G8 ban on ENR sales shuts Russian door on India

... but the Government still has its head buried in the sand...

12 July 2009
The Hindu
[For the print edition, this story was split into two. The URL of the second part, 'India to "study" G8 ban on nuclear fuel cycle sales', can be accessed here.]

G8 ban on ENR sales shuts Russian door on India

Siddharth Varadarajan

New Delhi: By not moving quickly to conclude an umbrella nuclear cooperation agreement with Russia before the international goalposts for commerce were moved again, India has made it easier for Washington to roll back the clean exemption the Nuclear Suppliers Group granted New Delhi from its export restrictions last year.

Diplomatic sources told The Hindu that Moscow had approached the Indian side several months ago for the negotiation of an agreement going beyond the one already signed for the purchase of additional reactors at Koodankoolam. Such an agreement could have provided for cooperation across the full range of civil nuclear activities and technologies, including enrichment and reprocessing (ENR), and allowed Russia to buck new rules restricting international trade in these technologies by saying such cooperation with India had already been “grandfathered”.

Though a draft agreement was developed, India showed no urgency in the matter. And now, it may be too late.

On July 8, the G8 declared: “Pending completion of work in the NSG [on new rules restricting ENR sales], we agree to implement [the “clean text” developed at the 20 November 2008 Consultative Group meeting] on a national basis in the next year”.

According to G8 diplomats, this text prohibits the sale of ENR items and technology to countries like India that are not parties to the Nuclear Non-proliferation Treaty.

After being blindsided by the G8’s decision, officials here scrambled Saturday to make light of the consequences.

South Block officials said that the U.S. had been trying from the outset to exclude ENR items from the purview of nuclear cooperation with India and that it was “only to be expected” that Washington would keep working in this direction.

Despite this knowledge, however, no attempts were made to enlist the support of Russia or France --- two countries that stand to make billions from reactor sales to India --- in the battle to prevent dilution of the principle of “full civil nuclear cooperation”.

The Ministry of External Affairs did not respond to a formal query on whether New Delhi intended to raise the rollback issue with the eight governments --- all of whom were party to the clean exemption the Nuclear Suppliers Group granted India last September from its ban on nuclear sales to non-NPT signatories.

Instead, sources said it was important for India to see the text of what the G8 had endorsed before reaching any conclusion about its implications. The sources added that US and G8 attempts to restrict ENR sales go back to 2004 and were not specifically directed at India. “But as far as India is concerned, last year’s NSG waiver was a unanimous decision to which the G8 countries were party and that is the agreement we intend to go by”.

Some officials claimed the issue was not critical since India did not need ENR technologies from abroad, though they acknowledged the danger of diluting the principle of Indian eligibility for full civil nuclear commerce. However, with sources expressing the hope that the G8 nonproliferation statement might not be “binding” on all its members, it is evident that South Block has still not fully digested the implications of what has happened at L’Aquila.

Whatever New Delhi may choose to believe, the door for ENR sales from the G8 has been shut for now. G8 diplomatic sources told The Hindu the adoption of the decision meant countries such as Russia and France would no longer be able to sell ENR items to India and that there was now a greater likelihood of the NSG forging a consensus along the lines of what has been agreed at L'Aquila.

The G8 decision does not affect the sale of nuclear reactors and fuel, or the right of India to reprocess spent fuel on the basis of bilateral agreements with individual suppliers. Unless overturned, it will, however, affect the cost-effectiveness of India’s reprocessing and enrichment operations since all components will have to be indigenously manufactured.