Siddharth Varadarajan: We will be discussing today India’s effort to join the Nuclear Suppliers Group (NSG), an effort that ended inconclusively, some would say in failure, when the 48-member nuclear suppliers cartel ended its 2-day plenary on June 24th without a decision on Indian membership.
The Seoul meeting began with a question mark. India had made its desire to join the NSG publicly known. The foreign office said that the prime minister was personally taking this up in Switzerland with Mexico. We know that he met [Chinese President] Xi Jinping in Tashkent just before the meeting started at Seoul. Do you think that India has reason to be disappointed with the fact that the Seoul meeting was unable to resolve this issue? Or, do you think that what we are seeing is the beginning of a process which will eventually work out in India’s favour?
Shyam Saran: No two situations are quite the same. What happened in 2008, if you take that analogy, then if you recall, we had a disappointing experience in August 2008 – the first plenary meeting [to decide on the NSG’s waiver for India]. But that did not deter us from engaging even more.
SV: That was quite a disaster right? 20-30 countries moving amendments…
SS: There were about 50 amendments! So, if an outside observer saw this, he would have thought there is really no way in which India could possibly mobilise a consensus in favour of getting the waiver at the subsequent meeting. In fact, I think the Chinese calculation at that time was this would not happen – if you see People’s Daily, you know, the article which appeared after that. So the fact that we were able to overcome, within that period of one month, the many voices opposing the waiver, would appear to show that there is some value, some merit in doing active diplomacy and turning things around. But I think at this particular juncture, if we see what happened in Seoul, one very big difference is that China – which had taken a somewhat discreet stand in opposing the waiver for India in 2008 – was actually very public and upfront in opposing the membership this time around. So that actually, to me, seemed to be the one big difference.
SV: Even so, they hid behind procedure.
SS: Well, whatever be the reason. After all, in 2008, they also hid behind procedure. They used the same arguments, that you know we should have a criteria-based approach, we should not have a country-specific exception, that we should be mindful of the fact that the international non-proliferation regime may be undermined as a result or that you know, the balance in South Asia may be adversely impacted by this and may even trigger a nuclear arms race in South Asia. The arguments are almost exactly the same as in 2008. But this time they have been made in a very public fashion and in a somewhat assertive fashion.
SV: And repeated …
SS: Yes, whenever this matter has been raised, not only at the governmental level, but also in the Chinese official media. It appears to me that we are facing a different China. We are facing a different geopolitical situation. Don’t forget that in 2008, we had virtually, with the exception of China, all countries very enthusiastically in favour of the waiver for India. This time around, people may not have been so energetic. This is partly because after all, if the idea was the way should be cleared for some of the important countries to engage India in nuclear commerce and derive some benefit from it by the sale of nuclear fuel and nuclear reactors – that is already there as a result of the waiver. In substantive terms, whether you are a member of the NSG or not, it does not really change the situation [in terms of access to material].
SV: Let’s go through this sequentially. For the benefit of our readers and viewers, if you were to take them one-by-one. The questions would obviously be: why does India want to be a member? Why now? In other words, have we acted at the right time? Third, the nature of objections that we saw in Seoul; and fourth, where do we go from here. If we proceed in that fashion, let’s discuss why India wants to be a member of the NSG given that the major restrictions imposed on the sale of nuclear material and fuel were lifted in 2008. Is it purely a defensive desire for India to be in a group that may later specify new rules that we can’t prevent? What is it?
SS: Well, that’s certainly an important consideration… that not being a member, you do not have any full control over future amendments. It means that the waiver that you enjoyed, in a sense, can be reversed by subsequent amendments.
SV: As we saw in 2011…
SS: Well, yes some part of it was. Therefore, being a member shows that even if there are amendments which may be tabled in the future, we have a voice in how they are possibly formulated. So that’s an important consideration. And what it would do is, that the waiver that you enjoy, currently, would be formalised. In a sense, it does not have the same level of formality, as you would have if you were a member of the NSG. So, there’s a value in the membership. One should not belittle the importance of being a member of the NSG. Now the issue is, you know, if we have not been able to get membership at the Seoul meeting, does it mean that our nuclear energy plans are somehow or the other suspect, or that our access to nuclear technology or fuel are in any case impacted. No.
SV: But the government said that it would…
SS: Well, the government has said that. But let us not forget that since the waiver, we have signed long term fuel supply agreements with a large number of countries.
SV: The electricity outputs of most of our nuclear plants has gone up …
SS: Exactly. They have gone up to 80-85%. So this is not a small gain from the waiver. Secondly, the nuclear power plant contract which was still on hold with regards to say, France and even with respect to the additional reactors from say, Russia. And of course, you know, the continuing saga of whether or not we are going to buy nuclear reactors from the US. All that has actually changed in the favour of India. So, the importance of this membership is to the extent, as I said, that it would formalise the waiver. But in terms of substantive advantage from membership, currently, since we have these long term arrangements, I do not think we should worry too much that this is somehow going to impact our nuclear energy.
SV: Now, in 2008, the waiver that was given by the NSG, had a clause where India committed to adhere to the NSG guidelines. It also had a paragraph that Indian adherence to any future guidelines would be facilitated by the NSG consulting India. We have seen that, since then, there has been one major change in guidelines which is that the NSG in 2011, in Noordwijk, adopted a new rule which introduced a non-proliferation treaty criterion for the export of reprocessing and enrichment (ENR) equipment … To the best of my knowledge, India was either not consulted or if we were consulted, our protestations were discounted or ignored when the new rule was introduced. So what you are saying in a sense is that membership would actually…..
SS: Would give you a voice in, as I said, the amendment process. But let me remind you that even at the time of the waiver itself, there were several countries which were asking for India to accept that there would be a prohibition on the transfer of ENR. And we said, no we cannot… So I don’t think this is a problem in substantive terms. But the principle that you mentioned that it would be better if we were part of the membership, because it would allow us to have a role to play in terms of the rule-making process – this is important precisely because, in a sense, you have been an exceptional case. Because you have been given a country-specific exemption, which is what China objected to. What the membership would do is, that country-specific exemption would actually be formalised if you actually become a member of the NSG. Now, yes, we have not succeeded in Seoul. My sense is given the kind of opposition we have seen from China and the fact that some of the countries are now hiding behind, in a sense, China’s opposition, it may be much more challenging in the coming weeks and months. We should continue to try and mobilise the consensus as we had done in the case of the waiver. But I don’t think that we should elevate this into a kind of elemental issue for India. I do not believe that it is an elemental issue.
SV: Do you think the government erred by casting this in such a high profile manner. Deploying the prime minister…there is an argument that what we have accomplished as a result is the re-hyphenation of [India with Pakistan]…
SS: Well, if we had succeeded, then the same people would have said, you know, thanks to the very energetic diplomacy which was engaged by the prime minister.
SV: But the point is we didn’t succeed.
SS: No, it didn’t succeed. I think we should be a little fair in this respect. Because I am conscious of the fact that the last time around, we had to engage in very energetic diplomacy. And my sense is that we would not have been able to get the waiver, if we had not engaged in that energetic diplomacy.
SV: And as you said, there was a major setback in August 2008, followed by…
SS: Exactly. So people could have said, after August,why are you doing this? Because there’s no good hope of your getting this.
SV: Let’s talk about timing now. You were involved in the first phase of negotiations. You saw the India-US 2005 statement all the way through to Vienna. I covered the story as a reporter. What were the discussions then about possible membership of the NSG? Did we raise it at that time as something that we want or did we flag it as an issue that would come up later?
SS: Well, you know, what happened then was that we went down to the wire when we were trying to get an agreement on the separation plan. And it was early in the morning of March 6  that we managed to actually get the agreement. And at that time, actually, there had been some talk of India becoming a member of those global organisations. But because of the very difficult and somewhat acrimonious exchanges which took place between the two sides, this particular issue actually was put aside. This is something which we’ll see later. The kind of political capital that the US would have to deploy in order to get this would be difficult, it may be easier to try and get the waiver. Therefore, we did not actually pursue this. But the idea that we should eventually become members of these global regimes was something which was already present in 2005-2006.
SV: So 2010 is when it gets raised again by President Obama…
SS: Well, it had been raised subsequently, not immediately after the waiver in 2008. But after the waiver, I think there were exchanges between the two sides on, what’s the next step. We also need to build a degree of credibility and a certain sense that you know, this is not a half-way house. And the US then agreed.
SV: So, in 2010, President Obama comes to Delhi, makes the announcement. This is followed up the next year by Richard Stratford of the US state department presenting his ‘food-for-thought’ paper to the NSG plenary in Noordwijk, Holland, where he raises the possibility of how India could be a member. In particular, he addresses this question of NPT as a criterion by saying that perhaps the 2008 waiver for India could be treated as an equivalent agreement. Then, things go quiet. From 2011 till pretty much last year, there doesn’t seem to be much forward movement. Is this because the previous government did not pursue matters or…
SS: Well, frankly, I am not in a position to really answer this question. Because I was not in government during this particular period. But my sense is that at various consultations which India had with the NSG, I think an assessment would have been made whether the time is right for us to be able to take this particular proposal forward. There is no doubt that when the Modi government took office, there has been a certain change in style. A sense that active diplomacy, energetic diplomacy, personal diplomacy between the prime minister and the counterpart leaders…this is something that can actually change the nature of the game, you know. So what we have seen is not just with respect to the NSG membership, but we have seen with respect to other aspects of India’s foreign policy as well. Now, you may argue for or against that kind of energetic diplomacy but I think what has resulted in this great effort to try and get this membership is the belief that given the kind of leadership you have, given the kind of energetic diplomacy that you have, this is worth trying. Having tried, if you have not got what you wanted, I don’t think you should take this as a great setback or this is the end of the road for us. I think we should cut our losses and you know, wait for a more propitious time when we can raise this again.
SV: We’ll have evaluated the reasons …
SS: Exactly. Evaluating the geopolitical backdrop against which this has happened is very important. We should be able to see why the situation today is different. Why is China today different than it was in 2008. I think these are more important questions than the mere question about membership of the NSG.
SV: So, we have questions pouring in our Facebook page…more than we can ask really. I’ll throw two at you. This is a question by Pranav Gupta: How important is diplomacy by stealth versus diplomacy by caution? How much does the centralisation of foreign policy by PMO matter? I think here, this question is getting to the heart of the style of diplomacy, if you will. He is suggesting perhaps that pursuing this matter behind closed doors might have been more effective than deploying, making public announcements about the prime minister being involved, so on. Does he have a point?
SS: As I said that, if this had succeeded, then people would have said, thanks to the personal diplomacy by Prime Minister Modi and the manner in which he sort of took it up at his level with his counterparts, is what actually has made the difference. Because it has not succeeded this time, so you have a lot of criticism. Frankly speaking, I think different leaders at different occasions have different styles. I think we should allow that element of you know, difference in style. As a professional diplomat, I would say, I would certainly give greater credence to you know, quiet diplomacy. You know, certainly not diplomacy by stealth, but certainly discretion. Not raise everything to the public level, not put countries in the dock. I don’t think that serves our interests well by doing this.
SV: Have we erred then – this is a question by Arvindan – by projecting only Chinese opposition when actually other countries have also opposed us. Are we making a mistake in singling out China?
SS: I would certainly hope that we do not make this into a major issue of contention between India and China. That I do not believe in…
SV: Have we already done that? By saying that ‘one country’…
SS: If you ask my own personal opinion, I would not have done that. You know, I wouldn’t have identified one or two countries. Remember, even in 2008, despite the fact that it was known which countries were actually opposed to India, we never went public with ‘Oh, this is the country which opposed or this is the country which voted for.’
SV: But I suppose this is because you got the waiver.
SS: Well, we got it. But we could have made a public statement saying you know, we thank the countries which supported us and you know, these are the bad guys.
SV: But, let me be Devil’s advocate. Why shouldn’t we? After all, if China has blocked something which is important for India. And has done so in tandem with Pakistan, which is opposed to Indian interests. What is the harm in going public?
SS: Well, that we should be mindful of the fact that there is opposition is something which is…I mean it doesn’t need a statement on the part of India to make that. There are ways in which you can make it very clear what really was the reason that we were not able to get this through. I am saying that in terms of an official posture by the government, it is best not to raise this to a level of, you know, a very major contention between India and China. Because there is much more to India-China relations than just the issue of the NSG membership. That’s why I said, earlier in my remarks, that I would not make this into an elemental issue for India.
SV: Vikrant Suryavanshi asks: despite the 2008 waiver, the Indian civil nuclear programme is not up to mark. Do you think that civil nuclear liability is the elephant in the room?
SS: (Laughs) Well, number one, I think perhaps people do not realise that had we not got the nuclear deal through, several of our nuclear reactors, which are based on uranium, would have actually faced major fuel shortages. Several of them were running much below capacity. So, one of the very important gains for India has been that the issue of nuclear fuel has been now resolved. And that’s a very major gain, as I mentioned. Also, in terms of nuclear technology, you know, our domestic technology, which is very good… we have been able to master the CANDU technology and have brought in our own design features, but we have not been able to go beyond… the largest reactor that we have… yeah, 700 MW. Now the world has moved to 1000 MW. Now even 1000 MW has become somewhat out-of-date, we are talking about 1500 MW reactors, 1700 MW reactors. So, if you really want to upgrade your technology and reach that level which we see internationally, then again, the nuclear deal has been extremely important. As you have seen, we have been able to conclude agreements with Russia and France. And now you have the prospect of being able to do the same with the US. Is the nuclear liability bill a hindrance? For some the US corporations, it is. Even now.
SV: Even now, despite the so-called FAQs…
SS: But I think what the government has done in terms of the insurance pool that it has introduced with the sort of re-interpretation of some of the legislative language, it has, in fact, substantially overcome that concern. Not the ideal, I grant that, but I think it has at least given sufficient amount of confidence to allow major international firms to actually think in terms of engaging in nuclear commerce.
Tomorrow: Part II of the interview, on the role of China and the way forward