By becoming a partner in Russia’s Angarsk fuel services project, India could have assured supply for its imported as well as indigenous safeguarded reactors.

Conceived in the backdrop of Russia’s negotiations with Iran in the context of its controversial nuclear programme — Tehran, however, rejected the idea — Mr. Putin, by proposing it as a global utility, would seem to have perceived that his initiative could benefit other countries that lacked enrichment capability and, in general, have positive implications for the global nuclear revival that is very much evident today. In fact, using the vast natural uranium reserves of Kazakhstan, Russia hopes to increase its share in the world nuclear fuel market from the current six per cent to 25 per cent.

Besides Kazakhstan, another potential participant is China. During a recent visit to China, the Russian Prime Minister Mikhail Fradkov had indicated that Angarsk could become a nuclear fuel services centre for the entire Shanghai Cooperation Organisation — Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. The chief of the Russian Federal Atomic Energy Agency (Rosatom), Sergei Kiriyenko, has stated that Armenia and Ukraine are also potential participants in the IUEC.

More importantly, India’s potential participation in the project was apparently mooted during Mr. Putin’s visit in January and the subsequent visit of Rosatom officials in February this year, subject to the guidelines of the Nuclear Suppliers Group (NSG) being suitably modified to allow the nuclear trade with India. India has, however, not moved forward on this suggestion waiting perhaps for the India-specific changes in NSG export controls. In the context of the highly probable successful conclusion of the India-U.S. nuclear deal, this naturally assumes significance, particularly with regard to assured fuel supply to the safeguarded reactors in any eventuality, including nuclear testing by India when the nuclear cooperation agreement with the U.S. will terminate under that country’s laws.

Soon after Mr. Putin’s announcement in January 2006, perhaps not to be left behind in this global initiative, U.S. President George W. Bush too announced a similar venture in February 2006 called the Global Nuclear Energy Partnership (GNEP). The GNEP proposal involves the establishment of an international consortium of supplier countries with full nuclear fuel cycle capability, including advanced technologies. The members of the consortium are supposed to become the main suppliers of uranium enrichment and spent nuclear fuel (SNF) reprocessing services to other countries.

President Bush had invited India to become a GNEP partner but not as a “supplier” country (notwithstanding the fact that he had described India as a country with advanced nuclear technology in the Singh-Bush joint statement of July 18, 2005) but as a recipient of its services. An important difference, particularly from India’s perspective, between the IUEC and the GNEP is that access to fuel supply and enrichment services from the latter is conditional upon a “recipient” country’s commitment to forego the development of uranium enrichment and plutonium reprocessing technologies.

Many other initiatives were put on the IAEA’s table last year for its consideration. However, unlike the Russian IUEC, these proposals, including the GNEP, are yet to get off the ground and their operational structures are not quite clear. The IAEA’s expert committee on a multilateral nuclear approach (MNA), formed in 2004, is yet to discuss their feasibility. In any case, except for the proposed IAEA-administered international fuel reserve, all of them, like the GNEP, seem to require the recipient countries to give up their legal right to national enrichment and reprocessing programmes, which would be unacceptable to India.

How does the Russian initiative become key for the India-U.S. nuclear deal to work? In the event of disruption of fuel supplies to safeguarded reactors for any reason, including cessation of the agreement following an Indian nuclear test for reasons of national security, India has sought an assured fuel supply for the lifetime of the reactors.

While failures in market mechanisms could be addressed by mechanisms likely to be built into the 123 agreement, including the formation of a “group of [U.S.] friendly countries” as proposed by the U.S., termination of the agreement would mean a termination of all these mechanisms as well. A resolution that now seems to have been worked out would require India to return an amount of fuel equal to the quantity supplied by the U.S. (including the reserve maintained for “reasonable operational requirements of the U.S. supplied reactors”) by some means.

In the event of an Indian test, the U.S. law banning nuclear exports would become operative and so would the domestic legislations of other potential suppliers such as France, Australia, Canada or the U.K., as it happened after the 1998 Pokhran tests. However, if India becomes party to the Russian project, the IUEC could become the source for fuel to be returned to the U.S. For, the statute of the IUEC only says that its services would be available to any partnering country “complying with its non-proliferation commitments.” Further there is no Russian law that prevents nuclear exports in the event of a nuclear test as is evident from the Russian project at Koodankulam and export of fuel to Tarapur. It is also unlikely that, while individual country’s laws could ban exports, the changed NSG guidelines themselves would be made conditional to India not testing under any circumstances.

Now India’s non-proliferation commitments involve only an export control regime and an appropriate domestic legislation in conformity with U.N. Security Council Resolution 1540. With the Indian SCOMET export control list, which includes sensitive nuclear materials and technologies, and the Indian WMD Act in place, this commitment is fully met. In particular, this implies non-export or diversion of enrichment and reprocessing technologies to other parties including non-state actors. Further, as it is not a signatory to the Comprehensive Test Ban Treaty (CTBT), a nuclear test by India does not violate any of its non-proliferation commitments.

Besides, an important limitation to taking full advantage of the India-U.S. nuclear deal and the opening up of the global nuclear trade would be financial resources for importing light water reactors (LWRs) or pressurised heavy water reactors (PHWRs). In the event of the breeder stage of the Indian nuclear programme — in which the 500 MWe prototype is at least four years away from becoming operational and proving the indigenous breeder technology — not succeeding as envisaged and the projected growth of nuclear power not being realised, India would necessarily have to rely on expanding the first stage beyond the current target of 10,000 MWe based on domestic uranium resources.

Since with relaxed NSG guidelines, India would be in a position to import just uranium fuel (natural or enriched) alone, an option that would become possible will be to build indigenously designed PHWRs under safeguards and burn imported fuel in them instead of growth being tied to imported reactor systems at high capital cost. The finance crunch could be overcome by allowing private sector participation. In fact, even with a successful breeder programme, one could consider going beyond 10,000 MWe based on indigenous PHWRs. From this perspective too, the IUEC could then be the source of assured fuel supply. The Indian government would do well to seriously consider taking steps to join the Russian initiative.

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