Recently, the Nuclear Suplier's Group (NSG) adopted new rules on transfer of ENR (Enrichment and Reprocessing) technologies. It was widely interpreted to be detrimental to the "clean waiver" that India received as part of the storied Indo-US "nuke deal".
But what is really the impact? My take...
There is a huge amount of confusion and lack of understanding on the isue of nuclear commerce in general, NSG/waivers et al in particular...That is expected, but then it means that the debate in "popular" fora on the issue becomes polemical rather than topical and rational..
First, what is NSG? NSG is a group of countires who have voluntarily come together to set out standards of nucelar commerce and curb non-proliferation...
Second, what are these NSG "guidelines", of the sort that the recent meeting of NSG passed w.r.t ENR tech? These are "voluntary" guidelines that members are expected to follow while trading with other countries..
Ergo, each member nation is really "free" to carry on as they jolly well wish, technically speaking..We have had numerous instances of that...Russia supplying fuel for Tarapur in 2001, when 32 out of 34 members of NSG then publicly commented that the action would circumvent Russia's NSG commitments...Or indeed, Kudunkulum 1/2, which technically could be argued were outside NSG guidelines...More recently, China's supply of Chashma 1/2 (and now 2 more) to Pak could be described similarly...
The question therefore is, if everything is "voluntary", why bother? What is the big deal about the NSG "waiver"? the answer, simply is, "institutional shame", if I may use that word..While NSG is a voluntary group, its members have sworn collectively to implement a set of non-proliferation guidelines...Therefore, every time a member of group chooses to do a trade that clearly "violates" the guidelines, it marks itself out as an 'exception"....Given the optics, no country wants to be known publicly as a serial "violator", not on an issue as touchy as nuke proliferation in the international context. (mind you, one is not talking of AQ Khan style proliferation, which is anyway outside the "system")...
Hence, each trade of that sort becomes a political battle to be fought...And diplomatic credits encashed....Russia's fuel supplies to Tarapur, or Kudumkulum, or indeed Chashma by China - each deal involved enormous amounts of public posturing, diplomatic battles...Net net, its not a scalable model if people are interested in scaling up trade...
Now that is exactly what India's objectives were...We were looking to scale up - on fuel supplies, on new power plant tech, and of course, on ENR as well (along with tons of other nuke related tech)....The only way to do that would have been to get a "waiver" from NSG, ie, an institutional recognition that we are "kosher"...Which would simply enable all member countries to enter into formal nuke supply agreements with us (123 style), and carry on trade in "normal, scalable" fashion..Which is precisely what has happened..We have concluded 123-style agreement with a host of countres - Russia, France, Kazakhstan, Canada and some more..With a few more in the pipeline - Japan, NZ etc...(The voluntary nature of the arrangement is also visible on the flip side as well - even though we are now kosher, Australia has demurred on entering into an agreement, on account of purely dometic issues)...
Importantly, trade has started - most conspicuously of fuel, but baby steps on LWR reactors from Russia and France as well...
Where does this ENR thing fit in the narrative? At the margin, its problematic...(It was always problematic, as there was little support for this aspect of the deal in the US legislature, even when there was widescale support for the deal itself - and private commitments were said to be given by the Bush administration to select legislators on that)...But at the same time, the voluntary aspect of NSG now comes into play...India is a "kosher" member of the "club" (trading gorup, not NSG, yet)...So France can sell us the reactor, the technology, the fuel...And through the same bilateral contract, ENR tech as well (something that they have publicly confirmed in the recent past)...It would still create a bit of noise, but given that its India, and given that the rest of the deal is fully "compliant" - the dollars to France (Euros rather!) will likely speak louder than that noise...In practical terms, India is actually more worried about the "optics" of the new guidelines than the real impact - we had an interview of Srikumar Bannerjee where he clearly says that he isnt really interested in ENR tech...And the way to deal with the optics would be to hasten bileteral trade - which is what the whole deal was entered for! Unfortunately, the last few months have been lost on account of the various corruption related noise, as also Fukushima...
Last bit, on our membership of NSG...Why is it a "game changer"? Simple..All rules/guidelines of NSG are set by consensus...Once we are a member, efectively there cant be a guideline implemented that goes against our interests!
There is a nice article by Harsh Pant on this - its a bit incomplete, but useful..
For those interested in the arcana, here is the US 123 agreement and the NSG waiver to India.
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