The Indo-US Nuclear Deal: A Post-Henry Hyde Act Analysis

The Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act is now law. With its passage, history of sorts has been created. India can now access civilian nuclear technology while keeping its nuclear weapons program. No country in the world, outside the NPT, can say so.

Critics in India have called this a complete sellout of our foreign policy and our nuclear programs - both civilian and military. Supporters on the other hand, call the Henry Hyde Act a clear and uninhibited victory. As in most such polarized arguments, the truth is somewhere in between. India gained something - nuclear cooperation - while losing on other fronts.

To truly understand the implications of the Act, it must be analyzed on two fronts - nuclear and foreign policy. And in that analysis, the real losses for India are not the tangible ones - such as loss of control over the civilian program. Rather, it is the loss of power India will face in future negotiations. And that has nothing to do with the agreement and more to do with how India has handled the passage of the Act through the US Congress.

Analyzing the Henry Hyde Act
The Henry Hyde Act is only one of many steps towards India's recognition as a nuclear state entitled to full civilian cooperation with the NSG. However, it is important because it sets an upper limit to what the US can offer India.

On the nuclear front the Act offers India access to technology for new, bigger, better reactors. Most critically, we get uranium for those reactors - something we were starved of domestically. And on the foreign policy front, it shows that India can now create a space for itself, and be eventually recognized as a nuclear state. By no means are these achievements to be scoffed at.

Critics point out that what it offers the Act can also take away. The Hindu points out correctly that:

1. Nuclear cooperation is not full and excludes enrichment and reprocessing technology which we need to complete our three-stage nuclear fuel cycle.


2. India does not get unconditional access of uranium fuel or technology. In particular, all cooperation will be stopped should India test another nuclear weapon.


3. The US President must report annually on India's nuclear program. Such reporting can, and probably will be used to pressure India on other fronts.

Most of these criticisms, while true, are somewhat misplaced. For instance, while nuclear cooperation is not complete, it is nonetheless substantial. Therefore, the mere fact that is not complete can hardly be seen as a strike against it.

Second, by denying India reprocessing technology, the Act prevents us from advancing very far in our three-stage fuel cycle. However, it is an established fact that our much-vaunted 3-stage fuel cycle is actually highly inefficient and expensive, and exists simply because we do not have sufficient domestic uranium for a traditional nuclear program. Therefore, if India could be guaranteed uranium fuel, abandoning the 3-stage cycle would actually make economic sense.

That guarantee, of course, will never come. Access even to this nuclear cooperation is conditional and subject to termination. However, even there, should cooperation end we only lose something we never had. Viewed that way, we don't lose much, do we?

The Real Loss: A Weakened Chicken Player
To understand the real loss for India, consider the following scenario. Following this agreement India builds 5 new, large reactors with American, Russian, and Japanese help. In 2012 the US asks India, once again, to vote against Iran at the IAEA, threatening to stop uranium supplies under the guise of annual reporting requirements. Considering the Iran-India gas pipeline is now operational, India must now choose between the fire and the frying pan.

By buying into US nuclear cooperation India will in the future have to choose between that cooperation and other alliances. When our mutual interests collide, as they must, India will be playing what is known in game theory as a game of chicken. Where India has really lost is in signaling that this nuclear cooperation is sacrosanct, and our other considerations are up for negotiation.

In Chicken, two things make a player strong. The first is the willingness to undergo significant pain in order to win. For instance, in the third Indo-China war, China invaded Vietnam, arguably lost the military battle and suffered heavy losses. However, it proved - for future confrontations - its willingness to suffer pain in order to inflict it. Vietnam would think twice before crossing paths with China again.

India lost several opportunities to signal the same to the US. In particular, public statements by our government supporting the Henry Hyde Act indicate that we will take whatever the US Congress offers. Instead, a smarter strategy would have been to criticize the Act as insufficient and threaten walking away from the deal. The mere willingness to consider rejecting the deal would be a signal that our acquiescence not be taken for granted. Not now. Not later.

Second, a constrained player is stronger. The original agreement with the USA was favorable to India partly because we had domestic constraints. Similarly, if the Prime Minister had subsequently gone to the US Congress and announced that certain conditionalities in the Hyde Act would be rejected by the Indian people the US Congress would be faced with removing those terms, or subsequent rejection of the deal.

Instead, by repeatedly supporting the deal and the Hyde Act in Parliament our government weakened those constraints, and in the process, has weakened India's negotiating position.

The Final Analysis
Not surprisingly, the Hyde Act both offers and takes away - such agreements are always based on quid pro quo. And the truth is that the Hyde Act offers India substantial present benefits. The associated losses are in the future, and the extent of those losses will depend on India's willingness to take choices that are painful in the short term.

For those reasons, and despite several reservations, I remain in favor of the deal - because it offers tangible nuclear benefits. I cannot, however, support India's bungled negotiation process. On the policy front, India is yet to see any benefits, such as recognition as a nuclear weapons state. And missteps in negotiation have already reduced India's ability to extract future benefits. The question then really is, when the time comes and India must decide to support Iran, test a nuclear weapon, or buy gas from Myanmar, will it be able to say to the US, "no, thank you"?