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India: The needless quest for NSG membership

by M. V. Ramana, Suvrat Raju, 3 August 2016

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The Telegraph, July 28 2016

Instead of further attempts to enter the NSG, India would do better to simply give this club a wide berth, write M.V. Ramana and Suvrat Raju

Over the past decade, successive Indian governments have made engagement with the Nuclear Suppliers Group a central element of their foreign policy. In its recent ungainly attempt to enter the NSG, the Narendra Modi government was simply continuing the policy of the United Progressive Alliance government that first initiated trade in uranium and nuclear reactors with NSG members in 2008. But what costs has the country paid for this "seat at the nuclear high table"? As we describe below, both the NSG waiver of 2008 and membership of the group - if it materializes - are largely irrelevant to electricity generation in the country. And the price that the country has paid, in terms of diplomatic concessions and expensive reactors that it has agreed to purchase from the United States of America and international nuclear suppliers, far outweighs the stated benefits of this engagement. Instead of further attempts to enter this club, the country would do better to simply give the NSG a wide berth.

The NSG is a cartel that controls trade in nuclear fuel and technology. Although its members are not ordinarily allowed to trade with countries that have not signed the nuclear non-proliferation treaty, in 2008, the NSG waived this requirement for India, which agreed to place its ’civilian’ nuclear facilities under international safeguards. The Indian atomic energy establishment claims that the waiver has been beneficial because uranium imports have allowed India to raise the average load factor at its nuclear plants from 54 per cent in 2007-08 to 82 per cent in 2014-15. However, this figure is deceptive. Since nuclear energy contributes a very small fraction to India’s total electricity generation, this rise in the load-factor translated to a negligible increase of less than 1 per cent in the country’s total electricity production in 2014-15.

The NSG waiver came with a tacit understanding that India would also purchase nuclear reactors from the US, France and Russia. These reactors are expensive and largely untested, and endanger the economic interests and the safety of Indian citizens. They constitute a cost, and not a benefit, of engaging with the NSG. For example, France would like India to buy several European Pressurised Reactors from its, essentially bankrupt, public sector company, Areva. But existing builds of the EPR at Flamanville (France) and Olkiluoto (Finland) have seen lengthy delays, large cost escalations, and safety problems, including a manufacturing defect in the pressure-vessel at Flamanville. Data from these sites suggest that each EPR, with a capacity of 1,650 megawatts, may cost as much as Rs 75,000 crore (10.5 billion euros). Then, even accounting for lower construction costs in India, the first-year tariffs from these reactors may be as high as Rs 19 per unit, as we showed in a detailed analysis for the Economic and Political Weekly in 2013. In parallel, the US wants India to buy six AP1000 reactors from the US-based Westinghouse Electric Company - each with a capacity of 1,000 MW. Cost estimates of these reactors from builds at Vogtle in the American state of Georgia suggest that they may be even more expensive than the EPRs in terms of capital cost per unit of capacity; six AP1000s could cost up to Rs 4 lakh crore with first-year tariffs possibly as high as Rs 25 per unit.

Even if India were to gain membership of the NSG, this would do little to ameliorate this poor cost-benefit ratio. NSG membership may theoretically allow India to purchase uranium enrichment and reprocessing technologies, which are not covered under the 2008 waiver. But since the country does not need either of these technologies, this is pointless. The vast majority of nuclear reactors in India are pressurized heavy water reactors that do not rely on enriched uranium. The fuel for the reactors at Tarapur and Kudankulam, that do use enriched uranium, is already provided through foreign contracts. Any new reactors that India imports will, in all probability, also come with associated fuel contracts. So, India has no use for the enrichment technology that NSG members might offer.

India can also do without reprocessing - the process of extracting and reusing plutonium from spent nuclear fuel. The idea of reprocessing arose early in the nuclear age, when many countries expected that nuclear power would grow dramatically and that the world would soon run out of uranium. However, global uranium production has comfortably kept pace with nuclear power. Reprocessing, on the other hand, has proven to be both expensive and hazardous. The 1957 explosion at the waste tanks at the Mayak reprocessing plant in the former Soviet Union remains the third most serious nuclear accident in history after Chernobyl and Fukushima. As a result, most countries have now abandoned reprocessing in favour of a cheaper and safer "once through" uranium cycle.

In a tacit acknowledgment that NSG membership had little to do with atomic energy, the government did not even bring the matter before the atomic energy commission, as its former chief, M.R. Srinivasan, revealed recently. Therefore, the bid for NSG membership was primarily a foreign policy initiative. But, even from a diplomatic point of view, membership of the NSG is not something to aspire to. The NSG ostensibly works to ensure that "nuclear technology transferred for peaceful purposes" is not "misused". However, its leading members have themselves significantly contributed to weapon proliferation. For example, France, Norway and Britain helped Israel start its nuclear programme, and American support for Israel has allowed it to build up a sizeable nuclear arsenal with few international consequences. Documents discovered in 2010 show how Israel, in turn, offered nuclear weapons "in three sizes" to the notorious apartheid regime in South Africa.

The five nuclear weapons states - all members of the NSG - have also seriously undermined the NPT by ignoring their commitments on disarmament in the treaty, which binds them to undertake "effective measures relating to the cessation of the nuclear arms race". The US has been one of the worst offenders. Despite the Obama administration’s rhetoric on disarmament, the US cut its warheads at a rate of only about 1.5 per cent each year from 2009 to 2013. Entry into this questionable club would hardly enhance India’s standing in the world.

In exchange for its support for India’s NSG membership, the US wants to recruit the Indian government as a tool in its attempts to contain China. The diplomatic fracas over the NSG advanced this geopolitical scheme as it aligned India squarely with the US against China. In a recent speech on the NSG issue, the US under secretary for political affairs, Thomas Shannon, suggested that India should "watch China, to ensure it behaves in a responsible fashion". The Indian bid was also viewed with suspicion in Pakistan, whose government felt that India might use NSG membership to further isolate Pakistan on the nuclear front. These competitive conflicts between the three nuclear-armed neighbours are dangerous and run contrary to the national interest in the long run.

The government is likely to renew its attempt to join the NSG later this year. But does it make sense to spend large amounts of money, and raise tensions with neighbouring countries, simply to gain admission to an unprincipled cartel of nuclear suppliers that has little to offer India?

The authors are physicists associated with the Coalition for Nuclear Disarmament and Peace

P.S.

The above article from The Telegraph [India] is reproduced here for educational and non commercial use.