Panel Remarks at the Pillsbury NEI Nuclear Export Controls Seminar
Principal Deputy Assistant Secretary, Bureau of South and Central Asian Affairs
I’d like to start by thanking the Pillsbury-NEI organizers for inviting me to speak and carving out some time on the agenda to focus on civil nuclear cooperation with India. The timing is especially appropriate as we look ahead to a USIBC- NEI Commercial Nuclear Executive Mission that I look forward to joining in India next week. That mission, and the broad range of top tier American companies participating, demonstrates the strong U.S. commitment to our civil nuclear partnership with India, and the unique American capabilities that India can now gain access to thanks to our 2008 Civil Nuclear Cooperation Agreement.
The USIBC delegation reflects the ongoing vitality of the American nuclear industry, and our industry’s eagerness to build profitable partnerships with Indian counterparts, just like those that have emerged in other high technology sectors like aerospace, information technology and biotech.
In many ways, our 2008 civil nuclear cooperation agreement remains the symbolic core of the strategic relationship – an emblem of our two governments’ commitment to engage each other as partners and a demonstration to the naysayers that even the most complicated aspects of our history can be turned to cooperative ventures that benefit both our countries.
The shared vision for cooperation on civilian nuclear energy which then President George W. Bush and Indian Prime Minister Manmohan Singh set out in their 2005 Joint Statement has been the catalyst for many of the subsequent positive developments in our relationship. Both governments have had to make major changes in the way that we approach nuclear commerce, and we are still working through the implications of those adjustments, but we are making progress.
Before I elaborate further on this, I would like to provide a brief overview of the U.S.-India Civil Nuclear Cooperation Initiative, delving into the strategic underpinnings of this collaboration. I’ll then provide a review of how we got here and lay out my vision for where this partnership will take us.
Strategic Logic Behind U.S.-India Civil-Nuclear Cooperation
From jointly pledging to seek a world without nuclear weapons, building consensus for a civil-nuclear accord, partnering to combat climate change, and enjoying close consultation on issues as diverse as humanitarian relief and intelligence-sharing, U.S.-Indian relations are bound by our shared strategic interests.
The vision for civil-nuclear cooperation was founded not only on the desire to move our strategic partnership to a new level, but on the premise that India largely shares our nonproliferation goals and requires nuclear power to sustain its growing economy in a safe, clean, and cost-effective manner. And given its plans to expand nuclear power production, we want to partner with India to build and safely maintain modern, efficient and, let me underscore the point, American reactors and infrastructure.
Nuclear power is essential to meeting India’s extensive energy requirements and alleviating its heavy dependence on imported energy inputs. The enduring commitment of our two countries to the use of nuclear energy to power our cities and our economies makes us natural partners for commercial and scientific cooperation.
However, this cooperation is not only about powering factories and schools or computers and cell phones. It is about transforming the strategic relationship between our two countries by working together to forge the “indispensible partnership” that President Obama reaffirmed during his watershed visit to India in November 2010.
Brief Overview of the Civil-Nuclear Deal
The landmark effort of our civil-nuclear agreement required significant and profound changes to U.S. and global nonproliferation policies. American diplomats and lawmakers have worked diligently to make the necessary changes domestically and internationally that helped pave the way for this cooperation to move ahead.
First, in 2006, our Congress passed and the President signed into law the Hyde Act. Next, we worked with our partners in the Nuclear Suppliers Group to reach consensus on an exception permitting civilian nuclear exports to India in 2008.
Finally, we were able to negotiate, sign, and obtain congressional approval for the U.S.-India 123 Agreement. Each of these steps required tremendous political capital, as well as the persistence, patience, and hard work of our diplomats and lawmakers who spent countless hours at negotiating tables in Washington, New Delhi, Vienna and capitals around the world.
None of our efforts would have been possible without India’s agreement to implement a series of enhanced nonproliferation commitments. In so doing, India pledged to assume the same responsibilities and practices as other leading countries with advanced nuclear technology.
First, India committed to draw a clear line between its civilian and military nuclear facilities, and to voluntarily place its civilian nuclear facilities under IAEA safeguards. In 2006, India identified 14 thermal power reactors, as well as a number of upstream and downstream facilities, and nine research facilities, to be designated as civilian under India’s Separation Plan.
· Next, India filed a declaration with the IAEA identifying these civilian facilities, and to demonstrate that the facilities would not in any way contribute to India’s strategic program, India further committed to sign and adhere to an Additional Protocol applicable to those facilities.
· Then, to help ensure that Indian companies comply with India’s international commitments prohibiting transfer of sensitive technologies to countries of concern, India took steps to harmonize its national export controls in 2007 with the control lists and guidelines of the Nuclear Suppliers Group and the Missile Technology Control Regime, as they existed at the time.
· Finally, India committed to maintain its unilateral moratorium on nuclear testing, and agreed to work with the U.S. to conclude a multilateral, verifiable Fissile Material Cutoff Treaty to irreversibly freeze the amount of fissile material available for nuclear weapons.
These commitments brought India’s domestic system into closer conformity with international nonproliferation standards, and implementation of these practices demonstrates India’s commitment to preventing proliferation from its civil nuclear program.
Where We Stand Today – And Where We Are Going Tomorrow
In the 2010 joint statement between President Obama and Prime Minister Singh, the United States committed to further expand high technology cooperation and trade, and India committed – among other things – to ensure a level playing-field for U.S. companies seeking to enter the Indian nuclear energy sector. The United States has moved quickly to fulfill our commitments to India.
Within a matter of months, our Department of Commerce removed nine Indian space and defense-related companies from the export control list for sensitive items, the “Entity List”, to drive hi-tech trade. Based on India’s commitment to adopt Wassenaar Arrangement controls, we moved proactively to relax our licensing policies on a broad range of dual-use items under the Strategic Trade Authorization regulation, which was finalized last summer.
And our diplomats have again been hard at work over the last two years working with members of the four multilateral export control regimes to support India’s bid for full membership, as India takes steps toward the adoption of the regimes’ export control requirements.
We’ve seen notable progress on the Indian side. Nuclear power generation grew by almost 5 percent in India last year, highlighting the increasing importance placed on developing this power source. We welcome news of the Kudankulam Nuclear Power Project’s expected commissioning in December. This development underlines India’s commitment to nuclear power, particularly in the face of long construction delays and formidable domestic hurdles. As hours of power outage have crippled industrial activities and affected people of all sections of society, the plant’s expected output of 2,000 megawatts of power is critical in supplying electricity to the southern state of Tamil Nadu.
India has the third largest number of reactors under construction in the world. And while India currently generates less than 3% of its total electricity from nuclear energy, the country plans to increase nuclear-power capacity from 4.5 gigawatts to 35 gigawatts by 2020. Coupled with heavy investment in infrastructure, and an increasing reliance on private enterprise, there are vast commercial opportunities in virtually every segment of the Indian nuclear energy market. We were delighted by news this spring that both Westinghouse and General Electric were making headway in their negotiations with NPCIL for Early Works commercial contracts.
These aren’t far-fetched opportunities, reserved for a privileged few. The development of India’s power sector translates into collective benefit: it means that education will be transformed through reliable electricity to power factories and smart phones; transportation will be revolutionized through the use of hybrid vehicles and light-rail trains; and commercial opportunities will emerge for the Indian middle class – like never before.
However, major challenges remain. In particular, India’s nuclear liability law is not in line with the international nuclear liability principles reflected in the Convention on Supplementary Compensation for Nuclear Damage. Current liability law and regulations impose the risk of a heavy financial burden on equipment suppliers seeking to enter the Indian market and expose such companies to the risk of significant financial penalty in the event of a nuclear accident, neither of which is consistent with international standards. Without a law consistent with this Convention in place, companies from the United States as well as other nations will find it difficult to participate in India’s nuclear power expansion plans.
While we understand that India’s law is currently being examined by the courts, we believe that consultations with the IAEA would be useful as a means to ensure that the liability law accomplishes our shared objective of moving India into the international mainstream of civil nuclear commerce. We want to ensure equal opportunities for American companies to conduct nuclear commerce in India AND preserve safety standards.
I’ve heard concerns from many Indian friends about the international debate over the future of nuclear power and you’ll certainly hear similar concerns throughout today’s discussions. Following last year’s triple disaster in Japan, it is natural that there is a democratic debate over whether nuclear power is a sensible option for energy production in light of the perceived risks. Without downplaying the seriousness of the Fukushima crisis, the fact remains that nuclear power is one of the safest and cleanest forms of energy compared with other sources. Simply put, fear of nuclear power is out of proportion to the actual risks. As India’s national debate plays out, it is important for all of us to keep reminding India of the U.S. commitment to nuclear power. Several decades ago, our nation faced debates similar to the ones occurring in Tamil Nadu, but it is widely believed among Americans today that nuclear energy is a viable, clean and safe power source.
As we look ahead to the future of our civil-nuclear cooperation we are additionally encouraged by the deepening cooperation between the U.S. and India on a wide range of clean energy and scientific fronts, which will enable us to pursue new scientific discoveries and advance our shared clean energy goals. India’s participation in the International Thermonuclear Experimental Reactor is another promising area for advanced technical collaboration in nuclear energy. Just last year the U.S. Department of Energy and India’s Department of Atomic Energy signed an implementing agreement on “Discovery Science” that provides the framework for India’s participation in the next generation particle accelerator facility at Fermilab.
The Indo-U.S. Civil-nuclear Energy Working Group, co-chaired by India’s Department of Atomic Energy and the U.S. Department of Energy, has developed an Action Plan and intends to focus on cooperation on both High Temperature Gas Reactors and Nuclear Safety in the coming year. We continue to actively explore opportunities for further cooperation.
We intend to redouble our efforts to expand scientific collaboration in this important area to build on these successes. And just as our scientists work side by side bringing us ever closer to solutions to global energy problems, we also look forward to seeing U.S. and Indian companies working together in the near future bringing innovative technology to India’s nuclear energy market.
We welcomed the Indian government’s announcement of two nuclear power reactor sites for U.S. firms in Gujarat and Andhra Pradesh, and we believe that realization of Secretary Clinton’s vision of the day when the “computers of a school in Gujarat are powered by a reactor designed in America” will not only mark the successful culmination of our six-year civil-nuclear cooperation effort, but will also be the first page of a new and promising chapter in our relationship.
As part of our global strategy for the support of nuclear power, and in the context of our unique strategic partnership with India, the United States remains committed to the full implementation of our 2008 civil nuclear cooperation agreement in a way that helps India to meet its growing energy requirements and creates opportunities for deeper cooperation between our companies and scientists.
The Civil-Nuclear Initiative still holds remarkable promise for the people of India and the United States. Without diminishing the very real and often frustrating challenges we have faced, both our governments are now engaged in bringing to fruition the practical benefits of the civil-nuclear agreement, especially reliable electricity for India’s homes and businesses. The Indian government has clearly indicated that nuclear energy will remain an important part of India’s energy equation, and we are equally committed to expanding cooperation in other areas, from wind and solar energy to natural gas and biofuels.
The future of the U.S-India partnership has never been brighter: driven by core strategic congruence, extraordinary people-to-people ties, and opportunities for historic cooperation on civil-nuclear energy; I am convinced it will only grow stronger in the years that lie before us.