The 123 Civil Nuclear Agreement between India and the United States was approved by the Senate by an 86-13 vote on Oct 1, 2008. This landmark deal, three years in coming, represents a major foreign policy achievement for both the Bush administration in its final months and Manmohan Singh’s coalition government in India that was almost voted out of power after allies withdrew support over the government’s aggressive backing of the pact. Ending thirty years of India’s nuclear isolation following its nuclear tests, the pact allows American businesses to begin selling nuclear fuel, technology and reactors to India in exchange for safeguards and U.N. inspections at India’s civilian, but not military, nuclear plants.
This pact offers a means for India to meet its rapidly growing energy needs as a result of the country’s rapid growth and development and dilapidated power infrastructure, which has led to persistent power shortages. India’s power-generation capacity lags far behind its needs. The economy has grown an average of 8.7% annually over the past five years. That trend, combined with rising incomes, has lifted electricity demand 9% a year while supply has not kept up. It also paves the way for the French, Russian, Japanese and U.S. companies to access India’s lucrative and expanding nuclear power market. India’s civilian nuclear market needs investments of US $150 billion by 2030, according to the U.S. Chamber of Commerce. The Confederation of Indian Industry has estimated that India’s plan to build 18 to 20 reactors to supplement the current 22 entails business opportunities worth US$30 billion. India’s objective is to increase reliance on nuclear power from the present 3% to 25% by 2050.
Critics of the deal have called it a “nonproliferation disaster” accusing it of sparking a nuclear arms race in Asia. India, along with Pakistan and Israel, has never signed the Non-Proliferation Treaty but conducted nuclear tests in 1974 and 1998. According to Daryl G Kimball (Arms Control Association), the deal creates a country-specific exemption from the core nonproliferation standards that the United States has spent decades to establish and undermines U.S. efforts to convince Iran and North Korea to end their nuclear programs. Critics argue that by only putting 14 of its 22 reactors under international safeguards, India can continue to expand its nuclear weapons program. Secretary of State Condoleezza Rice has assured Washington that any future testing by India would entail an automatic end to the pact as well as the imposition of international sanctions. An amendment to stop U.S. nuclear trade should India detonate a nuclear device was rejected by the Senate. India has been steadfast that the new access to international supplies of nuclear fuel and technology does not affect its freedom to test weapons, should the country wish to do so.
Supporters of the deal argue that the deal will help India become a responsible world power and will forge ties between two large democracies – a very important partnership for world peace. Furthermore, it will create thousands of high-tech jobs, ensure adoption of the safest, non-polluting energy-generation technology and help solve India’s energy needs.