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Address by Special Envoy to the Prime Minister, Mr. Shyam Saran at the Brookings Institution, Washington DC on Indo-US Civil Nuclear Agreement: Expectations and Consequences

Brookings, Washington
March 23, 2009

President Strobe Talbot Prof. Steve Cohen, distinguished guests, ladies and gentlemen:

I thank you for inviting me here today and for giving me the opportunity to revisit an initiative that consumed such a significant chunk of our two nations diplomatic energies over the past 4 years and whose progress from start to finish is best characterized as an extended roller-coaster ride. The story of this extraordinary journey will, I have no doubt, be written some day, conveying the sense of drama that attended it every inch of the way. I will resist that temptation of story-telling today, but instead try to focus on new pathways which have been opened up by the agreement, for us to explore together, as we confront a probably more uncertain, chaotic and even dangerous world.

First and foremost, of course, is the direct fall-out from the Agreement in terms of the significant business opportunities it opens up for our two countries. India has already conveyed a letter of intent for upto 10,000 megawatts of U.S. nuclear power reactors at sites that are currently under examination within our Government. State governments, where the potential sites are being considered, will need to be consulted. The good news is that in India, being chosen as a site for nuclear power, is a privilege most states aspire to, unlike the controversy such decisions are dogged by in other countries. 

Another procedural measure, important for U.S. nuclear suppliers, is India joining the international nuclear liability convention. I understand that the inter-agency process within government has been concluded. India plans to increase substantially its nuclear power production capacity. International cooperation in civil nuclear energy will be an important means to achieve this goal. Therefore we see joining the international nuclear liability convention as being in our interest and hope to do this soon. In any event, this does not prevent U.S. companies from engaging their Indian counterparts already to prepare the ground for substantial nuclear commerce. On the U.S. side, we await the early commencement of our dialogue on arrangements to give effect to our right to reprocess U.S. origin spent fuel. I understand the new Administration is ready to engage with us at an early date.

Another trade-generating fall-out of the nuclear agreement is sometimes neglected in our discourse over its merits. Over the years, prohibition on the transfer to India, of nuclear-related items, soon expanded significantly, to cover a very broad range of dual use items and technology. With the opening up of nuclear commerce with India, there is a need now to review and remove these unnecessary restrictions on international trade with India on dual use items and technology. As India’s economy matures and its industry moves into higher end manufacturing, the demand for high technology goods and services is destined for a major boost. And the U.S., of course, remains the preferred source of such goods and services. It is also our hope that the so-called Entity List, which still prohibits sale of U.S. technology and goods to a number of Indian high-tech companies, will be scrapped, sooner rather than later. The positive impact of a more liberal technology trade regime is already beginning to make an impact on India’s sourcing of defence hardware from the U.S.

It is true that India has also been hit by the global financial and economic crisis, and our growth rate is likely to go down 2 or 3 percentage points during the next couple of years. But energy and defence will remain at the top of our national agenda and this should encourage the U.S. to look at India as a welcome source of demand for its goods and services, even as the global economy contracts. 10,000 megawatts of nuclear energy may translate into U.S. $ 150 billion worth of projects, with significant business opportunities and potential collaboration for both Indian and US companies. This would also result in significant and high quality job creation in both our countries. If India maintains its current level of defence spending to achieve its medium and long-term goals of force upgradation, then a growing part of the expected 10 year acquisition plan of US$ 120 billion could be reoriented towards the U.S. This will require the U.S. to overcome lingering Indian doubts about the reliability of U.S. supplies. Simultaneously both of us need to work together to find a mutually acceptable solution which will take care of US legal requirements about end use monitoring of transferred defence articles and also meet our sensitivities. I am certain we will be able to do so quickly given our past experience and also given the interest both our countries have in strengthening this relationship.

Let me now turn to the larger nuclear domain and explore what could be a possible Indo-US agenda for nuclear non-proliferation and nuclear disarmament. It is my sense that thanks to the civil nuclear agreement, we are now, potentially, at a different level of engagement on these hitherto sensitive and even contentious issues, compared to the past. For India, the U.S. acknowledgement, endorsed by consensus by the Nuclear Suppliers’ Group, that India’s non-proliferation record and its current credentials are impeccable, has given the country a welcome sense of vindication. From being an outlier, India is now accepted as a partner in the global nuclear domain. The success of the civil nuclear initiative has engendered a sense of assurance and confidence which enables us to look, proactively and not defensively, at a new global agenda for nuclear non-proliferation and nuclear disarmament.

There are a number of initiatives proposed by President Obama during the presidential campaign, and since his inauguration, that have caught the attention of Indian policy-makers and which could become the agenda for a substantive Indo-US engagement on nuclear security issues. Let me mention a few of them:

1. Nuclear Disarmament: President Obama has signaled that he intends to bring nuclear disarmament back on the U.S. arms control and disarmament agenda. He has stated that he intends “to make the goal of eliminating nuclear weapons world-wide a central element of U.S. nuclear policies.” This corresponds neatly with our own long-standing advocacy of nuclear disarmament as one of the highest priority for the international community. During the election campaign President Obama has also declared that he “will initiate a high level dialogue among all the declared nuclear weapons states on how to make their nuclear capabilities more transparent, create greater confidence, and move towards meaningful reductions and eventual elimination of all nuclear weapons.”

I am not aware of what the current status of this proposal is, but India would certainly support it. The best way to follow up could be for India and the U.S. to support the setting up of an Ad Hoc Working Group in the Conference on Disarmament in Geneva on nuclear disarmament. India has proposed appointing a special coordinator at the CD to carry out consultations on measures which could lead to consensus and form a basis for the mandate for a Ad-hoc working group on nuclear disarmament. We are ready to consult with the U.S. on this subject. 

2. Fissile Material Cut Off Treaty (FMCT): India has held a consistent position on Fissile Material Cut-Off and envisages it as a significant contribution to nuclear non-proliferation in all its aspects. We have encouraged the negotiation and early conclusion of a multilateral, universally applicable and effectively verifiable treaty on Fissile Material Cut-Off at the Conference on Disarmament. The Bush Administration had signaled a change in policy, to insist that the FMCT should have no verification procedures and that national means would be relied upon for ensuring compliance. Therefore, even though the July 18, 2005 Indo-US Joint Communiqué states that the two countries would cooperate to bring about an early conclusion of the FMCT in Geneva, the nature of the treaty was left deliberately ambiguous, precisely because India continued to favour multilateral verification procedures. This is also the consensus view among Conference members. We welcome the Obama Administration’s reversion to this consensus and are prepared to work together for the early conclusion of an FMCT. We need bilateral consultations on the issue of the likely mandate and scope of the negotiations. 

3. Nuclear Weapons and Terrorism: India is one of the countries taking the lead in raising international awareness of the dangers inherent in the possible link between Weapons of Mass Destruction (WMD) and international terrorism. The possible acquisition, through clandestine means, of nuclear weapons or other WMDs, by terrorist and jihadi groups, adds an entirely new dimension to the nuclear threat, a threat which cannot be deterred by the doctrines of retaliatory use. In fact, the dangers of nuclear terrorism, are another reason to seek the early elimination of nuclear weapons. For as long as there is a world divided between nuclear weapon haves and have-nots, there will always be the danger of proliferation to additional countries. This is what gives rise to a clandestine network of the kind run from Pakistan and which creates potential sources of supplies for terrorist or jihadi groups. The greatest likelihood of such a threat emanates from our neighbourhood. What is encouraging, from an Indian perspective, is President Obama’s clear recognition of this danger and his willingness to confront it with a sense of urgency. He has committed himself to working together with other concerned countries in developing and implementing a comprehensive set of standards to protect nuclear materials from terrorist threat. During his election campaign, the President also spoke about his intention to convene a Summit on preventing nuclear terrorism. We are willing to work together with the U.S. on this shared concern, which to us, living in a dangerous neighbourhood, is of great importance.

President Obama has also spoken about his plans to expand the Proliferation Security Initiative (PSI) “from its current focus on stopping illicit nuclear shipments to eradicating nuclear market networks, like the remnants of the Abdul Qadeer Khan organization.”

India is not yet a member of PSI and there have been doubts in our country about its consonance with international maritime law. However, it is my own belief that India should have an open mind on joining the PSI and in supporting its expanded mandate as envisaged by President Obama. This fits in very well with India’s own concern over clandestine proliferation, especially in our own neighbourhood, and the likelihood of such clandestine activities facilitating the acquisition of nuclear weapons or fissile material, by a terrorist or a jihadi group. We look forward to exploring these ideas further, in a spirit of shared concern and convergent interest, with the U.S.

Non-Proliferation: President Obama has declared his intention to strengthen international non-proliferation efforts. We welcome this and are willing to work together with the U.S. and the rest of the international community in building a new, effective and credible non-proliferation architecture. The new Administration has already acknowledged a key element of the Indian approach – that efforts at ensuring global non-proliferation, horizontally to additional states, are unlikely to succeed unless they are linked, integrally, with visible and concrete progress towards nuclear disarmament. Some of the initiatives I have touched upon before, fall into the broad category of non-proliferation, such as the FMCT. However, there is specific reference to restricting the expansion of sensitive nuclear fuel cycle facilities that are capable of producing bomb grade plutonium and uranium. This could take the form of creating regional or international nuclear fuel banks to meet the nuclear fuel needs of countries that do not possess reprocessing or enrichment facilities.

India has developed indigenously a robust nuclear programme covering the complete fuel cycle. Nevertheless, in practical terms, we are already committed, in the Indo-US Joint Statement of July 18, 2005, to not transferring reprocessing and enrichment technologies and equipment to countries that do not possess them. Furthermore, we have expressed our willingness to ourselves host a regional or multilateral fuel bank, to supply nuclear fuel to other states, under appropriate IAEA safeguards. We would also be prepared, as a supplier nation, to participate in an international fuel bank, which may be located in a third country. It may be however difficult for India to endorse a view that there ought to be a discriminating legal regime put in place, which would allow only some states to possess reprocessing or enrichment facilities but not others. Therefore, while reserving our position on a question of principle, we would be prepared to work together with the U.S. and other friendly countries on practical steps to discourage proliferation. 

CTBT: Let me now turn to an issue that has been seen as potentially, a contentious one in our relations with the new US administration. This, of course, is the Comprehensive Test Ban Treaty or the CTBT. President Obama has made it clear that we will seek Senate ratification of the CTBT, which the U.S. has signed, and India has not. He has also promised to launch a “diplomatic effort to bring on board other states whose ratifications are required for the treaty to enter into force.”

India has been a consistent votary of a CTBT but did not sign the CTBT as it eventually emerged because it was not explicitly linked to the goal of nuclear disarmament. For India, this was crucial since it was not acceptable to legitimize, in any way, a permanent division between nuclear weapon states and non-nuclear weapon states. The other reason was the manner in which the CTBT was pushed through, bypassing the Conference on Disarmament, which works by consensus, and bringing the issue before the UN General Assembly. This was done to over-ride Indian objections and was justifiably seen in India as a not too subtle attempt to foreclose India’s options. Additionally, India was included in a category of states whose signature and ratification was deemed necessary in order for the Treaty to come into force, again an unusual provision, directed at putting international pressure on India to join a Treaty whose provisions it did not agree with. It was against this background that India did not sign the CTBT. However, since its nuclear test in 1998, India has observed a unilateral and voluntary moratorium and is committed to its continuance. This is spelt out in the Indo-US Joint Statement of 2005. It is also our conviction that if the world moves categorically towards nuclear disarmament in a credible time-frame, then Indo-US differences over the CTBT would probably recede into the background.

Anti-Satellite Weapons: India is one of a handful of countries with significant space capabilities. We have a large number of communications and resource survey satellites currently in orbit. Although this does not fall strictly within the nuclear domain, the need to ensure the peaceful uses of outer space, is important for nuclear stability and international security. We welcome President Obama’s intention to join multilateral efforts to prevent military conflict in space and to negotiate an agreement to prohibit the testing of anti-satellite weapons. This is an area of convergence on which we would be happy to work together with the U.S. and contribute to a multilateral agreement.

Conclusion: A careful examination of initiatives President Obama has signaled his intention to pursue during his tenure reveals a number of points of convergence in the pursuit of a stable, peaceful and eventually nuclear-weapons free world. Some of these initiatives have been followed up and announced after the President’s inauguration, such as nuclear disarmament and CTBT ratification. We await the elaboration of others, including the proposed summit on nuclear terrorism, the high level dialogue among declared nuclear weapons states to kickstart the process of nuclear disarmament, the pursuit of an anti-satellite weapon agreement and the elimination of clandestine nuclear proliferation networks. This security-related agenda is substantive and no less important than the follow-up on the civil nuclear cooperation agreement in terms of expanded nuclear and high tech commerce. These are early days yet in the new Administration and India, too, is headed towards general elections. The ongoing financial and economic crisis is obviously an over-riding preoccupation not only for the U.S. but for India as well. Nevertheless, I believe that the Civil Nuclear agreement has opened up several areas of mutual interest that are worth pursuing and which should, therefore, remain within our sights in the days ahead. 

I thank you for your attention and my apologies for interrupting what looks like a sumptuous lunch.