THE US-INDIA NUCLEAR DEAL

INTRODUCTION

The United States-India Peaceful Atomic Energy Cooperation Act of 2006 is the legal framework for a bilateral pact between the United States and India under which the U.S. will provide access to civilian nuclear technology and access to nuclear fuel in exchange for IAEA-safeguards on civilian Indian reactors.

On March 2, 2006 in New Delhi, George W. Bush and Manmohan Singh signed a Civil Nuclear Cooperation Agreement, following an initiation during the July 2005 summit in Washington between the two leaders over civilian nuclear cooperation.

Background

Signatories to the Nuclear Non-Proliferation Treaty (NPT) are granted access to civilian nuclear technology from each other as well as nuclear fuel via the Nuclear Suppliers Group in exchange for IAEA-verified compliance of the NPT tenets,however India was not sign this treaty as a result, India has not been granted access to civilian nuclear technology from any other country.

Terms of the deal

1.India agrees to allow inspectors from the International Atomic Energy Association (IAEA), the United Nations' nuclear watchdog group, access to its civilian nuclear program

2.India commits to signing an Additional Protocol which allows more intrusive IAEA inspections—or its civilian facilities.

3.India agrees to continue its moratorium on nuclear weapons testing.

4.India commits to strengthening the security of its nuclear arsenals.

5 U.S. companies will be allowed to build nuclear reactors in India and provide nuclear fuel for its civilian energy program

6.India works toward negotiating a Fissile Material Cutoff Treaty (FMCT) with the United States banning the production of fissile material for weapons purposes

INDIA – US NUCLEAR DEAL – The Benefits

How does US benefit with this Deal?

1.If India sets up 10 large size nuclear power plants, in next 15 years, India will import technology and hardware from US for at least half of these projects,each of these plants at a green field site will cost about $4 billion. In short, orders worth $15-20 billion could be placed with the US companies in next 6 to 8 years.

2.Fund for these installations will come to India either in form of FDI or soft & commercial loans. Banks and equipment manufacturers abroad will be delighted to make this amount available to India. In return India will pay it back with goods and services export.

3. Another unstated benefit for US appears to be their assessment that India could be a counter weight to a “rising China” in the region.

4.The growing energy demands of the Indian and Chinese economies have raised questions on the impact of global energy availability. The Bush Administration has concluded that an Indian shift toward nuclear energy is in the best interest for America to secure its energy needs of coal, crude oil, and natural gas.

What does India get out of the Deal?

1.India would be eligible to buy U.S. dual-use nuclear technology, including materials and equipment that could be used to enrich uranium or reprocess plutonium, potentially creating the material for nuclear bombs. It would also receive imported fuel for its nuclear reactors.

2. U.S. investment that could spur India's economic growth and bring in $150 billion in the next decade for nuclear power plants and to modernize the country's transportation system

3. After 50 years of isolation, India will have the opportunity to say something, in world forums like UN, WTO and World monetary lending institutions, and be heard. This was not the case previously.

4.It is India's stated objective to increase the production of nuclear power generation from its present capacity of 4,000 MWe to 20,000 MWe in the next decade which can not be acquired without signing this deal.

5.India could become a full member of the select group of G-8 members.

6.Nuclear energy would save 145 million tonnes of CO2 per year

What do proponents say about the deal?

1.It would encourage India to accept international safeguards on facilities it has not allowed to be inspected before.

2.Recognizes that India has a good record on proliferation

3..Rewards India's decision to adopt similar nuclear export standards as those imposed by the Nuclear Suppliers Group (NSG).

What are the objections to the agreement?

1.The safeguards apply only to facilities and material manufactured by India beginning when the agreement was reached.

2.The deal does not require India to cap or limit its fissile material production

3.It does not require India to restrict the number of nuclear weapons it plans to produce.

4.There are far more cost-efficient ways to improve India's energy and technology sectors