Stratfor on the Indo-US Civilian Nuclear Deal

Here is Stratfor's article on the Indo-US Civilian Nuclear Deal in full.

Indian Foreign Secretary Shiv Shankar Menon will have a dinner meeting with U.S. Undersecretary of State for Political Affairs Nicholas Burns on Tuesday in an attempt to iron out differences over a pending U.S.-Indian civilian nuclear agreement. It has been nearly two years since India and the United States announced a strategic nuclear partnership, yet both sides continue to stare defiantly at one another from across the negotiating table. While Indians are well accustomed to slow-moving political processes, the sticking points holding up this important deal are threatening to upset a geopolitical balance that the United States is attempting to develop in the Indian Ocean basin. Under the agreement, India will be given access to civilian nuclear fuel and technology from the 45-member Nuclear Suppliers Group, despite the fact that New Delhi is not a signatory to the Nuclear Nonproliferation Treaty (NPT). For this deal to take effect, Indian and U.S. officials must ink a bilateral deal -- termed the "123 agreement" -- that reconciles Indian demands with the final version of the bill passed by the U.S. Congress in December 2006. The problem is that India is not too pleased with several new stipulations that Congress added to the original agreement, and neither side has much of an appetite for making concessions at this point. The version that is currently up for debate stipulates that the United States will cease nuclear cooperation with India if India conducts a nuclear test in the future, and that India will not be allowed to reprocess spent nuclear fuel itself. But these two demands challenge the groundwork laid by Indian policymakers over the past 50 years. A testing ban simply will not fly in Indian defense circles. India's last major military standoff with nuclear rival Pakistan was only about five years ago, so New Delhi feels it cannot agree to become legally bound by a moratorium on nuclear testing while it faces a very real threat across its border. The issue could be resolved, however, by inserting language similar to that included in the withdrawal clauses of several other disarmament treaties such as the NPT. Such a clause allows the party in question to withdraw from the agreement when "extraordinary events ... have jeopardized the supreme interests of its country." The reprocessing issue is a bit more complex. At its current pace, India does not have enough uranium reserves to support both its civilian and military nuclear programs in the long run. With the U.S. nuclear deal, India can preserve its domestic source of uranium for its unsupervised military program, and use imported uranium for its supervised civilian reactors, allowing the Indian nuclear defense program to leap ahead (and keep Pakistani leaders up at night). However, India also owns more than 30 percent of the world's thorium reserves, compared to just 0.7 percent of uranium reserves. It makes good economic sense -- and is one of India's long-term goals -- to pursue a nuclear program that fully utilizes the country's abundant thorium reserves, rather than become increasingly dependent on foreign suppliers for its nuclear fuel. At the risk of getting too technical: uranium-fueled reactors will operate with thorium in the reactor chamber, so that while the Indians are potentially generating "traditional" nuclear power, they are also irradiating thorium, which will turn it into U-233. That U-233 can then be extracted, via reprocessing, and used to create a new type of nuclear fuel for a different reactor. This would allow India to take advantage of its wealth of thorium for power production. The problem (from the U.S. perspective) is that U-233 also can be used in nuclear weapons programs -- and the idea of indirectly supporting India's nuclear defense program is not something that U.S. President George W. Bush will be able to sell to Congress, even though, with Iraq in shambles, his administration is extremely keen on claiming a foreign policy success. Meanwhile, Indian Prime Minister Manmohan Singh is also under a great deal of political pressure at home, and cannot afford to give the main opposition Bharatiya Janata Party more fodder to use against him by appearing to cave in to U.S. demands. Indian officials and lobby groups are now being blamed in New Delhi for failing to communicate clearly India's core objections to the agreement much earlier in the process. With exasperation rising on all sides, negotiators in Washington and New Delhi are hoping to work out their differences ahead of a meeting between Bush and Singh in June on the sidelines of the G-8 summit in Germany. We are not prepared to declare the deal dead just yet, but the pressure is on.[Stratfor]