9

India and the Nuclear

Suppliers Group
From Estrangement to Engagement?
Arun Vishwanathan

Introduction
The Nuclear Suppliers Group (NSG) derives its important position in
international civil nuclear commerce from its membership, which currently
stands at 45 and includes a majority of countries engaged in nuclear trade.
NSG members control roughly 80 per cent of the global uranium reserves and
about 78 per cent of global uranium production. Currently, Namibia, Niger
and Uzbekistan are the only three non-NSG countries producing significant
amounts of uranium. However, they are party to Nuclear Weapon Free Zone
Treaties, and once the African and Central Asian nuclear weapon free zones
come into force they too would insist upon full scope safeguards for any
transfer of nuclear material or technology to Non-Nuclear Weapon States
(NNWS) as defined by the Nuclear Non-Proliferation Treaty (NPT). The NSG
members therefore possess a stranglehold on the entire spectrum of nuclear
technology, given that there is no supplier country outside of the NSG with
civilian nuclear technology.
In the annals of the non-proliferation regime India is a unique case. This
is so because since the 1974 Peaceful Nuclear Explosion (PNE), India has had
nuclear weapons capability though due to various reasons it shied away from
calling itself a one. Despite having the nuclear weapons capability and not
being a part of any international non-proliferation treaty, India respected the
basic objective that the non-proliferation regime was attempting to enshrine,
that of ensuring that nuclear weapons do not spread further.

.

Extrapolated from OECD Nuclear Energy Agency (NEA) and International Atomic Energy
Agency (IAEA) (2005). Uranium 2005: Resources, Production and Demand.

.

Vishwanathan, Arun (n.d.).The Nuclear Suppliers Group and the Indo-US Nuclear Deal, IDSA
Strategic Comments. http://www.idsa.in/publications/stratcomments/ArunVishwanathan260907.htm

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The NSG  has been in the Indian security consciousness since its
establishment in 1975, mainly because of the fact that it was posited as a
response to Indias PNE in 1974. The NSG too has been quite candid about
this fact as can be gleaned from any literature relating to it. This fact has been
quite explicitly referred to in one of the documents released by the Group in a
bid to increase transparency about its structure and functioning. In the above
mentioned document the Group traces its genesis to an explosion of a nuclear
device by a NNWS in 1974 that it says demonstrated the fact that nuclear
technology that is transferred for peaceful purposes can be misused. It was to
avert the risk of proliferation while engaging in nuclear cooperation that the
NSG was set up.
India because of such a direct link between the Groups establishment and
its nuclear programme has always been suspicious of the Groups activities.
Due to the fact that the Groups guidelines do not possess the sanctity of an
international treaty and leaves the implementation of its guidelines to the will
of the member countries through their national export control laws; India, till
the coming into force of the 1992 Warsaw Guidelines, managed to circumvent
the Group by approaching supplier countries directly.
However, the rules of the game changed for India with the adoption of
the Warsaw Guidelines. India realised that sooner or later, it would have to
engage with the Group for furthering its national nuclear programme. The
time of reckoning has finally come for India, with it having made use of every
loophole in the Guidelines, and with no NSG member including Russia willing
to circumvent the Guidelines to supply the nuclear fuel that India urgently
needs.
It is because of this fact that, the July 18th nuclear agreement between
India and the US becomes so crucial. The US by agreeing to engage in full civil

.

In this chapter hereon, for reasons of convenience the Nuclear Suppliers Group will be
interchangeably referred to as either the NSG or the Group.

.

In a document released by the NSG there is an oblique reference to this causal factor in the
establishment of the Group. For more details refer to International Atomic Energy Agency (1997).
The Nuclear Suppliers Group: Its Origins, Role, and Activities, INFCIRC/539, September 13. 5.

.

The Warsaw Guidelines came into force on 3 April 1992. They added a whole new section
on Dual Use items to the NSG Guidelines commonly referred to as Part II Guidelines and
also adopted full-scope safeguards as opposed to islanded or facility-specific safeguards for
any transfer of nuclear or nuclear related materials that were mentioned in the Part I or II of
the NSG Guidelines. The implications of this will be delineated in more detail in subsequent
sections of this chapter.

. Barauah, Amit and R. Ramachandran (2004). Russian Fuel for Tarapur Ruled Out, The Hindu,
December 6.

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nuclear cooperation and trade with India has in effect given it a foot in the
door in its attempt to trade with the members of the Group in its attempt to
further its domestic civil nuclear programme. This is so because, the only way
that the US can stand good on the promises it has made in the agreement is
by approaching its partners in the NSG to give India a permanent exception
to international rules barring nuclear cooperation, thus lifting the restrictions
placed on transfer of any items on the trigger list, which includes nuclear fuel,
dual use equipment.
However, this is easier said that done, because linked to this are various
other simultaneous steps that both the countries have to take, and various
impediments, and domestic and international pressures that both the countries
have to tide over. The first and most important step that India has to take in
order for this agreement to fructify is to identify and separate its civil and
military facilities and programmes and subsequently voluntarily place its
civilian nuclear facilities under IAEA safeguards. There are several domestic
lobbies working in India that are quite suspicious of this arrangement and
are of the view that this step will in effect place a perpetual impediment on
Indias strategic nuclear weapons programme. These are exacerbated by the
domestic turf battles between the various Indian governmental departments,
each reluctant to give away anything that would reduce its position or preeminence within the governmental set up.
The United States too has had to face a Congress that is not very happy
about the July 18th agreement mainly because it sees it as definitely weakening
the existing non-proliferation regime that the US has so painstakingly built up
over the past three decades. Domestically there are non-proliferation lobbies
in the US that are vying for every opportunity to throw a spanner into the
Bush administrations attempts to mollify the concerns of the US Congress.10
Internationally, the US will have to placate the concerns of the NSG members
about the implementation of the deal being a severe blow to the legitimacy
of the Group itself (as the Group itself as mentioned earlier was set up due
.

Office of Press Secretary White House, Joint Statement Between President George W. Bush
and Prime Minister Manmohan Singh, July 18, 2005, http://www.whitehouse.gov/news/
releases/2005/07/20050718-6.html; Office of the Spokesperson, US-India Civilian Nuclear
CooperationFact Sheet, Washington D.C., July 22, 2005 http://www.state.gov/r/pa/prs/
ps/2005/49969.htm

.

NSG defers action on India-US nuke deal, The Indian Express, October 20, 2005.

.

India has since then made its separation plan public. It proposes to place-reactors under the
civilian side and voluntarily place them under safeguards.

10. Raja Mohan, C. (2005). Deal Only if India Caps: NPT Lobby, The Indian Express, October 27.

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to the 1974 Indian PNE) on one hand, and questions about the US motives
behind rolling back its decades old non-proliferation policy that aimed at
isolating India as a means to ensure that it does not engage in proliferation,
and also utilise nuclear cooperation for peaceful purposes to take its weapons
programme forward.
The newfound desire on the part of the US to engage in civil nuclear
cooperation with India is not part of any recently discovered love for India
but an outcome of two factors. Firstly, the Bush administration has realised
that the decades old isolationist policies vis--vis India are not bearing the
fruits that it expected.11 India on the other hand, managed to conduct five
nuclear explosions in 1998 despite the USs policy of not cooperating with
India since the enactment of the Nuclear Non-Proliferation Act (NNPA) in
1979 on a sporadic basis.12 Secondly, this is also due to a desire on the part of
the Bush administration to groom India as a regional counterbalance to an ever
growing threat China. The US does not see Indias nuclear weapons as a threat
for American power but an asset in the larger game of tethering China.
Despite all these problems that both India and the US face while going
forth in their attempts to make the July 18th agreement see light, it is only
through proper implementation of the agreement that India has a fighting
chance to ensure civil nuclear cooperation with the NSG on the one hand,
and safeguard the efficacy of its domestic nuclear weapons programme on the
other.
Due to the existing international and regional scenario it becomes
supremely important for India to correctly understand the NSG and its
workings. By means of the July 18th agreement, the US is trying to make India
engage with the Group and ensure that India harmonises its domestic export
11.

Department of State, Government of the United States of America, Nicholas R Burns statement
to the Senate Foreign Relations Committee Hearing on US-India Civil Nuclear Cooperation Initiative,
November 2, 2005, http://www.state.gov/p/us/rm/2005/55969.htm

12.

Despite the enactment of the NNPA, the US has intermittently engaged in nuclear cooperation
with India on several separate occasions or has prodded its allies to fulfil Indian requirements
when it could not do so. Despite the NNPA, the US acceded to Indias request for some nuclear
components for the two Light Water reactors (LWR) that had been imported from the General
Electric in 1960s. In 1980, President Carter, overruled the US Nuclear Regulatory Commissions
(NRC) refusal to issue an export license for fuel for Tarapur and ordered the fuel to be supplied.
This decision was sustained in the Senate by a two vote margin. The Reagan administration, in
June 1983 did cite humanitarian concerns to export some components for the safe operation
of the Tarapur reactor. He did not think that the Congress would sustain for a second time
supply of fuel to India and thus used this smokescreen to circumvent the Congress. The
US instead asked France to supply the fuel in 1983 and consequently the application of the
tripartite safeguards agreement of 1971 between the US, India and the IAEA (INFCIRC/154)
with regard to nuclear material was transferred from the US in favour of France.

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control laws with the NSG Guidelines.13 Thus, the US in effect will bring in
India into the non-proliferation regime through the back door by using the
NSG as a means and thus, ensure that India becomes a stakeholder in the
regime and ensures the strengthening of the same.

NSG Guidelines
At the heart of the workings of the NSG are its guidelines, which are
divided into two sections, Part I and II. Part I of the NSG guidelines which
was first published in 1978 governs the export of material and items that are
especially designed or prepared for nuclear use. Part II of the guidelines governs
the export of nuclear-related dual-use equipment, materials, software, and
related technologies that could make a major contribution to nuclear explosive
activity or an unsafeguarded nuclear fuel-cycle activity, but that have nonnuclear uses as well, for example in industry.
One uniting thread that runs through both these guidelines is the fact
that, both of them were in response to an event that made the members face
up to the fact that there was a need to strengthen the existing export control
laws. From 1978 to 1990 the Group was relatively inactive, even though there
was an evident need to meet and update its existing Guidelines. In this respect,
NSG in its functioning had been very different from that of the Zangger
Committee that meets regularly and updates its Trigger List.14
While formulating Part I of its Guidelines which were first published by
the IAEA in 1978 as INFCIRC/254, the NSG incorporated the Zangger Trigger
List. It however, expanded it slightly, by adding some heavy water production
items. Apart from this the Guidelines also included the requirements for a
recipients assurances of non-explosive use, IAEA safeguards, and control on
re-transfer. The major difference between the Zangger Committee memoranda
and the new NSG guidelines was that the latter went beyond the context
of the NPT (it concerned nuclear transfers to any NNWS) and made the
conditions for nuclear exports more stringent.15
13.

This has been done through the WMD Act of 2005. India currently has harmonised its export
control systems with the guidelines and technological annexes of the NSG.

14.

During the years between 1978 and 1990, when the NSG was inactive the Zangger Committee
met several times and updated its Trigger List. In late 1990, the Committees modified and
consolidated Trigger List was published by the IAEA as INFCIRC/209/Rev 1.

15.

Strulak, Tadeusz (2003). The Nuclear Suppliers Group, The Nonproliferation Review, Fall 4.

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The NSG Guidelines that were published in 1978 as IAEA Document

INFCIRC/254 (subsequently amended), were to apply to nuclear transfers for
peaceful purposes to help ensure that such transfers would not be diverted to
unsafeguarded nuclear fuel cycle or nuclear explosive activities. As mentioned
earlier the Group added heavy water plants and equipment to a Trigger List
which otherwise was identical to the Zangger list. Another addition was a
section on physical protection. And finally, technology was mentioned in the
context of exercising restraint in the transfer of sensitive technologies and in
the replication of facilities using transferred equipment.16
A very important stipulation that were part of the Guidelines were formal
assurances from recipient state to the effect that nuclear transfers for peaceful
purposes would not be diverted to unsafeguarded nuclear fuel cycle or nuclear
explosive activities. Such an assurance was indispensable before any transfer
of nuclear technology and related materials took place.
The NSG Guidelines also strengthened re-transfer provisions and adopted
a requirement for physical protection measures and an agreement to exercise
particular caution in the transfer of sensitive facilities, technology and material
usable for nuclear weapons or other nuclear explosive devices. In doing so, the
NSG Guidelines recognised the fact that there is a class of technologies and
materials that are particularly sensitivenamely, enrichment and reprocessing
technologiesbecause they can lead directly to the creation of material usable
for nuclear weapons or other nuclear explosive devices. The Guidelines also
gave importance to the implementation of effective physical protection
measures around the installations where nuclear material was stored.17 The
Guidelines says that agreement among suppliers has to be ensured with regard
to the levels of protection to be ensured in relation to the type of materials, and
equipment and facilities containing these materials as this can help prevent the
theft and illicit transfer of nuclear material.
The end of the cold war re-galvanised the Group with the 1990 NPT
Review Conference (NPTRC) acting as a catalyst to this process. The 1990
Review Conference was important to the Groups evolutionary process because
the NPTRC Committee reviewing the implementation of Article III of the
NPT made several important recommendations. The recommendations can be
condensed into the following three headings:
16.

Thorne, Carlton E. (n.d.). Multilateral Nuclear Export Controls: Past, Present and Future, in
International Seminar on the Role of Export Controls in Nuclear Non-Proliferation. http://www.nsgonline.org/pdf/SeminarControl1.pdf

17.

International Atomic Energy Agency (2005). INFCIRC 254/ Rev.7/ Part 1, 50.

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That NPT parties consider further improvements in measures to

prevent the diversion of nuclear technology for nuclear weapons;

That States engage in consultations to ensure appropriate coordination

of their controls on the exports of items, such as tritium, not identified
in Article III but still relevant to nuclear weapons proliferation and
therefore to the NPT as a whole;

That nuclear supplier States require, as a necessary condition for the

transfer of relevant nuclear supplies to NNWS, the acceptance of IAEA
safeguards on all their current and future nuclear activities (i.e., fullscope safeguards or comprehensive safeguards).

The Group hereinafter began to realise that there was an urgent need to
update its existing Guidelines. The wheels were set in motion at The Hague
meeting of the NSG in March 1991 which was attended by all the 26 members
of the Group. The most important step taken at this meeting was to elaborate
a joint NSG arrangement, or regime, to control exports of nuclear related
dual-use materials, equipment, and technology in order to prevent their use
in unsafeguarded nuclear programmes and nuclear explosives programmes. A
special working group was set-up to accomplish this task.
Another long overdue decision that was taken was to broaden the NSG
control list so as to bring it into conformity with the more detailed and
more up to date Zangger Committee list. The Group also realised the need
to include more supplier States into its fold and a concrete step was taken in
this direction by giving the mandate to the host and Chair of the meeting, the
Netherlands, to approach a number of those States on behalf of the NSG. The
Hague meeting also set into motion the process of review and consultation
and exchange of information, a provision that had so far largely been on paper.
Thus, the decisions taken at The Hague meeting established the basis for the
very substantial progress made by the Group in the following two years.
This process was further necessitated by the disclosure of the Iraqi nuclear
weapons programme at the time of 1991 Gulf War. The nature and the extent
of the Iraqi programme gave a severe jolt to the members of the Group as many
of them had exported vast amounts of materials, equipment, and technology
(some of which were not directly nuclear-related) to Iraq which were used for
its formidable nuclear weapons programme. Iraq had also managed to secure
dual-use equipment by utilising various front companies and various other
circuitous routes. Thus, the limits of the existing Guidelines stared the Groups
members in the face.

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It thus became amply clear that export control provisions that had been
in force had not been able to prevent Iraq from pursuing a clandestine nuclear
weapons programme even while it was a member of the NPT. Though this later
led to the UN Security Council taking action against Iraq, the NSG came to realise
the lacunae in its export control guidelines as it existed at that point in time. The
NSG Guidelines as they existed when the Iraqi activities were discovered did not
cover a large part of Iraqs efforts that were to acquire dual-use items.
The second set of NSG Guidelines18 popularly known as Part II, governs
the export of nuclear-related dual-use equipment, materials, software,
and related technologies that could make a major contribution to nuclear
explosive activity or an unsafeguarded nuclear fuel-cycle activity, but that
have non-nuclear uses as well, for example in industry. This arrangement was
formally adopted by the 27 NSG members at the plenary meeting in Warsaw
(March 31-April 3, 1992), after a year of intensive negotiations, held in The
Hague, Brussels, Annapolis, and Interlaken. With a Point of Contact that was
established at the Warsaw meeting of the Group, and a Chairman of its own
as well as separate internal arrangements for admitting members the dual-use
export control regime now forms a separate and almost autonomous part of
the NSG even while it continues to work for achieving the Groups ends.
The Dual-Use Guidelines govern the transfers of dual-use items and a
list of some 65 items, including equipment, materials, and technology. Unlike
the Part I Guidelines which after their modification in Warsaw meeting of the
Group require full-scope safeguards for transfer of items on the items listed
there; the Dual-Use Guidelines do not require full-scope safeguards. Instead
IAEA safeguards are only required for the specific nuclear activity or facility
that the import is destined for.
The Part II Guidelines govern the export of nuclear-related dual-use
equipment like machine tools and lasers, material and technology (items that
have both nuclear and non-nuclear applications) that could make a significant
contribution to an unsafeguarded nuclear fuel cycle or nuclear explosive
activity as Part II of the Groups Guidelines which were published as IAEA
Circular INFCIRC/254 (with subsequent amendments). The NSG also decided
to establish a framework for consultation on the Dual-Use Guidelines, for the
exchange of information on their implementation and on procurement activities
of potential proliferation concern. Thirdly, it decided to establish procedures for
18.

These guidelines are contained in International Atomic Energy Agency, INFCIRC/254, Part 2
(as amended).

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exchanging notifications that have been issued as a result of national decisions

not to authorise transfers of dual-use equipment or technology, and to ensure
that NSG participants do not approve transfers of such items without first
consulting with the State that issued the notification.

India

and the

Full-Scope Safeguards

The decision to make a full-scope safeguards agreement with the IAEAa

condition for the future supply of Trigger List items to any non-nuclear-weapon
Statewas one that had been gathering steam for some time now as in the years
between 1978 and 1990 when the Group was relatively inactive. Seven members
had in fact unilaterally adopted full-scope safeguards agreement with the IAEA
as a condition for supply of new, significant items on the Trigger List to any nonnuclear-weapon State. This decision which was taken in the Warsaw meeting
of the Group ensured that only NPT parties and other States with full-scope
safeguards agreements could benefit from nuclear transfers. The declaration in
this regard which came out of the Warsaw meeting was published in May 1992
by the IAEA as INFCIRC/405.19 The amended version of the Guidelines was
published in July 1993 as IAEA INFCIRC/254/Rev I/Part I/Mod I.20
Indias problems with the NSG increased with the adoption of the fullscope safeguards by the members in the Warsaw meeting that took place from
March 31-April 3, 1992. With the members adopting a declaration adopting
full-scope safeguards as a prerequisite for any nuclear transfers to non-nuclearweapon States and the same coming into force on April 3, 1992, India would
now have to enter into a full-scope safeguards agreement with the IAEA for
receiving any material that was on the Trigger List. This rule has effectively
meant that India cannot get any nuclear material or dual-use items that are on
the Trigger list, and has made it impossible for India to acquire unsafeguarded
nuclear fuel, reactors or associated technology from countries like Russia,
France, Britain.
Full-scope safeguards require signing an agreement with the IAEA for
the safeguards to be applied on all source, and special fissionable material
in its current and future peaceful activities. Even as the new regime became
effective on January 1, 1993, steps were being taken to update and tighten
19.

International Atomic Energy Agency (1992). Statement on Full-Scope Safeguards Adopted by

the Adherents to the Nuclear Suppliers Guidelines, INFCIRC/405, May, http://www.iaea.org/
Publications/Documents/Infcircs/Others/inf405.shtml

20.

The full text of the various IAEA Information Circulars (INFCIRC) including the one
mentioned above is available at http://www.iaea.org/Publications/Documents/Infcircs/part10.shtml

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up the old system for controlling nuclear transfers. Both in Warsaw and in
Lucerne meetings, the NSG called on all nuclear suppliers to adopt the fullscope safeguards policy requirement. In Lucerne the NSG also promised to
counteract indirect supplies through third countries.
At the 1995 NPT Rev Con the full-scope safeguards policy adopted by
the NSG in 1992 was endorsed. Specifically, Paragraph 12 of Decision 2 on
Principles and Objectives for Nuclear Non-Proliferation and Disarmament
states that full-scope safeguards and international legally binding commitments
not to acquire nuclear weapons or other nuclear explosive devices should be
a condition for granting licences for Trigger List items under new supply
arrangements with non-nuclear-weapon States.21 The 2000 NPTRC also
reconfirmed that any transfer of nuclear-related dual-use items should be in
full conformity with the NPT. Further it calls on all State parties to ensure that
their exports of nuclear-related dual-use items to States not party to the Treaty
do not assist any nuclear-weapons programme.22
There are two exceptions to the FSS Guidelines as outlined in Clause
4 (a) of the Warsaw Guidelines. First, is the Safety Exception (outlined in
clause 4[b]), when they are deemed essential for the safe operation of existing
facilities.23 The second case (outlined in clause 4[c]) where an exception is
allowed to the application of the full-scope safeguards is when agreement or
contract has been drawn up prior to April 3, 1992.24
Indias problem with the Group and more importantly to the adoption of
full-scope safeguards arise from the fact that India sees the Groups activities
to be blind to Indias impeccable non-proliferation track record despite not
being a member of any international non-proliferation treaty. The full-scope
safeguards ignore the differential track record of the various non-nuclearweapon States and are applied across the board. Another problem that India
has with the Group is the fact that it sees the Group as not applying its
principles uniformly. One finds the NSG regularly expressing concern about
the illegal and covert development of nuclear explosives by Iraq, Iran, Libya
21.

Principles and Objectives for Nuclear Non-Proliferation and Disarmament, NPT/CONF.1995/32/

DEC.2, http://www.fas.org/nuke/control/npt/text/prin_obj.htm

22.

Final Document Issued by 2000 NPT Review Conference, May 20, 2000, http://www.cesd.org/
un/npt2000finaldoc.htm

23.

International Atomic Energy Agency (2003). Guidelines for the Export of Nuclear Material,
Equipment and Technology, INFCIRC/254/Rev.6/Part-I, May 16, 1.

24.

Ibid.

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and North Korea. But the illegal and covert development of nuclear weapons
by Israel is meticulously avoided.25
As mentioned earlier, Indias problems with the Group increased after the
NSG changed its rules in 1992 and made full-scope safeguards necessary for any
state receiving items that are on the Trigger List. The recent Russian refusal
to supply the much needed nuclear fuel for the Tarapur plant has brought to
the fore the limits that the change in the NSG Warsaw Guidelines has placed
on Indias possible options. Referring to the negative reactions from the NSG
when it had last supplied the fuel in 2001, the Director of the Russian Federal
Atomic Energy Agency, Mr. Alexander Yuryevich Rumyantsev pointed out that
Russia was bound by the Guidelines of the Group, which prevented it from
providing the fuel.26
The case of the supply of Russian nuclear fuel in 2001 brings out quite
starkly the problems that have emerged after the full-scope safeguards were
adopted. The agreement to supply the required nuclear fuel was reached
during President Vladmir Putins visit to New Delhi in October 2000 when
Russia and India signed a memorandum of understanding (MoU) to pursue
future cooperation in the peaceful uses of nuclear energy. The MoU was one
of several agreements, including a declaration of strategic partnership, that
were signed during Russian President Vladimir Putins October 2-4 visit to
New Delhi.27
The above-mentioned agreement caused quite a furore in the West with
the members of the NSG, led by the US criticising Russia for signing such
an agreement. At the December 2000 meeting of the NSG, an overwhelming
majority of the members expressed their strong concerns about Russias
planned shipment of nuclear fuel to India. The Group regarded this as being
inconsistent with Russias commitments. In the wake of the shipping of
the Russian fuel, the US released a Press statement from the Office of the
Spokesperson of the Secretary of State, stating that the US joins the other
nuclear suppliers in calling upon Russia to cancel this supply arrangement and
live up to its non-proliferation obligations.28
25.

Maitra, Ramtanu (n.d.). Russia Floats Novel Nuclear Idea for India, Asia Times, http://www.
atimes.com/atimes/South_Asia/EL03Df04.html

26.

See no. 7.

27.

Wagner, Alex (2000). Russia, India Sign Secret Nuclear Energy Accord, Arms Control Today,
November.

28.

Office of the Spokesperson of the Secretary of State, US. Deeply Regrets Russian Shipment of Uranium
Fuel to India, February 16, 2001, http://www.fas.org/nuke/control/nsg/news/treaty-nsg-010216.htm

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At the heart of the controversy was the absence of full-scope safeguards

agreement between India and the IAEA as required by the Warsaw Guidelines.
As a concept the FSS is derived from the objectives of the NPT that seeks to
prevent NNWS from acquiring nuclear weapon capabilities by imposing the
IAEAs safeguards regime on all nuclear facilities and activitiescurrent and
futureof a given country. As India is not a party to the NPT and has always
voiced its opposition to its discriminatory nature, accepting the FSS would be
tantamount to accepting the control regime of the Treaty itself.29
Russia while supplying the fuel for Tarapur and also during supply of the
two VVER reactors had made use of these exceptions. The safety exception was
made use of while supplying the Tarapur nuclear fuel. The second clause about
deals reached before April 3, 1992 was made use of while deciding to supply
the two VVER Reactors at Kudankulam. Both India and Russia maintained
that as the exceptions are provided within the Guidelines itself a violation of
the Groups Guidelines did not occur, though not many members of the NSG
shared this view. It can be said that the recent supply of fuel to Tarapur was
allowed by the Group members mainly because they saw the nuclear deal as
being in the pipeline.
What the recent Russian refusal to supply nuclear fuel for the Tarapur
Plant brings out is that India has probably used up all the possible loopholes
and Russia under the present circumstances might find it difficult to bail us
out any longer.
One interesting point that was made by Dr. G. Balachandran was that
unlike the NPT, which defines a Nuclear Weapon State (NWS) as one which
has manufactured and exploded a nuclear weapon or other explosive nuclear
device prior to January 1, 1967, there is no definition of an NWS or an NNWS
in the NSG Guidelines. Arguing that Indias nuclear tests of May 1998 had
created a peculiar situation and by recognising India as an NWS, Russia is
not bound by the FSS guideline of the NSG which is only for transfers to an
NNWS. What Russia could not transfer without invoking the FSS between
April 1992 and May 1998 could now be done without violating its commitment
to the NSG Guidelines.30
29. Ramachandran, R. (2000). Limiting Guidelines, Frontline 17, no. 24, November 25-December
8, 2000, www.frontlineonnet.com/fl1724/17240880.htm.
30. Balachandran, G. (2000). Indo-Russian Nuclear Cooperation, The Hindu, October 18.

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Such an interpretation seems technically correct but given the fact that
the NSG has evolved from Zangger which, in turn, has its origins in the NPT,
it would be reasonable to assume that the NSG, even if it does not explicitly
mention that it follows the definition of the NPT for a NWS or a NNWS,
does implicitly follow the NPT framework. Several NSG documents time and
again mention the NPT to be a cornerstone of its policies. Following the NPT
Review Conference 1995, the NSG released a statement stating that the NSG
Guidelines were consistent with the legal undertakings of the NPT. Given such
a state of affairs, it is highly unlikely that Russia would unilaterally move to
recognise India as a NWS and engage in nuclear commerce.
Realising that the Warsaw Guidelines had severely restricted its options,
India began to toy with the idea of islanding its nuclear facilities, namely
placing specific civilian nuclear facilities under IAEA safeguards in exchange for
international assistance in its effort to build additional nuclear power plants.
Such a possibility was even reported in the public sphere when there was a
news report in March 2002 that New Delhi had told US Deputy Secretary of
State, Richard Armitage that India would consider putting upto 80 per cent
of its reactors under safeguards if the US does not interfere with French or
Russian attempts to bend or change export control laws and allow industry in
these countries to build PWRs in India.31
With the July 18th agreement it has become very clear that such a dialogue
was very much underway and it was not a sudden development. The Indo-US
nuclear agreement does provide India with an opportunity to rectify the existing
situation where its ambition of achieving levels where 10 percent of its power
generation comes from nuclear sources has remained a pipe dream.
A combined reading of the July 18th agreement and the NSG Guidelines
is essential to understand the possibility of India and the US managing a
diplomatic coup d tat. As mentioned above, the NSG Guidelines require the
application of full-scope safeguards on all current and future peaceful nuclear
activities of a NNWS for transfer of items on the NSG Trigger List, which
includes all material directly related to the nuclear fuel cycle be it equipment,
material and technology. This also includes the source of fissionable material,
uranium ore or processed yellow cake.
31.

Hibbs, Mark (2003). New Delhi Offered US to Safeguard Most Power Plants, Nucleonics Week,
March 23.

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The phrase all current and future peaceful nuclear activities can be
interpreted to Indias advantage if peaceful activities are separated from
military activities and put under IAEA safeguards. This is exactly what the
July 18th agreement envisions when it outlines the separation of the civilian
and military facilities. However, for this to materialise, it is essential that the
NSG endorses this interpretation of the full-scope safeguards. This seems like
the only possible manner in which India can get around the NSG Guidelines if
it has to source its nuclear fuel from an external source.

India

and

NSG: Prospects

of an

Engagement

Indias relations with the NSG have come a long way, from the early
days when India was the target of the Group and the rationale behind its
establishment to a situation where it has begun actively engaging with India
to try and iron out the differences and include India in its fold. India too has
given up complaining about the discriminatory policies of the Group and is
quite happy about engaging with the Group, and invoking safeguards in its
facilities if the Group allows its members to engage in civilian nuclear trade
with India.
Indias relations with the NSG began to improve in 2003-04 when India
decided to send representatives to NSG Seminars. It later played host to a NSG
team in April 2004 (which also comprised of its then Chair, Chang-Beom Cho
of South Korea) which visited New Delhi for the first talks ever between India
and the Group. The visit was seen as significant because it would not have
been possible if the US had not softened its opposition to India joining the
Group without signing the NPT. This meeting saw issues of proliferation and
peaceful uses of nuclear energy being taken up. It was also decided during the
meeting that India would have a regular dialogue with the NSG.32
The NSGs dialogue is part of its outreach programme which seeks to
engage in consultations with non-member countries because of proliferation
concerns. The NSG Chair was authorised in 2001, to constitute a consultative
group comprising of the current, the predecessor and the next chairs of the
NSG for engaging in this dialogue process.33
As a follow-up to the 2004 meeting, the NSG Consultative Group again
visited New Delhi in April 2005. The team (popularly known as the Troika)
32. Ramachandran, R. (2005). India and the Nuclear Suppliers Group, The Hindu, April 25.
33.

Ibid.

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comprised of Richard Ekwall of Sweden, (the incumbent Chair at that time),

who was accompanied by representatives of the Republic of Korea (Ekwalls
predecessor) and Roald Naess of Norway (Ekwalls successor and the Current
NSG Chair since June 2005). In light of the A.Q.Khan Network being
unearthed in Pakistan the meeting focused on the effectiveness of domestic
export controls to check proliferation of nuclear material.
The meeting was more significant in light of the fact that it was the
teams third stopover after holding meetings with Israel and Pakistan for the
first time. Mr. Ekwall described the visit as part of an outreach programme
to States that are not members but are important for the global export
control regime.34 Both Israel and Pakistan have communicated their domestic
export laws to the IAEA last year, which have been circulated by the IAEA as
INFCIRC/632 and INFCIRC/636 respectively. In their bid to be regarded as
unilateral NSG adherentsfirst step towards the NSGs recognition of their
non-proliferation credentialsboth have claimed conformity of their laws to
NSG Guidelines. Israels law came into force on July 1, 2004, and Pakistans
law came into force on September 23, 2004.
India formulated its export control laws in 1995, which have been
subsequently revised in 2000. Though it has not communicated it to the
IAEA, it is Indias belief that after the passing of the 2005 WMD Bill (that
incorporates the UNSC Resolution 1540, which calls for harmonised global
export controls to prevent proliferation of WMD), India too is in a position to
make such an assertion.
In light of the changed scenario following the July 18th agreement, and
given the clean Indian track record in avoiding proliferation and its by and large
acceptance in the international arena, Indias future prospects with the NSG
do look very bright. There are several hurdles that the Indo-US combine will
have to overcome, but it does look like the Group will be finally welcoming
the prodigal son back.

Conclusion
Understanding the Nuclear Suppliers Group and its internal dynamics
has become very important for India for a variety of reasons. The need to do so
quickly becomes more imminent in the background of the July 18th agreement
34. Brunnstrom, David (2005). Anti-Proliferation Group Holds Talks in Pakistan, Reuters, April 11,
http://english.epochtimes.com/news/5-4-11/27766.html

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that has given India a porthole to transform the existing situation, from one
which is heavily loaded against us to one that suits us.
India for securing its future energy needs requires its domestic nuclear
power programme to expand and contribute the targeted 10 per cent of the
energy produced if not more. Given the present situation where no country
including Russia is willing to supply India with the nuclear fuel or newer and
more efficient reactors due to the NSG Guidelines, it becomes imperative that
India engage with the Group. The Group, in turn also needs India to engage
and cooperate with it, because it understands that it can never be successful in
ensuring non-proliferation in the future if India and as a result, Pakistan is out
of its loop. Thus, India becomes a critical country for the NSG too to engage.
The internal dynamics within the Group too have begun to crystallise on
the Indian issue with sub-groupings being formed within the NSG. Given below
is a brief analysis of the likely sub-groupings being formed. NSG members can
be broadly classified into five groups (see Table). The first group comprises of
countries that have supported the deal over the last two years. The second
group consists of States that are likely to go along with the United States
and Russia on the issue. Members of the New Agenda Coalition comprise the
third group. The fourth group consists of countries that do not wish to see the
dilution of the NPT as a consequence of the India deal.
China is one country that does not fit into any of these categories and
thus, remains a class apart. Initially, in the wake of the July 18, 2005 joint
statement, Beijing had maintained a studied silence on the issue. Subsequently,
it launched a verbal tirade against the US move, depicting as an example of
American double standards. It went on to say that if the US made a nuclear
exception for India, other powers could do the same with their friends, which
would ultimately weaken the global non-proliferation regime. Hypocrisy is
the word that comes to mind here, given Chinas past proliferation record of
extending wide-ranging assistance to Pakistans nuclear weapons programme
including complete weapons design, ring magnets, missile systems, etc.
There have been subsequent reports, mentioning unnamed sources in the
Chinese delegation to the IAEA Board of Governors, that China would give
its assent to the US proposal for an NSG exception clause for India in return
being allowed to continue exporting power reactors to Pakistan. This is in total
contrast to the de-hyphenation that the Bush administration has introduced
in its ties with India and Pakistan, with Under Secretary of State Nicholas

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Burns going to the extent of declaring that the nuclear deal is unique to India
and will not be extended in any way, shape or form to any other country
including Pakistan.
In recent months, however, China has adopted a more ambivalent stand.
On September 6, 2007, for instance, the Chinese Foreign Ministry spokesperson
blandly pointed out that within the Nuclear Suppliers Group there are
different views about relaxing the restrictions on nuclear exports to India,
without any hint about what Chinas views in this regard are.
Table 9.1
Possible Sub-groupings within the Nuclear Suppliers
Group on the Indo-US Deal

NSG Grouping

Member States

Countries that support

the Indo-US nuclear deal

Australia, Brazil, Canada, Cyprus, France, Germany, Russia,

South Africa, South Korea, United Kingdom, United States

Countries likely to
bandwagon with the US
or Russia

Argentina, Belarus, Bulgaria, Estonia, Croatia, Czech Republic,

Greece, Hungary, Italy, Portugal, Spain, Japan, Kazakhstan,
Latvia, Lithuania, Luxembourg, Malta, Romania, Slovak
Republic, Slovenia, Turkey, Ukraine

States with significant

non-proliferation concerns

Austria, Belgium, Denmark, Finland, Netherlands, Norway,

Poland

Non-commital States

Switzerland35

Possible spoiler

China

New Agenda Coalition

Ireland, New Zealand, Sweden36

Over the last two years India has been lobbying various member states
of the NSG to secure support for an exception in its favour. In June 2005
the Minister of State for External Affairs, Anand Sharma visited Brazil and
South Africa, and held discussions on this issue. In July 2006, Shyam Saran,
former Foreign Secretary and the then Prime Minister s Special Envoy on the
nuclear deal, hosted NSG Ambassadors at Washington in a bid to assuage their
concerns. Also, in the run-up to the Rio Plenary, Ronen Sen, Indias ambassador
to the United States, met several representatives of the NSG States in a bid
to energise opinion in favour of the agreement. Indias diplomatic efforts have
reaped benefits in the form of support from several NSG members like France,
35.

Switzerland has not come out with any reaction to the US proposal about granting a
permanent exception to India. However, it might be possible that the domestic nuclear
industry might prevail over the government citing enormous economic potential.

36.

Ireland and Sweden were critical of the deal at the Rio Plenary held in May 2006.

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Russia, the United Kingdom, Canada, Brazil, Cyprus, Australia, and South
Africa.
The issue of NSG membership, though separate from the current debate
on granting an exception to India, is likely to arise subsequently. Currently, the
NSG criterion for membership requires the applicant to be a NPT signatory.
In future, when India begins to engage in civil nuclear commerce with NSG
members, it would not like to be in a situation where it has to adhere to NSG
Guidelines including any future amendments without being a party to the
decision making process.
The internal dynamics of the NSG are quite complex. One example of
this is the fact that Brazil and South Africa, despite being members of the
New Agenda Coalition, have extended support for the Indo-US nuclear deal.
Members of this Coalition are otherwise vociferous supporters of full-scope
safeguards as a condition for transfer of trigger list items and technology to
NNWS. It is thus possible that there may be other NSG members who would
similarly extend support for the India-specific waiver in spite of their existing
allegiances.

Amendment

to the

NSG Guidelines

It is understood that the existing NSG Guidelines need to be modified

to enable India to participate in civil nuclear commerce with the Groups
members. As India is not a member of the Group, it has to rely upon the United
States and its allies to pursue the matter. In the July 18, 2005 statement, the
US had agreed to work with like minded States to modify NSG Guidelines.
Key Indian decision makers have made statements to the effect that they
expect the US to work out a clean and unconditional exemption for India
from the NSG.
A clear cut exception would necessarily mean that the NSG allows
participating governments to conduct civil nuclear commerce with India
without insisting upon full scope safeguards. Currently Article 4(a) of the
NSG Part I Guidelines requires full scope safeguards for transfer of trigger list
items or related technology to NNWS.
The US had circulated a pre-decisional draft prior to a NSG consultative
group meeting in Vienna held on March 22-23, 2006. It provided for a clean
India-specific exception and for removal of the requirement of full-scope
safeguards, thereby allowing NSG members to transfer Trigger List items and/

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or related technology to the safeguarded civil nuclear facilities in India It has

been reported that China and Japan raised several questions at this meeting,
many of which were critical of the deal. As Siddharth Varadarajan pointed out
in a March 2006 article, the American draft cleverly skirted the issue of Indias
non-nuclear weapon state status by referring to it as a State not party, and
never having been a party, to the NPT. Such phraseology allows an exception
to be granted without referring to India as a non-nuclear weapon state. By
adopting this line, the US seeks to assuage the concerns of its domestic nonproliferation lobby while at the same time paying due heed to Indias concerns
about being classified as a NNWS.
It has been reported that China subsequently circulated a draft at the
NSG, which allows civil nuclear cooperation though without an India-specific
exception. The Chinese draft reportedly lays down criteria for granting such
an exception without naming India.

Conclusion
The NSG is a crucial step in the process of operationalising of the Indo-US
nuclear deal. The NSG is very important because of the fact that its members
control roughly 80 per cent of the global uranium reserves and about 78 per
cent of global uranium production. Namibia, Niger and Uzbekistan are the
only three non-NSG countries producing significant amounts of uranium in
the world today. As can be seen from the above description of the internal
dynamics of the NSG, India and the United States, and their allies have a lot
of delicate balancing to do.
However, the Indo-US nuclear deal is important for may reasons, energy
security and infusion of new technology being only two of them. Most
importantly, the deal opens a door that was banged shut on Indias face after
the 1974 PNE. One does hope given the domestic political opposition to the deal,
India does not end up missing this bus. Missing this bus might just prove much
more costly for India than the bus that India missed on January 1, 1967.