India bracing itself for American NSG draft guidelines

The divisive debate and vote in Parliament this week shows Prime Minister Manmohan Singh has absolutely no room to manoeuvre. On August 17, 2006, he told the Rajya Sabha,

"If in their final form the US legislation or the adapted NSG Guidelines impose extraneous conditions on India, the Government will draw the necessary conclusions, consistent with the commitments I have made to Parliament."

Well, the Hyde Act was full of extraneous clutter, the 123 Agreement less so. But the ultimate test will be what happens at Nuclear Suppliers Group. Either the Americans deliver the "clean, clear and unconditional" exemption from the NSG's full-scope safeguards requirement that India wants or New Delhi might well have to walk away from the deal...

26 July 2008
The Hindu

India bracing itself for American draft
Washington has so far not shared its plans with Delhi on changes to NSG guidelines

Siddharth Varadarajan

New Delhi: In a sign of the uphill territory still left to traverse on the nuclear front, Indian officials are bracing themselves for a round of tough negotiations when the Americans finally share the text of their proposed amendment to the Nuclear Suppliers Group guidelines later this week.

A short draft comprising six paragraphs was circulated by the U.S. in March 2006 but it is believed to have undergone substantial revision in Washington since then. An unnamed State Department official was quoted in a recent report of the Congressional Research Service (CRS) as saying the new draft had deliberately not been circulated for fear that it would trigger fresh objections to the nuclear deal within India.

Though South Block is familiar with elements of the new draft, the actual text is only likely to be made available to New Delhi on Friday night or Saturday, officials told The Hindu on Friday.

At previous meetings with the Indian side on the NSG issue, U.S. officials have taken the view that while they fully support India’s demand for an unconditional exemption from the NSG’s restrictive export guidelines, a number of European members of the 45-nation nuclear cartel are pressing for inclusion of conditions and restrictions.

Asked whether it was not rather late in the day to be receiving a copy of the proposed changes to the NSG guidelines, a senior official said India had been saying right from the outset that it would accept only a “clean, clear and unconditional” exemption. “There is nothing to negotiate. The last thing we wanted was to get stuck whittling down a huge list of conditions to something smaller. Instead, we are saying, ‘You know what we want, and that’s a text which is unconditional’,” the official added.

Trial balloons

Among the conditions that have already been floated as trial balloons by the U.S. in previous discussions with India are provisions for periodic review, Indian compliance with future NSG guidelines, a reversion of the ban in case India conducts a nuclear test explosion, and a ban on the sale of enrichment and reprocessing equipment.

India, say the officials, has no option but to stick to its guns.

“If anything, the fierce debate and the trust vote that the Manmohan Singh government has just won demonstrate that the Prime Minister has absolutely no wiggle room,” said an official. “If the NSG imposes conditions, India will reserve the right to walk away.”

Part of the problem is the mixed signals the Indian side has sent on what might and might not be acceptable to the government.

For example, India has maintained that its nuclear testing moratorium is a unilateral commitment and that the NSG rule change should not be conditional on it. While U.S. law may require the cessation of cooperation in the event of a nuclear test, the laws of other suppliers like Russia and France do not. Yet, in an interview to the Asian Age on April 9, Shyam Saran, the Prime Minister’s Special Envoy, said it was “unrealistic” for India to expect the NSG not to insist on a no-testing condition. This statement has since been seized upon by the Americans as evidence that India might be flexible on its demand for a clean exemption. In its May 20, 2008 report, the CRS quoted Mr. Saran’s statement to speculate that “New Delhi may be willing to accept some conditions” on the NSG exemption front after all.

Though the NSG was set up in 1975 to tighten the rules of nuclear commerce in the wake of India’s 1974 nuclear test, its guidelines did not prohibit nuclear sales to India until 1992. That year, new rules were adopted stipulating that the export of so-called “trigger list items” could be made to non-nuclear weapon states only if all their nuclear activities were under safeguards.

Under the terms of the July 18, 2005 India-U.S. agreement, Washington is committed to working with its friends and allies to “adjust international regimes to enable full civil nuclear energy cooperation and trade with India.” New Delhi maintains that this means the NSG must unconditionally waive the applicability of its full-scope safeguards rule to India and not impose any other extraneous conditions.

India also objected to a prescriptive clause in the March 2006 NSG guideline draft which said members would “continue to strive” for the “earliest possible implementation” of full-scope safeguards in India.

Fear of U.S. vendors

In Congressional testimony, U.S. officials have assured legislators that they would oppose the adoption of NSG guidelines which would place U.S. firms at a disadvantage vis-a-vis competitors.

The fear of U.S. vendors is that since their nuclear exports to India would be governed by the NSG guidelines as well as the more restrictive provisions of the Hyde Act and the 123 Agreement, New Delhi should not be able to send its business to countries with less restrictive national rules.