NSG membership isn’t a big deal

| | in Oped

Though much diplomatic capital is being spent on it, membership to the elite club brings few benefits. Instead, it was the 2008 NSG waiver that had already put tangibles on the table, which India failed to leverage in its favour

These days, most of India’s diplomatic capital seems to be expended on dead-ends which India either can’t capitalise or which have no intrinsic value to the country. India’s quest for membership to the Nuclear Supplier’s Group is no different. The question is: What tangibles does India gain from NSG membership?

In many ways, the template for the current round of hopelessness was set by the nuclear waiver India in 2008. Make no mistake: The 2008 waiver was far more significant and meaningful than NSG membership ever can be. The main reasons, shorn of all hyperbole and chaff, for the 2008 waiver were two fold: First the bifurcation of civil and military nuclear programmes would allow a civil nuclear renaissance. This would allow India’s chronic energy shortages to be met by nuclear reactors, fuelling industrialisation and development.

Second, personnel from the civil to the military programme were allowed to to shift seamlessly. Though this went under the radar, it was perhaps the most significant part of the waiver. What it meant was that French reprocessing technology, the international gold standard of reprocessing, would be released to India should India buy a lot of French-designed reactors.

The French, in opposition to the US, have since confirmed that such reprocessing technology is now released for export to India under the 2008 waiver. By itself, the reprocessing technology is not significant. However, the fact that personnel can shift between civil and military means that such transferred technology could now be duplicated for the military programme, making th refining of weapons-grade fissile material more efficient.

So, what came of these two tangible benefits? Almost nothing. None of the foreign purchases of reactors have materialised to incentivise support for the next round. Much of this has to do with the Atomic Energy Commission’s insistence that its own domestic designs are cheaper and better for India, from an energy security point of view.

The problem is that these reactors have yet to demonstrate commercial viability. While the BJP is mostly to blame for the absurd Civil Liability for Nuclear Damage Act, the AEC’s own internal politics had just as much to do with that ill-advised piece of legislation. Either way, India is now stuck without a viable domestic option and without a foreign product to import. India’s inability to deliver transactional gains to its supporters, therefore, is seen as a sign on unreliability.

Why is the liability clause such a thoroughly pointless piece of legislation? As a rule, it is the operator who is held responsible for accidents. It is the operator’s job to ensure quality control with responsibility for the secondary and tertiary contracts which ensure operability, reliability and safety.

Take the 2010 Florida oil spill for example: The US Government has levied over $30 billion in fines on the operator British Petroleum — who in turn had the option of sueing rig owner Transocean, cementer Halliburton and blowout preventer manufacturer Cameron to recoup its losses.

The liability Act in that sense is no different from the equally pointless quality assurance clause that Dassault is being asked to provide for locally manufactured Rafale fighter jets. In both cases, foreign companies are being asked to pick up the tab for the notorious indiscipline of Indian labour and the lack of world class management and quality control practices of the Indian public sector.

The lack of foreign purchase has also been stalled by another bottleneck: All Western reactors, owning to economies of scale, use the Japanese manufactured-reactor vessel, an incredibly difficult piece of technology to manufacture. This means every reactor India buys from abroad is subject to a Japanese veto. Given Japan’s refusal to sign a bilateral nuclear deal, the probability of export clearance is slim, and the chances of technology transfer non-existent.

There were two ways that India could have bypassed this —both involving the large-scale purchase of foreign reactors. This would have ensured economic and political pressure on Japan on commercial grounds and, failing that, it would have created the economies of scale to break the Japanese monopoly on this technology. However, all of this was snuffed out by our ill-conceived liability Act.

There was also a third solution — the build-to-operate model used in countries where the manufacturer is also the main energy supplier. However, this would have meant that while India got nuclear power plants, it would not be given the technology. Also, the gigantic energy losses in India through theft and bad transmission, resulting in approximately $17 billion per year, or the cost for four imported reactors, means that no foreign company is interested in the build-to-operate model.

The question now is: How will NSG membership untie us from our own stupidity? The belief that Japan will somehow agree to a bilateral deal on the basis of ‘legitimacy’ that the 2008 waiver granted us stands on shaky ground. In short, NSG membership will not solve any of our problems which are all self-created.

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