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The Indo-US Nuclear Deal: A Post-Henry Hyde Act Analysis

The Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act is now law. With its passage history of sorts has been created. India now has a credible chance to legally access civilian nuclear technology while keeping its nuclear weapons program. No country outside the NPT can say so.

Critics in India have called this a complete sellout of our foreign policy and our nuclear programs - both civilian and military. Supporters on the other hand, call the Henry Hyde Act a clear and uninhibited victory. As in most such polarized arguments, the truth is somewhere in between. India gained something - nuclear cooperation - while loosing on other fronts.

To truly understand the implications of the Act, it must be analyzed on two fronts - nuclear and foreign policy. For India, the original intent of the Indo-US Nuclear Deal signed in March 2006, was two fold. On the nuclear front, India hoped to access civilian nuclear technology and fuel to expand its domestic program. On the foreign policy front, it hoped to create a India-specific niche for itself, justifying its nuclear non-proliferation and military credentials.

In that two-faced analysis the real losses for India are not the tangible ones, such as loss of control over the civilian program. Rather, it is the loss of power India will face in future foreign policy negotiations. And that loss has less to do with the original agreement and more to do with how India has handled the passage of the subsequent Henry Hyde Act through the US Congress.

The Henry Hyde Act: Tangible Nuclear Gains

The Henry Hyde Act is only one of many steps towards India’s recognition as a nuclear state, entitled to full civilian cooperation with the Nuclear Suppliers Group. However, it is an important step because it sets an upper limit to what the US can offer India. And there is no reason to believe that India can extract further concessions from other NSG members, many of whom are less enthusiastic of this initiative.

On the nuclear front the Act offers India access to technology for new, bigger, and better reactors, as well as uranium for those reactors - something we are short of domestically. On the foreign policy front the Act shows that India can now create a space for itself and eventually be recognized as a nuclear state. By no means are these achievements to be scoffed at.

Critics point out that what it offers, the Act can also take away. The Hindu points out, correctly, some of the major criticisms of the act that:

  • Nuclear cooperation is not full and excludes enrichment and reprocessing technology, which we need to complete our three-stage nuclear fuel cycle.
  • India does not get unconditional access of uranium fuel or technology. In particular, all cooperation will be stopped should India test another nuclear weapon.
  • The US President must report annually on India’s nuclear program. Such reporting can, and probably will, be used to pressure India on other fronts.

Most of these criticisms, while true, are somewhat misplaced. For instance, while nuclear cooperation is not complete, it is nonetheless substantial. Therefore, the mere fact that is not complete can hardly be seen as a strike against it.

Second, by denying India reprocessing technology, the Act prevents us from advancing very far in our three-stage fuel cycle. However, it is an established fact that our much-vaunted thorium fuel cycle is actually highly inefficient and expensive, and exists simply because we do not have sufficient domestic uranium for a traditional full-scale civilian nuclear program. Therefore, if India could be guaranteed uranium fuel, abandoning the 3-stage cycle would actually make economic sense.

That guarantee, of course, will never come. Access even to this nuclear cooperation is conditional and subject to termination. However, should cooperation end we only loose something we never had. Viewed that way, we don’t loose much, do we?

A Weakened Chicken Player: Intangible Foreign Policy Loss

To understand the real loss for India, consider the following scenario. Following this agreement, India builds 5 new, large reactors with American, Russian, and Japanese help. In 2012 the US asks India, once again, to vote against Iran at the IAEA, threatening to stop uranium supplies under the guise of annual reporting requirements. Considering that the Iran-India gas pipeline is now operational, India must now choose between the fire and the frying pan.

By buying into US nuclear cooperation, India will in the future have to choose between that cooperation and other alliances. When our mutual interests collide, as they must, India will be playing what is known in game theory as a game of chicken. Where India has really lost is in signaling that this nuclear cooperation is sacrosanct, and our other considerations are up for negotiation.

In Chicken, two things make a player strong. The first is to signal a willingness to undergo significant pain in order to win. For instance, in the third Indo-China war, China invaded Vietnam, arguably lost the military battle and suffered heavy losses. However, it proved - for future confrontations - its willingness to suffer pain in order to inflict it. Vietnam would think twice before crossing paths with China again.

India lost several opportunities to signal the same to the US. In particular, public statements by our government supporting the Henry Hyde Act indicate that we will take whatever the US Congress offers. Instead, a smarter strategy would have been to criticize the Act as insufficient and threaten walking away from the deal. The mere willingness to consider rejecting the deal would be a signal that our acquiescence not be taken for granted. Not now. Not later.

Second, a constrained player is stronger. The original agreement with the USA was favorable to India partly because we had domestic constraints. Similarly, if the Prime Minister had subsequently gone to the US Congress and announced that certain conditionalities in the Hyde Act would be rejected by the Indian people, the US Congress would be faced with removing those terms or subsequent rejection of the deal.

Instead, by repeatedly supporting the Hyde Act in Parliament our government weakened those constraints and in the process, has weakened India’s negotiating position.

The Final Analysis

Not surprisingly, the Hyde Act both offers and takes away - such agreements are always based on quid pro quo. The truth is that the Act offers India substantial present benefits. The associated losses are in the future, and the extent of those losses will depend on India’s willingness to take choices that are painful in the short term. Because of those tangible nuclear benefits, and despite several reservations, I remain in favor of the deal.

I cannot, however, support India’s bungled negotiation process. On the policy front India is yet to see any benefits, such as recognition as a nuclear weapons state. And missteps in negotiation have already reduced India’s ability to extract future benefits. India must take steps to limit those foreign policy losses. And the question to ask really is, when India must decide to support Iran, test a nuclear weapon, or buy gas from Myanmar, will it be able to say to the US, “No, thank you”

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4 comments for “The Indo-US Nuclear Deal: A Post-Henry Hyde Act Analysis”

  1. [...] itself, which is by far the best analysis of the deal thus far (see also my previous analysis - 1, 2 - for a primer on negoitation theory) . A careful reading clarifies that contrary to [...]

    Posted by The Indo-US Nuclear Deal: Epilogue in Parliament at The Discomfort Zone | August 20, 2007, 1:21 pm
  2. Great commentary. Very informative. Good work

    -n-

    Posted by neurojava | August 23, 2007, 4:06 pm
  3. [...] would still follow. If anything limits India’s foreign policy, it is not the deal but how important the PMO considers it. And to say that the agreement will limit India’s foreign policy options is no criticism at all [...]

    Posted by Concluding The Indo-US Nuclear Deal: Moving Beyond Blame at The Discomfort Zone | August 26, 2007, 9:37 pm
  4. please do not use “loose” instead of “lose”.

    Thanks

    Posted by smita | March 16, 2008, 3:13 pm

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