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A Statement of Intent

Reviewing Mr. Modi’s visit to the U.S. and U.S.-India security cooperation.

To say that Mr. Modi’s first visit to the U.S. as prime minister attracted considerable attention from India’s media would be the understatement of the year.  New York City and Washington, D.C. were abound with media personalities, politicians, and supporters and protesters alike.  In his four-day visit to the U.S., Mr. Modi attended and addressed the United Nations General Assembly, met with business and political leaders, addressed a large rally at New York’s historic Madison Square Garden, co-authored an opinion piece in the Washington Post with U.S. President Barack Obama, and held formal consultations with Mr. Obama and members of his administration.

However, despite the pomp and circumstance, formal consultations between Mr. Modi’s contingent and the Obama administration did not yield substantive results in defense and security.  The India-U.S. Defence Framework, which is due to expire in 2015, is still in the process of being negotiated between the two governments and has not yet been renewed.  The U.S.-India Joint Statement merely signaled a general desire to renew the framework, while also committing to expand political-military dialog to include defense licensing and cooperation.

No new defense deals were signed during the visit.  Although the sale of Chinook heavy-lift helicopters and Apache attack helicopters are being discussed between India and the U.S., the negotiations are clearly not a point where the deal could be signed.  Further, surprisingly little was mentioned on U.S.-India cooperation in a post-2014 Afghanistan, even as the U.S. and NATO concluded security agreements on force levels with the new unity government in Kabul.

The departure of U.S. troops from Afghanistan is a cause for concern for India and has direct national security implications.  India’s previous government shied away from arming and equipping Afghanistan’s armed forces, but positions of old need not preclude the new government from working with the U.S. to identify areas where India can substantively contribute to securing Afghanistan.

None of this necessarily means that Mr. Modi’s visit was a failure.  It is clear that Mr. Modi views relations with the U.S. as being vital to India’s security and progress and that he has a vision for future cooperation between the two countries.  However, Mr. Modi has only been in office for four months; it will take him and his government time to translate vision into action.  But if the India-U.S. Joint Declaration is anything to go by, it serves as positive statement of intent for future cooperation between the U.S. and India.

The statement reaffirms the commitment to fully implement the U.S.-India civil nuclear agreement, and specifically addresses the need for further dialog on the issue of supplier-side liability — where India is a victim of its own self-inflicted wounds — paving the way for U.S.-built nuclear plants in India.

The renewed commitment to cooperate on disrupting terrorist groups is also a positive.  Contrary to some media reports, this was not the first India-U.S. joint statement signaling an intent to cooperate against terror groups (including Lashkar-e-Taiba), nor was it the first joint statement to call on Pakistan to bring those responsible for 26/11 to justice.  Indeed previous joint statements by Dr. Manmohan Singh and Mr. Obama articulated similar objectives.

This was, however, the first time that other criminal and terrorist groups – ISIL, al-Qaeda, Jaish-e-Mohammad, D-Company and the Haqqani Network – were specifically called out.  It bodes well for future India-U.S. anti-terrorism cooperation that the U.S. Department of Treasury today announced further sanctions against Fazl ur-Rehman, leader of the Harakat ul-Mujahideen, and against two Pakistani individuals for providing financial support to Lashkar-e-Taiba.

While previous joint statements had quite generally alluded to the need to promote freedom of navigation in accordance with UNCLOS, this was the first time that the South China Sea was specifically referenced, as were the calls to resolve territorial and maritime disputes through “peaceful means.”  A less-hesitant articulation on the part of India is welcome, since China doesn’t seem particularly placated by the weak and deliberately-vague positions of old anyway.

India is also faced with tremendous human security challenges as the U.S. and its Middle Eastern allies target ISIL positions in Syria and Iraq.  Indeed, despite the thousands evacuated earlier this year, many Indian citizens still continue to reside in Iraq (including some potentially illegally) and are vulnerable to being trapped in areas of active conflict or held hostage by ISIL.  In this regard, the stated intention to cooperate on responding to the needs of those stranded in conflict zones is encouraging.

The U.S.-India joint statement was also unusually strong on Iran, calling on it to comply with UNSC-imposed obligations and cooperate fully with the IAEA.  One wonders what the Iranians make of the language in the joint statement and Mr. Modi’s meeting with Prime Minister Netanyahu on Sunday.  Perhaps some quiet diplomacy is needed with the Iranians.

Ultimately, the joint statement augurs well for U.S.-India ties, but operationalizing many of the commitments outlined in the statement will require sustained political stewardship at the highest levels of government in New Delhi and Washington, D.C.  It should serve as a warning to both governments that similarly visionary statements left much unrealized as a result of both the Obama administration’s preoccupation with domestic issues as well as the UPA’s feckless and ineffectual leadership.

In order to overcome the possibility of a relapse, Richard Fontaine’s policy brief for the Center for a New American Society recommends that each government designate a “high-level relationship owner,” suggesting that the U.S. vice president or a senior cabinet-level official for the U.S., and the National Security Advisor for India could play such a role.  It is a recommendation worthy of consideration in New Delhi and D.C.

 

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Winning the small nuclear battles

Dr. Singh and Mr. Obama must move forward on nuclear trade when they meet this week.

Some newspapers and political parties would have us believe that the PM is in New York with the express intention of selling India’s soul to America.

They contend that India’s Nuclear Liability Act (NLA), which allows for costs to be imposed on the supplier in the event of a nuclear disaster in India, is about to be sold down the river by the PM in order to remove impediments to the participation of U.S. firms in civil nuclear trade with India.  There was furor when it emerged that the Attorney General had issued an opinion indicating that the Nuclear Power Corporation (NPCIL) had the right to waive the liability provision, if provided for in a contract.

Outraged opposition parties and left-leaning media outlets argued that India was bypassing its own law to please the U.S.  A few observations on the subject:

The language in the NLA appears to be fairly clear on the applicability of supplier liability.  Clause 17 reads:

The operator of the nuclear installation, after paying the compensation for nuclear
damage in accordance with section 6, shall have a right of recourse where-

(a)    such right is expressly provided for in a contract in writing;
(b)    the nuclear incident has resulted as a consequence of an act of supplier or his
employee, which includes supply of equipment or material with patent or latent defects
or sub-standard services;
(c)    the nuclear incident has resulted from the act of commission or omission of
an individual done with the intent to cause nuclear damage.  [THE CIVIL LIABILITY FOR NUCLEAR DAMAGE ACT, 2010]

We’ll leave matters relating to the legal interpretation of the language in the Act to the experts on the subject, but if our admittedly untrained legal interpretation is correct, clause 17(a) does allow for supplier-side liability if “expressly provided for” in a contract between the operator (in most cases, GoI) and the supplier.

If this is indeed true, then the question of “bypassing” Indian law simply doesn’t arise.  The law itself does not make supplier-side liability mandatory.  Further, it the begs question of what the opposition — which was out screaming blue murder this past month — was doing when the bill was being debated in 2010.  Even assuming their very busy schedule of staging walkouts in Parliament got in the way of them expressing an opinion when the bill was being debated, what have they been doing the past two years since its enactment?

The NLA in its current state is simply incompatible with the IAEA Convention on Supplementary Compensation (CSC), which India undertook a commitment to accede to.  Contingent on these incompatibilities, India has signed the CSC but not ratified it, as ratification would require a change in our liability laws.  It is strange then that we appear so eager to be brought into the mainstream of the global framework for civil nuclear commerce and yet not want to be bound by its rules.

The issues pertaining to supplier-side liability are not U.S.-specific.  The truth is that no one is willing to do business with India given the costs imposed by the NLA on suppliers.  The Russians have refused to bring Kudankulam 3 and 4 under the ambit of the NLA.  The French company Areva has also made it clear that it will not be able to move forward, given the language in the NLA. The Canadians have expressed reservations.  Potential Indian suppliers themselves appear to be uneasy with supplier-side liability with FICCI warning that the NLA “threatens to completely undo the government’s efforts to accelerate nuclear power generation…”

The AG’s interpretation that the operator had the ability to contractually invoke or exclude supplier-side liability actually dates back to October 2012, when his legal opinion was provided during negotiations on Kudamkulam with the Russians.  There was not so much as a whimper in the left-leaning media then, but apparently now this interpretation causes a “dilution” in our liability laws to allow the prime minister to carry as a “gift” to the U.S.

The Cold War ended two decades ago, folks.  There is no benefit in India pretending to be more soviet than the Soviet Union in 2013.

Many in India are yet to appreciate the impact the NLA has had on the general mood towards India in DC.  This was about more than just nuclear commerce.  Presidents of the U.S. do not make phone calls to their Chinese counterparts asking them to drop their opposition to a third country’s bid for an NSG waiver merely at the prospect of being able to sell few nuclear reactors.  India would have most likely remained a nuclear paraih were it not for the efforts of the Bush administration.

Since obtaining an NSG waiver, the UPA has bungled like only it can.  Debates on nuclear liability were emotive rather than pragmatic, drawing wrong lessons from the Bhopal tragedy.  While the NLA automatically precluded the possibility of the participation of U.S. companies in civil nuclear commerce with India, companies in Russia and France, which were initially underwritten by their governments, were able to enter into exploratory discussions with India.  With Russia and France no longer willing to abide by the NLA, the prime minister arrives in the U.S. attempting to salvage a relationship and an economy.

Realistically, neither the U.S. nor India have each other on their list of top priorities at the moment. The Obama administration is faced with a precarious situation in Syria and is battling opposition on healthcare reform and budget disputes.  Meanwhile, with India heading to polls in May 2014, the UPA is effectively in a holding pattern with very little political capital at its disposal for brave new ideas.

Under the circumstances, if a pre-early works agreement can indeed be concluded between NPCIL and Westinghouse, it might help arrest the doom and gloom and allow both sides to reevaluate positions sometime next year.  This is about as much as we can hope for when Dr. Singh and Mr. Obama meet on Friday.

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Sauce for goose

The China-Pakistan nuclear deal: where have all the ayatollahs gone?

The Guardian carried a rather sensationalist piece by Chris McGreal on how Israel had, at one point, offered to sell nuclear weapons to South Africa.  Some in the United States are fuming at the idea that a U.S. “proxy” considered selling nuclear weapons to an “autocratic, unstable state” (South Africa was under apartheid at the time) — somehow, apparently, this undermines the U.S.’s “moral authority.”  It is another matter entirely that this report had little factual basis.

In fact, the outrage that is non-story has generated has largely obscured the very credible, and potentially significant story coming out of Beijing:

Chinese companies will build at least two 650-megawatt reactors at Chashma in Punjab, the Financial Times said.A statement posted on the website of the China National Nuclear Corporation on March 1 said the financing for two new reactors at Chashma was agreed by the two sides in February.

“Our Chinese brothers have once again lived up to our expectations,” the Financial Times quoted an unidentified Pakistani official as saying of the deal, which would help Pakistan cope with a crippling energy crisis. “They have agreed to continue cooperating with us in the nuclear energy field.” [Dawn]

Some sources indicate that the U.S. is unlikely to broach this issue with the Chinese.  In some ways, the Obama administration may feel that this alleviates its own moral burden, faced with increasing pressure from Pakistan for a civilian nuclear deal.  Of course, the administration would be missing the point — Pakistan’s desire for civilian nuclear energy is subordinate to its desire for parity with India in the eyes of the U.S. In that regard, Pakistan’s quest for a nuclear deal with the U.S. has nothing to do with its need for nuclear energy.

The implications of  specific aspects of the China-Pakistan deal will need to be further examined when more information is made available.  If their previous track records are any indication, these reactors will not be subject to IAEA safeguards or inspections.   Other questions exist — will China seek to “grandfather” the new reactors with those it built in Pakistan prior to joining the NSG?  If not, how could China possibly  ensure that an exception is made for Pakistan at the NSG in the event that the reactors are kept out of IAEA’s purview?

Purely from the perspective of strategic balance in South Asia, this deal may not alter much.  However, a couple of issues need to be considered in light of this deal. First, the impact of this deal is of greater consequence to the Middle East than it is to South Asia — particularly to Saudi Arabia and Iran.  Saudi Arabia’s “nuclear-capacity-by-proxy” strategy has paid rich dividends via Pakistan’s frantic acceleration of weapons production on its behalf.  Two 650 MW reactors will give this cozy arrangement fresh impetus, if any was needed.  By extension, this puts considerable strain on Iran’s own nuclear program.

Second, what does the deal say about non-proliferation ayatollahs in the Obama administration? Clearly, altered dynamics after the economic crisis, and China’s importance in negotiating through the nuclear issue with Iran leaves the U.S. with minimal leverage over China.  China, for its part, is using the opportunity to violate the spirit of those existing non-proliferation regimes on a technicality.  Of course, it has been doing this for ages, rather clandestinely.  Now, it does so brazenly.

There may be little that India can do to prevent the deal from going through.  In this context, the 2010 UN NPT RevCon directive to India (and Israel) to sign the NPT is absurd and deserving of contemptuous dismissal. A world order where global nuclear non-proliferation regimes attempt to shackle, curtail and impose significant costs on those willing to abide by established norms, but lack the capacity to punish those who willfully violate them in letter and spirit is unacceptable.   The necessity for India to be at the forefront of defining a new world order where verifiable, non-discriminatory nuclear disarmament is the objective, is felt more acutely now than ever.

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“Seeking tangible deliverances”

Entertaining Pak’s wish-list will impact Indo-US relations.

This rather optimistic piece by Baqir Sajjad Syed surfaced in the Dawn yesterday, conveying GHQ’s wish-list and expectations from Washington.  Rawalpindi feels the need to tell the Americans that it is time to “move on from symbolism and concretely address Pakistan’s core security concerns and its immediate economic needs.”  Pakistan is therefore “seeking tangible deliverances” from the US.  Translation, give us the reigns to Afghanistan, get India to budge on Kashmir and give us a nuclear deal along the lines of the Indo-US 123 Agreement.

The last demand is interesting, given how its need is articulated in the Dawn.  While the article submits that nuclear energy was needed to meet its growing energy needs, Islamabad really wants it because it doesn’t want to see itself being discriminated against vis-a-vis India.  In other words, rehyphenate the dehyphenation. Polaris has an excellent take on this sort of fallacious equating.  But this theme isn’t a stranger to discourse in some circles in the US.  Christine Fair’s Wall Street Journal piece in February recommended a “glutton for punishment” approach, where the US would offer Pakistan a “conditions-based” civil nuclear deal in return for Pakistan refocusing its efforts in resolving Washington’s conundrum in AfPak.

Forget that such a proposal would be shot down by Congress (by non-proliferation nazis in Mr. Obama’s own party, for starters) faster than Dick Cheney with a rifle.  Or that even in the very unlikely event that the Obama Administration could succeed in obtaining the blessings of the House and the Senate, there would be no way the Nuclear Suppliers Group would grant a waver to Pakistan (a non-NPT signatory), given its rich and vibrant history of nuclear proliferation.  Indeed, the very notion that the Obama Administration would consider such an arrangement with Pakistan would hurt an already ailing Indo-US relationship.  This blogger will therefore suggest that such a proposition be relegated to intellectual discussion only.

But Mr. Obama has done a terrific job on foreign policy, these past several months: appease your adversaries and alienate your allies.  The Western media is replete with articles about Dr. AQ Khan, as if Dr. Khan ran his “nuclear Wal Mart” independent of any official sanction from the powers-that-be in Rawalpindi.  For those Pakistani apologists in DC suffering from short term memory loss, The Washington Post serves up a timely reminder:

As troops massed on his border near the start of the Persian Gulf War, Iraqi President Saddam Hussein weighed the purchase of a $150 million nuclear “package” deal that included not only weapons designs but also production plants and foreign experts to supervise the building of a nuclear bomb, according to documents uncovered by a former U.N. weapons inspector.

The offer, made in 1990 by an agent linked to disgraced Pakistani scientist Abdul Qadeer Khan, guaranteed Iraq a weapons-assembly line capable of producing nuclear warheads in as little as three years. But Iraq lost the chance to capitalize when, months later, a multinational force crushed the Iraqi army and forced Hussein to abandon his nuclear ambitions, according to nuclear weapons expert David Albright, who describes the proposed deal in a new book.

Oh, and lest anyone seek to absolve the Pakistani State of any wrongdoing, let David Albright’s conversation on CNN with Wolf Blitzer serve as a reminder:

BLITZER: Is [AQ Khan] under any restrictions whatsoever?
ALBRIGHT: No. He’s actually launched a media campaign to try to say he didn’t do any of this. And so, it’s almost outrageous that he want us becoming free mounting a media campaign to clear his name supposedly, and ironically when he’s in court, he actually says he has no contact with western media, so he’s trying to have it all ways, and I think it’s a travesty in justice.
BLITZER: Because he was involved in helping not only the Iranians but the Iraqis and others, Libya, right?
ALBRIGHT: That’s right.
BLITZER: And then he was under house arrest by the Pakistanis, but no law even under house arrest.
ALBRIGHT: That’s right.
BLITZER: And the U.S. has never really had an access to questioning directly.
ALBRIGHT: That’s right. No one has. And the Pakistani government served as questioners for all, including the United States, the International Atomic Energy Agency and other countries. It was very unsatisfactory.

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