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SEEMA MUSTAFA | 26 JANUARY, 2015

A Done Nuclear Deal? Really?

PM Narendra Modi receiving US President Barack Obama at the Republic Day parade


NEW DELHI: Controversial is perhaps a mild word to describe the US-India civilian nuclear agreement that generated huge controversy in India, almost brought down a government, and soured relations between the two countries to almost irreparable proportions.

The entire Opposition in India at the time, including the BJP, joined hands to oppose the agreement that was seen as converting India into a client state of the United States insofar as foreign and strategic policy was concerned. The then Prime Minister Manmohan Singh determined to get the agreement through as the centrepiece of his relationship with then US President George W.Bush worked hard behind the covers to get the deal past Parliament. In fact, at the time the Indian government obfuscated the truth with the interested media relying on Washington briefings to arrive at some understanding of what had been conceded, and accepted, by New Delhi.

The Hyde Act, the enabling document for the deal was a particularly devious document insofar as a level playing field for India was concerned, but despite the detailed opposition then PM Singh was adamant to sign on the dotted line. At the end of the day a completely unexpected turn of events in the form of the Civil Nuclear Liability Law came as a major obstacle to the implementation of the signed agreement, stunning the US into a sulk, and making Singh throw up his hands finally. This Act seeking to protect Indian interests insisted, in the wake of the Bhopal gas tragedy, that the liability for compensation in case of a nuclear accident rested not with the operator (India) but the supplier (the US nuclear companies). It also ensured that the US did not have the rights to track the nuclear fuel being used in Indian reactors. Both these provisions were not acceptable to the US, the reverse was not acceptable to India, and the deal fell through.

US President Barack Obama was clear that the deal, along with other issues, would have to be the cornerstone of his relations with the new government under Prime Minister Narendra Modi. Eager to make a breakthrough PM Modi who feels that his international acceptance is linked to his acceptance by the country that had denied him a visa for the Gujarat violence was more than keen to hammer out a solution. A contact group of experts, officials and representatives of the US companies was formed and they had three meetings---the last a few days ago in London---to reach a workable compromise. They did not, and media reports quoting sources made it clear that the ‘contact group’ had been unable to really fix the issues, and while some kind of insurance cover at the Indian end was discussed the US was not willing to give up its legal right to track the nuclear fuel used in the Indian reactors.

The sources suggested that a political nod was necessary for the as yet imperfect results of the three meetings. Namely, the liability would rest with the operator through the insurance pool; and the US would continue to track the nuclear fuel. This was then followed by again unconfirmed reports that Washington was willing to give up the last but again there were contradictory reports suggesting that no, it was not.

Then came the PM Modi and US President Barack Obama hug in Delhi followed by talks for a few hours on January 25. Both leaders addressed a joint press conference and again the nuclear deal emerged as the centrepiece of the ‘new understanding’ and as both said ‘natural partnership.’ But they gave no details. And despite briefings by officials of the Ministry of External Affairs, there were not details about what had finally been agreed, and what had not. Foreign secretary Sujatha Singh bravely declared that the deal was done, but was unable to give details that could conclusively prove that this had been done without compromising Indian interests.

The details remain vague, strange as this was projected as the coup d’etat of the great chemistry and friendship struck by PM Modi and President Obama. The virtual centrepiece of the great ties forged between the two countries reflected in a robust defence, strategic, business partnership in the offing. So the question that came to mind as a writer who has been following the nuclear agreement, the subterfuge, the half truths, the twists and the turns from the first day of its inception was simply, what has India conceded in order to make this declaration?

Is the insurance group intended to circumvent the Nuclear Liability Act whereby the supplier, and not the operator, is to pay the liability in case of a nuclear accident?

PM Modi and President Obama spoke in generalities about the agreement supposedly reached:

Prime Minister Narendra Modi: In the course of the past four months we have worked with a sense of purpose to move it forward. I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability.”

President Obama: Today, we achieved a breakthrough understanding on two issues that were holding up our advances on civil nuclear cooperation and we are committed to moving towards full implementation and this is an important step that show how we can work together to elevate our relationship.”

Foreign Secretary Sujatha Singh and officials of the Ministry of External Affairs held a press briefing just after to supposedly give details of the deal and other agreements reached. On the nuclear deal the officials remained ambiguous, though even the questions asked were not as specific as these should have been at this point. However, even to the couple of questions that were more direct the officials sought refuge in rhetoric and were unable to say exactly how the two issues that have held up the deal for six years now were resolved. Given the nature of the positions taken by the two governments at the time, who caved in? And if actually there is a compromise then what is it in real terms? What are the specifics, as these alone can make the deal? Otherwise it is certainly not done, as Sujatha Singh declared.

The only point that was new and specific was that a India Nuclear Insurance Pool was being set up. According to the MEA joint secretary Amandeep Singh this was intended as a risk transfer mechanism being formed by four public sector undertakings in the general insurance business in India. These companies would contribute Rs 750 crores to the pool and the balance (of Rs 750 crores probably) would be contributed by the government on a tapering basis. But this was it. The premium he admitted was still being worked out and no one asked so he did not need to spell out whether this was the alternative that would pay the liability in case of a nuclear accident? And whether the US was off the hook despite the Nuclear Liability law here? And how could India or any country even think that Rs 1500 crores was actually a sum that could even mildly compensate victims of a nuclear accident?

The silence and deliberate obfuscation suggests that there is something to hide. And that while both President Obama and PM Modi claim to have given the nod for the deal, there is a clear cut attempt at least in New Delhi to gloss over the all important details. In what way have the issues that held up the deal been resolved? What is the solution read compromise reached? Clearly India’s pristine position as reflected by the Nuclear Liability law passed by Parliament in its wisdom no longer holds, otherwise the Americans would not have agreed. So what has been conceded? And what has been gained, if anything at all.

The commercial side has not even been looked at, and this will open an entirely new and vexed chapter of negotiations. But this is dependent entirely on what PM Modi and President Obama have given a nod to, and to what extent have they compromised, or otherwise, their respective nations interests.

Clear cut answers are required before the declaration of triumph can be accepted as such.

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