Why India’s NSG entry is no big deal

The diplomatic jostle around India securing a membership in the Nuclear Suppliers Group makes one feel the membership is like a magician’s box, capable of endless supplies of goodies. NSG is touted to be a technology storehouse for a member to dip into. That is quite not the case. The fact is, NSG membership has little to do with India’s nuclear programme.

Examine the issue closely, two facts emerge. One, India’s NSG membership is very unlikely to happen, and, two, it does not matter.

To say that China is not going to let India in offers no major insights. Some observers note China was not happy with giving India the one-time waiver, and had to fall in line only under the US pressure. Optimists hope for an encore. Some others hold China is just posturing, taking a hard stance against India, only to sacrifice its position later in the hope of muting global opposition to its moves in the South China Sea.

There is also hope that China may trade-off its opposition in return for its own membership into the Missile Technology Control Regime.

However, going by Beijing’s statements, it is clear that China will agree only if Pakistan is also admitted into the NSG. But nobody will let that happen given the country’s terrible proliferation track record.

Now, what does NSG membership mean to India’s nuclear programme? Nothing. Two former chairmen of India’s Atomic Energy Commission BusinessLine spoke to, MR Srinivasan and RK Sinha, expressed themselves almost identically: “Heavens are not going to fall if India does not get NSG membership.” India has access to technology, thanks to the waiver granted in 2008. No foreign nuclear reactor supplier is waiting for India to get a NSG membership.

In fact, a long list of deal-breaker challenges hamper progress of foreign companies selling their hi-tech reactors — nuclear liability issue, Japan’s distaste for nuclear (both GE and Westinghouse are today Japanese-owned), local opposition and pricing. ‘NSG membership’ has never shown up in the list.

Indeed, with the sole exception of Russia’s Rosatom, it is difficult to see any foreign companies selling their reactors to India, even assuming that local opposition to nuclear plants could be overcome.

According to an India-briefing document of World Association of Nuclear Operators, Areva was seeking a tariff of ₹9.18 a kWhr, while the Department of Atomic Energy would not go beyond ₹6.50. In contrast, Kudankulam units three and four are expected to sell at ₹3.90 a kWhr. Energy from India-built nuclear plants are much cheaper. For GE-Hitachi and Westinghouse-Toshiba, the liability issue is a big risk, and if they factor the risk in costs, their energy will also be pricey.

It is difficult to see any foreign reactors other than the Russians’ coming up in India. India’s nuclear roll-out will most likely be limited to Nuclear Power Corporation’s 12 Pressurised Heavy Water Reactors (including four under construction), a few fast neutron reactors and whatever the Russians supply at Kudankulam.

These are the bigger issues in India’s massive expansion of its nuclear capacity, not NSG membership. Nor is NSG likely to matter materially in terms of uranium supply. India has hammered out agreements with Canada (April 2013) and Australia (November 2014), and other countries such as Kazakhstan have been supplying too.

NSG membership is an assertion of right. When the one-time NSG waiver was granted to India in 2008, India agreed that it would abide by any rules that NSG may make in the future. Being inside would mean participating in that rule-making.

Besides, NSG membership will give India a chance to expose Pakistan’s terrible proliferation record.

In a recent editorial, the New York Times observed that if India gets the membership, it will forever block Pakistan. It observed that Pakistan once provided nuclear technology to North Korea and Iran, and giving India a membership and denying it to Pakistan will give “new incentives to misbehave”. Now, such talks are reward enough for India.

In the unlikely event of India getting in, it will be in a position to use its veto to hamper Pakistan. If it doesn’t get in, India can keep the spotlight shining on Pakistan and show China as a supporter of it. Either way, it is a victory.