India-U.S. Nuclear Deal Sputtering

Under Secretary of State Nicholas Burns (R) shakes hands with Indian Foreign Secretary Shiv Shankar Menon during a meeting in New Delhi, India on June 1. (Photo: Raveendran / AFP-Getty Images)

The much-heralded, but controversial two-year-old India-United States civilian nuclear deal was supposed to be the benchmark for the growing bonhomie between the two most vibrant democracies in the world. However, the final bilateral agreement is just sputtering along the diplomatic labyrinth, with the final post still a distance away.

The harsh world of realpolitik and the self-interests of both nations have replaced initial verbal niceties like "nearly there," "fusion of ideas" and a promise to "square the circle" to realistic phrases like "U.S. frustrated," "some hard work still needs to be done," "still have some distance to travel" and "both sides must compromise in order to close the gaps."

Senior Indian and American diplomats at the end of their latest three-day negotiations in New Delhi admitted that there was a "stalemate," but not a "deadlock" over the deal and that "more work remains to be done to complete arrangements that will permit a civilian nuclear agreement to be finalized."

There was an expectation that the negotiators would be able to narrow any differences before President Bush and Indian Prime Minister Manmohan Singh, the chief architects of the 2005 pact, met during the Group of Eight (G-8) Industrialized Nations summit being held in Heilingendamn, Germany this week.

India, along with China, South Africa and Mexico form part of the "outreach" group that will hold talks with the G-8 nations during the conference.

Under Secretary of State Nicholas Burns, who led the American delegation, was expected to address the media along with his Indian counterpart Foreign Secretary Shivshankar Menon but at the end of the talks did not do so as he had to "catch a flight."

Indian sources quoted in the local media indicated that the nuclear deadlock made Burns skip the event, as there were no results to show from the discussions. The senior American official actually flew out from New Delhi hours after the talks ended on Saturday, June 2. The local American embassy instead issued a press statement.

Bush and Singh signed the civilian cooperation agreement in July 2005 when the Indian leader was Washington with the aim of overturning three decades of American sanctions on nuclear trade to help India meet its burgeoning energy needs, even though New Delhi has tested nuclear weapons and is not a signatory of the Nuclear Non-Proliferation Treaty (NPT).

The pact was seen by both nations as a new milestone in the rapidly growing United States-India relationship and also as a pillar of 21st century international security.

Besides being a strategic partner, Washington sees India as a rising Asian superpower and the deal was to end India's global nuclear isolation by allowing other nations to sell their nuclear fuel and equipment to New Delhi.

Congress approved it last December but the two nations have failed so far to conclude a bilateral pact due to India's stand that it will not accept new terms in the deal included at the insistence of American lawmakers. Officials from both nations have met four times since last year to conclude the pact.

The deal has been at the center of criticism from the start, with commentators in both countries lamenting that their government was giving away too much to the other side.

According to Menon, in the most recent talks the two sides "had managed to come to an understanding of most of the issues that divide us and we have removed most issues from the table."

The sticking points are the issues of reprocessing spent nuclear fuel and cessation of cooperation in the event that India conducts another nuclear test,  an action it has taken in 1974 and 1998.

India and the United States also signed a nuclear fuel separation plan agreement in March 2006 which guarantees — including reserves — adequate fuel for India's reactors.

Due to the "Tarapur" effect, New Delhi is extremely cautious on these two issues after being previously let down by the United States.

In 1963 India obtained its first two power reactors from the United States with a promise of long-term support. However, in the 1970's Washington unilaterally changed its policy and stopped supplying fuel. Huge pools of spent fuel produced by American-built reactors began to accumulate at the nuclear power plant in Tarapur, India, with Washington neither agreeing to take it back nor granting India the permission to process it.

"That is why we are insisting on a clear, rights-based approach," said an Indian official.

The United States is insisting on taking the issue "down the line," or leaving it to be dealt later, when India is ready to reprocess the spent fuel from the noted reactors. Under the Atomic Energy Act, any country that buys or uses American fuel or equipment requires Washington's consent before starting the reprocessing the spent fuel.

Washington also says it is willing to offer India the "forward-looking" model along the same lines it has with China. The 1985 agreement with Beijing provides for altering American-originated material and consultations for a mutually acceptable arrangement, through a "presumption of approval" understanding.

India, while noting its declared policy of a unilateral moratorium on nuclear testing, refuses to accept the condition as legally binding.

Even as the nuclear deal has hit a stalemate, Bush reportedly proposes to ask India and China to cut their greenhouse gas emissions at the G-8 summit.

Also, there is a question of Washington opposing the construction of the over $7 billion Iran-Pakistan-India gas pipeline project. The three nations plan on signing a framework agreement soon, according to Indian officials.

Billed as a "peace pipeline," the project is designed to cater to the growing energy demands of India and Pakistan. However, Washington has stated that the pipeline will give Iran the revenues to further its alleged nuclear weapons program.

Singh is under pressure at home from both opposition figures and allies, including the Communist parties, to make a statement in Parliament over the status of the nuclear deal and the gas pipeline agreement. In turn, Washington has been accused of "gross interference" in India's domestic affairs.

Indian security experts indicate that if the India-United States nuclear deal is not completed soon, it will get shoved onto the backburner as America heads for the 2008 presidential polls. Singh also faces a national election in 2009.

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