Current General Studies Magazine: "Dimensions of Nuclear Suppliers Group and India's Deliberations with the Group Over Past Decade" October 2016

Current General Studies Magazine (October 2016)

General Studies - III "Science and Technology Based Article" (Dimensions of Nuclear Suppliers Group and India's Deliberations with the Group Over Past Decade)

The Nuclear Suppliers Group (NSG) is a term which has become well-known in the past few months particularly in various media in India and abroad.

The NSG is a group of nuclear supplier countries that seek to prevent nuclear proliferation by controlling export of materials, equipment and technology that can be used to manufacture nuclear weapons. The NSG started in 1975 with seven participating governments- Canada, West Germany, France, Japan, The Soviet Union, UK and USA. Some quarters are under the impression that the NSG was conceived and founded in response to India’s ‘Smiling Buddha’ nuclear test held in May 1974. However, this is largely a myth. Individual countries, both signatories to the Nuclear Non- Proliferation Treaty (NPT) and non-NPT countries were already exercising export controls on their nuclear trade. It may also be noted that in 1974-75 with the NPT open for signature since 1968, the number of NPT signatories was much less then what it is now. As a matter of fact, the NSG was conceived to bring under one umbrella all such nuclear technology and materials possessing countries, whether NPT or non-NPT, so as to curb proliferation of nuclear weapons making capability. The NSG wasactually intended to bring countries like France, then a non-NPT nuclear power, and other such countries under its umbrella.

After its start in 1975, the NSG held a series of meetings in London up to 1978 and came to be known as the ‘London Club’ ‘London Group’ or ‘London Suppliers Group’. In the NSG, the Zangger Committee, which is primarily responsible for interpreting Article 3.2 of the NPT is the source of the ‘Trigger List’ which is an International Atomic Energy Agency (IAEA) document. The Trigger List does exactly that. It triggers safeguards as a condition of supply of nuclear items by NSG members. It assists NPT parties in identifying equipment and materials subject to export controls.

After 1978, the NSG was largely inactive and its next meeting was held only in 1991. The Trigger List remained unchanged till a ‘Dual-use List’ was published in 1992. The NSG expanded to 15 members in 1977 and 12 more members joined in 1990.China joined group in 2004. The NSG has 48 members currently. India, Namibia and Pakistan have applied to join the group.

India looks at nuclear technology and nuclear materials primarily as a resource for meeting a part of its requirement for electricity. It considers nuclear power as safe, reliable, affordable and environmentally friendly and is engaged in nuclear technologies for deployment. Continuous evolution of the framework for governance of nuclear power including that for nuclear security has been given equal importance.

(i) Why does India seek membership of the NSG?

Following India’s application for NSG membership in May 2016 and the group’s annual plenary meeting held in Seoul on 23-24 June 2016, there has been media speculation as to why India needs to seek membership to this group when it has already achieved India-specific exemption to the NSG Guidelines in September 2008. To answer this question, we must examine our nuclear power development strategy, the technology dimension and various regimes that seek to control the global trade and transfer of technology, components and materials, which are essential for India’s development needs.

The official Indian Government position on the NSG application and subsequent developments is encapsulated in a Statement referred to by the External Affairs Minister in reply to a Starred Question in the Lok Sabha (lower House of the Indian Parliament) on July 20, 2016. In the Statement, EAM, Smt Sushma Swaraj said, "it is important for us to be part of the ‘rule making’ in the NSG rather than be in a position of ‘rule taking’” (ii). Membership of the NSG would enable India to have enhanced and uninterrupted access to nuclear technology, fuel and material required for its expanding civil nuclear program. Notwithstanding the facilities provided to our nuclear commerce on account of the 2008 exemption, there remains a level of future uncertainty about how decisions taken by the NSG may adversely impact on India’s nuclear energy programme. It is only with membership that India can be certain that no decision inimical to its interests will be taken collectively by the NSG.

In 1992, following the setback to India’s Integrated Guided Missile Development programme on account of sanctions imposed under the Missile Technology Control Regime (MTCR), India was denied access to Russian cryogenic engine technology. It was then decided at the highest levels to setup a committee to discuss ways in which to avoid or tackle such technology regulatory problems. Until then, India had adopted a hands-off policy towards such regimes, which sought to implement treaties which India did not join, such as the NPT. The committee felt that such an attitude was against India’s interests. Decisions taken in the NSG, first in 1992, regarding the Dual-use List, and again in 2011, regarding enrichment and reprocessing, were weighted against non-NTP states like India. In view of India’s civil nuclear development program and our burgeoning space program, it was important for India’s views to be reflected in such trade and technology control regimes. Such an assessment led to a change in attitude and a conscious decision was made to engage with the NSG and the MTCR.

Secondly, with the ‘Make in India’ strategy adopted by the Government in 2014, it is important to facilitate the processes of technology tie-ups so that, costs can be competitive. Membership of the NSG facilitates procurement of critical technology, components and materials from countries which have the same and are adhering to the Guidelines. For example, under Japan’s ‘White List’, which is applicable for NSG member states, licensing for export is almost automatic. Currently, since India does not have NSG membership, the process of imports of such items from Japan is time consuming and cumbersome. This adds to the cost of production in the country. Thirdly, is the issue of predictability for viability. While production of nuclear power is important to meet India’s Intended Nationally Determined Contributions (INDC) pledge of 40% of its power capacity coming from non-fossil sources by 2030, committed at the COP-21, it is a fact that nuclear power production has to compete in terms of costs, with other non- fossil energy sources like solar and wind. Since, the capital cost of nuclear energy production is very high, it is important to access low cost financing through reduction of the risk assessment factor. This factor is significantly lowered if a country has membership of NSG.

Why Now?

Another question that occurs in the minds of analysts is why does India seek membership at this stage. India had taken the decision to engage with NSG and the MTCR in the 1990s. Yet our formal application for membership for the NSG was submitted only on May 12, 2016. Similarly, India’s application for the MTCR was submitted in June 2015. The question arises us to why India applied for membership of these two trade and technology control organizations only now, after engaging with these organizations for nearly two decades.

As argued in a IDSA (Institute of Defence Studies & Analysis) ‘Issue Brief’, though there was no formal application from India, the past five NSG plenaries had regularly "discussed the NSG relationship with India.”(iii) The international situation faced by India in 1990s, especially after the nuclear tests of 1998, was not conducive to India to seek membership of any of these regimes. This adverse situation started changing only after the United States, the most powerful member of the NSG and the MTCR, during the Presidency of George Bush. Jr, launched a Civil Nuclear Initiative with India in July 2005, under the Next Steps in Strategic Partnership (NSSP), between India and the US, resulting from the Jaswant Singh-Strobe Talbot talks. US and global concerns about India’s nuclear proliferation intentions were set at rest. The US began to treat India as a responsible nuclear power, which should be brought into the global arms control regimes rather than be excluded, despite India’s refusal to sign the NPT.

India’s decision has been dictated, in the case of NSG membership, to a large extent by commitments made by India at COP-21 in Paris in December, 2015. In order to reach the goal of 40% of our power generating capacity emanating from non-fossil fuel sources by 2030, the role of nuclear power will be an important component in order to meet such a commitment. It is estimated that by 2030 we need to generate 175 GWe (gigawatt of electricity) from non-fossil fuel sources, primarily from nuclear, solar and wind sources. It is estimated that India’s current nuclear power generating capacity of 6 GWe will have to be increased to 63 GWe by 2030. This will increase the share of nuclear and hydel power in the country from about 3% of the total installed power generating capacity to about 7%. The scope for increasing hydel power generation is limited due to fluctuations in water supply, and environmental and social concerns. Thus, the bulk of the anticipated increase will have to come from nuclear power.

Similarly, India’s fast developing space program requires access to high technology and materials. India has already launched over 60 foreign satellites, on its launch vehicles. To keep up the pace in growth of our space program, including launch of foreign satellites, we require ease of access to foreign technology and materials. Hence our application for membership of the MTCR was made in June 2015. It was discussed at a plenary meeting in Rotterdam in October 2015. Following due process, India’s membership of the MTCR was accepted on June 27, 2016. On that day, India become the MTRC’s 35th member, and is its only non-NPT member. China has applied for MTRC membership in 2004 and is still awaiting entry.

India’s adherence to nuclear export controls at par with NPT

Though India has not signed or joined the NPT due to the regime’s discrimination in favour of the five original nuclear weapons powers, the country has been following a very robust nuclear export control regime. India’s nuclear non-proliferation record is second to none. Over the decades India has built up and maintained a credible export control regime. It has not exported its nuclear technology and materials to those countries not eligible to receive the same. It is said that during the time when Mrs. Indira Gandhi was Prime Minister, Libya had asked for India’s assistance in this regard, but the Indian Prime Minister refused. The first control list was published under SMET (Special Material, Equipment &Technology) in 1995. The Director General of Foreign Trade (DGFT) is the licensing authority, which follows a control list drawn up by a inter-ministerial working group.

In tune with security requirements as perceived by India, the country’s nuclear security architecture has been strengthened and India has also participated in strengthening the security architecture at the global level. India is a party to all the 13 universal instruments accepted as benchmarks for a State’s commitments to combat international terrorism and proliferation of weapons of mass destruction (WMDs). India is a party to the Convention on Physical Protection of Nuclear Materials (CPPNM) and has ratified its 2005 amendment. The Indian Atomic Energy Act, 1962 provides the legal framework for all aspects of development of nuclear and radiation technologies and their security. The Weapons of Mass Destruction and their Delivery Systems Act, 2005 gives effect to India’s obligations under the UNSC Resolution 1540. The Unlawful Activities (Prevention) Act, 1967 was amended in 2012 to include offences within the scope of, and as defined in several treaties, including CPPNM.

In addition to such a robust and evolving legal architecture, India’s export controls lists and guidelines have been harmonized with those of the NSG. The Atomic Energy Regulatory Board (AERB), which has de facto autonomous oversight powers over the security of nuclear and radiological material in the country will attain de jure autonomy with the setting up of a Nuclear Safety Regulatory Authority, legislation for which is being developed. The Department of Atomic Energy (DAE) through its Nuclear Controls and Planning Wing has taken robust steps towards implementation of India’s commitments related to nuclear safeguards, export controls and nuclear safety and security. There is a national level mechanism called a Counter Nuclear Smuggling Team. All major seaports and airports of the country are equipped with radiation portals and detection equipment to monitor all vehicular, passenger and cargo traffic. The solid legal architecture and robust implementation mechanism proves wrong naysayers who allude that India’s not joining the NPT is threat to the global nuclear non-proliferation regime. Instead, it would be in order to grade India’s nuclear security architecture as ‘NPT-plus’.

Following the nuclear tests in May 1998, there was global apprehension that such technology and materials from India may be passed on to non-nuclear regimes, particularly rogue countries. Under the circumstances, India decided to strengthen its export controls even further under SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technology). Simultaneously, India decided to engage with leading nuclear powers like the US, France, Russia etc, one of which was held under the rubric of the Jaswant Singh-Strobe Talbot (India-US) talks. Under the India-US Civil Nuclear Initiative, India made a commitment to follow the NSG and MTCR guidelines. India also sought to undertake harmonization of its access control measures to that of NSG and MTCR guidelines, for which it needed to meet with and have a dialogue with these regimes. These measures paved the way, in the September 2008, for the India-specific exemption provided by the NSG and facilitated the export of nuclear components, materials and technology from member states to India.

India’s NSG Process

In tune with the government decision to join the NSG, a presentation was made to the NSG Secretariat in Vienna in April 2016. A formal application followed on 12th May. Discussions on India’s application were held at the IAEA headquarters on 9th June. It was expected that India’s application would be considered at the NSG Plenary in Seoul on 23-24 June. However, one country, namely China, held up formal deliberations on this matter on the ground that there is no consensus among NSG members on the admissibility of non-NPT members.

There have been extensive reports, particularly in the Indian media, about India’s do or die campaign to secure entry into the NSG. This may have been prompted by the high-level intervention in some capitals of the world to convince those countries who have some apprehension about membership process of a non-NPT applicant, to convince them of the merits of India’s membership bid. In that context, the Indian President and Prime Minister during their recent travels abroad, took up the matter variously in New Zealand, China, Australia, Switzerland, Mexico, etc. Such high-level diplomacy did bring positive results. The Prime Minister during his meeting with Chinese President at the SCO Summit in Tashkent also tried to bring around the Chinese leader to our view point. It must be remembered that engagement with the NSG has been on-going process since the 1990s. India’s formal bid for membership of this body was taken up only recently for reasons already enumerated earlier. Due to the importance of NSG membership for India’s nuclear power development program, no doubt, a lot of political and diplomatic capital was expended in the weeks before the NSG plenary. However, this was not a new or a sudden decision, given our long engagement with the NSG and the importance of being inside the organization rather than outside.

The Way Forward

The lack of a result at Seoul does not in any way mean the end of the road for India’s NSG bid. At Seoul, the broad consensus among member states was to take the matter forward. Consultations on the issue of India’s membership is engaging the NSG members. Government of India continues to be engaged with all NSG members for an early decision on its application.

The desire of the NSG members to engage with India on its application is reflected by the fact that the current Swiss Chairperson of the NSG has appointed his immediate predecessor, Amb. Rafael Grossi of Argentina to hold informal discussions with NSG members about India’s application, in the interim period, before it is taken up formally in the near future. India too continues its diplomatic initiative. It is quite clear to all concerned that India cannot join the NPT in its present format, since it is a nuclear weapons state, weather recognized or not. However, India seeks to convince the non-proliferation community that it is second to none of the NPT members on the matter of non-proliferation of its nuclear technology and materials. Even regarding the CTBT, which is a non-issue today, India’s voluntary moratorium on testing, after the 1998 tests, implies that India is CTBT compliant also.

The Facilitator to the Chairperson of the NSG, as as the former Chairpersons, Amb. Grossi is currently designated, is serious and optimistic about India’s membership. In October 2015, on a visit to New Delhi, he said,”…nobody disputes that India is a key, major player in the economic scenario. Hence, there is recognition that some formula must be found for India (to become a member,), and I think it is possible”. At Seoul, Amb. Grossi remarked that though a decision on membership issue is not immediately possible, discussions must continue one way or the other. In order to, allay the concerns of some countries regarding the process for India’s participation in the NSG, Amb. Grossi said that, "…. whatever decision we arrive at would not run counter to the NPT’s mission principals and objectives are.”

(iv) Insofar as our resource dependence is concerned, probably that relating to energy has been the domain of greatest activism in India’s diplomatic interactions. Given our own commitment to shift to 40% non-fossil power generation capacity by 2030, attention is increasingly shifting to renewables. Nuclear energy will constitute the core of this commitment and is, therefore, central to India’s approach to climate change.

Addressing a Davos-type enclave in Mumbai in June 2016, India’s Foreign Secretary, Dr. S. Jaishankar remarked that the country’s goal is to substantially increase domestically produced nuclear power plants while simultaneously moving forward with foreign partners. Such large investments in the nuclear energy sector will happen only in a climate of predictability. It requires greater certainty of trading rules and access to technology. It is India’s expectation that membership of the Nuclear Supply Group can effectively address that concern. A strong Indian nuclear industry can make nuclear power more competitive globally. India issued 140 nuclear-related export licenses in 2015. As this trade and industry expands, it is in India’s interest that our practices are in conformity with global non-proliferation standards. This dynamic process has been continuously work in progress in India for the last several decades.

(v) India’s quest for NSG membership is not merely a straw in the wind. It has the firm support of most of the major powers of the globe, including the United States. An analysis of the public support expressed by various members of the NSG, usually in the form of a joint statement issued during high-level (President, PM) visits, reveals the extent and reach of such support among diverse NSG member states such as South Africa, Mexico, United States. Belgium, Finland, France, Russia and the United Kingdom. (please see slides 6-14)

Since NSG membership is of substantial importance to India, its quest for the same cannot be diluted or abandoned despite the lack of a positive result in Seoul. Indian diplomats and political leaders, at all levels continue to engage with the global nuclear community, including China, to persuade all NSG members of the importance of India being in the club rather than out of it. This was amply evident during the recent visit off the Foreign Minister of China, Wang Yi to India. During his talks with the External Affairs Minister in New Delhi on August 13, the latter concentrated to a large extent on this vital issue. It was agreed that a focused dialogue will take place between the Joint Secretary in the Ministry of External Affairs dealing with disarmament and international security and the Chinese Ministry of Foreign Affairs, Director General of its Arms Control and Disarmament Department. India is determined to join the NSG and will do whatever it takes to reach that goal.

(Source- Amb (Retd.) Debnath Shaw @ idsa)

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