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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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Phasing out India’s MiGs

Who’s in charge of holding the Defense Minister accountable?

Addressing members of the Rajya Sabha, AK Antony claimed that the process to phase out India’s MiGs would begin in 2014 and would be complete by 2017:

“We have got a clear-cut plan to replace them. By 2017, the entire MiG series will be replaced in a phased manner, that is from 2014 onwards,” said defence minister A K Antony in Rajya Sabha on Wednesday.

In the years ahead, India’s frontline combat fighters will have 270 Russian Sukhoi-30MKIs already being inducted for around $12 billion, the 126 new medium multi-role combat aircraft to be acquired in the $10.4 billion MMRCA project and the 250 to 300 fifth-generation fighter aircraft to be built with Russia in the gigantic $35 billion project.

Antony, on his part, assured Parliament that large-scale induction of Sukhoi-30MKIs, LCA and MMRCA would take place within the next few years, while acknowledging such an exercise could not take place in the past due to “historical reasons”. [The Times of India]

The perceptive among us no doubt realize that 2014 is three years — or 36 months — away.  Mr. Antony is claiming that within the next 36 months, he will begin phasing-out IAF’s aging MiG’s with 126 combat aircraft from an as-yet-undetermined vendor.  Even if we are to believe that the MMRCA deal will be concluded this year, there is no reason to suggest that the process from agreement-to-induction can be accomplished within the span of 3 years.

Mr. Antony also expects the IAF to begin replacing MiG-21s with Tejas LCAs (conceptualized 30 years ago) by the end of 2013. The fact that the indigenously developed Kaveri engine expected to power Tejas has been a disaster, and is, by his own admission, still “under development” (after 20 years) hasn’t damned his spirits apparently.

Even if we are to go by Mr. Antony’s word, the most optimistic assessments put an FGFA induction to the latter-half of 2017.  It is far from clear what HAL’s role will be in the development of the Indian version of the FGFA (and indeed, whether or not this will actually be the joint-development project with Sukhoi that India seems to portraying it to be), suffice to say that discussions are at a very early stage and inordinate delays are only to be expected, given our history of defense acquisitions from Russia. (Indeed, delivery and cost overruns of our previous big-ticket deal with Sukhoi were the subject of comment in a CAG audit report issued in 2000).

Given these facts, the answers provided by the Defense Minister did not strike anyone — not our MPs, and certainly not Mr. Antony himself — as odd and unrealistic.  Not one question on the answers provided by Mr. Antony was raised.  After all, in accordance with tradition in India, we do not interrogate our leaders.

So much for accountability.

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Responding to Michael Scheuer

Let us not rationalize irrationality.

The Diplomat carried an article by Michael Scheuer entitled “Coming Nuclear Flashpoint” on the India-Pakistan equation as it relates to Afghanistan.  Mr. Scheuer is a foreign policy critic and former CIA Station Chief of Bin Laden Issue Station (aka Alec Station).  He is noted to have strong views on U.S. invasions of Afghanistan and Iraq and on the “Israeli lobby” in D.C.

The gist of Mr. Scheuer’s article is essentially this — that India has unwisely chosen to involve itself in Afghanistan.  This has caused uneasiness in Pakistan, which may in turn result in a nuclear confrontation between the two neighbors.  Mr. Scheuer attempts to substantiate his “bells of doom” theory for India by making several arguments that have no sound basis.

The first has to do with the concept of Pakistan’s quest for “strategic depth” in Afghanistan.  This term is a particular favorite of folks in Rawalpindi and employed to sell gullible visiting U.S. and NATO generals on why Pakistan’s influence must be unchallenged in Afghanistan.  Let’s be clear about what this “strategic depth” really is.  It isn’t meant to be, as some might imagine, a last refuge for a retreating Pakistani army in the face of an invading Indian army.

The term “strategic depth” is a euphemism for territory that Pakistan wants to use to attack India and Indian interests. This has precedence:  while many in the West might have forgotten, the hijacking of the Indian Airlines flight to Kandahar in December 1999, executed by Pakistan’s military-jihadi complex, is still fresh in the minds of many in India.  The idea therefore, that India ought to somehow be sympathetic towards such nefarious designs is ridiculous.

Second, Mr. Scheuer attacks India’s investments in infrastructure projects in Afghanistan, suggesting that there is more than meets the eye as far as India’s intentions go.  Specifically, he draws attention to India’s work on the Zaranj-Delaram project, which he feels can be used by Afghanistan to trade with Central Asia by bypassing Pakistan; Mr. Scheuer feels that this was deliberately designed to hurt the Pakistani economy.  Here, it would not be imprudent to ask, “what Pakistani economy?”

At the very least, this argument presupposes that India gains from an economically battered Pakistan — if this were the case, India’s contribution to such a situation would matter little;  successive Pakistani governments have themselves been single-minded in their pursuit to loot their country and destroy its economy.

Third, on Afghanistan, Mr. Scheuer suggests that the mujahideen have not forgotten India’s support for Soviet Union’s invasion of Afghanistan, and the repercussions for this support will be apparent once U.S. and NATO forces leave.  Certainly, the mujahideen have been anti-India (supported as they are by Pakistan’s ISI) but it is wrong to think that they are representative of the people of Afghanistan.

A 2009 poll ( PDF) conducted by BBC/ABC/ARD indicates that 71 percent of the Afghans polled had a favorable opinion of  India — the highest for any foreign nation — as against unfavorable opinions of Pakistan (81 percent), the Taliban (89 percent) and Osama bin Laden (91 percent).  The same poll also showed that 56 percent of Afghans in 2009 indicated that they had access to improved road infrastructure, while 50 percent believed they had access to better medical care — two areas of significant Indian contribution.

Next, an area where I agree (if only in part) with Mr. Scheuer is on India’s exclusive reliance on soft power in Afghanistan.  Many of us at INI and other platforms have argued that over reliance on  soft power will be detrimental to India’s interests in Afghanistan.  Over at Pragati, many have made the case for India to match its soft power in Afghanistan with hard power, viz. deploying troops. Some of us have even argued that the very least India ought to do is commit to train the Afghan National Army at a time when Western forces are seeking to wind down their own commitments.

The difference between our arguments and Mr. Scheuer’s is that while we argue that soft power alone cannot be the basis of India’s engagement in Afghanistan, Mr. Scheuer argues that no Indian influence — whether soft or hard — is acceptable in Afghanistan.  Given the obvious implications of a security vacuum in Afghanistan to India’s internal security, such a position is not only untenable but unacceptable.

Mr. Scheuer is right that Indian interests in Afghanistan will be increasingly targeted once U.S. and NATO forces leave.  However, the  solution to this is not for India to flee from the scene, with tail firmly between its legs.  India must counter Pakistani influence by working with like-minded countries, such as Russia and Iran and yes, even the U.S. to deny ground to the Wahhabi brigade that turned Afghanistan into a festering swamp of extremism in the ’90s.

Finally, perhaps the biggest mistake Mr. Scheuer commits in his article is trying to rationalize the Pakistani establishment’s deliberate irrationality.  While on the one hand articulating Pakistan’s hysteria with great clarity, he almost inexplicably accepts this institutional irrationality as valid, and appears irritated that India does not.

Let us be clear — India’s actions in Afghanistan have as much to do with its desire to help rebuild a war-ravaged nation as they do with mitigating national security risks.  India need not apologize — to anyone — nor back down from doing everything it can to protect its people and its interests.  Now Pakistan’s interests may be incompatible with this, but that’s unsurprising, given that the Pakistan military-jihadi complex’s position is antithetical to the existence of India.  Giving credence to such irrational positions is an exercise in appeasement that will come back to haunt the rest of the world and India.

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Salaam, Washington

Navigating the nuances of the Indo-US relationship.

Much has been written about the impetus being given to the Indo-US partnership in the context of the strategic dialog between Secretary Clinton and Mr. Krishna in Washington, D.C.  For her part, Mrs. Clinton has tried to stay on message, terming Indo-US relations an “affair of the heart, not just of the head.”

As a precursor to the SM Krishna–Clinton moot, U.S. Under Secretary for Political Affairs William Burns spoke at the Council for Foreign Relations on Indo-US relations, attempting to dispel the notion that the Obama administration had “downgraded” ties with India or that the U.S. was attempting to “re-hyphenate” its relations with India and Pakistan.  Truth be told, while U.S. articulations are perhaps needed to temper the noise being generated by sections of the media, they may not have been altogether necessary for those studying Indo-US relations in the context of a rapidly changing world.  And despite the statements made by Secretary Clinton and Mr. Burns, a few points need elaboration.

First, while there is broad, bipartisan consensus on expanding Indo-US ties in the United States (a rarity in and of itself), there are differences on the specifics of what this should entail and how they should be operationalized. The Obama administration defines this partnership within the constructs of leveraging India’s growing global economic profile to tackle regional and global issues — climate change, nuclear non-proliferation, energy and trade security and ensuring checks and balances to China’s ambitions in the Indian Ocean.  In this respect, Mr. Burns’ comments on dialog between India and the U.S. on East- and Southeast Asia is important.

Second, it is important for India to understand the limits to this engagement, at least as far as the Obama administration is concerned.  Some of these limits are imposed by ideology and some by compulsion.  While sharing India’s concerns on jihadi terrorism emanating from Pakistan, the U.S., however, is constrained by its own involvement in the region and on how much it can prod Pakistan into taking any meaningful action on terror originating from its soil. The Obama administration is similarly unable to engage with India in a manner that would appear provocative to China.  And many will argue that given China’s importance to India’s own economy, neither would India.

What this means for India is that it cannot expect the U.S. alone to fully address its security concerns in Afghanistan, Pakistan and the larger region.  The folly of throwing your lot in with a singular power should be more apparent to India now than ever before. Affairs of the heart notwithstanding, securing India’s strategic interests in the region must be driven through multilateral engagement with like-minded regional actors, and not by blind faith in any one power.  In this regard, working with the Russians and Iranians on balancing power equations in Afghanistan is imperative.  It remains to be seen if Mr. Krishna’s recent visit to Iran helped in arresting New Delhi’s diminishing goodwill in Tehran.

Next, on defense procurement, India must be clear about where its defense gaps are best addressed by technical expertise possessed by U.S. companies and must resist the temptation to be over-enthusiastic in trying to please Washington.  Across the services, our weapons are primarily of Russian origin and there isn’t an immediate need to drastically alter this.  Russia is able to offer Indian defense companies opportunities that perhaps the U.S. is unable to — from Technology Transfer Agreements (TTAs) to joint production.  However, U.S. technology and systems can play a pivotal role in the development of India’s power projection capabilities –  from refuellers to transport and surveillance aircraft — and it is here that a meaningful and mutually beneficial partnership can be forged.

That the Obama administration appears to be redoubling efforts to engage with India is encouraging (providing access to David Headley is an important first step); but this is no different from either the Clinton or George W. Bush administrations in their initial years, where preoccupation with the economy and the war on terror allowed for limited bandwidth on Indo-US relations.  This has, in the past, resulted in the necessity to “re-boot” (to borrow an IT expression) Indo-US relations each time a new president took the oath of office in the White House.

Even today, U.S.’s India policy is being driven by people who are not India-experts; indeed, officials in the Obama administration charged with policy formulation and operational aspects relating to Indo-US relations are mostly either experts on East Asian affairs or on Af-Pak.  As India and the U.S. aim to significantly upgrade co-operation on regional and global issues, U.S. administrations must ensure that their India policy teams are appropriately staffed.  Neither India nor the U.S. can afford the extended learning curve each time a new administration comes into office.

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