An ‘Elite’ Nuclear Club Keeps India Out… For Now

At the end of last month, India was dealt one of the biggest
diplomatic setbacks since Prime Minister Narendra Modi took office in 2014. A
meeting in Seoul of the 48-member Nuclear Suppliers Group (NSG) adjourned with
an impasse on the question of whether India should be admitted to the elite
nuclear club. Interestingly enough, despite the support of a majority of the
nuclear superpowers (France, Russia, the United Kingdom, and the United States), India’s
bid was blocked by China. This of course, lays bare the festering geopolitical
rivalry between the two countries. More concerning, however, is the impact the NSG’s
indecision could have on India’s ability to ratify the climate change agreement
reached in Paris last December.

What influence does
the NSG wield?

The NSG, ironically, was formed in 1974 in response to India’s
first nuclear test. As an unrecognized nuclear country under the
Non-Proliferation Treaty (NPT), India had crossed the line and the
international community swiftly moved to limit its ability (and any other
non-nuclear states) from gaining access to nuclear equipment, materials, or
technology. While India’s nuclear program was never halted, the formation of
the NSG greatly curtailed its expansion especially on the civilian nuclear
energy front, as India had to rely on limited domestic uranium reserves.

In a landmark bilateral agreement in 2005 forged by the
George W. Bush administration, the United States committed to “work to achieve
full civil nuclear energy cooperation with India as it realizes its goals of
promoting nuclear power and achieving energy security.” In 2008, the Bush administration
secured a “waiver” for India so the NSG could depart from its existing rules,
which barred non-NPT signatories from engaging in nuclear trade with its member
states.

How does NSG
membership affect India’s ability to ratify the Paris Agreement?

Shortly after the decision came out of Seoul, the Indian
external affairs ministry released a statement
explicitly saying, “An early positive decision by the NSG would have allowed us
to move forward on the Paris Agreement.” In the lead up to the meeting, Indian
diplomats insisted that the country’s interest in NSG membership was purely to
expand its civilian nuclear energy program, which they argued would be vital to
meet the country’s nationally-determined target (40% of power generation
capacity from non-fossil fuel sources by 2030) under the Paris Agreement. In
fact, Prime Minister Modi just weeks before the Seoul meeting travelled to
Washington, D.C. to announce a cooperative agreement with President Obama to
build six new nuclear reactors and work to ratify the Paris Agreement by the
end of this year.

Functionally, NSG membership would have little effect on
India’s ability to fuel its nuclear reactors as the 2008 waiver has allowed it
to enter long-term fuel supply agreements with a number of countries. When
pressed, the external affairs ministry argued, “Membership of the NSG creates a
climate of predictability with regard to rules for nuclear commerce with India,
giving both Indian and foreign companies the confidence to commit the resources
that will be needed for the expansion of nuclear power in India.” In addition
to just predictability of rules, the ministry wrapped up with a financial
justification stating, “India being a price-sensitive energy market, such an
outcome also helps keep the cost of nuclear power within a reasonable band by
lowering the risk premium.”

For the Paris Agreement to enter into force, at least 55
countries representing 55 percent of global emissions will have to ratify the
agreement. As the world’s fourth largest emitter, India’s ratification of the
Paris Agreement will be important not just for mathematical reasons, but also
the symbolism that comes with the world’s fastest growing emitter committing
itself to the new climate regime. Therefore, ratification of the Paris
Agreement provides a great bargaining chip for India.

Needless to say, India’s aspiration to increase nuclear
capacity from 7 GW today to 63 GW by 2032 is an ambitious one. A closer
look at the numbers, however, suggests that India may be overplaying the
importance of NSG membership for Paris Agreement ratification. This was
corroborated by the Indian Environment Minister’s recent
remarks claiming that India is on track to meet its Paris climate goals
earlier than promised without any reference to the NSG.

What comes next?

Surely, India will continue to press for NSG membership as
entry into the group will be a big step towards asserting itself as a
legitimate nuclear power. India will, however, have to grapple with China’s
blockade. The official line from China during the Seoul meeting was that the
NSG needed to first agree on guidelines for admitting non-NPT signatories before
India’s membership could be considered. Coupling NSG membership with the NPT
allows China to claim that its interest is purely in protecting the
international non-proliferation regime – a seemingly noble cause. Yet, India is
unlikely to sign the NPT due to the structure of the treaty, which only allows
the five original nuclear states (the victors of World War II) to possess
nuclear weapons.

In 2008, it took a heavy diplomatic push within
the NSG by the Bush administration (including direct involvement by
then-Secretary of State Condoleezza Rice) to win broad support for India’s
waiver. While the Obama administration has signaled its support for India’s NSG
bid, high-level engagement on this issue is still yet to be seen. Considering
President Obama intends to stake part of his legacy on the success of the Paris
Agreement, India’s ratification of the agreement this year will be important.
We can therefore expect a diplomatic blitz on behalf of India in the final
months of the Obama administration.