NEWS ANALYSIS: Nuclear ban ends for India, big business begins

By Sunrita Sen Sep 7, 2008, 10:40 GMT

New Delhi - The Nuclear Suppliers Group's decision to allow trade in fissile materials and technology with India ending a 34-year ban is an acknowledgement of India's position as a responsible nuclear weapons state and would boost the global nuclear industry, officials and analysts said Sunday.

The Nuclear Suppliers Group (NSG), a body that controls all international trade in fissile materials, was formed as a reaction to India's nuclear test in 1974.

On Saturday, in Vienna, after three days of hard debate, the 45- member group decided to make an exception to its 1992 guidelines and allow trade with a non-signatory of the Nuclear Non-Proliferation Treaty with the capacity to produce nuclear bombs.

The United States had approached the group for the waiver in order to move ahead with a civilian nuclear deal with India under which it would help to build and supply fuel to civilian nuclear reactors to meet the unending energy needs of one of the world's fastest growing economies.

India, which has a closely guarded nuclear programme, both civilian and military, has agreed to international safeguards for the civilian reactors under the deal.

The debate in Vienna saw several countries raising concerns on what a waiver would mean for the global non-proliferation agenda. But Indian officials claim that given India's good non-proliferation record, unlike North Korea, Pakistan or even China, the move could only help the cause.

'Giving India the waiver and bringing it into the non- proliferation regime and acknowledging its nuclear arsenal is a gain for the international non-proliferation regime,' said K Subrahmanyam, strategic analyst based in the Indian capital.

Prime Minister Manmohan Singh said the 'forward looking and momentous decision' not only marked an end of India's long isolation from the nuclear mainstream but was a recognition of its 'impeccable' non-proliferation credentials and its status as a state with advanced nuclear technology.

During the three-decade trade ban, Indian reactors have struggled to sustain fuel supplies and its scientists have been hobbled by the lack of access to advanced technology.

Currently India has 17 reactors with another five under construction. Fourteen of these will be opened to International Atomic Energy Agency (IAEA) inspection, while the others will remain closed and can be used for India's strategic nuclear programme.

Indian officials and analysts, however, acknowledge that the NSG waiver has more to do with business than non-proliferation. India plans to buy at least 25 more reactors from Russia, France and the United States, besides building its own over the next two decades. This spells billions of dollars for the global nuclear industry.

While nuclear energy would still meet a little over 10 per cent of India's energy needs after two decades, Singh, for one, favours it as a more environment-friendly option with greater security than fossil fuels, given zooming international oil prices. India, with a population of over 1 billion, heavily depends on imported oil to meet its energy requirements.

The NSG waiver allows India to source nuclear materials not only from the US but from any of the other 44 members. However, National Security Advisor MK Narayanan indicated that any nuclear commerce was likely to be taken up only after the pact with the US came through.

'We owe the Americans. Only they could have got this (NSG waiver) through. The others could not have,' he said in an interview with NDTV news channel on Saturday.

Both Bush and US Secretary of State Condoleezza Rice are reported to have made several calls to pressure allies to agree to the India- specific waiver while the NSG session was on in Vienna.

Industry experts say india is likely to spread the largesse, possibly with Russia being the first to gain as new reactors at Kudankulam in southern Tamil Nadu state are already being built with Russian assistance.

Singh is likely to finalize a civilian nuclear deal with France during a visit to Paris scheduled for the end of September, and a similar agreement with Russia is on the anvil in December during the Russian president's visit to India.

Meanwhile, the pact with the US, which has seen three long years of negotiation, needs to be ratified by the US Congress when it meets on Monday for its last session before the Bush presidency ends.

There is a final hurdle in that any such agreement has a mandatory 30-day lie-in period before it can be approved, but the Bush administration is expected to persuade lawmakers to make an exception, Indian officials said.