All-clear for nuclear trade with India

08 September 2008

Guidelines are in place for international trade with India in nuclear energy technologies after a positive decision from the Nuclear Suppliers Group (NSG).


The NSG, which comprises 45 nations, held an extended meeting in Vienna, Austria last week following on from its first talks late in August. The first meeting saw opposition from a number of countries to the US-led proposal to make special rules for India, but second-round negotiations saw these issues resolved.


A statement from Indian prime minister Manmohan Singh said: "This is a forward-looking and momentous decision. It marks the end of India's decades-long isolation from the nuclear mainstream and of the technology denial regime. It is a recognition of India's impeccable non-proliferation credentials and its status as a state with advanced nuclear technology. It will give an impetus to India's pursuit of environmentally sustainable economic growth."


Rapid growth expected


India has an almost completely home-grown nuclear power sector which provides only a tiny fraction of the electricity needs of its 1.1 billion people. Major limiting factors have been having to rely on a meagre domestic supply of uranium while duplicating research and development already completed in other nations. With international trade, Indian nuclear energy could grow to provide 25% or more of electricity while Indian nuclear companies could find export markets for their own products and services.


The NSG decision allows the transfer of 'Trigger List' nuclear technology items to India for peaceful use. The Trigger List is so called because the transfer of any of its items would require nuclear safeguards to be in place at the receiving state to ensure the new equipment would be used only for peaceful uses.


India had a limited safeguards agreement with the International Atomic Energy Agency (IAEA) prior to the start of the initiative to bring it into international trade, but this has now been superceded by a far wider version, which is very much more restrictive than for countries with nuclear weapons that have signed the Nuclear non-Proliferation Treaty.


India is also now allowed to buy and sell 'dual-use' nuclear technology, which could in theory be applied to peaceful and military practises. This category covers a range of equipment, materials and software as well as other nuclear-related technologies. Significant in this group are nuclear fuel materials like uranium and technologies for uranium enrichment and used nuclear fuel reprocessing.


Trade in these nuclear items is permitted as long as it is in line with pre-existing non-proliferation rules set out by the IAEA and agreed by its member states. NSG governments are also required to notify each other of nuclear transfers to India and have been asked to share information on their bilateral deals with the nation.


Rounds of deals to follow


A range of bilateral deals is now expected as these are prerequisites for each nation's companies to actually begin trading. It is thought that Indian leaders have already concluded texts with France, Russia and the UK, but chief among these deals is the '123 Agreement' between the USA and India, negotiations for which started this whole initiative in July 2005.


After amendments in the USA, then a roadblock in the Indian parliament serious enough for prime minister Manmohan Singh to risk his government, the text now awaits final approval from the US Congress. This must come, however, before the end of President George Bush's term in office, or be renegotiated under the next President.


Ron Somers, president of the US-India Business Council called the NSG approval an "historic step forward for India and the world" before insisting "it is vital for the overall bilateral relationship and for US commercial interests that the 123 Agreement is ratified in this 110th Congress."