India Bets on Nuclear Future

John Larkin, The Wall Street Journal:

India's surprise decision to side with the U.S. in pushing to investigate Iran's nuclear activities has thrown the spotlight on another ambitious and controversial nuclear program: its own.

In September, India supported a resolution passed by the board of the International Atomic Energy Agency alleging Iran had engaged in "a policy of concealment" in its nuclear program -- a move that paved the way for the IAEA to refer the matter to the United Nations Security Council, where Tehran could face economic sanctions.

India's decision angered the Congress party-led government's left-wing coalition allies, which oppose a tilt toward Washington. Moreover, it struck energy and foreign-policy experts as counterproductive, as New Delhi has been pushing for closer ties with Iran, whose vast oil and gas reserves it considers crucial to the subcontinent's energy security.

But Prime Minister Manmohan Singh's government is focused on bigger stakes: preserving a pact negotiated with the U.S. to provide technology to India's atomic-power industry and allow it to import foreign uranium supplies for its reactors. New Delhi's pro-U.S. stance on Iran has demonstrated how far it is prepared to go to foster nuclear energy, and re-ignited domestic debate on the feasibility of nuclear power. The pro-nuclear lobby views it as key to India's energy security, while antinuclear activists say it offers false hope.

The preliminary deal, signed in July in Washington, could help remedy India's chronic energy shortages by opening the way to build dozens of new nuclear-power plants, say pro-nuclear advocates in India and the U.S.

The U.S. nuclear deal -- details of which are still being negotiated -- could have unraveled if New Delhi had refused to back the IAEA resolution, Indian officials and security analysts say. The resolution alleged that Iran's failure to suspend its uranium enrichment activities violated its obligations as a signatory of the nuclear Nonproliferation Treaty, a global accord signed by 187 countries that was initiated in 1970 to slow the spread of nuclear weapons. But the resolution stopped short of referring Iran to the Security Council. A decision on whether to take that step is expected at the next IAEA board meeting on Nov. 24.

"Given the choice, I think India will choose the U.S. over Iran," says Brahma Chellaney, a defense specialist at the Center for Policy Research in New Delhi. READ MORE

The U.S. nuclear agreement is considered vital to New Delhi's long-term aim of tripling nuclear-power output to 20,000 megawatts by 2020. U.S. companies such as Westinghouse Electric Co., a subsidiary of U.K.-based British Nuclear Fuels PLC, and General Electric Co. provide technology for many of the world's nuclear-power plants.

India's refusal to sign the Nonproliferation Treaty has barred it from most transfers of nuclear technology and fuel. The U.S. agreement opens the way for this trade with other nuclear-capable nations, too, if Washington can persuade them to agree to its terms.

The agreement hinges on congressional ratification, which might not come easily. Senior Republicans have already expressed anger that the administration of President George W. Bush sealed the July deal after months of secret negotiations, without the involvement of Congress.

It came under attack, too, from nonproliferation experts testifying during hearings at the House International Relations Committee on Oct. 26. Robert Einhorn, a former U.S. assistant secretary of state for nonproliferation in the Clinton administration, testified that the agreement only requires India to reaffirm existing commitments like a nuclear-test moratorium, and has "has no effect on India's ability to continue producing fissile material for nuclear weapons."

India currently has electricity-generating capacity of 120,000 megawatts, chiefly from coal-fueled power stations. But peak power demand exceeded supply by 12% in the year ended March 31. In a recent report, consultant McKinsey & Co. said India needs to add 90,000 megawatts of power by 2012 just to sustain economic growth at its current pace of about 7% a year.

"Without access to nuclear energy, there's no way India can meet that target," says Ashley Tellis, a senior associate at the Washington-based Carnegie Endowment for International Peace, and a strong supporter of sharing nuclear know-how with India.

India already has one of Asia's biggest atomic-power industries, with 15 nuclear reactors and seven more under construction, using limited supplies of local uranium that can fuel its current reactors but can't sustain a larger program. That puts it in the same league as China, which has 10 reactors and plans an additional 30 over the next 15 years.

Under the July agreement, Washington promised to seek changes in U.S. law and international rules governing atomic programs to permit exports of foreign nuclear equipment and technology to India. In return, India would have to submit its civilian nuclear facilities to IAEA safeguards. New Delhi wouldn't be required to open its military nuclear installations to inspections, but it must separate them from civilian programs and continue a self-imposed moratorium on bomb-testing.

The deal was a sharp reversal of U.S. policy: To date, such terms have been given only to nations that have agreed to controls enshrined in the Nonproliferation Treaty. India has been cut off from supplies of nuclear material and technology since it tested an atomic device in 1974.

In 1998, the U.S. imposed economic sanctions -- since removed -- after India detonated five nuclear devices in tests that prompted a confrontation with Pakistan and sparked fears of a regional nuclear-arms race.

S.K. Jain, the managing director of the Nuclear Power Corp. of India Ltd., a government agency that oversees nuclear-power generation, believes the U.S. deal will allow India to build 40 new reactors over the next 15 years. "We are a net energy-importing country," he says. "So we have no option but to explore [nuclear] energy."

Still, the deal with Washington has opponents in India as well in the U.S. For example, domestic critics argue that nuclear power won't offset dependence on imported oil -- the biggest item on India's energy-import bill -- since most of the imported crude is refined into petroleum products to fuel vehicles.

"The idea of nuclear power being a sustainable energy form in India is nonsense," says Praful Bidwai, a writer and antinuclear activist based in New Delhi.

But it is the possible impact of the U.S. pact on India's nuclear-weapons programs that has some American experts worried. These critics are concerned that India will be able to shield much of its bomb-making nuclear facilities from international inspections. India, says Mr. Jain, has four reactors under IAEA safeguards. But critics point out that hasn't stopped India from making bombs.

"Unless we can get India to halt fissile production, what we are in effect doing is egging on the worst of the [political] actors in India to make more bombs," says Henry Sokolski, the executive director of the Nonproliferation Policy Education Center in Washington.

Both governments want to nail down the agreement quickly. Nicholas Burns, the U.S. undersecretary of state for political affairs, visited India in late October for talks with senior Indian officials. New Delhi says it wants a breakthrough before President Bush visits India early next year.

Write to John Larkin at john.larkin@wsj.com