The United States and India recently finalized details on a controversial bilateral pact under which the US will provide India access to civilian nuclear technology and nuclear fuel. President George W. Bush and Prime Minister (PM) Manmohan Singh signed the pact, named the United States–India Peaceful Atomic Energy Act, in March 2006 but the US did not lift the prohibition on nuclear cooperation with India until August 13, 2007.

Adding to the controversy, in August 2007, Australia’s Prime Minister John Howard announced Australia’s decision to export uranium to India despite its refusal to sign the Nuclear Non-Proliferation Treaty (NPT).

Such nuclear assistance, while beneficial to US-India relations in the short-term, may lead to strained relations between India and its neighbors—China and Pakistan—in the long-term.

India’s Nuclear History

India first tested a nuclear weapon in 1974, in response to neighboring China’s deployment of nuclear arms. India later renounced nuclear weapons, in 1988. However, the rapid rise of China and the continued proliferation of nuclear weapons in both China and Pakistan prompted India to conduct nuclear tests again in 1998. The US brought sanctions against both India and Pakistan (who also conducted tests in 1998), but the sanctions against India were lifted in 2001.

Although India has yet to sign the NPT, the US has given priority to improving US – India relations. Demonstrating its willingness to cooperate with the US, India endorsed part of the US Anti-Ballistic Treaty and voiced concern about the spread of ballistic missiles in South Asia.

The US nuclear agreement with India includes non-proliferation elements. The International Atomic Energy Agency (IAEA) will control and inspect all future civilian nuclear reactors and 14 of India’s 22 current reactors. Although the agreement only covers peaceful, civilian cooperation, full disclosure of nuclear activity must occur, which was a concern with Iran’s nuclear program. The agreement still needs the backing of US Congress after India secures other international approvals.

Political Opposition from All Sides

This latest nuclear pact signals a deepening of relations between the oldest and the largest democracies in the world, however; the democratic process in each country maybe what tears the pact apart. Both countries have formed different interpretations and critics claim that both sides made too many compromises in an attempt to sell the idea.

Two days before the text was presented in parliament, PM Singh issued a statement assuring the public that the deal did not infringe upon India’s sovereign right to conduct nuclear tests. The Left parties demonstrated their opposition to the deal by walking out when PM Singh finished reading his statement in the Lower House of Parliament and the Upper House demanded his resignation. The Left parties are opponents of so-called “US dominance” and have voiced concerns about the potential for the US to arbitrarily end the agreement.

In response to PM Singh’s statement, the US declared that if India ever performed a test then all nuclear cooperation would be terminated. Yet, the termination clause of the deal does not mention the word ‘test.’ It merely states, “The party seeking termination has the right to cease further cooperation… if it determines that a mutually acceptable resolution of outstanding issues has not been possible or cannot be achieved through consultations.” US critics are angry that the deal ends years of denial of nuclear technology to India because of India’s previous nuclear tests and its refusal to sign the NPT.

Australian Uranium

The Australian Prime Minister and his cabinet have “decided in principle” to export uranium to India because of India’s strong non-proliferation record. The uranium will be subject to conditions providing assurances that Australian uranium will remain in peaceful uses at all times, supported by verification arrangements to ensure no Australian nuclear materials supplied to India contributes to any military purposes.

Future Outlook

The US – India deal presents a political crisis for Prime Minister Singh. The majority of legislators opposes the pact and has left the PM with two options.

• One option is to slowly bring the opposition around to the idea of agreeing with the deal by addressing their individual concerns, but then the agreement risks missing the opportunity to be ratified by US Congress in 2007.
• The second option is to get Nuclear Suppliers Group (NSG) and IAEA approval, but that will lose domestic legitimacy, broad-based support and further weaken Singh.

At first glance, the agreement appears to be beneficial to the US. India and the US have common threats including China’s military growth and Islamic terrorism in the Middle East. To this end, the US has long treated countries differently based on strategic calculations and India has a recent strong non-proliferation record. However, the threat will not be from India if more nuclear technology and uranium are allowed in the region.

The inevitable result will be an arms race involving China, Pakistan and India as each wishes to maintain and appearance of strength. In 1998 Pakistan and India performed their nuclear tests only five months after the US and China signed a similar agreement. The US and Australia should realize the long-term effects of their nuclear assistance to India, not only to themselves but also throughout the world.