The 600-pound Bengali Tiger in the Room: What the new Indian nuclear deal means for the country and the neighborhood

by Asa Zuberman-Leibman

Late last month, on his trip to the second most populous country on the planet, President Obama and Indian Prime Minister Narendra Modi signed off on a new nuclear deal, effectively making it easier for U.S. nuclear technology firms to establish operations in cities throughout the country. The deal will help the nation of over a billion with their push to move away from reliance on coal and instead focus on civilian nuclear energy. In fact, the Indian government plans a 14-fold increase in nuclear kilowatt energy by 2032. The main sticking point prior to this year’s successful negotiations was the aftermath of the 2008 U.S.-India Nuclear Deal, which put the onus on individual nuclear technology firms to pay the costs associated with damages and other insurance-related claims.

Now, in the 2015 agreement, firms will no longer have to front such expensive costs; instead, “insurance pools” will foot part of the bill. The new deal hopes to rope in companies such as GE and Westinghouse, two large, multinational energy conglomerates.

Congress and India’s Parliament actually passed a similar nuclear agreement in 2008; while the slight change in this agreement will hopefully serve to lift millions of people out of poverty, there are those who are less than thrilled over the agreement this time around, chiefly India’s rival, Pakistan. While India claims that the deal stuck between the two countries will only serve its domestic civilian energy purposes—the 2008 deal says as much—Pakistan is wary that the framework will only lead to a military-focused nuclear technology buildup. Pakistan’s National Security Advisor Sartaj Aziz expressed his discontent for the nuclear deal struck between the countries. “The operationalization of an Indo-US nuclear deal for political and economic expediencies would have a detrimental impact on deterrence stability in South Asia.”

In his worried claim, Aziz has a point. Back in 1998, when tensions with Pakistan over the Kashmir border-region were intensifying, India began to test and develop its nuclear arsenal. Clearly they took the intimidate your opponent so they back down approach to diplomacy, and instead of calming the region, Pakistan responded with nuclear tests of their own. While there have been skirmishes back and forth since then, both sides have managed to avoid a breakout of war.

But with the new round of negotiations between the U.S. and India, and a subsequent nuclear energy deal, Pakistan naturally feels on edge, especially since this type of nuclear backing comes from the most well-equipped nuclear armed state on Earth. Plus, with Obama pledging around $5 billion in arms sales between America and India back in 2011, Pakistani leaders must be worried that that number may swell to an even larger expenditure given the effective opening of India’s nuclear markets. From India’s perspective, any nuclear development will arouse Pakistani suspicions, but in order to remove themselves from dependence on coal energy, they must defer to outside sources and factors of energy. While I do not expect India to become an “Iranian situation”, i.e. they develop nuclear weapons under the guise of civilian nuclear technology, Pakistan certainly does.

For their part, Pakistan has recently enlisted the help of China to build six nuclear power plants throughout the country, seemingly in response to India’s deal with the U.S. Instead of battling over an arms race, the two border states appear to be competing with each other over who can produce the most nuclear energy in the next 20 years. Whether this becomes a nuclear arms race is yet to be seen, but by all accounts, India is on the fast track to cleaner, more renewable energy. This influx of energy will serve to lift the large majority of its population out of abject poverty, since many of these citizens live in rural areas—with nuclear power, India will have greater flexibility to supply an abundance of energy to its population that lives far from urban centers. Plus, doing so will be cheaper in the long run than traditional coal energy.

The likelihood that India further develops nuclear technology is rather low, given that the United States government is giving the go-ahead for these privatized projects. Either way, the offsetting energy agreement between Pakistan and China indicates that tensions have only simmered to a certain extent, and should Pakistan invoke their nuclear energy agreement to harness nuclear weapons-grade material, India will at least be able to look to the United States as a potential nuclear weapons-supporter. All of that is hypothetical; what is true is that India, with this deal, is well suited for a future with less dependence on coal and a larger population of electricity users.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s