Amir Ullah Khan

The debate over India agreement with the US on nuclear power has been raging and there is great opposition to the deal, especially from the BJP and the Communists. Let us see what this deal means for the Indian economy and why it is being opposed. Firstly, it must be noted that it was the then BJP government led by Prime Minister Vajpayee who launched this initiative in 2001 during his meeting with George Bush. The deal was formalized four years later when Manmohan Singh and George Bush gave a joint statement in June 2005 after which, in December 2006, the US Congress approved the deal. Secondly, it is a deal that focuses on the use of nuclear power for civilian purposes. It enables the production of electricity using nuclear power, which at the moment accounts for less than 3 per cent of Indian electricity generation. Thirdly, the Hyde Act, passed by the US Congress that allows the US government to negotiate the 123 deal, forbids further nuclear bombs being tested by India. It also forbids reprocessing of fuel to generate plutonium.

Understandably there is opposition to this deal in the US. India is not a signatory to the Non Proliferation Treaty. The NPT is a group of all nations that have developed nuclear weapons and binds these countries to some responsible behaviour. India has refused to sign this treat and therefore is not regulated by any international norm. However because India is not part of the NPT, the nuclear powers are banned from dealing with India and supplying it any raw material or technology that it needs. Some critics in the US have referred to India's status and pointed out how a country like India can be dangerous if provided with nuclear fuel and technology. This is particularly because India is close to Iran and is helping the country in developing its military. The Americans fear that India's well-developed space program and now its nuclear capabilities will get transferred to Iran. The Chinese have reason to be unhappy, their large neighbor will have access to nuclear fuel and technology and can always go against the agreement and test nuclear bombs. The same logic holds true for Pakistan.

Why are some Indians unhappy? The Communist parties and the BJP are opposed to this deal. Some opponents to the deal think this signals a shift towards a pro American policy. Even within the ruling party there are apprehensions that the Muslim constituency will be lost on account of this perception. This argument is denied by the fact that there are a large number of issues where India continues to bitterly oppose the US. At the WTO, for example, India is the leader amongst countries opposing subsides in the US and this has been the major reason for the deadlock at the WTO negotiations. Even on the issue of visas to workers, India has been bitterly opposed to the US migration policy. In the debate with the United States on outsourcing of jobs, India is seen as the big devil that is taking away local jobs to Hyderabad and Bangalore. With Presidential election scheduled for 2008, it is the US President who should be worried about the 123 deal with India and its political consequences there.

The second argument that is stated against the deal is that it will disallow India from testing nuclear weapons. Now, the last time the BJP government tested a nuclear device at Pokhran in 1998, most people were appalled. It resulted in a major fall in foreign investment, several projects had to be put on hold, India's global position became weak and foreign aid almost entirely died out. How many bombs do we need and how many more tests should we commission? In the mature nation that India is, nuclear tests are no longer seen as a certificate of patriotism. In any case, if a test has to be carried out, the US cannot stop India. It will only mean an end to the agreement. The 123 agreement prevents India from reprocessing the imported fuel to produce plutonium, but India has its own Uranium deposits if it indeed wants to develop bombs.

The final argument that is being made is the old one based on patriotism and nationalism. Similar allegations were made against Manmohan Singh when he started the economic reforms agenda. Almost everyone in the opposition, especially the BJP and the Communist parties had alleged that the government was selling the country to the demands of the World Bank and the IMF. However, economic reforms have clearly worked well and during the BJP regime in the center and in Communist controlled West Bengal were carried out with even more enthusiasm than by Manmohan Singh and his group. The self-proclaimed nationalists were agitated when the Indian government signed the WTO treaty in late 1994. The WTO was then seen as the big devil that would end India's sovereignty. Twelve years hence, nothing of that sort has happened and India's share in world trade has more than tripled. India's now is seen as an important country, and this is clearly on account of its improved economic power, and clearly not because of its domestic politics. This opposition to the 123 deal is another example of the over use of the nationalist argument to whip up sentiment and emotion.

The most important argument for the deal is that it will give India nuclear power. The Indian economy is growing at more than 8 per cent per year and the additional demand for electricity is therefore huge. There is already a big shortfall and anything done towards improving electricity supply should be welcomed. Nuclear power is a clear technological option that will help generate the 20000 Mw of power required in the next ten years. Electricity can be produced using hydropower but large dams have already been condemned by a large number of people. Thermal power uses fossil fuels and causes environmental damage; therefore not much can be done to augment the thermal power plants in the country. Nuclear plants are indeed a feasible option. The deal allows for greater investment in nuclear power as now plants can be imported and set up in partnership with foreign firms. These plants are capable of generating more than 1500 Mw of power thus allowing for large scale production which could help bring down rates of electricity supply.