Why is India pushing for the Nuclear Agreement with USA ?
Why is USA pushing for the Nuclear Agreement with India ?
despite there being sizeable opposition in both countries to this Deal
Let’s address the first question.
India,clearly needs significant additional Power Generation to sustain it’s GDP growth for the next few decades.In fact from the current US $ I Trillion economy ,if India grows at 7% to 8% CAGR it will cross US $ 4 Trillion in the next 20 years.Any higher rate of growth will see it becoming a US $ 6 Trillion economy in this period !
‘Powering India—the road to 2017’, a report by global consultancy firm McKinsey states that India will need $600 billion to meet electricity demand that may triple to 3,35,000 mw by 2017 and it will face a huge shortage of power if it does not act now.
India’s Hydel and Thermal Power Generation Capacities and those generated by Altrenative Sources like Wind and Solar would just not be enough to cope with an expected Power Demand
So what’s the opposition about ? ! Well for One it’s the way the UPA Government has gone about this whole process.Full Transperancy and Communication from Day One would have been a better idea.
A more compelling argument is that many believe that India will surrender some part of it’s sovereignty in that it will not be able to conduct further nuclear tests or it will risk facing stoppage of the supply of uranium which is the feed to the reactors.Australia,who holds 25% of the world’s uranium reserves, has already taken a U turn as the Labour Party has come into power and stated that it will not supply any uranium to India as India had not signed the 1970 Nuclear Non Proliferation Treaty.The risk is that if supplies do stop there is very little “corrective measures” (Draft IAEA Agreement) that India can take to keep the reactors in operation….The Reactors would at best serve as gigantic storage Bins…like the silos that store Wheat!…and they would have cost India over US $ 40 billion to build
The arguments on higher creation costs (Nuclear :Rs 6 crores/MW against Thermal :Rs 4 crores/MW) and safety issues (Chernobyl Disaster in 1986 in Ukraine was more due to lack of safegaurds prescribed by IAEA and the Three Mile Island Leakage was controlled by conventional means) are less compelling.
Now let’s tackle the second question as to why USA is pushing for this deal.
Clearly USA benefits two fold with this deal.
It hopes to immediately capture orders worth US $40 billion to supply equipment and even build the reactors.General Electric will be a clear beneficiary here.It’s CEO, Jeffrey Immelt,who till a few years ago treated India with disdain and had no time for It,has already flown into Delhi several times to lobby at the highest level for potential contracts.These would probably bail out GE.There a real “fear factor”on GE in USA and Immelt is under hell of a lot of pressure.In fact Immelt’s famous predecessor , Jack Welch even went on CNBC on Apr. 16, saying Immelt had a “credibility issue” and was “getting his ass kicked.” This was because Immelt oozed confidence but GE was unable to match it’s earnings guidance last quarter. Welch later said his comments were incorrectly interpreted, but that did little to change the fact of Immelt’s bruised credibility on the Street.
The second reason is that with growth and demand saturation levels in USA and Europe,USA can ill afford not to participate in India’s growth story in the next few decades.It clearly envisages significant incremental business with India
That India is on it’s way to becoming an Economic Superpower is arguable but that it weilds enormous Political Clout in the Sub Continent is not
Opposition in USA to the Deal is also centred around the fact that India has not signed the 1970 Non Proliferation Treaty and USA could have extracted much more…On the other hand Opposers in India feel that USA has extracted too much
So what’s the bottomline ….. should the deal go through ? Both India and USA clearly will benefit…..however with volatile,uncertain and fearful geo political situations across the globe,especially in pockets like Iran and Iraq and the Middle East,North Korea and even our subcontinent there is a very real nuclear threat and India would have to protect it’s defence interests and while doing so a situation may clearly arise where the Congress would have to explain why it spend US $ 40 billion to build reactors but now has no fuel to run them!…Corrective Measures would have an insignificant impact in such a situation and that is precisely the reason they have not been spelled out clearly in the draft IAEA agreement
Andrew Kramer’s vituperative column in the New York Times is explicit on the real reason why USA Invaded Iraq ….it was to control it’s Oil Reserves (Iraq has the second largest reserves after Saudi Arabia) and bring back US Oil Companies like Exxon,BP,Shell and Total to Iraq …it was not to search for Weapons of Mass Destruction and Terrorists as USA had claimed.The Invasion is nothing short of a War Crime.Despite tenders being floated for Oil Concessions in Iraq and bids received from over 40 companies including those from India,China and Russia the shortlisted are the American Companies who submitted no-bid contracts
In November 2007,bypassing the US Congress and the Iraqi Parliament and the people of both countries,President Bush and the Iraqi Prime Minister,Nouri al-Maiki signed a ” Declaration of Principles”.It contained a brazen statement about exploiting the resources of Iraq especially by “American Investments”.In January this year,President Bush made it even more clear stating that he would reject any Congressional legislation to restrict funding to “exercise United States control of the Oil resources of Iraq”
This would give you some idea of US Ploys to action out the Hidden Agenda at a future date…They would clearly do so in India too when it suited their interests…Remember it stopped short of declaring Pakistan a terrorist state as it needed access to Afghanistan to flush out the Al-quaeda,despite India providing enough proof of Pakistan aiding terrorists.
Even in the 1992 Stock Market Scam in India,when Citicorp was seen to be a big ally in the Bear Cartel in the Bulls v/s Bears Battle on Indian Bourses,and had it’s Indian banking license in jeopardy,it’s CEO at the time,John Reed,flew into Delhi for a few hours in his plane and strong sources say,literally blackmailed India’s Prime Minister that he would withdraw Billions of dollar deposits…at the time India was facing a deep economic crisis and had Foreign Reserves of just a few billion dollars(Today it proudly sits on FX Reserves of over US $ 300 billion)…interested on some of Citigroup’s mishaps,especially it’s role in the Indian Stock Scam of 1992 then just Google search for it
So is USA a friend or a Foe?…let’s just say both,India and USA, are the biggest icons of democracy in the world and they both need to protect their self interests…The question is when compromising on some interests when negotiating the deal you need to address” How Much is too Much ? !
Our Prime Minister,Mr Manmohan Singh may have given his personal promise to President Bush in 2005 to get the N-Deal Cleared…he needs to carry 120 crore Indians with him this time…But the first critical test will be to muster 272 votes in the trust vote on July 22,2008 in the Lok Sabha….The Left parties have withdrawn support to the UPA on the N-Deal Issue leading to the need for this trust vote.Earlier arch rivals,the Samajwadi Party is now lending the UPA support and like Shylock is expected to extract it’s pound of flesh from the Congress Government…quite brazenly too
I dare say… Cheers !