Building Japan-India Partnership

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Japan-India partnership key to bolstering stability in Asia

Brahma Chellaney

NEW DELHI — Japan and India are natural allies because they have no conflict of strategic interests and actually share common goals to build stability, power equilibrium and institutionalized multilateral cooperation in Asia. Indian Prime Minister Manmohan Singh’s visit to Tokyo this week offers an opportunity to the two countries to add real strategic content to their fast-developing relationship.

The ascension of Shinzo Abe as postwar-Japan’s youngest prime minister has symbolized the rise of an assertive, confident Japan eager to shape the evolving balance of power in Asia. Faced immediately with the crisis triggered by North Korea’s provocative nuclear test, Abe has pursued a pragmatic foreign policy while seeking to accelerate the nationalist shift in policy instituted by his predecessor, Junichiro Koizumi.

India, for its part, has moved from doctrinaire nonalignment to geopolitical pragmatism, reflected in the greater realism it displays in its economic and foreign policies. It has come to recognize that it can wield international power only through the accretion of its own economic and military strength. A close strategic and economic partnership with Japan chimes with its vision of a dynamic, multipolar Asia.

Close ties with Japan is an objective dear to Singh, whose host in Tokyo is a friend of India. Abe, in his book, Toward A Beautiful Country, published last July, declares that, “It is of crucial importance to Japan’s national interest that we further strengthen our relations with India.” Indeed, Abe optimistically states that “it will not be a surprise if in another 10 years, Japan-India relations overtake Japan-U.S. and Japan-China relations.”

To realize that scenario, Tokyo and New Delhi have to focus sustained attention on boosting their now-stagnant trade and building a multidimensional political relationship. The two also need to hold closer consultations on Asian economic and political issues, given that neither would like to see the emergence of a Sino-centric Asia.

Such is the international hype about China’s growth that it is frequently forgotten that Japan remains the world’s largest economic powerhouse after the United States, with an economy that is today double the size of China’s, with only a tenth of the population.

Tokyo may not share Beijing’s obsession with measures of national power, but Japan’s military establishment, except in the nuclear sphere, is already the most sophisticated in Asia.

            Encouraged by economic recovery, with a 2% yearly Japanese growth translating into an additional output almost the size of the entire annual gross domestic product of Singapore and the Philippines, Japan is going through a quiet transition from pacifism to being a “normal” state. Today, even as it has reinvigorated military ties with the United States, it is beginning to cautiously shape an independent foreign policy and rethink its security.

            India has also strengthened its relations with America. But from being non-aligned, India is likely to become multi-aligned, even as it preserves the kernel of nonalignment — strategic autonomy.

A key challenge for both Tokyo and New Delhi is to manage their increasingly intricate relationship with an ascendant China determined to emerge as Asia’s dominant power. Yet it makes sense for Japan and India to play down the competitive dynamics of their relationship with Beijing and put the accent on cooperation. This is what Abe and Singh have sought to do.

An emphasis on cooperation also suits China because it is in accord with its larger strategy to advertise its “peaceful rise.” China’s choir book indeed has been built around a nifty theme: its emergence as a great power is unstoppable, and it is thus incumbent on other nations to adjust to that rise.

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

The sharpening energy geopolitics in Asia also undergirds the need for a strategic partnership between Japan and India, both heavily dependent on oil imports by sea from the Gulf region. Mercantilist efforts to assert control over energy supplies and transport routes, and strategic plans to assemble a “string of pearls” in the form of listening posts and special naval-access arrangements along vital sea-lanes of communication, certainly risk fueling tensions and discord.

Before the United States and India unveiled plans to build a global strategic partnership, it was Tokyo and New Delhi that agreed in August 2000 during Prime Minister Yoshiro Mori’s visit to develop a “Global Partnership of the 21st Century.” Yet that proposal has moved forward rather slowly, even as India has overtaken China as the largest recipient of Japanese Overseas Development Assistance (ODA).

A recently released global-opinion poll by the Washington-based Pew Research Center showed the high positive rating Japan enjoys in India, and India in Japan, reflecting their close historical and cultural ties.

There is expectation that a true Indo-Japanese strategic partnership will now take off, given the foundation laid by an increasing number of high-level visitors. In the past year alone, Japan’s chief of joint staff as well as the chief of each of the three self-defense forces has visited India, while the Indian defense minister and the navy and air force chiefs have been to Japan.

Their partnership should seek to build greater defense cooperation, intelligence-sharing and joint initiatives on maritime security, counterterrorism, disaster prevention and management, and energy security. To maintain a peaceful environment that promotes security and economic growth, Tokyo and New Delhi need to promote institutional cooperation in Asia.

In that context, Abe’s idea of a four-sided strategic dialogue among Japan, India, Australia and the United States deserves careful reflection. A constellation of democracies tied together by strategic partnerships can help build Asian power equilibrium.

In the emerging Asia, the two major non-Western democracies, Japan and India, are set to become close partners. Their strategic relationship would help adjust balance-of-power equations in Asia and aid long-term stability.

Brahma Chellaney, professor of strategic studies at the privately funded Center for Policy Research in New Delhi, is a regular contributor to The Japan Times.

(c) The Japan Times, December 14, 2006.

India-China Power Gap

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Narrowing the Asymmetry

Brahma Chellaney  

© Asian Age March 24, 2007

India and China are not just nation-states but large, ancient civilizations that together represent one-third of humanity today. How their relationship evolves will have an important bearing on Asian geopolitics, international security and globalization. India-China ties thus constitute one of the most important bilateral relationships in the world.

            While both are ascendant powers, enjoying high GDP growth rates, the basis of their rise is different and a pointer to their relative strengths and weaknesses.

            India’s white-collar, services-led economic growth contrasts sharply with China’s blue-collar, manufacturing-driven expansion. More striking is the fact that in India the private sector continues to lead the growth while in China it is a state-driven boom. India does poorly wherever the state is involved, while the strength of the Chinese state as the prime driver of accumulating power carries significant strategic ramifications. In fact, owing to its dynamic centralized economy, China is able to practise a mix of crony capitalism and widespread, state-dispensed patronage.  

            Most startling is the fact that although both states have some similar competitive advantages, such as a large pool of skilled manpower and low wages, China’s ascension has been on the back of an increasing export surge while India’s imports-dependent economy relies primarily on domestic consumption for growth. Indian imports currently exceed exports by as much as 60 per cent. Such dependency on imports sets India apart from the Asian “tiger” economies, which are all export-oriented.

            In contrast to India’s yawning trade deficit, China tripled its trade surplus with the rest of the world just between 2002 and 2005. Given its trade surplus of $201.6 billion with the United States alone in 2005, it is hardly a surprise that Beijing is today sitting on a foreign-exchange hoard of $1 trillion — the world’s largest. It has ploughed more than two-thirds of its foreign-currency reserves into US dollar-denominated investments.

Washington now relies on Chinese surpluses and savings to finance its huge budget and trade deficits, hold down US interest rates and prop up the value of the dollar. Beijing, by financing the US deficits through its purchase of US government bonds, not only buys political clout in Washington but also keeps its currency undervalued so that Chinese exports stay cheap and imports dear. In the face of a rising Sino-US trade imbalance, it sustains the peg it has artificially set between the US dollar and the Chinese yuan by simply recycling its surplus dollars back into the American bond market. 

Beijing shields its currency manipulation through the potential threat to halt financing US deficits and unload its greenbacks. This month’s decision by the Chinese legislature, the National People’s Congress, to set up a new cabinet-led agency for active investment overseas can only help boost China’s international financial clout at a time when its foreign-currency reserves are continuing to soar.

            The India-China contrast is also stark in terms of military capabilities. India’s weaponry remains subcontinental in range, while China’s is intercontinental. Not surprisingly, India has found it difficult to break out of its subcontinental straitjacket. Indeed, far from developing a military reach to underpin its world-power ambitions, India even lags behind its regional-defence needs. Nearly a decade after declaring itself a nuclear-weapons state, India still does not have the retaliatory capability to strike deep into the Chinese heartland.  

            Even when China was poor and backward, it consciously put the accent on building comprehensive national power. It developed its first intercontinental ballistic missile, the 12,000-kilometre DF-5, in the 1970s. New Delhi, in contrast, has yet to start developing its first ICBM, although ICBMs are potent symbols of power and coercion in international relations.

            Today China’s military spending is drawing a lot of international attention for two reasons. Beijing has sustained double-digit increases in such spending for two continuous decades. In that same period, India’s defence expenditure has declined appreciably as a percentage of its GDP. Moreover, China’s military spending has risen the fastest in the world in percentage terms. Its recently unveiled budget, for example, boosted defence outlays by 17.8 per cent even as India announced a modest increase of 7.8 per cent — just above its current inflation rate — in its defence appropriations.

            In absolute terms, however, US military spending has now risen to a level not seen since the Reagan-era buildup. President George W. Bush’s new $622 billion Pentagon budget slips in $40 billion in spending increases. Even without the $142-billion budget component for fighting the wars in Iraq and Afghanistan and for countering terrorism, America alone accounts for 50 per cent of the global military spending.

            Even though the official Chinese military budget (which few believe because it hides more than it reveals) is double the Indian defence-spending level, it is not the size but how defence funds are utilized that makes the India-China contrast attention-grabbing.

           China’s priority for decades has been twofold: boosting its indigenous capabilities, especially its conventional and nuclear deterrence, and working to shift the balance of power in Asia in its favour. Today its increasingly sophisticated missile force is at the heart of its military modernization. And even as it imports high-tech conventional weaponry from Russia, it has emerged as one of the biggest arms exporters in the world, with its three biggest arms clients being India’s immediate neighbours — Pakistan, Burma and Bangladesh, in that order. Pakistan’s series of missile tests in recent weeks, including the March 22 test of an extended-range cruise missile, shows that China continues to covertly assist Islamabad in breach of its non-proliferation commitments.

          India, pitiably, relies on arms imports for meeting its basic defence needs. Such is its addiction to the import of major weapons and even small arms that it has kept its domestic armament-production base weak and underdeveloped. While China apportions 28 per cent of its military budget for defence-related research and development, India’s share is less than 6 per cent.

Prevention is always preferable (and cheaper) than cure. India’s defence planning, however, is still geared toward fighting the next conventional war when the country’s interests would be better served through a concerted focus on deterring aggression.

Preventing war demands major investments in and political commitment to systems of deterrence, which have to be developed indigenously. India, however, remains more committed to the soft and spendthrift option — buying weapons off-the-shelf overseas to fight the next conventional war, although such a full-fledged war remains remote 35 years after the last one. The threats India confronts are increasingly unconventional in nature, whether it is trans-border terrorism from Pakistan or China’s new anti-satellite (ASAT) prowess. Yet Indian defence planners remain frozen in a conventional mindset. 

India’s addiction to foreign arms — many of questionable value — has become so acute that it has emerged as the world’s largest weapon importer since 2004. Defence Minister A. K. Antony’s comment last month about $8 billion to 10 billion in potential offsets from arms imports during the 11th Five-Year Plan (which begins April 1) indicates that India intends to buy foreign weapons worth between $27 billion and $33 billion in this period. Such arms imports will not make the nation strong but only eat up its meagre defence resources.

The key difference between India and China is that the latter uses its defence funds wisely and intelligently. Had the situation been the converse, with China spending on the military only what India does today but India’s defence expenditure matching the current Chinese level, it would still have been a matter of concern in the regional context for this very reason — the prudent use of funds by Beijing. A China-level Indian defence budget would have been a delectable bonanza for the major military-industrial complexes overseas.

India, lamentably, has yet to grasp the simple truth that the capacity to defend oneself with one’s own resources is the first test a nation has to pass on the way to becoming a great power. Indeed no state can aspire to be a great power if it allows asymmetry with a regional rival to widen to a point where not only its battlefield vulnerability is exposed but also its strategic space and room for manoeuvre come under growing pressure.

What India needs to do is to declare a moratorium on all arms imports for three years or so. That would help save billions of dollars without compromising its defence. Such action is necessary for it not only to kick its addiction but also to clean up the Augean stables.

          More broadly, given China’s deep-rooted authoritarianism, vibrant state-driven economy, accumulating military might and unconcealed aim to dominate Asia, India needs to narrow the power disparity with Beijing through a steadfast focus on developing and exploiting hard power — economic and military.

It is true that India tends to do well in areas where the state is little involved and that China’s development of hard power, in contrast, is a planned, state-driven exercise. But can India emerge as a great power without the state playing its due role in building comprehensive national power? The Indian state continues to be characterized by ad hoc policymaking. Furthermore, without its emergence as a major international manufacturing hub, India will continue to import more goods than it exports while being unable to alleviate unemployment and income disparities. India also should make increasing use of soft power to underpin its diplomacy and image.

India and China, admittedly, have built a mutual stake in maintaining the peaceful diplomatic environment on which their continued economic modernization and security depend. Both also seek to emphasize cooperation, for different reasons. Yet given their size, ambitions and proximity, competition is inevitable. This is more so because unlike Europe, where the most-powerful state, Germany, is content with being one among equals, Asia has yet to banish the threat of hegemony by a state within.  

India-U.S. Nuclear Deal: Long-Maul Exercise

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Long Maul
 
The July 2005 accord’s main benefit for India remains the symbolically important message that the United States, reversing a three-decade punitive approach toward India, has embraced it as a “responsible” nuclear state. The actual incentive proffered by the United States for a final deal — the lifting of civil nuclear sanctions — is of less significance because high-priced imported commercial power reactors can play only a marginal role in meeting India’s energy needs. In other words, India is already savoring the main gain from the original deal.
 
Brahma Chellaney
 
© Asian Age, March 10, 2007
 
The controversial US-India nuclear deal may not be in the news these days but it quietly continues to ferment new issues. Even as America and its friends persist with their hard sell of the deal, increasing doubts about the wisdom and costs of pushing ahead with it on terms set by the US Congress have gripped the Indian establishment. 
            After the conditions-laden Hyde Act was passed, Prime Minister Manmohan Singh had told Parliament, “Clarifications are necessary, and will be sought from the US, because there are areas which cause us concern.” However, instead of clearing India’s specific concerns, Washington continues to project a rosy picture and make light of the PM’s statement. Assistant Secretary of State Richard Boucher gloated before a congressional panel three days ago that the Hyde Act has been “very well crafted” to let President George W. Bush and Dr. Singh “move forward in a way that is prudent and in a way that meets their own expectations.”
            Yet the projected timeframe for stitching up the final deal continues to slip. When the agreement-in-principle was unveiled on July 18, 2005, it was sanguinely claimed by both sides that by spring of 2006, the deal would take effect. Then when the Hyde Act was passed, US officials voiced optimism that the final deal would be before Congress by July 2007. 
            Now Washington has further revised the deadline to late 2007 or early 2008. Even that seems overly optimistic when one bears in mind that after almost 20 months, only the first of the five phases has been completed to clinch the final deal. There is still a long road ahead for the two sides to traverse.
  Let’s not forget that the US-China nuclear deal, signed in 1984, took nearly 14 years to come into force, and another nine years thereafter for Beijing to place its first import order for US reactors. The US-India deal, in fact, involves more processes and complicating factors. Long after the original actors involved in the July 18, 2005, accord have faded into history, India would still be grappling with the deal-related issues.
  Indeed the deal’s main benefit for India remains the symbolically important message of July 18, 2005 that the United States, reversing a three-decade punitive approach toward India, has embraced it as a “responsible” nuclear state. The actual incentive proffered by the US — the lifting of civil nuclear sanctions — is of less significance because high-priced imported commercial power reactors can play only a marginal role in meeting India’s energy needs. In other words, India is already savouring the main gain from the deal.
  Still, the US continues to flog the deal when in reality the Hyde Act has become an epitome of Washington’s penchant to overplay its hand. Such overdo in seeking to hold India to a plethora of concessions and good-behaviour conditions could have made sense if the only choice New Delhi had was to take it or lump it. Fortunately for India, it has more than wiggle room. Indeed its interests do not dictate any urgency in wrapping up a final deal. Even if it deferred a decision ad infinitum, any future terms for gaining a right to import power reactors and fuel can only be better, not more mortifying, than those laid down in the Hyde Act. 
  Any dispassionate appraisal shows that, on balance, America stands to gain financially and politically more than India from the final deal. Even in the nuclear-power sector, the deal would help create thousands of new American jobs through exports to India, and provide US industry — which hasn’t built a power reactor in almost three decades — access to broad-based Indian engineering expertise in areas ranging from uranium processing to heavy-forging capabilities in reactor construction, as a currently-visiting delegation of executives of 18 US nuclear companies acknowledges.
  So it is astonishing that the American executive and legislature should have framed the terms of a final deal in such a manner as to engender growing misgivings in India. Washington clearly miscalculated that India was so desperate for a final deal that it would accept debasing terms, even if reluctantly.  
  Ironically, while India needs to be in no hurry, the deal is a matter of urgency for American strategic and financial interests. For America, the deal opens the way to not only India’s strategic co-optation but also securing tens of billions of dollars worth of contracts, as the US-India Business Council admits. It is not an accident that the most-fervent force still pushing for a final deal continues to be US corporate and political interests.
           The delay and uncertainty over a final deal have only prompted American officials to demand that India start delivering to the US on the promised rewards now. Many of the coveted rewards have little to do with the nuclear-power sector. Rather they extend from arms contracts to the opening up of the Indian retail and financial sectors. The nuclear deal is also at the core of US foreign-policy efforts to bring New Delhi closer to the American position on issues ranging from Pakistan and Iran to the Doha Development Round negotiations.
  Far from the cards being stacked against it, India today has sufficient leverage to manoeuvre negotiations with the US in a way that its interests are safeguarded. What it needs is tact, patience and perseverance for a potentially long-haul exercise.
  The correct response to Washington’s overplaying of its hand will be to focus on Indian concerns and not allow the country to be cornered by a US legislation patently beyond the pale. Shining the spotlight on India’s concerns and insisting that the US satisfactorily address them also obviates the need to reject the Hyde Act or disengage from any process. 
  Put simply, India ought to buy time to shield its long-term interests. Sound diplomacy doesn’t come without statecraft. Nor can diplomacy deliver results without team work or with the other side setting the agenda and timetable. New Delhi needs to sort out several issues.
● The sequence in which the remaining processes are to be carried out cannot disadvantage India. To some extent, this already is happening, as the US has tacitly revised the sequencing. After having complained last year that New Delhi was not doing enough to lobby member-states of the Nuclear Suppliers’ Group for a special exemption from the cartel’s export controls, the US now says the NSG process can wait. And after having announced in December that the next phase would involve negotiations to conclude a bilateral civil nuclear cooperation agreement (the so-called 123 accord), the US says India’s proposed agreement with the International Atomic Energy Agency demands equally high priority. 
            It is apparent now that the NSG would consider an exemption only after India has reached an agreement with the IAEA to bring its entire civil nuclear programme under external inspections (safeguards). The US is pressing India for an early conclusion of such an agreement with the IAEA.
  While an accommodating India has agreed to parallel processes with the IAEA and the US to negotiate a safeguards pact and a 123 agreement, respectively, the sequencing issue is far from settled. How can India finalize a safeguards pact without clarity on an NSG decision and the 123 agreement? Given that the US Congress legislated a conditional exemption for India from US export controls without awaiting the safeguards pact, why should the NSG insist on awaiting the outcome of the India-IAEA process before carving out an India-specific exception? 
  New Delhi believes that with IAEA Director-General Mohamed ElBaradei’s support, a safeguards agreement could be reached quickly, although no one can predict how such an accord would fare with the Agency’s 35-nation governing board. But once India has finalized a safeguards pact and “concluded all legal steps required prior to signature,” as sought by the US, drawing back from those “legal steps” would not be easy.
           While it is true that some other NSG members also think that the nature and scope of IAEA safeguards India agrees to would be crucial to getting the NSG to fashion a special exemption, relegating the NSG action to the penultimate process very much suits Washington. In the fifth and final phase of the deal-making process, the US would have to take the entire package of actions to its legislature for approval, as required by the Hyde Act. 
  An early NSG exemption would only arm India with leverage vis-à-vis the US. But keeping the NSG decision hanging till the last-but-one stage, Washington believes, would help make New Delhi comply with the extraneous preconditions mandated by the Hyde Act, such as the requirement that India adhere to the Missile Technology Control Regime, yet remain subject to US missile and space sanctions. The US has now submitted a detailed dossier on how India should unilaterally but formally adhere to MTCR by implementing “specific procedures.”  
● The increasingly strained relations between the Ministry of External Affairs and the Department of Atomic Energy call for urgent repair. The bad blood between the DAE and the MEA, as personified by special envoy Shyam Saran and Foreign Secretary Shivshankar Menon, is an open secret. Their thinking and approach on the deal remain not in sync.
If India is to advance its interests, this sorry state of affairs needs to end. How can India conduct effective negotiations on a nuclear deal if the chief negotiator does not inspire confidence in the nuclear establishment? Or when a media campaign now and then is scripted against nuclear scientists by a still-mysterious force? Without team play and mutual respect, diplomacy cannot work.
          In the latest disagreement, the DAE wanted the MEA to secure clarifications from the US on key Indian concerns before submitting an Indian draft of the planned 123 agreement. After all, the PM had himself underscored the necessity of such clarifications. The US-Indian differences on some fundamental issues remain so wide that without finding ways to narrow them, it would be pointless and even counterproductive, the DAE argued, to hand in an Indian counter-draft to the version submitted by the Americans in March 2006.
The DAE was genuinely concerned about India getting into a bureaucratic haggle over wording where semantic compromises are sought by negotiators to paper over real differences. The divergence on issues is such that, even if skirted, it would inexorably surface later, only to exact a heavy price. The DAE thus wanted to first clear the key differences and find mutually agreeable language codifying that understanding in the draft 123 accord. 
The Saran-Menon duo, however, pressed for forward movement in the 123 process through the submission of the Indian counter-draft. The US State Department, for its part, contended that it was futile to continue discussions on the Hyde Act because it had given all the clarifications it could on the legislation. Both the MEA and the US became impatient with what they saw as stalling tactics by the DAE.
In the end, the MEA had its way, with the foreign secretary handing over last month in Washington the Indian counter-draft — to which the US has still to respond. Despite Dr. Singh’s assurance in Parliament last December that clarifications were necessary on areas of divergence, deep differences remain on several core issues. 
Those differences have arisen because the US legislature spurned most of Dr. Singh’s benchmarks, as spelled out by him in Parliament last August 17. And despite the MEA’s meretricious faith in addressing India’s concerns through the 123 agreement, Boucher has just testified that it will be “a standard bilateral agreement” as required by US law.
● To strengthen its negotiating leverage, the government needs to concede a role for Parliament. It hardly redounds to the credit of the world’s largest democracy that its Parliament has yet to carefully scrutinize a deal that not only centres on the very future of the country’s nuclear programme, but also has divided India like no other issue in modern times. In contrast, the US Congress will have a second shot at scrutinizing and approving the deal in its final form. 
The 123 agreement, when ready, will be signed by an Indian bureaucrat, like the last 123 accord in 1963. It will not be submitted to Parliament for vetting, let alone for approval, but the US legislature will examine it minutely and have the right to attach conditions to its entry-into-force. If Dr. Singh were to agree to place the 123 accord before Parliament for scrutiny and a no-vote debate, he would only strengthen his own hands.
More broadly, a smart Indian strategy would be to drag out the negotiations into the next decade. That way India will still enjoy the main benefit of the deal without having to meet grating conditions to earn a dubious right to import power reactors. 
Like a blue chip in a soaring stock market, a rising India’s stock and influence are bound to soar internationally in the coming years, strongly positioning New Delhi to conclude a deal on terms that are fairer and more balanced than on offer today. Its interests also demand a deal encompassing not just civil nuclear export controls but the full range of dual-use technology controls in force against it.

Japan-China

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Nationalism on the rise
 
Brahma Chellaney
International Herald Tribune
 
TOKYO: With China and South Korea expressing anger after the visit Tuesday by Japan’s prime minister, Junichiro Koizumi, to the Yasukuni war shrine, it will be tempting for the rest of the world to draw a simplistic message. A halt to such pilgrimages, one might think, could put an end to strategic antagonisms in East Asia.

The reality is that revisionist history is being employed as a political tool not only by Japan but also by those who have turned Yasukuni, where 14 top war criminals are honored, into a potent symbol of friction between countries. In fact, resurgent nationalism has become the single biggest threat to Asia’s renaissance.

For more than half a century, both China and Japan have been dominated by a single party that now finds pandering to nationalistic sentiment attractive in the face of an eroding political base. The spats over history also represent a tussle for leadership in East Asia at a time when China’s dramatic rise has begun to influence geopolitics.

China uses the Nanjing massacre and Japan uses the Hiroshima and Nagasaki bombings as national symbols of crimes by outsiders. Since China became Communist, it has employed purported history to gobble up Tibet, seize Indian territories, assert its claims in the East and South China Seas, and demand Taiwan’s "return."

Today, unassuaged historical grievances not only engender ugly nationalism but also help spread the virus of xenophobia to the homogenized societies of East Asia. Focusing on unsavory history amplifies mistrust and runs counter to the liberalizing elements of globalization.

Yasukuni, a private Shinto memorial to Japan’s war dead, is a symptom of the Asian malady, not the cause.

Koizumi’s annual visits as prime minister to Yasukuni, a legacy of pre-1945 Japanese militarism, have certainly been provocative, particularly his latest – his first on the highly symbolic Aug. 15 anniversary of Japan’s World War II surrender. Yet it would be naïve to assume that nationalism-mongering in East Asia will end if his successor were to avoid the shrine.

China’s use of the history card against Japan predates Koizumi’s Yasukuni visits. Even if Koizumi’s successor were to change course, Beijing would still be able to exploit the issue of controversial Japanese history textbooks and what it sees as Japan’s insufficient penitence for its 1931 occupation of Manchuria and 1937 invasion of Han China.

In fact, it was in the 1990s, when Japan was still China-friendly and the main aid provider to Beijing, that the Chinese Communists began a "political education" campaign demonizing Japan for its past atrocities. That campaign laid the groundwork for the upsurge of nationalism and the deterioration of China- Japan relations.

In seeking to address domestic political imperatives to replace the increasingly ineffectual Communist ideology with fervent nationalism, China’s rulers have helped whip up Japanese nationalism. That is the kind of political shortsightedness that could one day spell doom for the Communist hold on power.

Those who seek to turn Yasukuni into a bigger issue than it really is are not only taking sides but also playing into the hands of Japanese nationalists, gratuitously arming them with leverage and even encouraging them to raise the stakes.

It is thus little surprise that Foreign Minister Taro Aso last week called for turning Yasukuni into a state memorial, while Koizumi’s most likely successor, Chief Cabinet Secretary Shinzo Abe, publicly questioned the legitimacy of the Allied tribunal that convicted as "Class A" war criminals – guilty of "crimes against peace" – 14 leading figures who in 1978 were added to Yasukuni’s rolls. For his part, Koizumi has used Yasukuni to stand up to China and fashion an extraordinary legacy pivoted on a nationalist shift in policy.

In his five years in office, Koizumi has not only built popular support for revision of the U.S.-imposed pacifist Constitution but also laid the foundation for the emergence of a more muscular Japan. To the nationalists, his Yasukuni visits epitomize Japan’s return to being a "normal" state.

Both Japan and China need to break free from history. Yet in April 2005, Prime Minister Wen Jiabao of China demanded that Japan "face up to history squarely," setting the stage for his country’s scripted anti-Japanese mob protests.

While railing against the risk of renewed Japanese militarism in Asia, Wen appeared oblivious to the fact that while Japan has fought no conflict in the past 60 years, China has waged wars on several flanks in the years since it came under Communist rule. Before asking Japan for yet another apology for its atrocities, China should face up to its more recent history of aggression by apologizing to the Tibetans, Indians and Vietnamese.

Disputes over Yasukuni, history textbooks, war museums and xenophobic cultural programming need to be resolved through quiet diplomacy, not an outpouring of inflammatory rhetoric that incites more forbidding nationalism.

Brahma Chellaney, author of the forthcoming "Asian Juggernaut: The Rise of China, India and Japan," is professor of strategic studies at the Center for Policy Research in New Delhi.

First published: IHT AUGUST 15, 2006

Chinese Foreign Policy

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Beijing’s historical fantasies
 
Brahma Chellaney
International Herald Tribune
 
NEW DELHI China has succeeded in putting the spotlight on Japan’s World War II history. But while harping on that distant war, Beijing refuses to face up to its own aggressions and employs revisionist history to rationalize its assertive claims and ambitions.

With fervent nationalism replacing Communist ideology, the scripted anti-Japanese mob protests earlier this year were one blatant case of the Chinese rulers’ open mixing of history with their politics. Another case in point occurred more recently at a seminar in Mumbai, after Pranab Mukherjee, the Indian defense minister, fleetingly cited the Chinese invasion of 1962 as a defining moment that set in motion India’s new thrust on defense production, and referred to the still-festering border problem with China, which he said had resolved its land-frontier disputes "with all its neighbors except India and Bhutan."

In contravention of diplomatic norms, which would have involved consulting the Chinese ambassador in New Delhi, China’s Mumbai-based consul general castigated Mukherjee on the spot for using the term "invasion" and claimed that "China did not invade India." Later, the ambassador, too, criticized Mukherjee’s reference to 1962, telling the Indian media, "Whatever happened in the past is history, and we want to put it back into history."

The incident revealed how China contradictorily deals in history vis-à-vis its neighbors to further its own foreign policy objectives: While it wants India to forget 1962, it misses no opportunity to bash Japan over the head with the history card. Its aim is not to extract more apologies from Tokyo for its World War II atrocities but to continually shame and tame Japan. (It is ironic that visiting Chinese Premier Wen Jiabao used Indian soil last April to demand that Japan "face up to history squarely," setting the stage for his country’s orchestrated anti-Japanese protests.)

Another way China manipulates history is by reconstructing the past to prepare for the future. This was illustrated by the Chinese foreign ministry’s posting on its Web site last year a revised historical claim that the ancient kingdom of Koguryo, founded in northern Korea, was Chinese. This was seen as an attempt to hedge China’s options with a potentially unified Korea.

Then there is China’s continued use of what it presents as history to advance extravagant territorial or maritime claims. Its maps show an entire Indian state — Arunachal Pradesh — as well as other Indian areas as part of China.

While the Chinese-Japanese rivalry has deep roots, dating back to the 16th century, the Chinese and Indian military frontiers met for the first time in history only in 1950, when China annexed (or as its history books say, "liberated") Tibet, a buffer nearly the size of Western Europe. Within 12 years of becoming India’s neighbor, China invaded this country, with Mao Zedong cleverly timing the aggression with the Cuban missile crisis.

Beijing has yet to grasp that a muscular approach is counterproductive. Had it not set out to "teach India a lesson," in the words of then Premier Zhou Enlai, this country probably would not have become the significant military and nuclear power that it is today. The invasion helped lay the foundation of India’s political rise.

This has a reflection today. Just a decade ago, Beijing was content with a Japan that was pacifist, China-friendly and China’s main source of low-interest loans. Now, it is locked in a cold war with Tokyo, with its growing assertiveness and ambition spurring a politically resurgent Japan.

Even the Chinese consul general’s outburst has counterproductively returned the focus onto an invasion that Beijing wishes to eliminate from public discussion and about which it hides the truth from its own people. The impertinence only draws attention to the fact that China remains unapologetic for the major stab in the back that shattered India’s pacifism and hastened the death of its first prime minister, Jawaharlal Nehru.

Japan certainly needs to come to terms with its brutal militaristic past. But just as Japanese textbooks and the museum attached to the Yasukuni Shrine glorify Japan’s past, Chinese textbooks and the military museum in Beijing distort and even falsify history. The key difference is that Chinese foreign policy seeks to make real the legend that drives official history — China’s centrality in the world.

(Brahma Chellaney is professor of strategic studies at the Center for Policy Research in New Delhi.)

 
First published

IHT DECEMBER 12, 2005

Nuclear Deal With India

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U.S. deal is a bad choice for power generation
 
Brahma Chellaney
International Herald Tribune
TUESDAY, DECEMBER 27, 2005
 
NEW DELHI India

A much-trumpeted deal between the United States and India seeks to employ the lure of assistance with commercial nuclear power to bring many Indian nuclear sites under international inspections. Even as tough negotiations are now under way to implement the deal, few have examined its premise – that the way for India to meet its rapidly expanding energy demands is to import nuclear power reactors.

The deal’s very rationale is fundamentally flawed because generating electricity from imported reactors makes little economic or strategic sense. Such imports will lead to energy insecurity and exorbitant costs.

India should not replicate in the energy sector the major mistake it has pursued on armaments. Now the world’s largest arms importer, India spends billions of dollars a year on weapons imports, some of questionable value, while it neglects to build its own armament-production base. India should not think of compounding that blunder by spending billions more to import overly expensive reactors when it can more profitably invest in the development of its own energy sources.

India should think instead of tapping its vast hydroelectric reserves and exploiting its coal reserves, which are among the largest in the world.

The global share of nuclear-generated electricity has remained constant at roughly 16 percent for a decade. Despite being free of carbon and greenhouse gases, nuclear power faces the continuing global challenge to become commercially competitive with thermal power, even when the costs of antipollution technology for the latter are included.

Studies comparing the costs of producing electricity from new nuclear, coal and natural gas plants have revealed that the baseline cost of new nuclear power remains significantly higher worldwide. In India, study after study has shown nuclear-generated electricity to be costlier than coal-generated electricity. And the price of nuclear-generated electricity in no nation includes the potential costs of spent-fuel disposal.

Still, indigenous nuclear reactors make sense to several nations, for whom nuclear power is part of a push for fuel diversity to help spread out potential long-term risks.

No country, however, has tried to build energy security by importing reactors of a type it has no intent to manufacture nationally and whose fuel requirements will keep it perpetually dependent on foreign suppliers. Yet this is the bizarre path India wishes to embark upon.

If the deal is implemented, it will allow India to import only the proliferation-resistant light-water reactor (LWR), fuelled by low-enriched uranium. LWRs, however, do not fit India’s three-phase nuclear power development program, which seeks to overcome the country’s natural-uranium shortage through a shift to fast-breeder technology. Fast-breeder reactors will employ plutonium (recycled from the spent fuel of existing plants) and thorium, of which India has 31 percent of the world’s reserves.

Yet India now wants to shortsightedly import reactors dependent on foreign fuel and spare parts to be part of what its prime minister farcically calls "a broad-based energy security policy." The government heeds no lesson from India’s bitter experiences over America’s abandonment, a quarter-century ago, of its legally binding commitment to supply fuel and parts to the first Indian nuclear plant, the General Electric-built Tarapur. Key issues relating to Tarapur remain outstanding.

Imported reactors, despite their bad economics, can make energy-security sense only if they are part of a country’s planned transition to autonomous capability. A good example is China, which is aggressively working to become self-sufficient in reactors and fuel despite entering the nuclear power field two decades after India.

As it is, India’s indigenous reactors are unable to supply electricity to consumers at rates offered by the Indian thermal power industry. The differential will become appreciably higher when electricity is produced from imported reactors.

Is it really necessary to showcase the U.S.-India strategic partnership through a deal that commits India to a wrong energy choice? Even with a tenfold increase in India’s nuclear generating capacity, nuclear power would still contribute a tiny share of this country’s total electricity.

The billions of dollars saved from not importing high-priced, uneconomical reactors could be invested domestically to generate many times more electricity from indigenous energy resources.

America can help India better by selling not its dubious nuclear reactors, but its clean-coal and renewable-energy technologies, even as it draws on the deal to end its export controls against New Delhi.

(Brahma Chellaney is professor of strategic studies at the Center for Policy Research in New Delhi.)

Nuclear Deal

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The best of intentions, the worst of results
 
Brahma Chellaney
International Herald Tribune
MONDAY, JUNE 26, 2006
 
NEW DELHI With its first anniversary approaching, the vaunted U.S.-India nuclear deal, far from adding momentum to the building of close ties between the world’s most powerful and most populous democracies, threatens to become a political albatross for both countries.

This week, Senate and House committees in the U.S. Congress are likely to take up their own versions of the bill that seek to attach tougher conditions. In New Delhi, the main opposition coalition, concerned over limits on India’s nuclear program, petitioned the president last week to stop the deal.

The nuclear deal has needlessly injected controversy and complications into a relationship whose direction already had been set toward closer engagement through a global strategic partnership. The bitter debate the deal has triggered in both countries could end up terminally poisoning the relationship.

Since the deal was signed last July, America’s image has slipped in India. The 2005 global opinion poll by the Pew Research Center disclosed that more respondents in India (71 percent) expressed a positive view of the United States than in any other nation surveyed. The 2006 Pew survey showed that America’s rating has plummeted 15 points in India.

The nuclear deal may have been founded on good intentions, and its goal is certainly bold – to eliminate a decades-long source of acrimony between the two countries by removing U.S.-fashioned multilateral controls on the export of commercial nuclear power reactors and fuel to India. At the practical level, however, the deal is rooted in several myths.

Myth: The deal will eliminate discrimination against India and end its nuclear isolation.

With or without the deal, India will stay in a third aberrant category – neither a formal nuclear power nor a nonnuclear nation, but a nonsignatory to the Nuclear Nonproliferation Treaty that possesses nuclear weapons. In fact, continued discrimination is built into the deal, with India agreeing to put 35 of its nuclear sites under international inspections of a type applicable only to nonnuclear states – permanent and legally irrevocable.

Far from seeking a blanket lifting of the nuclear embargo against India, the deal only calls for limited civilian nuclear commerce, tightly regulated by export-licensing requirements and subject to Indian "good behavior."

Myth: The way for India to meet its burgeoning energy demands is to import nuclear power reactors.

This argument is fundamentally flawed because generating electricity from imported reactors dependent on imported fuel makes little economic or strategic sense. Even if India spent tens of billions of dollars to import reactors, nuclear power would still make up a tiny share of its total electricity production, given that nuclear plants take exceptionally long to complete and the share of other energy sources is likely to rise faster.

A wiser approach for India would be to secure clean-coal and renewable energy technologies to exploit its huge coal and hydroelectric reserves, among the largest in the world.

Myth: Nuclear energy, according to President George W. Bush, will reduce India’s oil dependence and help stabilize world oil prices.

The truth is it won’t cut or slow down India’s fast- rising oil imports even marginally. India does not use oil to generate electricity.

In any case, India cannot correct its current oil reliance on the Gulf region by fashioning a new dependency on a tiny global nuclear-supply cartel made up of a few state-guided firms. While oil is freely purchasable on world markets, the global nuclear reactor and fuel business is the most politically regulated commerce in the world.

The Bush administration has a strong commercial motivation to press ahead with the deal. Having failed to use tax breaks and other incentives to revive the U.S. nuclear power industry, which has not received a single reactor order in more than 30 years, the administration is banking on India, which has agreed to import within the next six years eight reactors worth from $14.4 billion to $20 billion.

Yet the deal is already a drag on the U.S.-India relationship. It would be best to let it lapse to allow the relationship to develop without any encumbrance.

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

Nuclear

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India’s raw deal with the United States
 
By Brahma Chellaney
International Herald Tribune
 
MONDAY, AUGUST 8, 2005

NEW DELHI When President George W. Bush last month announced his support for a deal allowing civilian nuclear technology sales to India, a storm of protests arose. Nonproliferation advocates around the globe were angered that Bush had implicitly legitimized New Delhi’s nuclear arsenal, but what has been less noted is that Indian voices were raised also. Why? Because the technology deal involves an unequal bargain in which India gains few benefits even as it agrees to many restrictions – including a limit on its ability to deter its nuclear-armed neighbor China.

India claims that under the deal it will assume the same duties and rights as the other nuclear powers, "no more and no less." The truth, however, is different. Indeed, China’s welcome and Pakistan’s lack of protest indicate their glee over a deal that employs the lure of commercial nuclear power assistance to help constrain the growth of India’s nuclear military capacity.

The deal has advantages for America. If approved by the U.S. Congress and the other nuclear powers, it would lift a sales ban that dates back to the first Indian nuclear explosion in 1974. The ban has been a major stumbling block to the forging of a true U.S.-Indian strategic partnership. Another advantage for Washington is that the deal opens the way to tens of billions of dollars worth of contracts for U.S. technology.

What India gets out of it is less clear. One benefit is that the deal would allow the country to import nuclear reactors and fuel for generating electricity. But the protesters in India are focusing on the deal’s implications for the country’s nascent nuclear military program. China has always been the primary focus of its nuclear drive; India still lacks missiles that can strike deep into the Chinese heartland.

And while Bush has made only a promise that he may not be able to fulfill, the deal lists a lot of requirements for India. This includes bringing civil nuclear plants and materials under international monitoring, allowing foreign inspectors unhindered access, and refraining from further testing.

By agreeing to separate its civilian and military nuclear programs, India will raise the costs of its declared policy to build a "credible minimum deterrent." The deal strikes the weak spot of India’s nuclear military capacity – its umbilical ties with the civilian program. India’s weapons program flows out of the civilian nuclear program.

Bush, meanwhile, rejected New Delhi’s request that the deal classify India as a nuclear-weapons state. India, however, has agreed to take on obligations that the recognized nuclear powers have not accepted.

First, India is to begin "identifying and separating civilian and military nuclear facilities and programs in a phased manner" and then declare the civilian part in full to the International Atomic Energy Agency. (In contrast, China will remain free from any obligation to carry out civil-military segregation.)

Second, India has agreed to "voluntarily" allow all its civil nuclear sites to be inspected by the energy agency. The other nuclear powers have not done that in practice, because in a majority of cases there is not even the pretense of civil-military separation. The five recognized nuclear powers, under voluntary accords, offer nuclear materials and plants for agency inspections in name only. The agency, in return, carries out token inspections or, often, no inspections. India, however, will have to accept, on its civilian program, rigorous inspections. The atomic energy agency will treat it like a non-nuclear state.

Third, India has pledged "adherence," to the rules of the very nuclear technology cartels that continue to exclude it – the American-led Nuclear Suppliers’ Group and Missile Technology Control Regime.

For Bush, the deal is an astute move that can result in lucrative business contracts, secure a firm U.S. strategic foothold in India, and bring a large part of the Indian nuclear program under international monitoring. However, is it in the United States’s interest to limit India’s ability to deter China?

Bush faces an uphill task persuading both Congress and America’s partners in the Nuclear Suppliers’ Group (including China) to exempt India from export controls. New Delhi should wait until Bush has delivered his part of the bargain and then meet its obligations to the extent honored by the other nuclear powers, and with the same rights as them – "no more and no less."

(Brahma Chellaney is a professor of strategic studies at the Center for Policy Research in New Delhi. )

India-U.S. Nuclear Deal

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Long-Maul Exercise
 
The deal’s main benefit for India remains the symbolically important message of July 18, 2005 that the United States, reversing a three-decade punitive approach toward India, has embraced it as a “responsible” nuclear state. The actual incentive proffered by the United States — the lifting of civil nuclear sanctions — is of less significance because high-priced imported commercial power reactors can play only a marginal role in meeting India’s energy needs. In other words, India is already savouring the main gain from the deal.
 
Brahma Chellaney
 
© Asian Age, March 10, 2007
 
The controversial US-India nuclear deal may not be in the news these days but it quietly continues to ferment new issues. Even as America and its friends persist with their hard sell of the deal, increasing doubts about the wisdom and costs of pushing ahead with it on terms set by the US Congress have gripped the Indian establishment. 
            After the conditions-laden Hyde Act was passed, Prime Minister Manmohan Singh had told Parliament, “Clarifications are necessary, and will be sought from the US, because there are areas which cause us concern.” However, instead of clearing India’s specific concerns, Washington continues to project a rosy picture and make light of the PM’s statement. Assistant Secretary of State Richard Boucher gloated before a congressional panel three days ago that the Hyde Act has been “very well crafted” to let President George W. Bush and Dr. Singh “move forward in a way that is prudent and in a way that meets their own expectations.”
            Yet the projected timeframe for stitching up the final deal continues to slip. When the agreement-in-principle was unveiled on July 18, 2005, it was sanguinely claimed by both sides that by spring of 2006, the deal would take effect. Then when the Hyde Act was passed, US officials voiced optimism that the final deal would be before Congress by July 2007. 
            Now Washington has further revised the deadline to late 2007 or early 2008. Even that seems overly optimistic when one bears in mind that after almost 20 months, only the first of the five phases has been completed to clinch the final deal. There is still a long road ahead for the two sides to traverse.
  Let’s not forget that the US-China nuclear deal, signed in 1984, took nearly 14 years to come into force, and another nine years thereafter for Beijing to place its first import order for US reactors. The US-India deal, in fact, involves more processes and complicating factors. Long after the original actors involved in the July 18, 2005, accord have faded into history, India would still be grappling with the deal-related issues.
  Indeed the deal’s main benefit for India remains the symbolically important message of July 18, 2005 that the United States, reversing a three-decade punitive approach toward India, has embraced it as a “responsible” nuclear state. The actual incentive proffered by the US — the lifting of civil nuclear sanctions — is of less significance because high-priced imported commercial power reactors can play only a marginal role in meeting India’s energy needs. In other words, India is already savouring the main gain from the deal.
  Still, the US continues to flog the deal when in reality the Hyde Act has become an epitome of Washington’s penchant to overplay its hand. Such overdo in seeking to hold India to a plethora of concessions and good-behaviour conditions could have made sense if the only choice New Delhi had was to take it or lump it. Fortunately for India, it has more than wiggle room. Indeed its interests do not dictate any urgency in wrapping up a final deal. Even if it deferred a decision ad infinitum, any future terms for gaining a right to import power reactors and fuel can only be better, not more mortifying, than those laid down in the Hyde Act. 
  Any dispassionate appraisal shows that, on balance, America stands to gain financially and politically more than India from the final deal. Even in the nuclear-power sector, the deal would help create thousands of new American jobs through exports to India, and provide US industry — which hasn’t built a power reactor in almost three decades — access to broad-based Indian engineering expertise in areas ranging from uranium processing to heavy-forging capabilities in reactor construction, as a currently-visiting delegation of executives of 18 US nuclear companies acknowledges.
  So it is astonishing that the American executive and legislature should have framed the terms of a final deal in such a manner as to engender growing misgivings in India. Washington clearly miscalculated that India was so desperate for a final deal that it would accept debasing terms, even if reluctantly.  
  Ironically, while India needs to be in no hurry, the deal is a matter of urgency for American strategic and financial interests. For America, the deal opens the way to not only India’s strategic co-optation but also securing tens of billions of dollars worth of contracts, as the US-India Business Council admits. It is not an accident that the most-fervent force still pushing for a final deal continues to be US corporate and political interests.
           The delay and uncertainty over a final deal have only prompted American officials to demand that India start delivering to the US on the promised rewards now. Many of the coveted rewards have little to do with the nuclear-power sector. Rather they extend from arms contracts to the opening up of the Indian retail and financial sectors. The nuclear deal is also at the core of US foreign-policy efforts to bring New Delhi closer to the American position on issues ranging from Pakistan and Iran to the Doha Development Round negotiations.
  Far from the cards being stacked against it, India today has sufficient leverage to manoeuvre negotiations with the US in a way that its interests are safeguarded. What it needs is tact, patience and perseverance for a potentially long-haul exercise.
  The correct response to Washington’s overplaying of its hand will be to focus on Indian concerns and not allow the country to be cornered by a US legislation patently beyond the pale. Shining the spotlight on India’s concerns and insisting that the US satisfactorily address them also obviates the need to reject the Hyde Act or disengage from any process. 
  Put simply, India ought to buy time to shield its long-term interests. Sound diplomacy doesn’t come without statecraft. Nor can diplomacy deliver results without team work or with the other side setting the agenda and timetable. New Delhi needs to sort out several issues.
● The sequence in which the remaining processes are to be carried out cannot disadvantage India. To some extent, this already is happening, as the US has tacitly revised the sequencing. After having complained last year that New Delhi was not doing enough to lobby member-states of the Nuclear Suppliers’ Group for a special exemption from the cartel’s export controls, the US now says the NSG process can wait. And after having announced in December that the next phase would involve negotiations to conclude a bilateral civil nuclear cooperation agreement (the so-called 123 accord), the US says India’s proposed agreement with the International Atomic Energy Agency demands equally high priority. 
            It is apparent now that the NSG would consider an exemption only after India has reached an agreement with the IAEA to bring its entire civil nuclear programme under external inspections (safeguards). The US is pressing India for an early conclusion of such an agreement with the IAEA.
  While an accommodating India has agreed to parallel processes with the IAEA and the US to negotiate a safeguards pact and a 123 agreement, respectively, the sequencing issue is far from settled. How can India finalize a safeguards pact without clarity on an NSG decision and the 123 agreement? Given that the US Congress legislated a conditional exemption for India from US export controls without awaiting the safeguards pact, why should the NSG insist on awaiting the outcome of the India-IAEA process before carving out an India-specific exception? 
  New Delhi believes that with IAEA Director-General Mohamed ElBaradei’s support, a safeguards agreement could be reached quickly, although no one can predict how such an accord would fare with the Agency’s 35-nation governing board. But once India has finalized a safeguards pact and “concluded all legal steps required prior to signature,” as sought by the US, drawing back from those “legal steps” would not be easy.
           While it is true that some other NSG members also think that the nature and scope of IAEA safeguards India agrees to would be crucial to getting the NSG to fashion a special exemption, relegating the NSG action to the penultimate process very much suits Washington. In the fifth and final phase of the deal-making process, the US would have to take the entire package of actions to its legislature for approval, as required by the Hyde Act. 
  An early NSG exemption would only arm India with leverage vis-à-vis the US. But keeping the NSG decision hanging till the last-but-one stage, Washington believes, would help make New Delhi comply with the extraneous preconditions mandated by the Hyde Act, such as the requirement that India adhere to the Missile Technology Control Regime, yet remain subject to US missile and space sanctions. The US has now submitted a detailed dossier on how India should unilaterally but formally adhere to MTCR by implementing “specific procedures.”  
● The increasingly strained relations between the Ministry of External Affairs and the Department of Atomic Energy call for urgent repair. The bad blood between the DAE and the MEA, as personified by special envoy Shyam Saran and Foreign Secretary Shivshankar Menon, is an open secret. Their thinking and approach on the deal remain not in sync.
If India is to advance its interests, this sorry state of affairs needs to end. How can India conduct effective negotiations on a nuclear deal if the chief negotiator does not inspire confidence in the nuclear establishment? Or when a media campaign now and then is scripted against nuclear scientists by a still-mysterious force? Without team play and mutual respect, diplomacy cannot work.
          In the latest disagreement, the DAE wanted the MEA to secure clarifications from the US on key Indian concerns before submitting an Indian draft of the planned 123 agreement. After all, the PM had himself underscored the necessity of such clarifications. The US-Indian differences on some fundamental issues remain so wide that without finding ways to narrow them, it would be pointless and even counterproductive, the DAE argued, to hand in an Indian counter-draft to the version submitted by the Americans in March 2006.
The DAE was genuinely concerned about India getting into a bureaucratic haggle over wording where semantic compromises are sought by negotiators to paper over real differences. The divergence on issues is such that, even if skirted, it would inexorably surface later, only to exact a heavy price. The DAE thus wanted to first clear the key differences and find mutually agreeable language codifying that understanding in the draft 123 accord. 
The Saran-Menon duo, however, pressed for forward movement in the 123 process through the submission of the Indian counter-draft. The US State Department, for its part, contended that it was futile to continue discussions on the Hyde Act because it had given all the clarifications it could on the legislation. Both the MEA and the US became impatient with what they saw as stalling tactics by the DAE.
In the end, the MEA had its way, with the foreign secretary handing over last month in Washington the Indian counter-draft — to which the US has still to respond. Despite Dr. Singh’s assurance in Parliament last December that clarifications were necessary on areas of divergence, deep differences remain on several core issues. 
Those differences have arisen because the US legislature spurned most of Dr. Singh’s benchmarks, as spelled out by him in Parliament last August 17. And despite the MEA’s meretricious faith in addressing India’s concerns through the 123 agreement, Boucher has just testified that it will be “a standard bilateral agreement” as required by US law.
● To strengthen its negotiating leverage, the government needs to concede a role for Parliament. It hardly redounds to the credit of the world’s largest democracy that its Parliament has yet to carefully scrutinize a deal that not only centres on the very future of the country’s nuclear programme, but also has divided India like no other issue in modern times. In contrast, the US Congress will have a second shot at scrutinizing and approving the deal in its final form. 
The 123 agreement, when ready, will be signed by an Indian bureaucrat, like the last 123 accord in 1963. It will not be submitted to Parliament for vetting, let alone for approval, but the US legislature will examine it minutely and have the right to attach conditions to its entry-into-force. If Dr. Singh were to agree to place the 123 accord before Parliament for scrutiny and a no-vote debate, he would only strengthen his own hands.
More broadly, a smart Indian strategy would be to drag out the negotiations into the next decade. That way India will still enjoy the main benefit of the deal without having to meet grating conditions to earn a dubious right to import power reactors. 
Like a blue chip in a soaring stock market, a rising India’s stock and influence are bound to soar internationally in the coming years, strongly positioning New Delhi to conclude a deal on terms that are fairer and more balanced than on offer today. Its interests also demand a deal encompassing not just civil nuclear export controls but the full range of dual-use technology controls in force against it.