The nuclear deal: A positive fallout

[Adux]

The nuclear deal: A positive fallout

Dhruva Jaishankar










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August 10, 2007
Last week, an Indian journalist asked me who had the most to gain from the US-India nuclear agreement. The answer, I had thought, was obvious -- India, specifically India's people and India's businesses. The fact that this is not self-evident to many Indians speaks volumes about the trust deficit remaining between the United States and India, as well as India's lingering insecurity concerning its role on the world stage.
From an Indian perspective, what exactly does the nuclear deal accomplish? The direct benefits to India are three-fold: Increased energy diversity, greater access to technology and the potential for newer and deeper strategic partnerships.

As anyone who has experienced India's infamous 18-hour power cuts can tell you, its people and its burgeoning businesses are badly in need of stable, assured energy sources. This will require a diversification of India's energy options, including more efficient fossil fuel use, the harnessing or import of greater amounts of hydroelectric power, and the development of renewable energy sources such as wind and solar power, in addition to greater investments in nuclear energy. Nuclear energy currently accounts for a pitiful 3 per cent of India's overall energy, despite a sizeable nuclear infrastructure. The deal could greatly increase that figure in the coming decades.

Technologically, India has been denied access to vital scientific know-how since its nuclear weapons test in 1974. The technological denial has applied not only to expertise related to civilian nuclear energy, but also to various 'dual-use' technologies, such as propulsion and electronic systems, which could theoretically be used for military purposes. It has applied even to a range of seemingly innocuous agriculture- and health-related technologies. The nuclear deal explicitly and implicitly eliminates these technological barriers.

Lastly, the deal gives India an elevated standing in the global nuclear and political order, not quite on par with the five Nuclear Weapon States designated by the Non-Proliferation Treaty, but nevertheless, a far greater standing than it has ever enjoyed before. The removal of technological barriers and the development of at least one crucial sector of the economy could in turn lead to greater and deeper economic and strategic ties not just with the United States, but also with Russia [Images], Europe, China and Japan [Images].

These three primary benefits for India from the nuclear agreement could, in turn, have a ripple effect. The US-India relationship is expected to improve along many dimensions in multiple sectors in the coming years, leading to increased trade in goods, greater investment in a diverse range of industries, and further social and cultural exchange between the two countries.

To some extent, such improvements are taking place already, regardless of the nuclear agreement and the agreement's impact on these fields will consequently be difficult to gauge. However, two specific aspects of the US-India relationship, with similarly tenuous connections to the nuclear agreement, may yet prove indirect beneficiaries of the deal.

The first will be greater commercial and technological opportunities in the defence sector. The US military industrial complex is already looking at India as a money-spinning market for its weapons systems. Of course, India, as the world's largest purchaser of military equipment, has no obligation -- legal or otherwise -- to buy American defence equipment. In fact, India will most likely continue to buy cheaper Russian and Israeli products whenever available, as they may be enough to ensure technological parity, if not slight superiority, vis-a-vis its two major competitors, China and Pakistan.

However, the option of buying American defence equipment is now on the table, and in some cases at least, the Indian government would be wise to take advantage of this opportunity. This does not mean that India should necessarily grant the multi-billion dollar contract for 126 medium multi-role combat aircraft to an American company. But India's war-fighting machinery could benefit enormously from such acquisitions as superior night vision, better communications technology and more sophisticated electronic warfare systems.

The Indian military, which has pitiful little say in the choice of equipment purchased, is keen to acquire high-quality American products, many of which are denied to the Chinese and Pakistani militaries. The purchase of select American equipment could therefore see India gain a sizeable military-technological advantage over its regional competitors.

A second indirect benefit to India could be in the education sector. Some 20,000-odd Indian students, academics and researchers have been flocking to the United States each year for the past decade, and US universities are likely to remain the world's pre-eminent institutions of research and learning. However, Indian scientists have so far been prevented access to, or discouraged from cooperating in, sensitive nuclear-related and other high-technology fields.

The nuclear agreement can potentially eliminate this knowledge embargo, allowing interested and competent Indians to study and conduct further research in top US universities. Some will almost assuredly settle in the United States and contribute to that country's scientific establishment as part of the inevitable brain drain. Others, as recent migration trends have begun to show, will likely return to India with top-notch academic credentials and experiences and would prove valuable additions to their native country's scientific establishment. As the Chinese are so fond of saying under such circumstances, a more robust scientific and academic relationship between the United States and India could prove to be 'a win-win situation.'

The biggest remaining impediment, both to the consummation of the agreement and India's ability to reap its fruits, is the trust factor. Understandably, Indians have historically had reasons to mistrust the United States. They remember the Tarapur episode following India's 1974 nuclear explosion, as well as the turnaround in US support for India between 1965 and 1971. More recently, they read about the United States considering reneging on F-16 parts to Hugo Chavez's hostile Venezuela. The nuclear deal, offered seemingly altruistically by the US to India, is in part an effort to assure Indians that the United States can indeed be trusted.

Enduring distrust of the United States is substantiated by lingering Indian insecurity and suspicion in its foreign policy, frequently bordering on paranoia. As C Raja Mohan recently noted in light of the 123 Agreement between the US and India, 'It is a long political tradition in India to look for secret clauses in bilateral agreements.' But India is no longer the weak, impoverished country it was in 1974, nor is it an oil-rich but petty state like Venezuela.

As a fast-growing economy and the fourth largest military power, India's ventures in foreign policy -- be they concerning Iran, Nepal, Pakistan or even Fiji -- should scarcely be fraught with such hesitance or trepidation. The boldness of the nuclear deal could provide a much-needed boost of confidence to a country which, at 60, is only now learning to tightrope across the world stage without the safety net of the United Nations or the Non-Aligned Movement.

It should be noted that US-India relations were not always laden with such mutual suspicion. Indians often conveniently forget that a warmer US-India relationship, which included cooperation and alignment on Tibet and China, existed until the Indo-Pakistan war of 1965. The US and its institutions were also among the prime technological and scientific contributors to India's 'Green Revolution' and its subsequent agricultural self-sufficiency.

While some opinion contributors in the Indian press have descended to questioning the patriotism of the proponents of the nuclear deal, a glance at the wide-ranging benefits of the agreement for common Indians clearly demonstrates in whose best interests the deal was arranged. Many of these critics -- Cold War atavists -- appear sadly negligent towards the needs of India's people and overlook the plain facts about the US-India relationship.

Today, India sends more students to the United States than any other country, Indians regularly think more favourably of the United States than citizens of most other countries do, and the United States remains India's largest trade partner. Arguably, the nuclear agreement is an attempt by both governments to improve their relationship to a level comparable to the relationships between their people and between their business communities. Indian mistrust of the United States, once synonymous with its foreign policy, is clearly a sentiment belonging to the past.

Dhruva Jaishankar researches US foreign policy towards South Asia in Washington DC

http://in.rediff.com/news/2007/aug/10guest.htm

 

[BanglaBhoot]

Power Plays: Business Implications of the Indo-U.S. Nuclear Deal

Published: August 09, 2007 in Knowledge@Wharton

On a flight to India five months ago, Wharton management professor Saikat Chaudhuri's co-passenger was a U.S.-based executive from General Electric, who was headed for talks with government officials in New Delhi. The executive had made numerous trips to India in the previous year, and he was also talking to several Indian states to explore deals to build nuclear and other power plants. "He was preparing for the market that would open up with the Indo-U.S. nuclear deal," says Chaudhuri.

That executive may have congratulated himself earlier this month when the two countries finally signed the deal -- called the "123 Agreement" because it falls under the U.S. Atomic Energy Act section of that number. Others may be cheering as well: Two big U.S. delegations -- representing 180 companies and 38 companies respectively -- visited India in the past year, looking to sell items such as Westinghouse nuclear reactors, uranium from South Dakota and Lockheed Martin fighter jets.

The agreement aims at ensuring U.S. support for India's civilian nuclear power program, with the promise of a significant jump in trade and business relations between the two countries. India will open its 14 civilian nuclear plants -- eight others are for military purposes -- to international inspection. Still, political groups in both countries threaten to block the deal, even as the emerging geopolitical realities and the economic benefits appear to outweigh the concerns. India Knowledge@Wharton spoke to corporate executives, analysts and Wharton faculty members to understand the business ramifications of the deal.

Staying Below the Radar

Initially, it appeared that most of the debates about the U.S.-India nuclear agreement were largely political. A deafening silence marked the business implications -- and with good reason: Many senior executives were waiting for the political clouds to clear and for the final terms of the agreement to be revealed. As GE India's CEO T.P. Chopra told India Knowledge@Wharton in an interview, the final form of the agreement would affect GE's nuclear power strategy in the country. Some business leaders point to other challenges. "First, some hurdles still remain," says the CEO of an Indian company that has been negotiating with U.S. firms for defense joint ventures. "The last thing we want is to give ammunition to the Left-wing parties. They would love to project the U.S. as greedy capitalists selling the country for a few dollars more. Business will keep silent until it's all signed, sealed and delivered." (The Congress Party-led Indian government depends on support from the Left, which has rejected the deal.)

Although the agreement is in its last lap, the consent of lawmakers in both India and the U.S. has to be secured. That is regarded as a formality, but adverse publicity could still affect the outcome. Also, an additional India-specific safeguards protocol will need to be signed with the International Atomic Energy Agency (IAEA) and the 45-nation Nuclear Suppliers Group (NSG) will need to approve the deal as well.

By the second week of August, however, a flurry of business moves has become evident. According to an August 9 Bloomberg News report, "Areva, the world's largest maker of nuclear power stations, and General Electric, are among four companies poised to share $14 billion of orders from India as nations led by the U.S. prepare to lift a 33-year ban. Toshiba's Westinghouse Electric and Russia's atomic energy agency Rosatom will probably also win contracts to each build two 1,000 megawatt reactors, according to Nuclear Power Corp. of India chairman S.K. Jain." The report noted India can begin purchasing equipment following NSG approval of the agreement.

Bloomberg added that "the orders will form the first phase of Prime Minister Manmohan Singh's plan to build 40,000 megawatts of nuclear capacity by 2020, equivalent to a third of current generation. India needs to add to the 3% of electricity that comes from Russian-designed reactors to meet soaring energy needs and reduce its reliance on coal-fired power plants." The report also quoted one source who said India would "try to diversify its suppliers and it's highly likely all four [Areva, GE, Westinghouse and Rosatom] will win the contracts."

Even so, the going will hardly be easy. Wharton management professor Jitendra Singh says one of the main hurdles the U.S. government faces is to ensure the deal survives any opposition from legislators. "Congress is on a collision course with the Bush administration right now," he says. "The odds are that they are not in a very cooperative state of mind." He feels the Democrats may not support the deal beyond a point. "That still leaves the challenge of getting the NSG to cooperate, and that may prove difficult as well."

A Symbolic Cachet

Notwithstanding the political test, Singh says the deal has "symbolic significance" and that "it may be remembered in time as a watershed event for India." He notes that for all the rhetoric about Pakistan being a major ally in the United States' war on terror, "the U.S. has refused point blank on any kind of parity between Pakistan and India in the nuclear domain." He attributes that stance to the fact that "India has always played by the rules, even though it was not a signatory to the NPT (Nuclear Non-Proliferation Treaty), whereas Pakistan has been a nuclear proliferator with supplies to Iran, Libya, North Korea and perhaps others."

Chaudhuri also feels the symbolic value of the deal is significant for long-term planning between the U.S. and India, "whereas in earlier years you had to always include a caveat" about how the relationship would evolve. "In the past, there has always been a certain amount of mistrust between the two countries, which has perhaps prevented closer ties and led to some political uncertainties over the last 20 to 30 years," he says. He now sees clear signals from the U.S. that it "wants to engage India" for both economic and geopolitical reasons.

For U.S. companies, multi-billion dollar opportunities are opening up. "It is not just in the nuclear area," says Shivanand Kanavi, a commentator on technology issues who is currently writing a book on India's nuclear program and is the author of Sand to Silicon, a book on the digital revolution. "There are opportunities at several levels and in several sectors."

One obvious opportunity is that U.S. companies will be allowed to sell both nuclear reactors and technology to India. This is big business -- roughly $150 billion worth, according to estimates from the U.S.-India Business Council (USIBC). The numbers are extrapolated from the Indian nuclear industry's plans to increase nuclear power output from around 3,500 MW now to 60,000 MW over the next three decades. The Atomic Energy Commission has doubled its target for 2024 from 20,000 MW to 40,000 MW. Nuclear energy today accounts for barely 3% of India's total generation of 120,000 MW.

A clear beneficiary of the new regime is the public-sector Nuclear Power Corporation of India (NPCIL) -- the entity negotiating the deals with Areva, GE, Westinghouse and Rosatom cited in the Bloomberg report.

Chaudhuri says that unlike telecommunications, roads and airports where India has been aggressively forging ahead, its energy sector "has not quite had that radical transformation yet." He expects the ramifications for Indian industry to be huge, by lowering infrastructure costs with increased supply of power.

Regulatory Bottlenecks

At the recent annual general meeting of Tata Power, the group's chairman, Ratan Tata, told shareholders: "If the government opens the sector for private investment, Tata Power would be certainly interested in operating a nuclear power plant." A critical challenge for businesses, however, will be securing the government's green light. Today, only companies with a 51% government stake are allowed to generate nuclear energy. In practice, this has boiled down to only NPCIL. Two years ago, the 89.5% government-owned National Thermal Power Corporation (NTPC) had approached NPCIL with a proposal that it enter the nuclear generation arena. But the talks have not made much headway. (Incidentally, NTPC shares rose on the release of the text of the 123 Agreement; NPCIL is not listed.)

For the private sector to enter the fray, the regulatory environment will need to change. In May, Atomic Energy Commission chairman Anil Kakodkar told a meeting in Kolkata (formerly Calcutta) that the Atomic Energy Act would be amended as soon as possible to allow private-sector participation. Draft legislation has already been circulated.

Apart from the Tatas, other interested parties will likely include the Anil Ambani-controlled Reliance Energy, the Essar Group and the GMR Group. Reliance has set up a "New Power Initiative" including senior executives from NPCIL. The Tata Group has also taken on board people with nuclear domain expertise.

Kanavi points out that U.S. companies helping to set up these plants will be looking to work with Indian contractors. Some of the contenders include: Larsen & Toubro (L&T), Hindustan Construction Company (HCC) and Gammon India in civil construction; L&T in reactors; Bharat Heavy Engineering Ltd (BHEL) in boilers; KSB, Kirloskar Brothers, Mather & Platt, Jyoti Ltd. and Bharat Pumps in boiler feed pumps; Alpha Laval, GEI Hammon Pipes, Maharashtra Seamless and Ratnamani Metals in heat exchangers; Honeywell Automation in panels; and Rolta India in consulting and engineering services. Some industry watchers also include Walchandnagar Industries, Godrej & Boyce, Bharat Heavy Plates & Vessels, the Hyderabad-based MTAR (which produces assemblies and precision components for use in space and nuclear applications), and Crompton Greaves.

Over the years that the Indian nuclear industry was shunned by the Western world, many of these companies have built up a good deal of expertise. HCC, for instance, was the first Indian construction company to undertake civil engineering works for pressurized heavy water reactor power projects in India. "HCC has constructed four out of the seven nuclear power plants in India," says chairman and managing director Ajit Gulabchand. Four new plants are under construction, with HCC building two of them.

"It is fast becoming accepted that nuclear energy is 'green' compared to conventional energy sources, and it is also quicker to implement," says Gulabchand. "There is a renewed global focus on building new capacities."

M.V. Kotwal, who heads the heavy engineering division of engineering giant L&T, now sees openings to set up "light water nuclear reactors of the boiling water type or the pressurized water type." He says the technology for such reactors, which need enriched uranium as fuel, is available with the U.S., France, Japan and Russia. Whereas L&T is equipped to manufacture the main reactor vessels as well as steam generators, pressurizers and other critical equipment for such nuclear power plants, "it is a problem at times to source some of the raw material which is manufactured by European, Japanese and Russian companies," says Kotwal. "After the clearance of the agreement, it will be easier to source such material and hence to speed up the Indian program."

Because of their extensive domestic experience and cost advantages, companies like L&T also plan to export nuclear reactor building skills and associated operation and maintenance services once the agreement is finalized.

Meanwhile, the perestroika in the nuclear arena will extend to exploration. The public-sector Uranium Corporation of India will be bidding for mines abroad. Meanwhile, at home, the private sector is being allowed into uranium exploration. For starters, the Department of Atomic Energy (DAE) will outsource areas like data collection and analysis.

Mega Defense Deals

All of this is, however, small change compared to defense deals, which have U.S. companies waiting anxiously. A conservative estimate says that India will spend $70 billion in defense procurement over the next five years. (The $150 billion estimated for nuclear power projects is spread over 28 years.)

Take just one component: fighter jets. India is in the market for 126 multi-role combat aircraft. At $10 billion, this is one of the world's biggest single-supplier contracts. New Delhi-based defense commentator Siddharth Srivastava wrote in an Asia Times article that the contenders are Boeing's F-18 Super Hornet, Lockheed Martin's F-16 Fighting Falcon, the Russian MiG-35, the Swedish SAAB Group's Jas-39, the Typhoon Eurofighter (the combined effort of British, German, Italian and Spanish firms), and the French Dassault Rafale.

The agreement will have spin-off benefits for Indian companies, as government regulations require foreign suppliers to invest 30% of deal values above $66 million in India's defense industry, wrote Srivastava. He points to Boeing's recent win of a $11 billion order for 68 aircraft from Air India, and its announcement that it would invest $1.7 billion to buy goods and services from Indian companies. Lockheed Martin has approached Hindustan Aeronautics, Bharat Electronics, BHEL, and the Tatas for joint defense projects, he adds.

Today, Russia is India's biggest defense supplier. Israel stands at No. 2, having overtaken France, the U.K. and the U.S., who had been hamstrung by various restrictions but now want part of the action. India this year expects to spend $10.5 billion on military equipment, including $4 billion for the air force, $2.8 billion for the army and $2.5 billion for the navy. Some 70% of those capital needs are met though imports.

The big Indian houses of Tata, Mahindra and Godrej are cobbling together consortia to bid for defense projects that may open up once the nuclear deal takes effect. L&T has already signed up with European aerospace and defense group EADS. Incidentally, L&T is planning to build submarines for the Indian Navy and has produced prototypes of products including missile launchers.

Indian business groups with defense expertise include Tata (electronic warfare systems, embedded software), Mahindra (simulators, surveillance systems), Ashok Leyland (transport/passenger vehicles, light armored trucks), Kirloskar (naval engines) and Bajaj Tempo (armored vehicles, components). Mahindra recently announced a marketing and support deal with Seabird Aviation Jordan to supply Seabird seeker aircraft to India. "This is a natural extension of our activities in the field of surveillance for which we have obtained a license from the government of India," says Brigadier (Retd.) K.A. Hai, CEO of Mahindra Defense Systems.

Another area where the nuclear agreement will make a difference is in space. "The deal will pave the way for lifting technology restriction regimes," says Kanavi. "One example: U.S. satellites or even satellites carrying U.S. components are not allowed to be launched by the Indian Space Research Organization. This might change and lead to India entering the business of space launches and satellite fabrication as a serious player. It has a price advantage of about 30% here due to the availability of high-skilled talent at low cost."

Economic Realities

"Ultimately, economics determines everything," says Chaudhuri, who feels those compulsions will override political opposition to the deal. To support that point, he says that despite widespread criticism of China's political system and its human rights issues, the U.S. business community is "very close to China." He says the Chinese government's investment in New York City-based private equity firm Blackstone "is very telling," as is also the recently embattled financial services giant Bear Stearns's attempt to rope in Chinese partners.

Chaudhuri adds that it is impressive that India "stuck to its guns" in the negotiations leading up to the nuclear deal, and also won the endorsement of its scientific establishment. "What's also interesting is that India is going to keep its options open and engage various countries, including Russia and China, at the geopolitical level," he says. "That's a new reality that has to be accepted by the rest of the world." The deal also sends a clear message to the U.S. that its "unilateral actions are probably bound not to be as effective any more," he says.

"There are some people who look askance at the 'sudden' emergence of India," Singh says. He argues that a longer-term historical perspective is needed, citing William Dalrymple's article in Time magazine's Asian edition on August 13, in which he says the notion of India as a poor country is of relatively recent origin, and that as late as 1700, it was one of the wealthiest regions of the world.

"It may be worth reminding ourselves that at one time India was called Sone ki Chidiya -- the Golden Bird," says Singh. "Maybe that was not just a flight of fancy after all. And India and China are simply heading back, in this post-Cold War, post-imperialism era, to their historically handsome share of world GDP and trade."

 

[BanglaBhoot]

N-deal relies on God, not common sense

By Bharat Karnad

The Asian Age - August 11, 2007

M.K. Narayanan, national security adviser to Prime Minister Manmohan Singh, in a press interview, attributed his alleged success in negotiating the 123 Agreement with the United States, to the role "played" by "God." Now that the text of the agreement is available for scrutiny, it is clear the "God" the NSA relied on was in America’s pay. How else to explain a deal that will strategically hog-tie India, reduce it to a client state in all but name, and otherwise politically and militarily neuter this country? What Narayanan could have done with is less divine intervention than common sense and old fashioned patriotic resolve to prevent the United States from having its way at India’s expense. But then, the Indian government seems happy with only a supposedly cleverly-worded bargain.

The contents of the agreement have come as no great surprise. It was a story foretold in a whole bunch of articles written by this analyst and published periodically in The Asian Age over the last three years, starting with the first one in October 2004 when the then recently installed Manmohan Singh regime, keen to revive the deal the Atal Behari Vajpayee government had set aside owing to Washington’s intransigence, decided that what was needed was still more give on India’s part. It proved the right recipe to get the Americans on board. After all, there is no agreement that cannot be obtained with another country by piling concessions upon concessions on a plate already filled with national security compromises.

The insidious nature of the Indian compromises and concessions evident in the 17 Articles in the 123 Agreement has been adequately analysed in recent reports in this paper, and elsewhere in critical press assessments. What is obvious is that the only thing the US conceded in the negotiations is an intercessionary instrument of "consultations" on a host of issues, like fuel supply and the return of imported nuclear material, should India resume testing. What good Narayanan and Co. think such consultations will do is anybody’s guess, considering that the consequences mandated by the Hyde Act cannot be escaped. If India resumes testing — which it desperately needs to do to inject credibility into its unproven and untested thermonuclear deterrent and which, hopefully, a strong future government will order — the US, after a round or two of consultations, will end the nuclear cooperation and terminate the deal in its entirety. The Indian government, for incomprehensible reasons, seems unable or unwilling publicly to admit that the 1954 US Atomic Energy Act (as amended in 1974) and the Hyde Act supersede the 123 Agreement, a fact the Narayanan-led negotiating team acknowledged when it approved the final text.

Three other aspects of the 123 Agreement need to be borne in mind by Parliament, which will be discussing it. The first is India’s acceptance of safeguards in perpetuity on the civilian part of its nuclear programme. This most significantly defines a non-nuclear weapon state under current international non-proliferation law. In the context of the loss, for all intents and purposes, of the testing option and the fast-tracking of the Fissile Material Cut-off Treaty as required by the Hyde Act, the safeguards in perpetuity will lead to the progressive increase in the number of facilities under safeguards and severely limit the prospective growth of the Indian nuclear force to meaningful size. The government, hereafter, will have to be content with what traction the phrase "state with advanced nuclear technology" can muster in international circles, which won’t be much.

Secondly, the government believes that the Nuclear Suppliers Group solidarity is bit of a fiction, that Russia and France, tempted by huge contracts for reactors, will break rank and, in case the US ends nuclear cooperation with India, they will continue to supply fuel and other material on a bilateral, contractual, basis. The trouble is, Russia and France have insisted all along that Delhi first meet all the American non-proliferation demands contained in the US laws, before they engage in selling anything to India. Implicit in this is their commitment to hew to the Hyde Act in toto, including the provision requiring the other NSG member-states to also cease nuclear cooperation if Washington decides to do so for reasons other than nuclear-related, such as India’s continued close relations with Iran. And, in any case, the US is in a position to enforce its diktat in the NSG as elsewhere.

Finally, contrary to Prime Minister Manmohan Singh’s pledges in Parliament and the declaration in the "separation plan," the 123 Agreement requires India to put all breeder reactors under international safeguards, thereby closing that route to weapon-grade plutonium and forcing this country into sharing its technological advances in breeder reactors and thorium utilisation through participation in GNEP (Global Nuclear Experimental Project).

Devastating as the impact of the 123 Agreement will be on India’s military atom and the integrity of its civilian nuclear programme, it is important to plumb the sort of thinking and pre-determined negotiating strategy that have produced this accord. What it says about the persons responsible for it and about this government, is another matter. In this regard, consider what Narayanan has said. Asked if he was "100 per cent satisfied with the text of the 123 Agreement," the NSA replied: "I am one of those who believes that if you are negotiating and you get everything you want, then obviously there is something wrong." Meaning, that if by some off-chance he had been presented a 123 draft for approval with "everything" India wanted — free, open and unconditional nuclear trade and commerce and no restraints whatsoever on testing, technology transfer and reprocessing of spent imported fuel, Narayanan would have rejected it, preferring something a lot more onerous. Well, that is what the country is stuck with.

Then Narayanan amplified some more, this time on his boss’ attitude. "The PM had always taken the view (vis-à-vis the Americans)," the NSA revealed, "that if (the Americans have) a legal problem, we will not try to ask (the Americans) to break (their) law." This exceptional kindness on the part of the Indian principals, which the US undersecretary of state Nicholas Burns thanked the Indian negotiators for, leads to the unavoidable conclusion that Manmohan Singh considered the inviolability of US laws, like the Hyde Act, more important than protecting India’s nuclear sovereignty and national security and, therefore, that undermining the latter was permissible just so the American side was kept in good humour and a deal, even one damaging to India’s vital national interests, could be procured. This is the same Manmohan Singh, it may be recalled, who praised the British for the "benefits" of the Raj.

No wonder, in his July 27 press conference, a relieved Burns asserted that no other country could expect to get this kind of deal. Then again no other country (with the exception of Pakistan) would be foolish enough to hanker for one and sacrifice so much for it. It brings to mind a baffled query by a senior Iranian official to Indian visitors to Tehran recently: "Why does a powerful country like India not act like a big power?" With the 123 Agreement, India has agreed to shore up a tottering global non-proliferation order of which it is the chief victim and to shape its foreign policy as desired by Washington. The reasons for "Rising" India’s eagerness to take an axe to its own strategic feet and to crawl back to being a 21st century dependency are a mystery history will unravel. For now, the 123 Agreement provides evidence of quite a spectacular failure of national will, the will to genuine greatness.