confirmation, by the appropriate authority of the recipient Party to the appropriate authority of the supplier Party that such items both will be subject to the Agreement and have been received by the recipient Party.

4. The Parties affirm that the purpose of this Agreement is to provide for peaceful nuclear cooperation and not to affect the unsafeguarded nuclear activities of either Party. Accordingly, nothing in this Agreement shall be interpreted as affecting the rights of the Parties to use for their own purposes nuclear material, non-nuclear material, equipment, components, information or technology produced, acquired or developed by them independent of any nuclear material, non-nuclear material, equipment, components, information or technology transferred to them pursuant to this Agreement. This Agreement shall be implemented in a manner so as not to hinder or otherwise interfere with any other activities involving the use of nuclear material, non-nuclear material, equipment, components, information or technology and military nuclear facilities produced, acquired or developed by them independent of this Agreement for their own purposes.

ARTICLE 3 – TRANSFER OF INFORMATION

1. Information concerning the use of nuclear energy for peaceful purposes may be transferred between the Parties. Transfers of information may be accomplished through reports, data banks and computer programs and any other means mutually agreed to by the Parties. Fields that may be covered include, but shall not be limited to, the following:

a. Research, development, design, construction, operation, maintenance and use of reactors, reactor experiments, and decommissioning;

b. The use of nuclear material in physical, chemical, radiological and biological research, medicine, agriculture and industry;

c. Fuel cycle activities to meet future world-wide civil nuclear energy needs, including multilateral approaches to which they are parties for ensuring nuclear fuel supply and appropriate techniques for management of nuclear wastes;

d. Advanced research and development in nuclear science and technology;

e. Health, safety, and environmental considerations related to the foregoing;

f. Assessments of the role nuclear power may play in national energy plans;

g. Codes, regulations and standards for the nuclear industry;

h. Research on controlled thermonuclear fusion including bilateral activities and contributions toward multilateral projects such as the International Thermonuclear Experimental Reactor (ITER); and

1. Any other field mutually agreed to by the Parties.

2. Cooperation pursuant to this Article may include, but is not limited to, training, exchange of personnel, meetings, exchange of samples, materials and instruments for experimental purposes and a balanced participation in joint studies and projects.

3. This Agreement does not require the transfer of any information regarding matters outside the scope of this Agreement, or information that the Parties are not permitted under their respective treaties, national laws, or regulations to transfer.

4. Restricted Data, as defined by each Party, shall not be transferred under this Agreement.

ARTICLE 4 – NUCLEAR TRADE

1. The Parties shall facilitate nuclear trade between themselves in the mutual interests of their respective industry, utilities and consumers and also, where appropriate, trade between third countries and either Party of items obligated to the other Party. The Parties recognize that reliability of supplies is essential to ensure smooth and uninterrupted operation of nuclear facilities and that industry in both the Parties needs continuing reassurance that deliveries can be made on time in order to plan for the efficient operation of nuclear installations.

2. Authorizations, including export and import licenses as well as authorizations or consents to third parties, relating to trade, industrial operations or nuclear material movement should be consistent with the sound and efficient administration of this Agreement and should not be used to restrict trade. It is further agreed that if the relevant authority of the concerned Party considers that an application cannot be processed within a two month period it shall immediately, upon request, provide reasoned information to the submitting Party. In the event of a refusal to authorize an application or a delay exceeding four months from the date of the first application the Party of the submitting persons or undertakings may call for urgent consultations under Article 13 of this Agreement, which shall take place at the earliest opportunity and in any case not later than 30 days after such a request.

ARTICLE 5 – TRANSFER OF NUCLEAR MATERIAL, NON-NUCLEAR MATERIAL, EQUIPMENT, COMPONENTS AND RELATED TECHNOLOGY

1. Nuclear material, non-nuclear material, equipment and components may be transferred for applications consistent with this Agreement. Any special fissionable material transferred under this Agreement shall be low enriched uranium, except as provided in paragraph 5.

2. Sensitive nuclear technology, heavy water production technology, sensitive nuclear facilities, heavy water production facilities and major critical components of such facilities may be transferred under this Agreement pursuant to an amendment to this Agreement. Transfers of dual-use items that could be used in enrichment, reprocessing or heavy water production facilities will be subject to the Parties’ respective applicable laws, regulations and license policies.

3. Natural or low enriched uranium may be transferred for use as fuel in reactor experiments and in reactors, for conversion or fabrication, or for such other purposes as may be agreed to by the Parties.

4. The quantity of nuclear material transferred under this Agreement shall be consistent with any of the following purposes: use in reactor experiments or the loading of reactors, the efficient and continuous conduct of such reactor experiments or operation of reactors for their lifetime, use as samples, standards, detectors, and targets, and the accomplishment of other purposes as may be agreed by the Parties.

5. Small quantities of special fissionable material may be transferred for use as samples, standards, detectors, and targets, and for such other purposes as the Parties may agree.

6. (a) The United States has conveyed its commitment to the reliable supply of fuel to India. Consistent with the July 18, 2005, Joint Statement, the United States has also reaffirmed its assurance to create the necessary conditions for India to have assured and full access to fuel for its reactors. As part of its implementation of the July 18, 2005, Joint Statement the United States is committed to seeking agreement from the U.S. Congress to amend its domestic laws and to work with friends and allies to adjust the practices of the Nuclear Suppliers Group to create the necessary conditions for India to obtain full access to the international fuel market, including reliable, uninterrupted and continual access to fuel supplies from firms in several nations.

(b) To further guard against any disruption of fuel supplies, the United States is prepared to take the following additional steps:

i) The United States is willing to incorporate assurances regarding fuel supply in the bilateral U.S.-India agreement on peaceful uses of nuclear energy under Section 123 of the U.S. Atomic Energy Act, which would be submitted to the U.S. Congress.

ii) The United States will join India in seeking to negotiate with the IAEA an India-specific fuel supply agreement.

iii) The United States will support 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.

iv) If despite these arrangements, a disruption of fuel supplies to India occurs, the United States and India would jointly convene a group of friendly supplier countries to include countries such as Russia, France and the United Kingdom to pursue such measures as would restore fuel supply to India.

(c) In light of the above understandings with the United States, an India-specific safeguards agreement will be negotiated between India and the IAEA providing for safeguards to guard against withdrawal of safeguarded nuclear material from civilian use at any time as well as providing for corrective measures that India may take 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.

ARTICLE 6 – NUCLEAR FUEL CYCLE ACTIVITIES

In keeping with their commitment to full civil nuclear cooperation, both Parties, as they do with other states with advanced nuclear technology, may carry out the following nuclear fuel cycle activities:

i) Within the territorial jurisdiction of either Party, enrichment up to twenty percent in the isotope 235 of uranium transferred pursuant to this Agreement, as well as of uranium used in or produced through the use of equipment so transferred, may be carried out.

ii) Irradiation within the territorial jurisdiction of either Party of plutonium, uranium-233, high enriched uranium and irradiated nuclear material transferred pursuant to this Agreement or used in or produced through the use of non-nuclear material, nuclear material or equipment so transferred may be carried out.

iii) With a view to implementing full civil nuclear cooperation as envisioned in the Joint Statement of the Parties of July 18, 2005, the Parties grant each other consent to reprocess or otherwise alter in form or content nuclear material transferred pursuant to this Agreement and nuclear material and by-product material used in or produced through the use of nuclear material, non-nuclear material, or equipment so transferred. To bring these rights into effect, India will establish a new national reprocessing facility dedicated to reprocessing safeguarded nuclear material under IAEA safeguards and the Parties will agree on arrangements and procedures under which such reprocessing or other alteration in form or content will take place in this new facility. Consultations on arrangements and procedures will begin within six months of a request by either Party and will be concluded within one year. The Parties agree on the application of IAEA safeguards to all facilities concerned with the above activities. These arrangements and procedures shall include provisions with respect to physical protection standards set out in Article 8, storage standards set out in Article 7, and environmental protections set forth in Article 11 of this Agreement, and such other provisions as may be agreed by the Parties. Any special fissionable material that may be separated may only be utilized in national facilities under IAEA safeguards.

iv) Post-irradiation examination involving chemical dissolution or separation of irradiated nuclear material transferred pursuant to this Agreement or irradiated nuclear material used in or produced through the use of non-nuclear material, nuclear material or equipment so transferred may be carried out.

ARTICLE 7 – STORAGE AND RETRANSFERS

1. Plutonium and uranium 233 (except as either may be contained in irradiated fuel elements), and high enriched uranium, transferred pursuant to this Agreement or used in or produced through the use of material or equipment so transferred, may be stored in facilities that are at all times subject, as a minimum, to the levels of physical protection that are set out in IAEA document INFCIRC 225/REV 4 as it may be revised and accepted by the Parties. Each Party shall record such facilities on a list, made available to the other Party. A Party’s list shall be held confidential if that Party so requests. Either Party may make changes to its list by notifying the other Party in writing and receiving a written acknowledgement. Such acknowledgement shall be given no later than thirty days after the receipt of the notification and shall be limited to a statement that the notification has been received. If there are grounds to believe that the provisions of this sub-Article are not being fully complied with, immediate consultations may be called for. Following upon such consultations, each Party shall ensure by means of such consultations that necessary remedial measures are taken immediately. Such measures shall be sufficient to restore the levels of physical protection referred to above at the facility in question. However, if the Party on whose territory the nuclear material in question is stored determines that such measures are not feasible, it will shift the nuclear material to another appropriate, listed facility it identifies.

2. Nuclear material, non-nuclear material, equipment, components, and information transferred pursuant to this Agreement and any special fissionable material produced through the use of nuclear material, non-nuclear material or equipment so transferred shall not be transferred or re-transferred to unauthorized persons or, unless the Parties agree, beyond the recipient Party’s territorial jurisdiction.

ARTICLE 8 – PHYSICAL PROTECTION

1. Adequate physical protection shall be maintained with respect to nuclear material and equipment transferred pursuant to this Agreement and nuclear material used in or produced through the use of nuclear material, non-nuclear material or equipment so transferred.

2. To fulfill the requirement in paragraph 1, each Party shall apply measures in accordance with (i) levels of physical protection at least equivalent to the recommendations published in IAEA document INFCIRC/225/Rev.4 entitled “The Physical Protection of Nuclear Material and Nuclear Facilities,” and in any subsequent revisions of that document agreed to by the Parties, and (ii) the provisions of the 1980 Convention on the Physical Protection of Nuclear Material and any amendments to the Convention that enter into force for both Parties.

3. The Parties will keep each other informed through diplomatic channels of those agencies or authorities having responsibility for ensuring that levels of physical protection for nuclear material in their territory or under their jurisdiction or control are adequately met and having responsibility for coordinating response and recovery operations in the event of unauthorized use or handling of material subject to this Article. The Parties will also keep each other informed through diplomatic channels of the designated points of contact within their national authorities to cooperate on matters of out-of-country transportation and other matters of mutual concern.

4. The provisions of this Article shall be implemented in such a manner as to avoid undue interference in the Parties’ peaceful nuclear activities and so as to be consistent with prudent management practices required for the safe and economic conduct of their peaceful nuclear programs.

ARTICLE 9 – PEACEFUL USE

Nuclear material, equipment and components transferred pursuant to this Agreement and nuclear material and by-product material used in or produced through the use of any nuclear material, equipment, and components so transferred shall not be used by the recipient Party for any nuclear explosive device, for research on or development of any nuclear explosive device or for any military purpose.

ARTICLE 10 – IAEA SAFEGUARDS

1. Safeguards will be maintained with respect to all nuclear materials and equipment transferred pursuant to this Agreement, and with respect to all special fissionable material used in or produced through the use of such nuclear materials and equipment, so long as the material or equipment remains under the jurisdiction or control of the cooperating Party.

2. Taking into account Article 5.6 of this Agreement, India agrees that nuclear material and equipment transferred to India by the United States of America pursuant to this Agreement and any nuclear material used in or produced through the use of nuclear material, non-nuclear material, equipment or components so transferred shall be subject to safeguards in perpetuity in accordance with the India-specific Safeguards Agreement between India and the IAEA [identifying data] and an Additional Protocol, when in force.

3. Nuclear material and equipment transferred to the United States of America pursuant to this Agreement and any nuclear material used in or produced through the use of any nuclear material, non-nuclear material, equipment, or components so transferred shall be subject to the Agreement between the United States of America and the IAEA for the application of safeguards in the United States of America, done at Vienna November 18, 1977, which entered into force on December 9, 1980, and an Additional Protocol, when in force.

4. If the IAEA decides that the application of IAEA safeguards is no longer possible, the supplier and recipient should consult and agree on appropriate verification measures.

5. Each Party shall take such measures as are necessary to maintain and facilitate the application of IAEA safeguards in its respective territory provided for under this Article.

6. Each Party shall establish and maintain a system of accounting for and control of nuclear material transferred pursuant to this Agreement and nuclear material used in or produced through the use of any material, equipment, or components so transferred. The procedures applicable to India shall be those set forth in the India-specific Safeguards Agreement referred to in Paragraph 2 of this Article.

7. Upon the request of either Party, the other Party shall report or permit the IAEA to report to the requesting Party on the status of all inventories of material subject to this Agreement.

8. The provisions of this Article shall be implemented in such a manner as to avoid hampering, delay, or undue interference in the Parties’ peaceful nuclear activities and so as to be consistent with prudent management practices required for the safe and economic conduct of their peaceful nuclear programs.

ARTICLE 11 – ENVIRONMENTAL PROTECTION

The Parties shall cooperate in following the best practices for minimizing the impact on the environment from any radioactive, chemical or thermal contamination arising from peaceful nuclear activities under this Agreement and in related matters of health and safety.

ARTICLE 12 – IMPLEMENTATION OF THE AGREEMENT

1. This Agreement shall be implemented in a manner designed:

a) to avoid hampering or delaying the nuclear activities in the territory of either Party;

b) to avoid interference in such activities;

c) to be consistent with prudent management practices required for the safe conduct of such activities; and

d) to take full account of the long term requirements of the nuclear energy programs of the Parties.

2. The provisions of this Agreement shall not be used to:

a) secure unfair commercial or industrial advantages or to restrict trade to the disadvantage of persons and undertakings of either Party or hamper their commercial or industrial interests, whether international or domestic;

b) interfere with the nuclear policy or programs for the promotion of the peaceful uses of nuclear energy including research and development; or

c) impede the free movement of nuclear material, non nuclear material and equipment supplied under this Agreement within the territory of the Parties.

3. When execution of an agreement or contract pursuant to this Agreement between Indian and United States organizations requires exchanges of experts, the Parties shall facilitate entry of the experts to their territories and their stay therein consistent with national laws, regulations and practices. When other cooperation pursuant to this Agreement requires visits of experts, the Parties shall facilitate entry of the experts to their territory and their stay therein consistent with national laws, regulations and practices.

ARTICLE 13 – CONSULTATIONS

1. The Parties undertake to consult at the request of either Party regarding the implementation of this Agreement and the development of further cooperation in the field of peaceful uses of nuclear energy on a stable, reliable and predictable basis. The Parties recognize that such consultations are between two States with advanced nuclear technology, which have agreed to assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology.

2. Each Party shall endeavor to avoid taking any action that adversely affects cooperation envisaged under Article 2 of this Agreement. If either Party at any time following the entry into force of this Agreement does not comply with the provisions of this Agreement, the Parties shall promptly hold consultations with a view to resolving the matter in a way that protects the legitimate interests of both Parties, it being understood that rights of either Party under Article 16.2 remain unaffected.

3. Consultations under this Article may be carried out by a Joint Committee specifically established for this purpose. A Joint Technical Working Group reporting to the Joint Committee will be set up to ensure the fulfillment of the requirements of the Administrative Arrangements referred to in Article 17.

ARTICLE 14 – TERMINATION AND CESSATION OF COOPERATION

1. Either Party shall have the right to terminate this Agreement prior to its expiration on one year’s written notice to the other Party. A Party giving notice of termination shall provide the reasons for seeking such termination. The Agreement shall terminate one year from the date of the written notice, unless the notice has been withdrawn by the providing Party in writing prior to the date of termination.

2. Before this Agreement is terminated pursuant to paragraph 1 of this Article, the Parties shall consider the relevant circumstances and promptly hold consultations, as provided in Article 13, to address the reasons cited by the Party seeking termination. The Party seeking termination has the right to cease further cooperation under this Agreement if it determines that a mutually acceptable resolution of outstanding issues has not been possible or cannot be achieved through consultations. The Parties agree to consider carefully the circumstances that may lead to termination or cessation of cooperation. They further agree to take into account whether the circumstances that may lead to termination or cessation resulted from a Party’s serious concern about a changed security environment or as a response to similar actions by other States which could impact national security.

3. If a Party seeking termination cites a violation of this Agreement as the reason for notice for seeking termination, the Parties shall consider whether the action was caused inadvertently or otherwise and whether the violation could be considered as material. No violation may be considered as being material unless corresponding to the definition of material violation or breach in the Vienna Convention on the Law of Treaties. If a Party seeking termination cites a violation of an IAEA safeguards agreement as the reason for notice for seeking termination, a crucial factor will be whether the IAEA Board of Governors has made a finding of non-compliance.

4. Following the cessation of cooperation under this Agreement, either Party shall have the right to require the return by the other Party of any nuclear material, equipment, non-nuclear material or components transferred under this Agreement and any special fissionable material produced through their use. A notice by a Party that is invoking the right of return shall be delivered to the other Party on or before the date of termination of this Agreement. The notice shall contain a statement of the items subject to this Agreement as to which the Party is requesting return. Except as provided in provisions of Article 16.3, all other legal obligations pertaining to this Agreement shall cease to apply with respect to the nuclear items remaining on the territory of the Party concerned upon termination of this Agreement.

5. The two Parties recognize that exercising the right of return would have profound implications for their relations. If either Party seeks to exercise its right pursuant to paragraph 4 of this Article, it shall, prior to the removal from the territory or from the control of the other Party of any nuclear items mentioned in paragraph 4, undertake consultations with the other Party. Such consultations shall give special consideration to the importance of uninterrupted operation of nuclear reactors of the Party concerned with respect to the availability of nuclear energy for peaceful purposes as a means of achieving energy security. Both Parties shall take into account the potential negative consequences of such termination on the on-going contracts and projects initiated under this Agreement of significance for the respective nuclear programmes of either Party.

6. If either Party exercises its right of return pursuant to paragraph 4 of this Article, it shall, prior to the removal from the territory or from the control of the other Party, compensate promptly that Party for the fair market value thereof and for the costs incurred as a consequence of such removal. If the return of nuclear items is required, the Parties shall agree on methods and arrangements for the return of the items, the relevant quantity of the items to be returned, and the amount of compensation that would have to be paid by the Party exercising the right to the other Party.

7. Prior to return of nuclear items, the Parties shall satisfy themselves that full safety, radiological and physical protection measures have been ensured in accordance with their existing national regulations and that the transfers pose no unreasonable risk to either Party, countries through which the nuclear items may transit and to the global environment and are in accordance with existing international regulations.

8. The Party seeking the return of nuclear items shall ensure that the timing, methods and arrangements for return of nuclear items are in accordance with paragraphs 5, 6 and 7. Accordingly, the consultations between the Parties shall address mutual commitments as contained in Article 5.6. It is not the purpose of the provisions of this Article regarding cessation of cooperation and right of return to derogate from the rights of the Parties under Article 5.6.

9. The arrangements and procedures concluded pursuant to Article 6(iii) shall be subject to suspension by either Party in exceptional circumstances, as defined by the Parties, after consultations have been held between the Parties aimed at reaching mutually acceptable resolution of outstanding issues, while taking into account the effects of such suspension on other aspects of cooperation under this Agreement.

ARTICLE 15 – SETTLEMENT OF DISPUTES

Any dispute concerning the interpretation or implementation of the provisions of this Agreement shall be promptly negotiated by the Parties with a view to resolving that dispute.

ARTICLE 16 – ENTRY INTO FORCE AND DURATION

1. This Agreement shall enter into force on the date on which the Parties exchange diplomatic notes informing each other that they have completed all applicable requirements for its entry into force.

2. This Agreement shall remain in force for a period of 40 years. It shall continue in force thereafter for additional periods of 10 years each. Each Party may, by giving 6 months written notice to the other Party, terminate this Agreement at the end of the initial 40 year period or at the end of any subsequent 10 year period.

3. Notwithstanding the termination or expiration of this Agreement or withdrawal of a Party from this Agreement, Articles 5.6(c), 6, 7, 8, 9, 10 and 15 shall continue in effect so long as any nuclear material, non-nuclear material, by-product material, equipment or components subject to these articles remains in the territory of the Party concerned or under its jurisdiction or control anywhere, or until such time as the Parties agree that such nuclear material is no longer usable for any nuclear activity relevant from the point of view of safeguards.

4. This Agreement shall be implemented in good faith and in accordance with the principles of international law.

5. The Parties may consult, at the request of either Party, on possible amendments to this Agreement. This Agreement may be amended if the Parties so agree. Any amendment shall enter into force on the date on which the Parties exchange diplomatic notes informing each other that their respective internal legal procedures necessary for the entry into force have been completed.

ARTICLE 17 – ADMINISTRATIVE ARRANGEMENT

1. The appropriate authorities of the Parties shall establish an Administrative Arrangement in order to provide for the effective implementation of the provisions of this Agreement.

2. The principles of fungibility and equivalence shall apply to nuclear material and non-nuclear material subject to this Agreement. Detailed provisions for applying these principles shall be set forth in the Administrative Arrangement.

3. The Administrative Arrangement established pursuant to this Article may be amended by agreement of the appropriate authorities of the Parties.

IN WITNESS WHEREOF the undersigned, being duly authorized, have signed this Agreement.

DONE at , this day of , 200 , in duplicate.

FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT

UNITED STATES OF AMERICA: OF INDIA:

AGREED MINUTE

During the negotiation of the Agreement for Cooperation Between the Government of the United States of America and the Government of India Concerning Peaceful Uses of Nuclear Energy (”the Agreement”) signed today, the following understandings, which shall be an integral part of the Agreement, were reached.

Proportionality

For the purposes of implementing the rights specified in Articles 6 and 7 of the Agreement with respect to special fissionable material and by-product material produced through the use of nuclear material and non-nuclear material, respectively, transferred pursuant to the Agreement and not used in or produced through the use of equipment transferred pursuant to the Agreement, such rights shall in practice be applied to that proportion of special fissionable material and by-product material produced that represents the ratio of transferred nuclear material and non-nuclear material, respectively, used in the production of the special fissionable material and by-product material to the total amount of nuclear material and non-nuclear material so used, and similarly for subsequent generations.

By-product material

The Parties agree that reporting and exchanges of information on by-product material subject to the Agreement will be limited to the following:

(1) Both Parties would comply with the provisions as contained in the IAEA document GOV/1999/19/Rev.2, with regard to by-product material subject to the Agreement.

(2) With regard to tritium subject to the Agreement, the Parties will exchange annually information pertaining to its disposition for peaceful purposes consistent with Article 9 of this Agreement.

FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT

UNITED STATES OF AMERICA: OF INDIA:

Official text of the Hyde Act

HENRY J. HYDE UNITED STATES-INDIA PEACEFUL ATOMIC ENERGY COOPERATION ACT OF 2006

TITLE I—UNITED STATES AND
INDIA NUCLEAR COOPERATION

SEC. 101. SHORT TITLE.

This title may be cited as the ‘‘Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006’’.

SEC. 102. SENSE OF CONGRESS.

It is the sense of Congress that—

(1) preventing the proliferation of nuclear weapons, other weapons of mass destruction, the means to produce them, and the means to deliver them are critical objectives for United States foreign policy;

(2) sustaining the Nuclear Non-Proliferation Treaty (NPT) and strengthening its implementation, particularly its verification and compliance, is the keystone of United States nonproliferation policy;

(3) the NPT has been a significant success in preventing the acquisition of nuclear weapons capabilities and maintaining a stable international security situation;

(4) countries that have never become a party to the NPT and remain outside that treaty’s legal regime pose a potential challenge to the achievement of the overall goals of global nonproliferation, because those countries have not undertaken the NPT obligation to prohibit the spread of nuclear weapons capabilities;

(5) it is in the interest of the United States to the fullest extent possible to ensure that those countries that are not States Party to the NPT are responsible in the disposition of any nuclear technology they develop;

(6) it is in the interest of the United States to enter into an agreement for nuclear cooperation arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) with a country that has never been a State Party to the NPT if—

(A) the country has demonstrated responsible behavior with respect to the nonproliferation of technology related to nuclear weapons and the means to deliver them;

(B) the country has a functioning and uninterrupted democratic system of government, has a foreign policy that is congruent to that of the United States, and is working with the United States on key foreign policy initiatives related to nonproliferation;

(C) such cooperation induces the country to promulgate and implement substantially improved protections against the proliferation of technology related to nuclear weapons and the means to deliver them, and to refrain from actions that would further the development of its nuclear weapons program; and

(D) such cooperation will induce the country to give greater political and material sup-port to the achievement of United States global and regional nonproliferation objectives, especially with respect to dissuading, isolating, and, if necessary, sanctioning and containing states that sponsor terrorism and terrorist groups that are seeking to acquire a nuclear weapons capability or other weapons of mass destruction capability and the means to deliver such weapons;

(7) the United States should continue its policy of engagement, collaboration, and exchanges with and between India and Pakistan;

(8) strong bilateral relations with India are in the national interest of the United States;

(9) the United States and India share common democratic values and the potential for increasing and sustained economic engagement;

(10) commerce in civil nuclear energy with India by the United States and other countries has the potential to benefit the people of all countries;

(11) such commerce also represents a significant change in United States policy regarding commerce with countries that are not States Party to the NPT, which remains the foundation of the international nonproliferation regime;

(12) any commerce in civil nuclear energy with India by the United States and other countries must be achieved in a manner that minimizes the risk of nuclear proliferation or regional arms races and maximizes India’s adherence to international non-proliferation regimes, including, in particular, the guidelines of the Nuclear Suppliers Group (NSG); and

(13) the United States should not seek to facilitate or encourage the continuation of nuclear exports to India by any other party if such exports are terminated under United States law.

SEC. 103. STATEMENTS OF POLICY.

(a) IN GENERAL.—The following shall be the policies of the United States:

(1) Oppose the development of a capability to produce nuclear weapons by any non-nuclear weapon state, within or outside of the NPT.

(2) Encourage States Party to the NPT to interpret the right to ‘‘develop research, production and use of nuclear energy for peaceful purposes’’, as set forth in Article IV of the NPT, as being a right that applies only to the extent that it is consistent with the object and purpose of the NPT to prevent the spread of nuclear weapons and nuclear weapons capabilities, including by refraining from all nuclear cooperation with any State Party that the Inter-national Atomic Energy Agency (IAEA) determines is not in full compliance with its NPT obligations, including its safeguards obligations.

(3) Act in a manner fully consistent with the Guidelines for Nuclear Transfers and the Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Materials, Software and Related Technology developed by the NSG, and decisions related to the those guidelines, and the rules and practices regarding NSG decisionmaking.

(4) Strengthen the NSG guidelines and decisions concerning consultation by members regarding violations of supplier and recipient understandings by instituting the practice of a timely and coordinated response by NSG members to all such violations, including termination of nuclear transfers to an involved recipient, that discourages individual NSG members from continuing cooperation with such recipient until such time as a consensus regarding a coordinated response has been achieved.

(5) Given the special sensitivity of equipment and technologies related to the enrichment of uranium, the reprocessing of spent nuclear fuel, and the production of heavy water, work with members of the NSG, individually and collectively, to further re-strict the transfers of such equipment and technologies, including to India.

(6) Seek to prevent the transfer to a country of nuclear equipment, materials, or technology from other participating governments in the NSG or from any other source if nuclear transfers to that country are suspended or terminated pursuant to this title, the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), or any other United States law.

(b) WITH RESPECT TO SOUTH ASIA.—The following shall be the policies of the United States with respect to South Asia:

(1) Achieve, at the earliest possible date, a moratorium on the production of fissile material for nuclear explosive purposes by India, Pakistan, and the People’s Republic of China.

(2) Achieve, at the earliest possible date, the conclusion and implementation of a treaty banning the production of fissile material for nuclear weapons to which both the United States and India become parties.

(3) Secure India’s—

(A) full participation in the Proliferation Security Initiative;

(B) formal commitment to the Statement of Interdiction Principles of such Initiative;

(C) public announcement of its decision to conform its export control laws, regulations, and policies with the Australia Group and with the Guidelines, Procedures, Criteria, and Control Lists of the Wassenaar Arrangement;

(D) demonstration of satisfactory progress toward implementing the decision described in subparagraph (C); and

(E) ratification of or accession to the Convention on Supplementary Compensation for Nuclear Damage, done at Vienna on September 12, 1997.

(4) Secure India’s full and active participation in United States efforts to dissuade, isolate, and, if necessary, sanction and contain Iran for its efforts to acquire weapons of mass destruction, including a nuclear weapons capability and the capability to en-rich uranium or reprocess nuclear fuel, and the means to deliver weapons of mass destruction.

(5) Seek to halt the increase of nuclear weapon arsenals in South Asia and to promote their reduction and eventual elimination.

(6) Ensure that spent fuel generated in India’s civilian nuclear power reactors is not transferred to the United States except pursuant to the Congressional review procedures required under section 131 f. of the Atomic Energy Act of 1954 (42 U.S.C. 2160 (f)).

(7) Pending implementation of the multilateral moratorium described in paragraph (1) or the treaty described in paragraph (2), encourage India not to increase its production of fissile material at unsafeguarded nuclear facilities.

(8) Ensure that any safeguards agreement or Additional Protocol to which India is a party with the IAEA can reliably safeguard any export or reexport to India of any nuclear materials and equipment.

(9) Ensure that the text and implementation of any agreement for cooperation with India arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) meet the requirements set forth in subsections a.(1) and a.(3) through a.(9) of such section.

(10) Any nuclear power reactor fuel reserve provided to the Government of India for use in safeguarded civilian nuclear facilities should be commensurate with reasonable reactor operating requirements.

SEC. 104. WAIVER AUTHORITY AND CONGRESSIONAL APPROVAL.

(a) IN GENERAL.—If the President makes the determination described in subsection (b), the President may—

(1) exempt a proposed agreement for cooperation with India arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) from the requirement of subsection a.(2) of such section;

(2) waive the application of section 128 of the Atomic Energy Act of 1954 (42 U.S.C. 2157) with respect to exports to India; and

(3) waive with respect to India the application of—

(A) section 129 a.(1)(D) of the Atomic Energy Act of 1954 (42 U.S.C. 2158(a)(1)(D)); and

(B) section 129 of such Act (42 U.S.C. 2158) regarding any actions that occurred before July 18, 2005.

(b) DETERMINATION BY THE PRESIDENT.—The determination referred to in subsection (a) is a determination by the President that the following actions have occurred:

(1) India has provided the United States and the IAEA with a credible plan to separate civil and military nuclear facilities, materials, and programs, and has filed a declaration regarding its civil facilities and materials with the IAEA.

(2) India and the IAEA have concluded all legal steps required prior to signature by the parties of an agreement requiring the application of IAEA safe-guards 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 programs as declared in the plan described in paragraph (1), including materials used in or produced through the use of India’s civil nuclear facilities.

(3) India and the IAEA are making substantial progress toward concluding an Additional Protocol consistent with IAEA principles, practices, and policies that would apply to India’s civil nuclear program.

(4) India is working actively with the United States for the early conclusion of a multilateral treaty on the cessation of the production of fissile materials for use in nuclear weapons or other nuclear explosive devices.

(5) India is working with and supporting United States and international efforts to prevent the spread of enrichment and reprocessing technology to any state that does not already possess full-scale, functioning enrichment or reprocessing plants.

(6) India is taking the necessary steps to secure nuclear and other sensitive materials and technology, including through—

(A) the enactment and effective enforcement of comprehensive export control legislation and regulations;

(B) harmonization of its export control laws, regulations, policies, and practices with the guidelines and practices of the Missile Technology Control Regime (MTCR) and the NSG; and

(C) adherence to the MTCR and the NSG in accordance with the procedures of those regimes for unilateral adherence.

(7) The NSG has decided by consensus to permit supply to India of nuclear items covered by the guidelines of the NSG.

(c) SUBMISSION TO CONGRESS.—

(1) IN GENERAL.—The President shall submit to the appropriate congressional committees the determination made pursuant to subsection (b), together with a report detailing the basis for the determination.

(2) INFORMATION TO BE INCLUDED.—To the fullest extent available to the United States, the report referred to in paragraph (1) shall include the following information:

(A) A summary of the plan provided by India to the United States and the IAEA to separate India’s civil and military nuclear facilities, materials, and programs, and the declaration made by India to the IAEA identifying India’s civil facilities to be placed under IAEA safeguards, including an analysis of the credibility of such plan and declaration, together with copies of the plan and declaration.

(B) A summary of the agreement that has been entered into between India and the IAEA requiring the application of safeguards in accordance with IAEA practices to India’s civil nuclear facilities as declared in the plan de-scribed in subparagraph (A), together with a copy of the agreement, and a description of the progress toward its full implementation.

(C) A summary of the progress made toward conclusion and implementation of an Additional Protocol between India and the IAEA, including a description of the scope of such Additional Protocol.

(D) A description of the steps that India is taking to work with the United States for the conclusion of a multilateral treaty banning the production of fissile material for nuclear weapons, including a description of the steps that the United States has taken and will take to encourage India to identify and declare a date by which India would be willing to stop production of fissile material for nuclear weapons unilaterally or pursuant to a multilateral moratorium or treaty.

(E) A description of the steps India is taking to prevent the spread of nuclear-related technology, including enrichment and reprocessing technology or materials that can be used to acquire a nuclear weapons capability, as well as the support that India is providing to the United States to further United States objectives to restrict the spread of such technology.

(F) A description of the steps that India is taking to secure materials and technology applicable for the development, acquisition, or manufacture of weapons of mass destruction and the means to deliver such weapons through the application of comprehensive export control legislation and regulations, and through harmonization with and adherence to MTCR, NSG, Australia Group, and Wassenaar Arrangement guidelines, compliance with United Nations Security Council Resolution 1540, and participation in the Proliferation Security Initiative.

(G) A description and assessment of the specific measures that India has taken to fully and actively participate in United States and international efforts to dissuade, isolate, and, if necessary, sanction and contain Iran for its efforts to acquire weapons of mass destruction, including a nuclear weapons capability and the capability to enrich uranium or reprocess nu-clear fuel and the means to deliver weapons of mass destruction.

(H) A description of the decision of the NSG relating to nuclear cooperation with India, including whether nuclear cooperation by the United States under an agreement for cooperation arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) is consistent with the decision, practices, and policies of the NSG.

(I) A description of the scope of peaceful cooperation envisioned by the United States and India that will be implemented under the agreement for nuclear cooperation, including whether such cooperation will include the provision of enrichment and reprocessing technology.

(J) A description of the steps taken to ensure that proposed United States civil nuclear cooperation with India will not in any way assist India’s nuclear weapons program.

(d) RESTRICTIONS ON NUCLEAR TRANSFERS.—

(1) IN GENERAL.—Pursuant to the obligations of the United States under Article I of the NPT, nothing in this title constitutes authority to carry out any civil nuclear cooperation between the United States and a country that is not a nuclear-weapon State Party to the NPT that would in any way assist, encourage, or induce that country to manufacture or otherwise acquire nuclear weapons or nuclear explosive devices.

(2) NSG TRANSFER GUIDELINES.—Notwithstanding the entry into force of an agreement for co-operation with India arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) and pursuant to this title, no item subject to such agreement or subject to the transfer guidelines of the NSG, or to NSG decisions related thereto, may be transferred to India if such transfer would be inconsistent with the transfer guidelines of the NSG in effect on the date of the transfer.

(3) TERMINATION OF NUCLEAR TRANSFERS TO INDIA.—

(A) IN GENERAL.—Notwithstanding the entry into force of an agreement for cooperation with India arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) and pursuant to this title, and except as provided under subparagraph (B), exports of nuclear and nuclear-related material, equipment, or technology to India shall be terminated if there is any materially significant transfer by an Indian person of—

(i) nuclear or nuclear-related material, equipment, or technology that is not consistent with NSG guidelines or decisions, or

(ii) ballistic missiles or missile-related equipment or technology that is not consistent with MTCR guidelines,

unless the President determines that cessation of such exports would be seriously prejudicial to the achievement of United States nonproliferation objectives or otherwise jeopardize the common defense and security.

(B) EXCEPTION.—The President may choose not to terminate exports of nuclear and nuclear-related material, equipment, and technology to India under subparagraph (A) if—

(i) the transfer covered under such subparagraph was made without the knowledge of the Government of India;

(ii) at the time of the transfer, either the Government of India did not own, control, or direct the Indian person that made the transfer or the Indian person that made the transfer is a natural person who acted without the knowledge of any entity described in subparagraph (B) or (C) of section 110(5); and

(iii) the President certifies to the appropriate congressional committees that the Government of India has taken or is taking appropriate judicial or other enforcement actions against the Indian person with respect to such transfer.

(4) EXPORTS, REEXPORTS, TRANSFERS, AND RETRANSFERS TO INDIA RELATED TO ENRICHMENT, REPROCESSING, AND HEAVY WATER PRODUCTION.—

(A) IN GENERAL.—

(i) NUCLEAR REGULATORY COMMIS-SION.—The Nuclear Regulatory Commission may only issue licenses for the export or reexport to India of any equipment, components, or materials related to the enrichment of uranium, the reprocessing of spent nuclear fuel, or the production of heavy water if the requirements of sub-paragraph (B) are met.

(ii) SECRETARY OF ENERGY.—The Secretary of Energy may only issue authorizations for the transfer or retransfer to India of any equipment, materials, or technology related to the enrichment of uranium, the reprocessing of spent nuclear fuel, or the production of heavy water (including under the terms of a subsequent arrangement under section 131 of the Atomic Energy Act of 1954 (42 U.S.C. 2160)) if the requirements of subparagraph (B) are met.

(B) REQUIREMENTS FOR APPROVALS.— Exports, exports, transfers, and retransfers referred to in subparagraph (A) may only be approved if—

(i) the end user—

(I) is a multinational facility participating in an IAEA-approved program to provide alternatives to national fuel cycle capabilities; or

(II) is a facility participating in, and the export, reexport, transfer, or retransfer is associated with, a bilateral or multinational program to develop a proliferation-resistant fuel cycle;

(ii) appropriate measures are in place at any facility referred to in clause (i) to ensure that no sensitive nuclear technology, as defined in section 4(5) of the Nuclear Nonproliferation Act of 1978 (22 U.S.C. 3203(5)), will be diverted to any person, site, facility, location, or program not under IAEA safeguards; and

(iii) the President determines that the export, reexport, transfer, or retransfer 21 will not assist in the manufacture or acquisition of nuclear explosive devices or the production of fissile material for military purposes.

(5) NUCLEAR EXPORT ACCOUNTABILITY PROGRAM.—

(A) IN GENERAL.—The President shall ensure that all appropriate measures are taken to maintain accountability with respect to nuclear materials, equipment, and technology sold, leased, exported, or exported to India so as to ensure—

(i) full implementation of the protections required under section 123 a.(1) of the Atomic Energy Act of 1954 (42 U.S.C. 2153 (a)(1)); and

(ii) United States compliance with Article I of the NPT.

(B) MEASURES.—The measures taken pursuant to subparagraph (A) shall include the following:

(i) Obtaining and implementing assurances and conditions pursuant to the export licensing authorities of the Nuclear Regulatory Commission and the Department of Commerce and the authorizing authorities of the Department of Energy, including, as appropriate, conditions regarding end-use monitoring.

(ii) A detailed system of reporting and accounting for technology transfers, including any retransfers in India, authorized by the Department of Energy pursuant to section 57 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2077(b)). Such system shall be capable of providing assurances that—

(I) the identified recipients of the nuclear technology are authorized to receive the nuclear technology;

(II) the nuclear technology identified for transfer will be used only for peaceful safeguarded nuclear activities and will not be used for any military or nuclear explosive purpose; and

(III) the nuclear technology identified for transfer will not be retransferred without the prior consent of the United States, and facilities, equipment, or materials derived through the use of transferred technology will not be transferred without the prior consent of the United States.

(iii) In the event the IAEA is unable to implement safeguards as required by an agreement for cooperation arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153), appropriate assurance that arrangements will be put in place expeditiously that are consistent with the requirements of section 123 a.(1) of such Act (42 U.S.C. 2153(a)(1)) regarding the maintenance of safeguards as set forth in the agreement regardless of whether the agreement is terminated or suspended for any reason.

(C) IMPLEMENTATION.—The measures de-scribed in subparagraph (B) shall be implemented to provide reasonable assurances that the recipient is complying with the relevant requirements, terms, and conditions of any licenses issued by the United States regarding such exports, including those relating to the use, retransfer, safe handling, secure transit, and storage of such exports.

(e) JOINT RESOLUTION OF APPROVAL REQUIREMENT.—Section 123 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2153(d)) is amended in the second proviso by inserting after ‘‘that subsection’’ the following: ‘‘, or an agreement exempted pursuant to section 104(a)(1) of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006,’’.

(f) SUNSET.—The authority provided under sub-section (a)(1) to exempt an agreement shall terminate upon the enactment of a joint resolution under section 123 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2153(d)) approving such an agreement.

(g) REPORTING TO CONGRESS.—

(1) INFORMATION ON NUCLEAR ACTIVITIES OF INDIA.—The President shall keep the appropriate congressional committees fully and currently in-formed of the facts and implications of any significant nuclear activities of India, including—

(A) any material noncompliance on the part of the Government of India with—

(i) the nonproliferation commitments undertaken in the Joint Statement of July 18, 2005, between the President of the United States and the Prime Minister of India;

(ii) the separation plan presented in the national parliament of India on March 7, 2006, and in greater detail on May 11, 2006;

(iii) a safeguards agreement between the Government of India and the IAEA;

(iv) an Additional Protocol between the Government of India and the IAEA;

(v) an agreement for cooperation between the Government of India and the United States Government arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) or any sub-sequent arrangement under section 131 of such Act (42 U.S.C. 2160);

(vi) the terms and conditions of any approved licenses regarding the export or reexport of nuclear material or dual-use material, equipment, or technology; and

(vii) United States laws and regulations regarding such licenses;

(B) the construction of a nuclear facility in India after the date of the enactment of this title;

(C) significant changes in the production by India of nuclear weapons or in the types or amounts of fissile material produced; and

(D) changes in the purpose or operational status of any unsafeguarded nuclear fuel cycle activities in India.

(2) IMPLEMENTATION AND COMPLIANCE REPORT.—Not later than 180 days after the date on which an agreement for cooperation with India arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) enters into force, and annually thereafter, the President shall submit to the appropriate congressional committees a report including—

(A) a description of any additional nuclear facilities and nuclear materials that the Government of India has placed or intends to place under IAEA safeguards;

(B) a comprehensive listing of

(i) all licenses that have been approved by the Nuclear Regulatory Commission and the Secretary of Energy for exports and reexports to India under parts 110 and 810 of title 10, Code of Federal Regulations;

(ii) any licenses approved by the Department of Commerce for the export or reexport to India of commodities, related technology, and software which are con-trolled for nuclear nonproliferation reasons on the Nuclear Referral List of the Commerce Control List maintained under part 774 of title 15, Code of Federal Regulation, or any successor regulation;

(iii) any other United States authorizations for the export or reexport to India of nuclear materials and equipment; and

(iv) with respect to each such license or other form of authorization described in clauses (i), (ii), and (iii)—

(I) the number or other identifying information of each license or authorization;

(II) the name or names of the authorized end user or end users;

(III) the name of the site, facility, or location in India to which the export or reexport was made;

(IV) the terms and conditions included on such licenses and authorizations;

(V) any post-shipment verification procedures that will be applied to such exports or reexports; and

(VI) the term of validity of each such license or authorization;

(C) a description of any significant nuclear commerce between India and other countries, including any such trade that

(i) is not consistent with applicable guidelines or decisions of the NSG; or

(ii) would not meet the standards applied to exports or reexports of such material, equipment, or technology of United States origin;

(D) either

(i) an assessment that India is in full compliance with the commitments and obligations contained in the agreements and other documents referenced in clauses (i) through (vi) of paragraph (1)(A); or

(ii) an identification and analysis of all compliance issues arising with regard to the adherence by India to its commitments and obligations, including—

(I) the measures the United States Government has taken to remedy or otherwise respond to such compliance issues;

(II) the responses of the Government of India to such measures;

(III) the measures the United States Government plans to take to this end in the coming year; and

(IV) an assessment of the implications of any continued noncompliance, including whether nuclear commerce with India remains in the national security interest of the United States;

(E)(i) an assessment of whether India is fully and actively participating in United States and international efforts to dissuade, isolate, and, if necessary, sanction and contain Iran for its efforts to acquire weapons of mass destruction, including a nuclear weapons capability (including the capability to enrich uranium or reprocess nuclear fuel), and the means to deliver weapons of mass destruction, including a description of the specific measures that India has taken in this regard; and

(ii) if India is not assessed to be fully and actively participating in such efforts, a description of—

(I) the measures the United States Government has taken to secure India’s full and active participation in such efforts;

(II) the responses of the Government of India to such measures; and

(III) the measures the United States Government plans to take in the coming year to secure India’s full and active participation;

(F) an analysis of whether United States civil nuclear cooperation with India is in any way assisting India’s nuclear weapons program, including through

(i) the use of any United States equipment, technology, or nuclear material by India in an unsafeguarded nuclear facility or nuclear-weapons related complex;

(ii) the replication and subsequent use of any United States technology by India in an unsafeguarded nuclear facility or

unsafeguarded nuclear weapons-related complex, or for any activity related to the research, development, testing, or manufacture of nuclear explosive devices; and

(iii) the provision of nuclear fuel in such a manner as to facilitate the in-creased production by India of highly enriched uranium or plutonium in unsafeguarded nuclear facilities;

(G) a detailed description of

(i) United States efforts to promote national or regional progress by India and Pakistan in disclosing, securing, limiting, and reducing their fissile material stock-piles, including stockpiles for military purposes, pending creation of a worldwide fissile material cut-off regime, including the institution of a Fissile Material Cut-off Treaty;

(ii) the responses of India and Pakistan to such efforts; and

(iii) assistance that the United States is providing, or would be able to provide, to India and Pakistan to promote the objectives in clause (i), consistent with its obligations under international law and existing agreements;

(H) an estimate of

(i) the amount of uranium mined and milled in India during the previous year;

(ii) the amount of such uranium that has likely been used or allocated for the production of nuclear explosive devices; and

(iii) the rate of production in India of—

(I) fissile material for nuclear explosive devices; and

(II) nuclear explosive devices;

(I) an estimate of the amount of electricity India’s nuclear reactors produced for civil purposes during the previous year and the proportion of such production that can be attributed to India’s declared civil reactors;

(J) an analysis as to whether imported uranium has affected the rate of production in India of nuclear explosive devices;

(K) a detailed description of efforts and progress made toward the achievement of India’s

(i) full participation in the Proliferation Security Initiative;

(ii) formal commitment to the Statement of Interdiction Principles of such Initiative;

(iii) public announcement of its decision to conform its export control laws, regulations, and policies with the Australia Group and with the Guidelines, Procedures, Criteria, and Controls List of the Wassenaar Arrangement; and

(iv) effective implementation of the decision described in clause (iii); and

(L) the disposal during the previous year of spent nuclear fuel from India’s civilian nuclear program, and any plans or activities relating to future disposal of such spent nuclear fuel.

(3) SUBMITTAL WITH OTHER ANNUAL REPORTS.—

(A) REPORT ON PROLIFERATION PREVENTION.—Each annual report submitted under paragraph (2) after the initial report may be submitted together with the annual report on proliferation prevention required under section 601(a) of the Nuclear Non-Proliferation Act of 1978 (22 U.S.C. 3281(a)).

(B) REPORT ON PROGRESS TOWARD RE-GIONAL NONPROLIFERATION.—The information required to be submitted under paragraph (2)(F) after the initial report may be submitted together with the annual report on progress to-ward regional nonproliferation required under section 620F(c) of the Foreign Assistance Act of 1961 (22 U.S.C. 2376(c)).

(4) FORM.—Each report submitted under this subsection shall be submitted in unclassified form, but may contain a classified annex.

SEC. 105. UNITED STATES COMPLIANCE WITH ITS NUCLEAR NONPROLIFERATION TREATY OBLIGATIONS.

Nothing in this title constitutes authority for any action in violation of an obligation of the United States under the NPT.

SEC. 106. INOPERABILITY OF DETERMINATION AND WAIVERS.

A determination and any waiver under section 104 shall cease to be effective if the President determines that India has detonated a nuclear explosive device after the date of the enactment of this title.

SEC. 107. MTCR ADHERENT STATUS.

Congress finds that India is not an MTCR adherent for the purposes of section 73 of the Arms Export Control Act (22 U.S.C. 2797b).

SEC. 108. TECHNICAL AMENDMENT.

Section 1112(c)(4) of the Arms Control and Nonproliferation Act of 1999 (title XI of the Admiral James W. Nance and Meg Donovan Foreign Relations Authorization Act, Fiscal Years 2000 and 2001 (as enacted into law by section 1000(a)(7) of Public Law 106–113 and contained in appendix G of that Act; 113 Stat. 1501A– 486)) is amended—

(1) in subparagraph (B), by striking ‘‘and’’ after the semicolon at the end;

(2) by redesignating subparagraph (C) as subparagraph (D); and

(3) by inserting after subparagraph (B) the following new subparagraph:

‘‘(C) so much of the reports required under section 104 of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 as relates to verification or compliance matters; and’’.

SEC. 109. UNITED STATES-INDIA SCIENTIFIC COOPERATIVE NUCLEAR NONPROLIFERATION PROGRAM.

(a) ESTABLISHMENT.—The Secretary of Energy, acting through the Administrator of the National Nuclear Security Administration, is authorized to establish a cooperative nuclear nonproliferation program to pursue jointly with scientists from the United States and India a pro-gram to further common nuclear nonproliferation goals, including scientific research and development efforts, with an emphasis on nuclear safeguards (in this section referred to as ‘‘the program’’).

(b) CONSULTATION.—The program shall be carried out in consultation with the Secretary of State and the Secretary of Defense.

(c) NATIONAL ACADEMIES RECOMMENDATIONS.—

(1) IN GENERAL.—The Secretary of Energy shall enter into an agreement with the National Academies to develop recommendations for the implementation of the program.

(2) RECOMMENDATIONS.—The agreement entered into under paragraph (1) shall provide for the preparation by qualified individuals with relevant expertise and knowledge and the communication to the Secretary of Energy each fiscal year of—

(A) recommendations for research and related programs designed to overcome existing technological barriers to nuclear nonproliferation; and

(B) an assessment of whether activities and programs funded under this section are achieving the goals of the activities and programs.

(3) PUBLIC AVAILABILITY.—The recommendations and assessments prepared under this subsection shall be made publicly available.

(d) CONSISTENCY WITH NUCLEAR NON-PROLIFERATION TREATY.—All United States activities related to the program shall be consistent with United States obligations under the Nuclear Non-Proliferation Treaty.

(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as may be necessary to carry out this section for each of fiscal years 2007 through 2011.

SEC. 110. DEFINITIONS.

In this title:

(1) The term ‘‘Additional Protocol’’ means a protocol additional to a safeguards agreement with the IAEA, as negotiated between a country and the IAEA based on a Model Additional Protocol as set forth in IAEA information circular (INFCIRC) 540.

(2) The term ‘‘appropriate congressional committees’’ means the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives.

(3) The term ‘‘dual-use material, equipment, or technology’’ means material, equipment, or technology that may be used in nuclear or nonnuclear applications.

(4) The term ‘‘IAEA safeguards’’ has the meaning given the term in section 830(3) of the Nuclear Proliferation Prevention Act of 1994 (22 U.S.C. 6305(3)).

(5) The term ‘‘Indian person’’ means—

(A) a natural person that is a citizen of India or is subject to the jurisdiction of the Government of India;

(B) a corporation, business association, partnership, society, trust, or any other non-governmental entity, organization, or group, that is organized under the laws of India or has its principal place of business in India; and

(C) any Indian governmental entity, including any governmental entity operating as a business enterprise.

(6) The terms ‘‘Missile Technology Control Regime’’, ‘‘MTCR’’, and ‘‘MTCR adherent’’ have the meanings given the terms in section 74 of the Arms Export Control Act (22 U.S.C. 2797c).

(7) The term ‘‘nuclear materials and equipment’’ means source material, special nuclear material, production and utilization facilities and any components thereof, and any other items or materials that are determined to have significance for nuclear explosive purposes pursuant to subsection 109 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2139(b)).

(8) The terms ‘‘Nuclear Non-Proliferation Treaty’’ and ‘‘NPT’’ mean the Treaty on the Non-Proliferation of Nuclear Weapons, done at Washington, London, and Moscow July 1, 1968, and entered into force March 5, 1970 (21 UST 483).

(9) The terms ‘‘Nuclear Suppliers Group’’ and ‘‘NSG’’ refer to a group, which met initially in 1975 and has met at least annually since 1992, of Participating Governments that have promulgated and agreed to adhere to Guidelines for Nuclear Transfers (currently IAEA INFCIRC/254/Rev.8/Part 1) and Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Materials, Software, and Related Technology (currently IAEA INFCIRC/254/ Rev.7/Part 2).

(10) The terms ‘‘nuclear weapon’’ and ‘‘nuclear explosive device’’ mean any device designed to produce an instantaneous release of an amount of nuclear energy from special nuclear material that is greater than the amount of energy that would be released from the detonation of one point of trinitrotoluene (TNT).

(11) The term ‘‘process’’ includes the term ‘‘reprocess’’.

(12) The terms ‘‘reprocessing’’ and ‘‘reprocess’’ refer to the separation of irradiated nuclear materials and fission products from spent nuclear fuel.

(13) The term ‘‘sensitive nuclear technology’’ means any information, including information incorporated in a production or utilization facility or important component part thereof, that is not available to the public and which is important to the design, construction, fabrication, operation, or maintenance of a uranium enrichment or nuclear fuel reprocessing facility or a facility for the production of heavy water.

(14) The term ‘‘source material’’ has the meaning given the term in section 11 z. of the Atomic Energy Act of 1954 (42 U.S.C. 2014(z)).

(15) The term ‘‘special nuclear material’’ has the meaning given the term in section 11 aa. of the Atomic Energy Act of 1954 (42 U.S.C. 2014(aa)).

(16) The term ‘‘unsafeguarded nuclear fuel-cycle activity’’ means research on, or development, design, manufacture, construction, operation, or maintenance of—

(A) any existing or future reactor, critical facility, conversion plant, fabrication plant, re-processing plant, plant for the separation of isotopes of source or special fissionable material, or separate storage installation with respect to which there is no obligation to accept IAEA safeguards at the relevant reactor, facility, plant, or installation that contains source or special fissionable material; or

(B) any existing or future heavy water production plant with respect to which there is no obligation to accept IAEA safeguards on any nuclear material produced by or used in connection with any heavy water produced therefrom.

Official text of Indian Prime Minister’s August 17, 2006, assurances to Parliament

NUKED PROMISES

Indian Prime Minister Manmohan Singh defined the following benchmarks and red lines on the civil nuclear deal with the United States in a statement in the Rajya Sabha, the upper house of Parliament, on August 17, 2006:

1. At the outset, I would like to convey my gratitude to all the Hon’ble Members who have participated in this debate. I am grateful for this opportunity to clarify some of the issues arising from the discussion. I will do so in a non partisan spirit and I have every reason to believe that after I have finished that I will be able to carry the whole House with me. Our Government has never shied away from a full discussion in Parliament on this important issue. On three previous occasions on July 29, 2005, February 27, 2006 and March 7, 2006, I had made detailed statements and discussed this important subject in this august House. Once again, several issues have been raised during the current discussions and I wish to take this opportunity to respond to them. I also intend to cover developments since my last suo motu statement of March 7 this year.

2. Two types of comments have been made during the discussion in the House. The first set of issues pertains to the basic orientation of our foreign policy. Some Hon’ble Members have observed that by engaging in discussions with, and allegedly acquiescing in the demands made by the United States, we have compromised the independent nature of our foreign policy.

3. The second set of issues pertain to deviations from the July 18 Joint Statement and the March 2 Separation Plan. Many of the points raised by the Hon’ble Members have also been aired outside Parliament, notably also by some senior members of the scientific establishment. Overall, a listing of the important concerns include the following: that the India-US Nuclear initiative and more particularly the content of the proposed legislation in the US Congress, could undermine the autonomy of our decision-making; limit the options or compromise the integrity of our strategic programme; and adversely affect the future of our scientific research and development. To sum up, this would suggest that India’s strategic nuclear autonomy is being compromised and India is allowing itself to be pressurized into accepting new and unacceptable conditions that are deviations from the commitments made by me to Parliament in July 2005 and in February and March this year.

4. I recognize that many of these concerns are borne out of genuine conviction that nothing should be done that would undermine long standing policies that have a bearing on India’s vital national security interests. I fully share and subscribe to these sentiments. I would like to assure the Hon’ble Members that negotiations with the US regarding the civilian nuclear deal have not led to any change in the basic orientation of our policies, or affected our independent judgment of issues of national interest. Last year during my visit to the US, I addressed the National Press Club in the full glare of the media. A question was put to me regarding what I thought about the US intervention in Iraq. In the full public glare of the media I said that it was a mistake. I said the same to President Bush when he visited India. I said India does not find favour with regime change.

5. The thrust of our foreign policy remains the promotion of our national interest. We are unswerving in our commitment to an independent foreign policy. We do recognize the complexities present in an increasingly inter-dependent and multi-polar world. While we recognize that the United States is a pre-eminent power and good relations with the U.S. are in our national interest, this has not in any way clouded our judgment. There are many areas of agreement with the United States, but at the same time there are a number of areas in which we have differences and we have not shied away from making these known to the US, as also expressing them in public. Currently, we are engaged not only with the US but other global powers like Russia, China, the EU, UK, France and Japan. We are also focusing on ASEAN, as well as countries in West Asia, Africa and Latin America. More importantly, we are devoting proportionately larger time and effort in building relations with countries in our immediate neighbourhood like Nepal, Bhutan, Sri Lanka, Bangladesh, Myanmar, and Pakistan. Our relations with all these countries are determined by the dictates of our enlightened national interest and we have not allowed any other country, including the United States, to influence our polices. This will not change as long as I am Prime Minister.

6. I would, hence, again reiterate in view of the apprehensions expressed, that the proposed US legislation on nuclear cooperation with India will not be allowed to become an instrument to compromise India’s sovereignty. Our foreign policy is determined solely by our national interests. No legislation enacted in a foreign country can take away from us that sovereign right. Thus there is no question of India being bound by a law passed by a foreign legislature. Our sole guiding principle in regard to our foreign policy, whether it is on Iran or any other country, will be dictated entirely by our national interest.

7. Let me now turn to some of the concerns that have been expressed on the second set of issues regarding possible deviations from assurances given by me in this august House on the July 18, 2005 Joint Statement and the March 2, 2006 Separation Plan. I would like to state categorically that there have neither been nor will there be any compromises on this score and the Government will not allow such compromises to occur in the future.

8. Hon’ble Members will recall that during President Bush’s visit to India in March this year, agreement was reached between India and the United States on a Separation Plan in implementation of the India-United States Joint Statement of July 18, 2005. This Separation Plan had identified the nuclear facilities that India was willing to offer, in a phased manner, for IAEA safeguards, contingent on reciprocal actions taken by the United States. For its part, the United States Administration was required to approach the US Congress for amending its laws and the Nuclear Suppliers’ Group for adapting its Guidelines to enable full civilian nuclear cooperation between India and the international community.

9. The US Administration had thereafter approached the US Congress to amend certain provisions of the United States Atomic Energy Act of 1954, which currently prohibit civil nuclear cooperation with India. The US House of Representatives International Relations Committee passed a Bill on the subject on 27th June 2006. The House of Representatives passed the Bill as approved by its International Relations Committee on July 27.

10. The Senate Foreign Relations Committee passed its version of the Bill on June 29, 2006. The US Senate is now expected to vote on this version of the Bill some time in September. We have concerns over both the House and Senate versions of the Bill. Since the two Bills are somewhat different in content, according to US practice they will need to be reconciled to produce a single piece of legislation. After adoption by both the House and the Senate, this would become law when the US President accords his approval. The final shape of the legislation would, therefore, be apparent only when the House and the Senate complete the second stage of assent/adoption.

11. Meanwhile, the US Government has approached the Nuclear Suppliers’ Group to adapt its guidelines to enable full civil nuclear cooperation between India and the International community. In March this year, the NSG at its plenary meeting in Brazil held a preliminary discussion on this issue. The matter will be further discussed by the Nuclear Suppliers’ Group later this year. On our part, we have separately raised this issue with several countries and urged them to lift the existing restrictions on nuclear supplies to India. I myself have raised this issue with the Heads of State or Government of Russia, France, UK, Japan, Germany, Brazil, Norway, Iceland and Cyprus, among others.

12. In view of the concerns voiced by the Hon’ble Members, I shall try to address each of these concerns in some detail. I shall, however, begin by affirming that our approach is guided by the understandings contained in the July 2005 Joint Statement and the March 2006 Separation Plan. What we can agree with the United States to enable nuclear cooperation must be strictly within these parameters.

13. The key provisions to which references have been made in Parliament and outside are the following:

(i) Full Civil Nuclear Cooperation: The central imperative in our discussions with the United State on Civil Nuclear Cooperation is to ensure the complete and irreversible removal of existing restrictions imposed on India through iniquitous restrictive trading regimes over the years. We seek the removal of restrictions on all aspects of cooperation and technology transfers pertaining to civil nuclear energy ‑ ranging from nuclear fuel, nuclear reactors, to re-processing spent fuel, i.e. all aspects of a complete nuclear fuel cycle.

This will be the surest guarantee of India’s acceptance as a full and equal partner of the international nuclear community, even while preserving the integrity of our three stage nuclear programme and protecting the autonomy of our scientific research and development. We will not agree to any dilution that would prevent us from securing the benefits of full civil nuclear cooperation as amplified above.

(ii) Principle of Reciprocity: I had earlier assured the House that reciprocity is the key to the implementation of our understanding contained in the July 2005 Statement. I stand by that commitment. When we put forward the Separation Plan, we again made it clear to the United States that India could not be expected to take on obligations such as placing its nuclear facilities under safeguards in anticipation of future lifting of restrictions. India and the United States have held one round of discussions on a proposed bilateral cooperation agreement. India and the IAEA have held technical discussions regarding an India-specific Safeguards agreement. Further discussions are required on both these documents. While these parallel efforts are underway, our position is that we will accept only IAEA safeguards on the nuclear facilities, in a phased manner, and as identified for that purpose in the Separation Plan only when all nuclear restrictions on India have been lifted. On July 29 last year, I had stated that before voluntarily placing our civil nuclear facilities under IAEA safeguards, we will ensure that all restrictions on India have been lifted. There has been no shift in our position on this point.

(iii) Certification: The draft Senate Bill requires the US President to make an annual report to the Congress that includes certification that India is in full compliance of its non‑proliferation and other commitments. We have made it clear to the United States our opposition to these provisions, even if they are projected as non‑binding on India, as being contrary to the letter and spirit of the July Statement. We have told the US Administration that the effect of such certification will be to diminish a permanent waiver authority into an annual one. We have also indicated that this would introduce an element of uncertainty regarding future cooperation and is, not acceptable to us.

(iv) India as a State possessing Advanced Nuclear Technology: Hon’ble Members may recall that the July Statement, had acknowledged that India should be regarded as a State with advanced nuclear technology enjoying the same advantages and benefits as other states with advanced nuclear technology, such as the US. The July Statement did not refer to India as a Nuclear Weapons State because that has a particular connotation in the NPT but it explicitly acknowledged the existence of India’s military nuclear facilities. It also meant that India would not attract full‑scope safeguards such as those applied to Non‑Nuclear Weapon States that are signatories to the NPT and there would be no curbs on continuation of India’s nuclear weapon related activities. In these important respects, India would be very much on par with the five Nuclear Weapon States who are signatories to the NPT. Similarly, the Separation Plan provided for an India‑specific safeguards agreement with the IAEA with assurances of uninterrupted supply of fuel to reactors together with India’s right to take corrective measures in the event fuel supplies are interrupted. We have made clear to the US that India’s strategic programme is totally outside the purview of the July Statement, and we oppose any legislative provisions that Mandate scrutiny of either our nuclear weapons programme or our unsafeguarded nuclear facilities.

(v) Safeguards Agreement and Fuel Assurances: In this respect too, it is worth emphasizing that the March 2006 Separation Plan provides for an India‑Specific Safeguards Agreement with the IAEA, with assurances of uninterrupted supply of fuel to reactors that would be placed under IAEA safeguards together with India’s right to take corrective measures in the event fuel supplies are interrupted. We, of course, have the sovereign right to take all appropriate measures to fully safeguard our interests. An important assurance is the commitment of support for India’s right to build up strategic reserves of nuclear fuel over the lifetime of India’s reactors. We have initiated technical discussions at the expert level with the IAEA on an India‑Specific Safeguards Agreement. Both the Bilateral Nuclear Cooperation Agreement with the United States and the India-Specific Safeguards Agreement with the IAEA would be only within the parameters of the July Statement and the March Separation Plan. There is no question of India signing either a Safeguards Agreement with the IAEA or an Additional Protocol of a type concluded by Non‑Nuclear Weapons States who have signed the NPT. We will not accept any verification measures regarding our safeguarded nuclear facilities beyond those contained in an India-Specific Safeguards Agreement with the IAEA. Therefore there is no question of allowing American inspectors to roam around our nuclear facilities.

(vi) Integrity and reliability of our strategic programme – autonomy of decision-making and future scientific research and development: In my statement of March 7, 2006, I had assured Parliament that the Separation Plan would not adversely affect our strategic programme. I reiterate that commitment today. The Separation Plan has been so designed as to ensure adequacy of fissile material and other inputs for our strategic programme, based on our current and assessed future needs. The integrity of our 3‑Stage nuclear programme will not be affected. The autonomy of our Research and Development activity, including development of our fast breeder reactors and the thorium programme, in the nuclear field will remain unaffected. We will not accept interference by other countries vis-à-vis the development of our strategic programme. We will not allow external scrutiny of our strategic programme in any manner, much less allow it to be a condition for future nuclear cooperation between India and the international community.

(vii) Moratorium on production of fissile material: Our position on this matter is unambiguous. We are not willing to accept a moratorium on the production of fissile material. We are only committed to negotiate a Fissile Material Cut-off Treaty in the Conference on Disarmament in Geneva, a commitment which was given by the previous government. India is willing to join only a non‑discriminatory, multilaterally negotiated and internationally verifiable FMCT, as and when it is concluded in the Conference on Disarmament, again provided our security interests are fully addressed.

(viii) Non‑discriminatory Global Nuclear Disarmament: Our commitment towards non-discriminatory global nuclear disarmament remains unwavering, in line with the Rajiv Gandhi Action Plan. There is no dilution on this count. We do not accept proposals put forward from time to time for regional non‑proliferation or regional disarmament. Pending global nuclear disarmament, there is no question of India joining the NPT as a non‑nuclear weapon state, or accepting full‑scope safeguards as a requirement for nuclear supplies to India, now or in the future.

(ix) Cessation of Future Cooperation: There is provision in the proposed US law that were India to detonate a nuclear explosive device, the US will have the right to cease further cooperation. Our position on this is unambiguous. The US has been intimated that reference to nuclear detonation in the India-US Bilateral Nuclear Cooperation Agreement as a condition for future cooperation is not acceptable to us. We are not prepared to go beyond a unilateral voluntary moratorium on nuclear testing as indicated in the July Statement. The same is true of other intrusive non‑proliferation benchmarks that are mentioned in the proposed US legislation. India’s possession and development of nuclear weapons is an integral part of our national security. This will remain so.

14. Hon’ble Members will appreciate the fact that an international negotiation on nuclear energy cooperation particularly when it involves dismantling restrictive regimes that have lasted for over three decades is a complex and sensitive exercise. What we are attempting today is to put in place new international arrangements that would overturn three decades of iniquitous restrictions. It is inevitable, therefore, that there would be some contradictory pulls and pressures. This does not mean that India will succumb to pressures or accept conditionalities that are contrary to its national interests.

15. I had personally spoken to President Bush in St. Petersburg last month on this issue, and conveyed to him that the proposed US legislation must conform strictly to the parameters of the July 18, 2005 Statement and the March 2, 2006 Separation Plan. This alone would be an acceptable basis for nuclear cooperation between India and the United States. India cannot, and is not prepared to, take on additional commitments outside this agreed framework or allow any extraneous issues to be introduced. I have received an assurance from the US President that it was not his intention to shift goalposts, and that the parameters of the scope of cooperation would be those contained in the July 2005 Joint Statement and the March 2006 Separation Plan. A White House Statement of Administration Policy of July 26, 2006 recognizes some, though not all, of India’s concerns, and conveyed that the Administration has voiced them with the Congress.

16. I can assure you that there is no ambiguity in our position in so far as it has been conveyed to the US. The US is aware of our position that the only way forward is strict adherence to July Statement and March Separation Plan. I am hopeful that the bilateral India‑US Civil Nuclear Cooperation Agreement when concluded will take into account the issues raised here. However, I must be honest and frank that I cannot predict with certainty the final form of the US legislation or the outcome of this process with the NSG, which consists of 45 countries with divergent views. We are hopeful that this will lead in a direction wherein our interests are fully protected and that there is a complete lifting of restrictions on India that have existed for three decades. Such an outcome if it materializes will contribute to our long‑term energy security by enabling a rapid increase in nuclear power. It would lead to the dismantling of the technology denial regimes that have hampered our development particularly in hi‑tech sectors. I will have wide consultations including with the members of the Atomic Energy Commission, the nuclear and scientific communities and others to develop a broad based national consensus on this important matter. I wish to inform members of the House that I have invited members of the Atomic Energy Commission on the 26th August for a meeting. That same day I have also invited the group of distinguished scientists who have expressed concerns to meet me.

17. Finally, I would only like to state that in keeping with our commitments to Parliament and the nation, we will not accept any conditions that go beyond the parameters of the July 18, 2005 Joint Statement and the March 2, 2006 Separation Plan, agreed to between India and the United States. If in their final form the US legislation or the adapted NSG Guidelines impose extraneous conditions on India, the Government will draw the necessary conclusions, consistent with the commitments I have made to Parliament.

[Prime Minister also gave the following responses to points raised by the Left parties]

1. Whether the deal will give “full” civilian nuclear technology and lift all existing sanctions on dual use technology imposed on India for not signing the NPT.

Response: The objective of full civil nuclear cooperation is enshrined in the July Statement. This objective can be realized when current restrictions on nuclear trade with India are fully lifted. In accordance with the July Statement, US has initiated steps to amend its legislation and to approach the NSG to adapt its guidelines. We seek the removal of restrictions on all aspects of cooperation and technology transfers pertaining to civil nuclear energy – ranging from supply of nuclear fuel, nuclear reactors, reprocessing spent fuel, i.e., all aspects of complete nuclear fuel supply. Only such cooperation would be in keeping with the July Joint Statement.

2. Cannot accept restrictions on Indian foreign policy to be imposed such as on Iran, irrespective of whether it is in the policy section or in the sense of the House section of the legislation.

Response: Government is clear that our commitments are only those that are contained in the July Joint Statement and in the Separation Plan. We cannot accept introduction of extraneous issues on foreign policy. Any prescriptive suggestions in this regard are not acceptable to us.

Our foreign policy is and will be solely determined by our national interests. No legislation enacted in a foreign country can take away from us this sovereign right.

3. Signing of IAEA safeguards in perpetuity for the civilian programme to take place after the US Congress had approved a “123 Nuclear Cooperation Agreement”. All restrictions on India to be lifted before we sign the IAEA safeguards.

Response: I had conveyed to Parliament on July 29, 2005 on my return from Washington that before placing any of our nuclear facilities under IAEA safeguards, we will ensure all restrictions on India have been lifted. Under the Separation Plan agreed to with the United States, India has offered to place under IAEA safeguards 14 of its reactors presently operating or under constructions between 2006 and 2014. The nuclear facilities listed in the Separation Plan will be offered for safeguards only after all nuclear restrictions have been lifted on India. This would include suitable amendments to the US legislation to allow for such cooperation, the passing of the bilateral agreement with India and the adaption of the NSG guidelines. It is clear that India cannot be expected to take safeguards obligations on its nuclear facilities in anticipation of future lifting of restrictions.

4. Guarantees on fuel as agreed in the March 2006 statement.

In case the US reneges on supply of fuel, they will ensure continuity through other members of the Nuclear Suppliers Group (NSG).

Response: Separation Plan includes elaborate fuel supply assurances given by the United States. Understandings in the Separation Plan also provide for contingency of disruption of fuel supplies to India. In such a case, the United States and India would jointly convene a group of friendly supplier countries (Russia, France and United Kingdom) aimed at restoring fuel supplies to India. An important assurance is the commitment of support for India’s right to build strategic reserves of fuel over the life time of its nuclear reactors. In the event of disruption of fuel supplies despite the assurances, India will have a right to take corrective measure to ensure the operation of its nuclear reactors.

5. India will work for an FMCT and for nuclear disarmament with all nuclear weapon states, in line with the Rajiv Gandhi Plan or Delhi Declaration in tandem.

Response: Our support for global nuclear disarmament remains unwaivering. Prime Minister Rajiv Gandhi had put forward an Action Plan in the 1988 UNGA Special Session on Disarmament. We remain committed to the central goal of this Action Plan, i.e., complete elimination of nuclear weapons leading to global nuclear disarmament in a time-bound framework. India has agreed to negotiations in the Conference on Disarmament in Geneva for a Fissile Material Cut-off Treaty. There has been no change in our position on this matter.

6. In the original deal, there is no provision for US inspectors, only provision for IAEA inspectors. The draft US Bills contains such provisions.

Response: In the Separation Plan, we have agreed to offer for IAEA safeguards nuclear facilities specified in the Separation Plan for that purpose. The nature of safeguards will be determined by an India specific safeguards agreement with the IAEA. This will be applied to the safeguarded nuclear facilities in India. Therefore, there is no question of accepting other verification measures or third country inspectors to visit our nuclear facilities, outside the framework of the India specific safeguards agreement.

7. An India-specific protocol and not an Additional Protocol as per IAEA Standard Modified Protocol.

Response: In the Separation Plan, we have agreed to conclude an India specific safeguards agreement with the IAEA. The question of an Additional Protocol will arise only after the India specific safeguards agreement is in place. As a country with nuclear weapons, there is no question of India agreeing to a Safeguards agreement or an Additional Protocol applicable to non-nuclear weapon states of the NPT.

8. References to Iran in the House Bill.

Response: We reject the linkage of any extraneous issue to the nuclear understanding. India’s foreign policy will be decided on the basis of Indian national interests only.

9. Reference to Proliferation Security Initiative in the House and Senate Bills.

Response: The Proliferation Security Initiative (PSI) is an extraneous issue as it is outside the framework of the July 18 Joint Statement. Therefore, we cannot accept it as a condition for implementing the July Statement. Separately, the Government has examined the PSI.

We have certain concerns regarding its legal implications and its linkages with the NPT. We also have concerns with amendments to the suppression of Unlawful Activities at Sea Treaty under the International Maritime Organisation.

10. The Jackson-Vanik Amendment linking the granting of MFN status to USSR to Jewish emigration is an example relevant to the current debate.

Response: We have studied the proposed US legislation very carefully, including the so-called binding and non-binding provisions. The non-binding provisions do not require mandatory action, but at the same time, have a certain weight in the implementation of the legislation as a whole. We have conveyed our concerns to the US Administration in this respect. Jackson-Vanik Amendment was binding on the Administration and cannot be cited as a precedent for non-binding references in the current bills. A more accurate example than the Jackson-Vanik Amendment is the set of provisions accompanying the renewal of MFN status to China, that included references to China’s human rights, China’s political and religious prisoners, protection of Tibetan heritage and freedom of political expression.

11. Role of Parliament in approving foreign policy.

Response: India follows a Parliamentary model, as specified in our Constitution, wherein treaty making powers rest with the Executive. However, we have kept Parliament fully in the picture regarding various stages of our negotiations with the United States. Broad based domestic consensus cutting across all sections in Parliament and outside will be necessary. We will work towards that objective by addressing various concerns as fully as possible.

[Prime Minister also gave the following responses to points raised by the group of nuclear scientists]

1. “India should continue to be able to hold on to her nuclear option as a strategic requirement in the real world that that we live in, and in the ever-changing complexity of the international political system. This means that we cannot accede to any restraint in perpetuity on our freedom of action. We have not done this for the last 40 years after the Non-Proliferation Treaty came into being, and there is no reason why we should succumb to this now. Universal nuclear disarmament must be our ultimate aim, and until we see the light at the end of the tunnel on this important issue, we cannot accept any agreement in perpetuity.”

Response: We are very firm in our determination that agreement with United States on Civil Nuclear Energy in no way affects the requirements of our strategic programme. We are fully conscious of the changing complexity of the international political system. Nuclear weapons are an integral part of our national security and will remain so, pending the global elimination of all nuclear weapons and universal non-discriminatory nuclear disarmament. Our freedom of action with regard to our strategic programmes remains unrestricted. The nuclear agreement will not be allowed to be used as a backdoor method of introducing NPT type restrictions on India. Our offer to put nuclear facilities under safeguards in perpetuity is conditional upon these facilities securing fuel from international sources for their life time. If the fuel supply assurances as enumerated in Separation Plan are disrupted, then India will have the right to take corrective measures to ensure the continued operation of these reactors.

2. “After 1974, when the major powers discontinued cooperation with us, we have built up our capability in many sensitive technological areas, which need not and should not now be subjected to external control. Safeguards are understandable where external assistance for nuclear materials or technologies are involved. We have agreed to this before, and we can continue to agree to this in the future too, but strictly restricted to those facilities and materials imported from external sources.”

Response: Sensitive nuclear technology facilities have not been covered in the Separation Plan. Therefore, there is no question of putting them under safeguards or under external controls. Even with regard to nuclear facilities that have been included in Separation Plan, safeguards will be applied in phases between 2006 and 2014. These safeguarded facilities will be eligible for and will receive fuel materials and technology from international sources. If such supplies cease, then India will be free to protect its interests through corrective measures. That will be spelt out clearly in the India specific safeguards agreement.

3. “We find that the Indo-US deal, in the form approved by the US House of Representatives, infringes on our Independence for carrying out indigenous research and development in nuclear science and technology. Our R&D should not be hampered by external supervision or control, or by the need to satisfy any international body. Research and technology development are the Sovereign rights of any nation. This is especially true when they concern strategic national defence and energy self-sufficiency.”

Response: Our independence for carrying out independent research and development in nuclear science and technology will remain unaffected. There will be no external supervision of our R&D since none of the sensitive R&D facilities which handle nuclear material have been included in the Separation Plan. Nothing in the Separation Plan infringes on our sovereign right to conduct research and technology development concerning our national defence and energy self-sufficiency. Government is committed to preserve the integrity of the three stage nuclear power programme, including utilization of our vast thorium resources. Certain nuclear facilities including centers such as TIFR, Variable Energy Cyclotron Centre, Saha Institute of Nuclear Physics etc., have been designated as civilian in the Separation Plan. As these facilities will not handle nuclear material, there is no question of safeguards being applied to them. We expect these centers to participate as full partners in international collaboration project.

4. “While the sequence of actions to implement the cooperation could be left for discussion between the two governments, the basic principles on which such actions will rest is the right of Parliament and the people to decide. The Prime Minister has already taken up with President George Bush the issue of the new clauses recommended by the US House of Representatives. If the US Congress, in its wisdom, passes the bill in its present form, the ‘product’ will become unacceptable to India, and diplomatically, it will be very difficult to change it later. Hence, it is important for our Parliament to work out, and insist on, the ground rules for the nuclear deal, at this stage itself.”

Response: I had taken up with President Bush our concerns regarding provisions in the two bills. It is clear that if the final product is in its current form, India will have grave difficulties in accepting the bills. The US has been left in no doubt as to our position. The ground rules for our discussions are clear. These are the parameters of the July Statement and the March Separation Plan and commitments given by me to Parliament in the three suo moto Statements and my reply to today’s discussions will be the guiding principles of our position. Parliament has been kept fully informed at every stage of the discussions. In their final form, if US legislation or the NSG guidelines impose extraneous conditions on India, the Government will draw the necessary conclusions consistent with my commitments to Parliament.

[Above text released by the Prime Minister’s Office, New Delhi]