The U.S., India and the Elusive 123 Deal

The United States and India are turning a new chapter in world history as they seek to close a deal on civil nuclear cooperation and nonproliferation. Referred to as the “123″ agreement, negotiations have been in the works since 2005. While there have been some roadblocks put up on the deal from members of India’s parliament in recent weeks, both parties hope to have a final agreement approved by the end of the year.

The agreement claims to enhance cooperation between the United States and India for generation of peaceful nuclear energy. But in reality it allows India to reprocess U.S. supplied nuclear fuel and proceed with its nuclear weapons program. If passed in its current form, the agreement will act as a catalyst for pumping nuclear fuel and technology into a region perceived by some U.S. leaders as a “nuclear tinder box”. The deal disregards India’s 1974 and 1998 nuclear tests and it’s unwillingness to join the 1968 Nuclear Nonproliferation Treaty (NPT). Furthermore, the 123 agreement could have wider repercussions for U.S. efforts to contain other nations seeking nuclear power such as Iran and North Korea. Increased cooperation between the U.S. and India would be a welcome development for these two nations who have often been at odds with one another. But the deal that is on the table is too dangerous for the region and the world for it to go forward.

A New Strategic Partnership

The 123 deal is reflective of the steadily increasing confidence the United States and India are now reposing in each other. As the geopolitical winds shift, the United States is now looking east towards India as an exceedingly important partner for defense and the global economy.

With Europe’s decline on the world stage, the United States views India and China as the emerging powers with a global disposition. But India’s existing regional preeminence and geo-strategic location vis-a-vis Pakistan, Afghanistan, Central Asia, Middle East, Russia, and China is a key asset in the growing relationship. Forging defense ties with India shall facilitate U.S. access to Central Asian oil and gas reserves, reduce its dependence somewhat on Pakistan, and in tactically confronting Iran if needed. A strong alliance with India would also deter Russian influence, giving the U.S. an edge over its erstwhile rival in the region. In terms of monetary gains, the 123 agreement could reap over a hundred billion dollars of business to U.S. firms selling nuclear technology.

India, the world’s largest democracy and the seventh largest country in the world, is seeking broader participation in world politics with the grand prize of a permanent seat in the United Nations Security Council. While India has historically pursued a policy of non-alignment, it now perceives a strategic partnership with the U.S. as a significant national interest, in particular countering China’s rising influence. Its cooperation on a U.S. proposal for an allied “1,000 Ship Navy” is evidence of the fundamental shift in policy. India is also eager to acquire U.S. defense technology including the purchase of 126 fighter aircraft from the United States. If the fighter jet deal goes through it would cost India US $10.2 billion and could be its biggest ever defense purchase. Other incentives for India include increased jobs for the skilled Indian labor force which has grown tremendously with American outsourcing over the years. India has liberalized its markets at par with the winds of globalization; made a niche in the international knowledge base; and has exhibited substantial growth in its economic sector. Closely aligning with the U.S. would likely strengthen its economy and security.

Atoms for the Common Good?

As argued by the U.S. and India, the 123 agreement is intended for peaceful purposes and will help meet India’s energy needs through “environment friendly” means. India ranks amongst the largest emitters of carbon dioxide in the world and with its rising economy, the levels of environmental pollution in the country are soaring. But nuclear energy comes with high economic costs, adverse health and environmental effects, a potential for proliferation, and a problem for the long term management of nuclear waste.

The University of Princeton scholar, M. V. Ramana suggests that in India’s case, nuclear energy has not proved to be cost-efficient. In a report titled More Missiles than Megawatts he argues that, “India’s nuclear establishment has failed to produce either the world-class technology or the large quantity of cheap electricity that it once promised.”

Ramana also quite aptly emphasizes the hazards associated with nuclear power plants. Citing the example of Chernobyl, he suggests that nuclear technology for the purpose of generating energy is not safe for the environment and renders human populations highly vulnerable. Another South Asian writer Ashwin Kumar observes that, “on measures of occupational exposure to workers, and compliance with standards for accident prevention, Indian nuclear plants perform poorly.” Illustrating the vulnerability of the plants, the 2004 Tsunami struck the coast of India, affecting the Kalpakkam nuclear power plant near Madras/Chennai. The tsunami waves hit the nuclear plant at Kalpakkam, around 70 km south of the city, and extensively damaged the complex, which was subsequently shut down.

A Breakdown of International Order

Although officials assert that the deal is in compliance with U.S. law, it violates international law, specifically the NPT. At the same time it makes a major exception to the U.S. prohibition of nuclear assistance to any country that doesn’t accept international monitoring of all its nuclear facilities. It also reverses a ban on U.S. civilian nuclear trade with India which was put in place following India’s 1974 nuclear test.

A loophole in the deal is the lack of a termination clause in case India tests a nuclear weapon. In making such concessions to India, the U.S. brings it at par with countries that have agreed not to develop nuclear weapons in exchange for support in developing peaceful nuclear technology. The 123 agreement sets a precedent that would allow other supplier countries like China and Russia to drop controls on their allies, thereby undercutting the drive for nuclear non-proliferation.

Furthermore, while both parties retain the right to revoke the deal with a year’s notice, the agreement makes the U.S. liable to find alternate supplier countries for India, if it decides to withdraw.

Seeking insurance in case the deal goes under, India has been engaged in talks with the Nuclear Suppliers Group countries, including Australia, which recently ended a ban on uranium sales to India. This demonstrates a double standard on the policy of selling nuclear fuel only to the signatories of the NPT. Chances are that the NPT will soon become null and void.

The Dangers of the Deal

Given India’s history of warfare and strained relations with many of its neighbors, the 123 deal is ominous for regional security. South Asia is viewed as a nuclear flash point due to the unresolved conflicts between India and Pakistan. The agreement on the table now would without doubt fuel the vicious arms race between the two states and the entire South Asian region. Pakistan would do whatever it could to balance against its archrival India. Pakistan would likely reinforce its key strategic alliances with nations such as China to counter the U.S.-India nexus.

It would divert potential development funds towards military expenditure bringing greater misery to the citizens of both nations. The region, constituting nearly one-fifth of the world’s population, also happens to be one of the poorest areas of the world. Meeting socio economic developmental requirements through appropriate domestic and external policies is an extreme challenge given the volatility of the region.

In going ahead with the deal the United States is clearly undermining its own stance with regards to the non-proliferation regime. The deal may have already spurred a contagion effect in the wider south and south east Asian region. The potential of leaks to other aspirants for nuclear power in the vicinity will become greater. The proposed 123 deal could have severe repercussions on world order and stability. Given so close a contiguous region, the de facto and unsafe nuclear regimes in South Asia, leave no time to preempt even an accidental nuclear exchange or a false alarm. The consequences of a nuclear war would be catastrophic for the warring parties as well as the neighbouring states.

An Alternative Path

The proposed 123 deal is intended to serve as a cornerstone in the emerging relations between the U.S. and India. It is being viewed as a critical test of confidence between the great powers. The responsibility for inviting global nuclear anarchy however, would rest upon the U.S. if indeed it goes ahead with the agreement as it stands now.

It is time for U.S. policymakers to weigh short-term gains against long term consequences. Prior to placing the deal before the Congress, the U.S. negotiating team must insist upon incorporating the conditionalities of the NPT. As the preeminent driver of the international security architecture, the U.S must take the initiative of convincing India to sign the NPT and open all its facilities to inspection by the International Atomic Energy Agency.

Above all the deal must not be antithetical to the United States commitment to non-proliferation. India must assure the U.S that it will neither test nor expand its nuclear weapons arsenal in exchange for nuclear fuel and technology for peaceful purposes. But this is easier said than done. The United States may have to offer incentives to India such as unconditional support for a permanent seat in the UN Security Council.

If the United States succeeds in bringing India under the NPT and fulfills the commitments outlined in the Bush-Singh statement, it would significantly strengthen the nonproliferation regime. These steps would have a positive cascade effect, creating the necessary space for Pakistan to roll back its nuclear program. A nuclear weapons free South Asia would promote stability and security in the region and bring about prosperity and development that its people deserve. An international environment that is responsive to the NPT would leave Iran and North Korea in a state of diplomatic isolation and perhaps more. The ball lies in the U.S. court. It should revise the agreement and take the lead in building a global consensus to eliminate rather than proliferate nuclear weapons.

Saira Yamin teaches at the Department of Defense and Strategic Studies, Quaid-e-Azam University, Islamabad. She is currently pursuing doctoral studies in Conflict Analysis and Resolution at George Mason University and is an analyst for Foreign Policy In Focus.