The Real Story Behind The U.S.-India Nuclear Deal

By Subrata Ghoshroy,
Posted October 17, 2008.
Courtesy Of AlterNet

The recently passed nuclear pact was not just a late win for an unpopular president, it was a coup for lobbyists and defense contractors.

At about 2:30 PM on Wednesday, October 8th, President Bush signed into law H.R. 7081, the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, a.k.a. the "U.S.-India nuclear deal." In attendance were Vice President Dick Cheney, Secretary of State Condoleezza Rice, who is credited as the architect of the deal, members of Congress and an array of Indian American supporters. It was the final milestone in a long road that started on July 18, 2005, when President Bush and India's Prime Minster Manmohan Singh announced the deal in a surprise joint statement. It was also a good photo op for a beleaguered president whose legacy will be an ill-conceived war and the worst economic crisis since the Great Depression.

The legislation signed by Bush is technically known as the 123 Agreement because it amends section 123 of the U.S. Atomic Energy Act of 1954, which regulates U.S. cooperation with other nations in nuclear matters and prohibits trading with states that have not signed the 1968 Non-Proliferation Treaty (NPT). Not only is India a non-signatory to the landmark treaty, it is, along with Israel and Pakistan, also in contravention of its underlying principle, having secretly developed the bomb by transferring fissile material from its civilian program.

But while the point of the legislation was ostensibly to enable India to meet its energy needs, in reality it was about much more than that. The primary motivation is the U.S. embrace of India as a strategic partner.

An Important, Unlikely Ally

India is no small prize. A founding member of the Non-Aligned Movement and a traditional champion of "third world" countries at the U.N. and the World Trade Organization, gaining India as a collaborator rather than an adversary was not a stroke of genius by the Bush administration. It started under President Clinton, but could not be consummated because of India's nuclear tests in 1998. (Strobe Talbot, Deputy Secretary of State under Clinton, describes this in his book, Engaging India: Diplomacy, Democracy, and the Bomb.) Faced with the rapid
decline of the U.S.'s global popularity in the world and desperate for a foreign policy success, getting India on our side became a "win-win" proposition for the Bush administration. But the so-called "nuclear irritant," as Bush called it, was standing in the way. It had to be removed.

The payoff was immediate. India voted twice against Iran at the International Atomic Energy Agency (IAEA). According to an article published by the Campaign Against Sanctions and Military Intervention in Iran, a former Assistant Secretary of State for International Security and Non-Proliferation, Stephen Rademaker reportedly remarked at a meeting in New Delhi in February 2007: "The best illustration of this [change in India's attitude] is the two votes India cast against Iran at the IAEA. I am the first person to admit that the votes were coerced."

Rademaker left the State Department in January 2007 to take up a "lucrative" job with Barbour, Griffith and Rogers, the firm hired by the Indian Embassy in Washington to lobby for the deal.

India's actions did not go unappreciated. While expressing his frustration with India's continued pursuit of an Iran-Pakistan-India natural gas pipeline deal in the face of U.S. opposition, at a hearing for the 123 Agreement this summer, Congressman Gary Ackerman, Chair of the House Foreign Affairs Committee's Middle East and South Asia

subcommittee, called India's IAEA vote "courageous." But, he warned, he would not continue to make nice if India kept pursuing the pipeline. "Continued pursuit of the pipeline or other investments in Iran's energy sector ? will halt and potentially even roll back the progress made in bilateral relations over the last several years," he said.

As Noam Chomsky observed in a recent interview, India seems to be playing on both sides of the street. Unfortunately, it can't go on for ever.

A "Strategic Partnership"

That the nuclear deal was about much more than nuclear energy was evident from the title of the hearing this summer, which took place on June 25th: "More than just the 123 Agreement: The future of U.S.-Indo relations." A cursory search of the transcript for the word "Iran" found it mentioned a total of 96 times, compared with 81 for "nuclear" (with the two often mentioned in the same context). Of the three witnesses who testified before the committee, all were old State Department hands and cheerleaders for the deal. No skeptics were invited, not even for the appearance of balance.

In a report sent to Congress this September, President Bush acknowledged India's cooperation with American initiatives, referring specifically to India's votes in the IAEA: "The Government of India has taken several steps to support the U.S. and to bring Iran back into compliance with its international obligations, particularly those pertaining to its nuclear weapons program." In addition, "India has also maintained a strong public line of support for P5+1 and U.S. diplomatic efforts to resolve international concerns with Iran's nuclear program," Bush said, referring to efforts that are viewed by most of the rest of the world as coercive and discriminatory towards Iran.

For their part, high-level Indian government officials promoting the deal have also waxed enthusiastic about the transformation of the India-U.S. relations. In December 2005, then Foreign Secretary Shyam Saran, the point man for the deal, delivered a speech at the Carnegie Endowment for International Peace in Washington, D.C. titled "Transforming India-U.S. Relations: Building a Strategic Partnership." The U.S.-India deal, he said, was a "declaration" that U.S. and India were moving towards a "global partnership," based not only on "common values," but "common interests" as well. These included the "promotion of democratic values and practices," and "combating terrorism and WMD proliferation" -- a whole-hearted embrace of the Washington consensus and evidence that, as former U.S. Ambassador Teresita Schaffer told the House Foreign Affairs Committee, Indian foreign policy has "turned around" from the days of non-alignment.

A further sign of the growing strategic partnership is the rapidly strengthening defense link between India and Israel. In the past decade, as the relationship has blossomed, Israel has stepped in as a major supplier of weapons and sophisticated military hardware to India as a surrogate, since because U.S. firms were blocked from selling to India because of remaining sanctions and also because of inevitable protests by Pakistan. Israel is now India's second largest arms supplier.

The Israel lobby was instrumental in garnering congressional support for the deal. In January this year, in an unprecedented move India launched a sophisticated Israeli satellite, the TECSAR, which could boost its intelligence gathering capabilities regarding Iran, according to the Israeli newspaper Haaretz. The satellite, manufactured by Israel Aerospace Industries (IAI), was sent into orbit from the Sriharikota Launching Range in India using an Indian rocket. According to the Jerusalem Post, the launch of the TecSar was the first launch of an Israeli satellite aboard an Indian missile and it is part of growing Indian-Israeli cooperation,which is scheduled to eventually lead to the launching of two more satellites. While Indian space officials facing criticism at home and abroad characterized the launch as a strictly commercial venture, the significance of it was not lost in Iran and elsewhere.

Alongside the joint statement, the United States and India signed a ten-year defense pact, which envisages global collaboration in multilateral operations, expanded two-way defense trade, increased opportunities for technology transfers and coproduction, increased collaboration on missile defense, "and the list goes on," said Chairman Ackerman at the hearing.

A Deal "Crafted With The Private Sector Firmly In Mind"

The signing of the defense pact is a clear, significant sign of where India wants to be in the future. So is India's support for the U.S.-led war in Afghanistan. But perhaps most importantly, the defense pact has opened the door for the selling of U.S. military equipment to India.

As Chomsky pointed out, Condoleezza Rice was "actually on record admitting what is truly behind this deal." Indeed, testifying before the Senate Foreign Relations Committee on April 5, 2006, the Secretary of State made it clear it was about opening a new market for American technology: "At its core, our initiative with India is not simply a government-to-government effort. It was crafted with the private sector firmly in mind." She was not just talking about the nuclear industry, which is predicting a $100 billion market in India in the next 10 or 15 years. Boeing, for example, is reportedly projecting a market of $15 billion for its own products in India over the next 10 to 15 years.

In his testimony before the House committee this summer, Stephen Cohen, a Senior Fellow at the Brookings Institute and an old India hand, said that India will be "one of the largest markets for defense equipment in the coming two decades." India's recent purchase of six C-130J aircraft -- made by Lockheed Martin -- was the "biggest ever Indian purchase of American equipment in dollar terms." The deal was worth more than one billion dollars.

Walter Andersen, a former State Department intelligence specialist who also testified, described the Indian Navy as an even more promising area for sales. With 35 ships in the works, India is now embarked on "one of the most ambitious naval building and procurement plans in the world," he said. And, he added, the U.S. -- and perhaps other U.S.

allies like Japan and South Korea -- is more competitive as the "Indians have become increasingly skeptical" about the reliability of Russian naval suppliers.

A Victory For Lobbyists and The Bush Administration

Indeed, the U.S.-India nuclear agreement is a big deal, one made possible by the United States' willingness to trample many of its own laws and principles for non-proliferation of nuclear weapons, as well as the efforts of business lobbies in the U.S. and India, which stand to profit immensely.

There were other payoffs as well. On his way back from New York immediately after the congressional vote in favor of the deal, the Indian Prime Minister stopped in Paris to sign a similar deal with France. The deal will allow the French nuclear giant Areva to sell at least two reactors and fuel to India. As the French anti-nuclear group Sortir to Nucleare (End Nuclear Power)aptly observed: "For having helped the U.S. and India get around the rules of non-proliferation, France will be able to sell nuclear reactors to India. These are nauseating deals that endanger the future of the planet," reported AFP.

That the U.S. Senate voted 86-13 in favor of the deal is a testament to the power of such lobbying. By contrast, non-proliferation advocates -- not a homogeneous group by any means -- faced a David vs. Goliath situation. The brief debate before the House vote, however, revealed the concern among many members over the serious negative implications of the deal on the future for non-proliferation and disarmament.

On the day of the vote, Boeing and Raytheon lobbyists were reportedly out in force, talking directly to the few wavering Senators bypassing even their staffers. "It was at a very high level," said one observer. "No one talked to the staffer, they went straight to the Senator and talked about business interests." For his part Vice Presidential nominee Joe Biden had pronounced that he was "going to work like the Devil to make it happen." And he did, by bending all the congressional rules and handing a prize to the most unpopular President in recent history barely a month before the U.S. elections.