Energy Security Implications of the U.S.-India Nuclear Deal
Appeared in Journal of Energy Security, April 23, 2009
By Jeremy Carl
On July 22, 2008, India's government led by Prime Minister Manmohan Singh narrowly survived a no-confidence vote, the first such vote in Indian politics in the last decade. Opposition lawmakers waved stacks of Indian currency on the floor during the debate, and charged that Singh's Congress-Party-led coalition government had only carried the day due to bribery of reluctant lawmakers. The entire scene was one of the most turbulent political events in India during the last several years, and the issue dominated India's news media in the days leading up to the vote. What was surprising was the issue that led to the no confidence vote; it was not related to caste, regionalism, farmers, the Hindu-Muslim conflict or any one of the many other popular issues that generally dominate the Indian political debate. Instead, India's government came close to collapse because it had approved a deal with the United states in which the US agreed to share nuclear technology and fuel with India (breaking a longtime international blockade against India by the Nuclear Suppliers Group [NSG]) in exchange for granting the International Atomic Energy Agency (IAEA) limited rights of inspection of India's nuclear facilities. The US-India Nuclear deal crated a unique exception to the non-proliferation treaty (NPT) for India. The US then aggressively lobbied its partner nations in the nuclear suppliers group to extend their own NPT exceptions to India.
Currently nuclear power In India makes up just 2% of India's total energy consumption. To understand why India felt a need to risk its governmental survival on what would seem to be a peripheral issue, it is important to understand the broader political context in which Indian energy policy, and in particular nuclear energy policy, operates.
It is also useful to understand the misperceptions that many in the policy community have about the deal. Many analysts, particularly those based in Washington, see the US-India Nuclear deal as a mere fig-leaf for India's desire to acquire additional nuclear fuel and technology for weapons production. While it was certainly true that India wanted the ability to gain increased access to fuel for its nuclear arsenal (though this is formally disallowed under the agreement) it is equally the case that India was desperate for an alternative to its current coal-based fuel system, which is straining mightily under increased domestic energy demand and the continuing struggles of an industrial reform process. The Indian leadership saw a potential increase in nuclear energy as a valuable alternative to coal that would provide stable baseload electricity and also possibly address (at least rhetorically) the climate implications of India's coal build-out. Given the theoretical restriction against repurposing imported fuels and technologies for weapons, one can expect India to proceed very cautiously regarding taking risks with turning "civilian" nuclear fuel and technology to military uses. But in Washington, pundits and researchers tend to be somewhat ignorant of Indian domestic political interests and more carefully attuned to issues surrounding nuclear weapons, causing them to overemphasize the weapons dimension of the agreement. For India, this deal is just as much about energy as it is about weapons.