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The Indo-US Nuke Treaty : Ask Just Two Questions

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 !


2 thoughts on “The Indo-US Nuke Treaty : Ask Just Two Questions”

  1. Correct me if I’m wrong but the main jist of this treaty is that India will be able to trade in the supplies required to maintain a civil nuclear program, despite not having signed the nuclear non-proliferation treaty. I don’t see why we don’t join the treaty and by doing so force Pakistan in doing the same. I mean we are right now in a group that includes Pakistan, Israel and North Korea. How does that help our global image? The fact that the US is willing to trade nuclear supplies with us (and I think allow other nations to trade with us as well) despite India not being part of the non-proliferation treaty shows that either the US really trusts India not to misuse the noncivil Nuclear program or that they are succumbing to intense corporate pressure to go ahead and open the gates to the untapped Indian market in the civil nuclear industry. Either way, I don’t see how this can hurt us as we long as we don’t become overly dependent on foreign nations to fuel our energy needs and maintain a diverse energy portfolio.. something which the US has slowly faltered in and now realizes it is in trouble because of its overly foreign dependent energy program (before they invaded Iraq of course).

  2. Gaurav Parikh

    At the outset itself,India will be heavily dependent on import of uranium to feed the New Nuclear Reactors for Civil Purposes under this new N Deal….There is no alternative feed…Thus there will always be the risk of stoppage of supplies for long extended periods that could run into years for some reason or the other…there would be little or no trade then of any nuclear supplies even though India can take corrective measures…these may have little or no impact

    Also US recent history is not very reassuring and highlights a hidden agenda when USA strikes or negotiates any bilateral deals with another country

    When the Commodity Investment Guru from USA,Jim Rogers visited India a few years ago,I attended his workshop and asked him a question in context of Crude Oil Prices as to what was the real reason for US invading Iraq….He preferred not to answer and actually abrubtly concluded the workshop at 4 pm and walked away lest he face a further barrage of awkward questions…he hates the dollar and prefers China to India as an Investment destination

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