India’s NSG embarrassment: Why were we standing at the NSG door, pleading to be let in?


Celine Mary

If you thought it was just face that we lost in Seoul, let’s just say you may want to think again.

Earlier in June this year, Washington and New Delhi agreed to move ahead with the construction of six nuclear reactors in India by a company called Westinghouse. This was after the landmark civil nuclear deal had been signed in 2008 by the then prime minister, Manmohan Singh.

The Modi government removed the obstacle that the civil nuclear deal has been facing since 2008; namely the sticky point called liability in the case of an accident.

While the Manmohan Singh government were ready to fight it out, the Modi dispensation created an insurance pool of about $ 250 million. What it means is that in the event of an accident like the Fukushima leak if the operator exercised their ‘right to recourse’ against a supplier, the insurance pool would pay for it.

Though the government says this would create no additional burden on the taxpayer, it is a fact that the India Nuclear Insurance Pool is a risk transfer mechanism formed by GIC and 4 other PSUs contributing to the pool which are state-owned. This is out of the tax-payers’ money.

Additionally, the Modi government went ahead and ratified the 1997 Convention on Supplementary Compensation for Nuclear Damage (CSC), which allows suppliers access to the Indian market without the risk of being held responsible for potential accidents. Though section 17 of our Civil Liability for Nuclear Damage Act, 2010, provides recourse to the operator, to get the compensation from the supplier, the CSC makes the recourse available only if it has been expressly covered in the contract between the operator and the supplier. In other words, if the operator leaves this recourse out of the contract, the burden will fall on the operator’s government, in our case, India.

And what did India get for this bending backwards exercise? Nine standing ovations and 90 cheers? And of course the elusive promise of membership in the NSG. But, let’s talk about that later.

So with this deal, who really gained? Interesting story.

Westinghouse is a company in a mess. The assets, dominated by Toshiba, have been written down by Yen 260 billion, this year. Additionally, Toshiba has just suffered a Yen 483.2 billion loss. Toshiba said the net loss was mainly due to a slump in its electric and social infrastructure sector, including nuclear power businesses, as well as extra costs related to its restructuring.

But, Toshiba shares rose to six-month high after its US unit Westinghouse clinched the nuclear deal with India.

Neither Toshiba nor Westinghouse has signed a nuclear deal since the 2008-09 global financial crisis. Toshiba needed to sell its medical devices unit to Canon and its home appliances business to China’s Midea, to make ends meet.

In China, Westinghouse has been facing project management issues, whereby the date of completion which was originally set as 2013, has been pushed to 2017. Chinese officials have reportedly been frustrated that Westinghouse oversold their AP1000. Time and again, safety concerns have been raised about Westinghouse reactors. For instance, in 2012, it was reported that Westinghouse assemblies had structural damages, in Ukraine. In 2015, there was news about problems with their Reactor Coolant pumps.

After the Fukushima leak, nobody except China and India remained excited about nuclear energy. Even the U.S is tilting towards renewable energy. Though, India and China are half the world in terms of their population, it certainly does suggest a degree of desperation in the US establishment to somehow keep Westinghouse going; not on their shoulders, but ours now.

For the cash strapped Japanese conglomerate that has suffered record losses, India presented its Knight in Gujarati armour. But what are our compulsions in going with Westinghouse?

With a loss-incurring, pretty much close to its expiry date company like Westinghouse, could we not have negotiated better?

Could we not have used our leverage to push through our version of the suppliers liability clause and not go on an oasis hunting for NSG membership?

While we were playing the dandiya with Barack, what were China and Westinghouse doing? Face it, the future of Westinghouse lies in China. Why? Because while 4 AP1000 reactors are already under construction in the USA and China, the latter is also planning to build a whopping 135 more in near future.

All of them will definitely not go to Westinghouse, but the Pennsylvanian manufacturer knows well where its bread will come.

China harbours an enormous ambition of moving out from just being a buyer of nuclear technology to being a seller. So does India. In April, the U.S. government charged China General Nuclear Power Corp, best known as CGN, with conspiracy to obtaining illegal nuclear reactor building plans to help design its own reactor, known as the Hualong One. Hualong One is now already under construction in China and is expected to become operational by 2020.

With this in the background, the proximity of China with Pakistan and its blow hot-blow cold diplomatic jhoola relationship with India, China’s stand at the Indian NSG application was anyone’s guess. With a membership which requires a unanimous approval from all member countries, just China was a big enough fly in our chai. Why didn’t we see it before gulping it down?

Why were we standing at the NSG door, pleading to be let in, in the first place? Other than a token membership card, what were we aiming to gain?

If the NSG didn’t recognise us as a Nuclear Power, would we cease to be one?

Many today misinterpret non-alignment, the same way they do non-violence. Nehru who had coined this term with his ‘evil genius’ VK Menon, said “it seems to me extraordinarily presumptuous on anybody’s part to ask me to join this or that bloc. Is my country so small, so insignificant, so lacking in worth or strength, that it cannot say what it wants to say, that it must say ditto to this or that? Why should my policy be the policy of this country or that country? It is going to be my policy, the Indian policy and my country’s policy.”

This is the confidence with which we had started.

During troubled times, the Nuclear Non-Proliferation Treaty was being forced down the world’s throat by five countries that were themselves busy modernising their own nuclear arsenals. Without a nuclear disarmament policy by the rest of the world, it was lofty to imagine that India would give up its own security, for global acceptance.

The 1974 Pokhran test was conducted, as India called for a ban on nuclear testing in 1954, for a non-discriminatory treaty on non-proliferation in 1965, for a treaty on non-use of nuclear weapons in 1978, for a nuclear freeze in 1982 and for a phased program for complete elimination of nuclear weapons in 1988.

With all these pleas falling on deaf ears, India went ahead to secure itself. Why should India now try to claw back into this group? What does it stand to gain?

And this elite group is not actually bathed in virtue in any case.

According to the Article 1 of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), the N-5 countries are not to provide nuclear weapons or knowhow or assistance to non-nuclear weapon states. It was reported in the New York Times, on June 1, 1998, that China was assisting Pakistan’s nuclear programme. Further reports have come in, that nuclear material was being diverted to North Korea, through Pakistan. Article VI of NPT obligating the N-5 to pursue disarmament is also, nowhere near reality. So, why are we dying to get into this lofty company of bully nations with no other agenda but to create a chasm between the nuclear haves and have-nots?

Is nuclear cooperation only the need of India? No. U.S needs India as much.

Dr. Siegfried S. Hecker, former Director of the Los Alamos National Laboratory, observed while testifying before a U.S. Senate Committee in 2008 that the United States might benefit from access to Indian nuclear technology: “I found that whereas sanctions slowed progress in nuclear energy, they made India self-sufficient and world leaders in fast reactor technologies. While much of the world’s approach to India has been to limit its access to nuclear technology, it may well be that today we limit ourselves by not having access to India’s nuclear technology developments. Such technical views should help to advice the diplomatic efforts with India.”

That is the reason why the Bush administration bent the NSG rules in 2008, thereby making India the first non-NPT country with nuclear weapons, allowed to carry out nuclear commerce with the rest of the world.

And the world would have again bent rules for us, to supply power cheaper than the rest of the world. That is how a confident country thinks out of the box, that the world tries to trap her in; not by loading herself on the world.

Patience is a virtue few leaders have; but that can be cultivated in them by the people of the country. When leaders find that the people fall for their hyperbole, they themselves fall into the trap of believing their hyperbole. We need to move out of headlines and start calming down our leaders.

So, coming back to what we achieved or lost at Seoul; We had no business being there in the first place.

Celine Mary is a social media activist based in Doha and is working as an IT consultant. Views expressed here are the author’s own and doesn’t subscribe to them.