An agreement that was called a deal

SANJAYA BARU

July 21, 2015 

It is only in the last year that there has been some course correction in Washington and New Delhi over the historic nuclear deal. If in 2005 it was the nuclear deal that opened the door to a strategic partnership, in 2015 it is the strategic partnership that has enabled a closure on the deal

Ten years ago, on the morning of July 19, 2005, the readers of The Hindu would have seen a boxed news item next to the front page lead story with an innocuous headline that read “Manmohan expresses satisfaction over talks”. It was not just the byline of the writer (N. Ravi, the newspaper’s former Editor-in-Chief) that justified the placement of that report, but its stunning opening line: “In a significant development after the meeting that Prime Minister Manmohan Singh had with American President George Bush at the White House, the United States, acknowledging that India is a nuclear weapons power, agreed to cooperate with it in the area of civilian nuclear energy.”

Thus began the long, rocky and uncertain journey of the “Agreement for Cooperation Between the Government of the United States of America and the Government of India Concerning Peaceful Uses of Nuclear Energy” that finally secured the Indian Parliament’s imprimatur three years later. The agreement came to be called a “deal”because it was viewed in transactional terms by many in both countries. One U.S. Congressman put it bluntly during a meeting with Dr. Singh, “it’s 123 for 126” — the reference being to the 123 Agreement that had to be signed and the 126 fighter jets that the United States hoped India would buy from it. Others rejected such a transactional interpretation and viewed the agreement as the key that enabled both countries to open the door to a longer term strategic partnership.

The 10th anniversary

Interestingly, a decade later it was left to a think tank in Washington DC to bring together a group of some of the former U.S. and Indian officials, associated in various capacities and to varying degrees, with the negotiation of the agreement. There has been no similar high level celebration of the 10th anniversary of the Bush-Singh “deal” in India. Even the Congress Party has remained silent, not making any statement so far to remind the people of an important achievement of its own government. For a party that observes so many ritual anniversaries, it is indeed puzzling that there has been no celebration of such a historic achievement of its last Prime Minister. Of all his achievements in the Prime Minister’s Office (PMO), Dr. Singh will be remembered for the nuclear deal.

“ Neither the Congress nor the BJP has been willing to openly endorse the fact that the deal was made possible by the actions of successive Congress and BJP Prime Ministers”

In the U.S., on the other hand, given the bipartisan support for the agreement, the gathering last week in Washington DC was addressed by U.S. Vice President Joseph Biden. It may be recalled that as a member of the U.S. senate at the time, President Barack Obama had actually voted against the 123 agreement. In government, Mr. Obama has not only endorsed the agreement entered into between Mr. Bush and Dr. Singh but also joined hands with Prime Minister Narendra Modi to complete the journey begun a decade ago by endorsing a mutually agreed fudge on India’s civil nuclear liability law.

Political reading

Despite the fact that the Congress and the Bharatiya Janata Party (BJP) are implicitly on the same side as far as the civil nuclear agreement and the strategic partnership with the U.S. are concerned, neither party has been willing to openly endorse the fact that this agreement was made possible by the actions of successive Congress and BJP Prime Ministers — P.V. Narasimha Rao, Atal Bihari Vajpayee, Manmohan Singh and Narendra Modi. As I recorded in my book,The Accidental Prime Minister, on completing the 123 agreement with the U.S., Dr. Singh told Mr. Vajpayee, “I have only completed what you began.” In tying up the loose ends of the civil nuclear liability law, Mr. Modi can say much the same to Dr. Singh! While the Bush-Singh agreement was not just about nuclear energy, but also about defining a new relationship between two great democracies, the immediate considerations that defined the timetable of the agreement getting finalised had as much to do with Mr. Bush’s tenure coming to an end as it had with uranium shortage in India and the falling capacity utilisation at nuclear power plants. With some nuclear power plants on the verge of shutdown and with even friendly countries like Russia insisting that India needed the approval of the Nuclear Suppliers Group (NSG) before any fresh export of uranium could be authorised, getting the 123 agreement done became important in itself, and not just as a step towards a U.S.-India strategic partnership.

An energy initiative

An important reason why the agreement was projected as an energy initiative was because many in government believed that politically it would be difficult to sell to the public a complex technical agreement without giving it a popular basis. Some political leaders like Lalu Prasad and Sharad Pawar recalled how the Narasimha Rao government was put on the defensive during the Uruguay Round of world trade negotiations because the Opposition projected the “Dunkel Draft”, a draft agreement authored by Arthur Dunkel (the last director-general of GATT — General Agreement on Tariffs and Trade) as anti-farmer. Few in India may have actually read the Dunkel Draft but millions of farmers agitated against an imaginary enemy named “Uncle Dunkel”.

It was for this reason that a document was prepared explaining how the nuclear deal was all about delivering electricity to people, especially power starved rural India. The document was translated into all languages and copies made available to members of Parliament and State legislatures. The media campaign that followed generated adequate public support for the nuclear deal so that every public opinion poll conducted during the period 2006-2008 showed majority opinion supporting the government on the deal.

This is not to say that India was not serious about increasing generation of nuclear energy. It is not widely known that for years the plan target for nuclear energy generation was that it would constitute a mere 3.0 per cent of total energy generation at home. In actual fact, in the mid-2000s it was not even 2.0 per cent. The proponents of the nuclear deal hoped that with easier access to uranium and new nuclear plants, India could try double nuclear generation capacity by 2020. No more.

Setbacks

Two developments have come in the way of this objective getting realised. First, in his second term Dr. Singh failed to get parliamentary approval for the original civil nuclear liability bill that his government had drafted in early 2010. Neither Prithviraj Chauhan, then the Minister dealing with atomic energy in the PMO, nor Shivshankar Menon, then National Security Advisor, was able to sell the original draft bill to the Opposition. Even though some senior members of the BJP had no problem endorsing the original draft, the L.K. Advani faction of the BJP, including Sushma Swaraj and Yashwant Sinha, teamed up with the Communist Parties, to demand redrafting of the Bill.

In the first such instance of taking the Opposition’s help to draft a government bill (later repeated when Anna Hazare’s supporters were drafted into writing the Lok Pal bill) the Singh government rewrote its own bill and introduced elements that have since made the liability law stillborn.

The second development was the Fukushima disaster in Japan that, on the one hand, increased the cost of building nuclear power plants and, on the other, revived the global anti-nuclear campaign.

For all these reasons, it may be argued that the expected take-off of the civil nuclear energy programme has not happened. However, when the political and business environment is more hospitable for the resumption of a larger civil nuclear energy programme, the U.S.-India agreement, the NSG waiver and the many uranium supply deals India has entered into would all make it easier for new investment to come in.

What of the U.S.-India strategic partnership? The 123 agreement was done at a time when the U.S., under the Bush presidency, and India, during the first Manmohan Singh government (UPA-I) had shared strategic concerns. The 2008-09 trans-Atlantic financial crisis and its aftermath altered the global context. The first Obama administration and the second Manmohan Singh government virtually abandoned the nuclear deal and strayed away from the nascent strategic partnership. It is only in the last one year that there has been some course correction in both capitals. If in 2005 it was the nuclear deal that opened the door to a strategic partnership, in 2015 it is the strategic partnership that has enabled a closure on the nuclear deal.

(Sanjaya Baru is the author of The Accidental Prime Minister: The Making and Unmaking of Manmohan Singh and Director for Geo-economics and Strategy, International Institute for Strategic Studies.)