Taking Stock of the U.S.-India Nuclear Deal

Geoffrey Pyatt
Principal Deputy Assistant Secretary, Bureau of South and Central Asian Affairs
Mumbai, India
September 30, 2011

As prepared for delivery

It is an immense pleasure to be invited to address such a prestigious audience from the worlds of science and business, as well as distinguished U.S. and Indian government officials. I’d like to pay special thanks to the India Section of the American Nuclear Society for bringing together this important gathering. This Indo-U.S. Nuclear Safety Summit comes at a crucial juncture in our civil-nuclear partnership, and at an important moment for India's entire nuclear power industry.

We meet today in Mumbai, one of the great cities of the world. It has been four years since I have visited this remarkable global hub, a metropolis whose skyscrapers and side streets, boardrooms and chai vendors provide one of the most dramatic manifestations of India's stunning diversity and youthful energy. It is always inspiring to come back here, and to witness this city on the move – becoming bigger, taller, and continuing to secure its place at the center of Asia, a nexus for capital and knowledge in the 21st century.

As much as Mumbai has changed in the four years that I have been away, the contours of the U.S.-India relationship have changed even more. It has been a little over six years since the joint statement in which President Bush and Prime Minister Singh outlined a vision for cooperation on civilian nuclear energy that many of us have worked diligently since then to fulfill. This has been a period of unprecedented collaboration between our two governments, as we have worked together to meet the demands of this young century, forging a partnership that will be of fundamental importance to both our countries.

I am here today as much as anything to listen to the Indian officials and American business representatives and to hear your ideas about how best to take forward our relationship, but I would like to take this opportunity to offer some personal reflections on the U.S.-India civil-nuclear deal. Specifically, I’d like to 1) review the objectives of our civil-nuclear cooperation; 2) take a look at how we got here and what remains to be done; and 3) lay out Washington's vision for where this partnership will take us.

The Strategic Logic of U.S.-India Civil-Nuclear Cooperation
On issues as diverse as keeping the world safe from nuclear weapons, reaching a historic civil-nuclear accord, partnering to combat climate change, and supporting Afghan reconciliation and consulting on the Asian balance of power, India and the United States are bound by strategic necessity. We know that we must forge new habits of cooperation, and partner to solve the great challenges that face mankind – together – in order to sustain the progress of the last decade. Our citizens and businesses – not to mention our respective national interests – demand it.

The symbolic core of our transformed bilateral relationship is the 2005 nuclear deal, and our subsequent work together in the U.S. Congress, before the IAEA, and with the member states of the Nuclear Suppliers Group, to enable its implementation. Our two governments' vision for civil-nuclear cooperation was founded on the premise that India needs nuclear power to sustain its rapidly growing economy in a safe, clean, and cost-effective manner, and that the United States itself has a stake in India's continued success.

The goal of the 2005 joint statement is to fulfill that vision; to provide India access to the technology it needs to build and safely maintain a modern and efficient fleet of civilian nuclear reactors and infrastructure, enabling India to tackle the power requirements of its growing economy. Prime Minister Singh has been clear that nuclear power will be an important part of India's energy mix, supplying the power that drives India’s manufacturing sector and lights India’s homes and institutions of learning.

However, our civil nuclear cooperation is about more than just powering computers and cell phones. It is fundamentally about transforming the strategic relationship between our two countries by working together to achieve the “indispensible partnership” that President Obama reaffirmed during his visit to India. In retrospect the 2005 civil-nuclear agreement was the catalyst to much of what we have accomplished since then through the U.S.-India Strategic Dialogue and two historic visits between Prime Minister Singh and President Obama. To a degree few of us predicted at its inception, the nuclear deal became a "joint venture" embraced by both governments at the highest levels and then presented to the international community. This experience was key to establishing trust between our leaderships and demonstrating to the rest of the world what we could accomplish together.

The logic of our strategic relationship and our civil-nuclear cooperation ultimately centers on people. I can guarantee that everyone in this room would affirm their desire to make people’s lives better. Imagine for instance a young girl from a rural village. She has the drive and the determination to get her education, to chart a successful career, and make a difference in the world. However, the odds are stacked against her because her village has no consistent electricity, and suffers from health challenges and other blights because of its isolation. Her school has outdated books, and doesn’t have the power to tap into the vast catalog of school materials available online. She is not without hope, and she is determined. But she – and all of the inhabitants of her village – deserve a chance. They need to be given the opportunity to learn, to compete, and to be able to utilize the technology that the 21st century has to offer! Our nuclear partnership will provide the energy that can help make this girl’s dreams – and the hopes of many others like her – a reality.

A Short History of the Civil-Nuclear Deal
I’d like to now pivot, and provide a short recollection of how the U.S.-India Civil-Nuclear Deal came to be. The landmark accomplishment 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.

In 2006, bipartisan majorities in our Congress passed the U.S.-India Peaceful Atomic Energy Cooperation Act, which exempted this cooperation from certain requirements of the Atomic Energy Act of 1954. Next, we were able to negotiate, sign, and eventually pass through Congress the U.S.-India 123 Agreement. Finally, we worked with our partners in the Nuclear Suppliers Group to reach consensus on a waiver for civilian nuclear exports to India in the summer of 2008. Each of these steps required a large investment of 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.

But none of our efforts would have been possible without India’s agreement to implement a series of enhanced nonproliferation commitments which ensured that our cooperation strengthened the international nonproliferation system, from which India itself benefits and of which India is a critical stakeholder. India agreed to adopt the same responsibilities and practices as other leading countries with advanced nuclear technology, by taking a number of concrete steps.

  • First, India agreed to draw a clear line between its civilian and military nuclear facilities, and to voluntarily place its civilian nuclear facilities under IAEA safeguards. India’s 2005 Separation Plan identified 14 thermal power reactors, and well as a number of upstream and downstream facilities, and nine research facilities for the safeguarded side of India's nuclear complex.
  • Next, India filed its declaration with the IAEA regarding these civilian facilities, and to demonstrate that the facilities would not in any way contribute to India’s strategic program, India further agreed to an Additional Protocol applicable to those facilities.
  • Then, to help ensure that Indian companies comply with India’s international commitments to not transfer sensitive technologies to countries of concern, India harmonized its national export controls with the control lists and guidelines of the Nuclear Suppliers Group and the Missile Technology Control Regime.
  • Finally, India committed to maintain its unilateral moratorium on nuclear testing, and agreed to work with the U.S. to conclude a multilateral Fissile Material Cutoff Treaty to irreversibly and on a global basis reduce the amount of fissile material available for nuclear weapons.

These steps clearly demonstrated to the world India’s commitment to preventing proliferation from its civil-nuclear program and brought India’s domestic system into closer conformity with international nonproliferation standards.

Where We Stand Today And Where We Are Going Tomorrow
With all that we’ve accomplished together, the ground work was laid for last year’s joint statement between President Obama and Prime Minister Singh where the United States agreed 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 these additional commitments to India.

Within a matter of months, our Department of Commerce removed nine Indian entities from its “entities list.” Based on India’s commitment to adopt Wassenaar Arrangement controls, we decided to proactively relax our licensing policies on a broad range of dual-use military equipment under the Strategic Trade Authorization regulation, which was finalized this summer. And our diplomats have been active this year working with members of the four multilateral export control regimes to support India’s bid for full membership.

However, as this audience knows well, unease persists about the current playing field in the Indian nuclear energy sector. This is not insurmountable, and in fact, through engagement with the IAEA, we believe that any concerns can be addressed and mitigated in a way that satisfies all of India's international partners.

As Deputy Secretary Burns said earlier this week, “completing our civil nuclear cooperation partnership is central to both our nations’ long-term prosperity and India’s future energy security. For international and Indian firms to participate in India’s civil nuclear sector, India needs a nuclear liability regime consistent with international standards. To this end, we welcome India’s commitment to ratify the Convention on Supplemental Compensation later this year. And we encourage India to engage with the International Atomic Energy Agency to ensure that the liability regime that India adopts by law fully conforms with the international requirements under the Convention.” Just last week, Finance Minister Mukherjee reiterated that India is committed to ratifying the CSC before the end of the year, showing that our two governments are in lock-step on this critical element of our civil-nuclear partnership.

One thing our bilateral civil-nuclear cooperation has taught all of us is that by working together our two countries can tackle even the toughest of problems. As Secretary Clinton noted in Chennai, “if we redouble our efforts we are poised to go even further in our civil-nuclear cooperation. And the commercial opportunities in India’s nuclear energy market continue to grow every day.”

As everyone in this audience is aware, India has the largest number of reactors planned or under construction out of any country in the world. Coupled with heavy investment in infrastructure, the recent discovery of uranium deposits in Andhra Pradesh, and an increasing reliance on private enterprise, there are vast commercial opportunities in virtually every segment of the Indian nuclear energy market.

These aren’t far-fetched opportunities, reserved for a privileged few. Tapping these opportunities means that education can be transformed through reliable electricity to power computers and smart phones; transportation can be revolutionized through the use of hybrid vehicles and light-rail trains; and commercial opportunities can emerge for anyone with a good idea and entrepreneurial zeal, not just those who have access to captive power generators in Gurgaon or HiTec City, where multinational firms have the benefit of supplying their own power.

Thanks to Indian and American diplomatic effort, India can now select from a wide choice of international nuclear suppliers to supplement its indigenous efforts, but I assure you that American technology and American companies are the best the world has to offer:

  • For starters, the U.S. has over 50 years’ experience operating and maintaining the largest fleet of nuclear energy reactors anywhere in the world at world-class levels of safety and reliability.
  • Almost half of all nuclear power plants in the world are based on Westinghouse’s pressurized water technology, and nearly 20 percent are based on General Electric’s boiling water technology. That means more than 60 percent of the world’s reactors are based on technology developed in the United States. And every day, our firms continue to innovate, setting an ever-higher bar for next-generation nuclear energy technologies.
  • And we are open for business. In fact, U.S. companies representing the full spectrum of commercial nuclear activities have participated in six commercial trade missions to India in the past few years, including:
  • Major engineering and construction companies such as Bechtel, CH2M Hill, Fluor, Shaw Group and URS;
  • Reactor-designer vendors such as General Electric and Westinghouse, but also designers of small modular reactors such as Babcock & Wilcox, Holtec and Nuscale;
  • Specialized component suppliers such as Transco Products;
  • A range of nuclear fuel producers, including converters such as Converdyn, and fuel enrichers such as USEC and GE; and finally,
  • Nuclear plant operators, such as Exelon and Entergy, which offer the plant management models that yield the highest capacity factors of the world’s large reactor fleets.

I hope these commercial interactions will travel in both directions: Today, I would like to renew the invitation made by the former Secretary of Commerce Gary Locke to bring a trade mission from India to the United States for meetings with counterparts in government, at manufacturing facilities, national research laboratories, and educational institutions.

This visit would also be an opportunity for Indian business leaders to learn how to navigate the U.S. export licensing process and should debunk any lingering concerns that a license requirement for a particular item means a license will be denied. The Departments of State and Commerce have planned additional outreach work in India that we hope will further help to dispel these myths about U.S. export controls.

I should note – unequivocally – that all of our companies involved in these missions have the strong support of the United States government. It is also imperative that these companies have the utmost confidence in the investment climate in India and in the hospitality of its national regulations, given the long shelf-life of civil-nuclear projects, and the formidable investment cost that civil-nuclear cooperation requires. The United States was pleased to hear a clear, consistent message from the Government of India last week – in Chicago, Washington and New York – not only extolling the growth benefits of investing in India, but also reflecting that the Government of India is committed to making itself a predictable and safe place to invest.

As we look ahead to the future of our civil-nuclear cooperation we are additionally encouraged by our rapidly expanding science and technology cooperation.

This 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.

This agreement is the latest step in the deepening cooperation between the U.S. and India on a wide range of clean energy and scientific fronts, and will enable us to pursue new scientific discoveries together and to advance our shared clean energy goals.

This cooperation is broad-based, and is rapidly expanding. The Indo-U.S. Science and Technology Forum, along with its U.S. counterpart the India Science and Technology Partnership, has facilitated travel for nearly 10,000 scientists between the United States and India, established 24 joint research centers and organized more than 30 training programs and 150 bilateral conferences, two-thirds of which have resulted in long-term partnerships.

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 will focus on cooperation on both High Temperature Gas Reactors and Nuclear Safety in the coming year.

We intend to sustain our efforts to expand scientific collaboration in this important area to build on these successes. And we look forward to similar successes in the near future for U.S. companies in the Indian nuclear energy market.

Ladies and gentlemen, we all have learned that crafting and implementing a civil-nuclear agreement is a long and complex endeavor. It has been an evolving process that ultimately will allow citizens from both our countries to thrive, and prosper throughout the 21st century. In the face of inevitable setbacks we persevered, worked together, and accomplished what our leaders resolved to do. Now we must implement it.

We believe that 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 completion of our six-year civil-nuclear cooperation effort, but will be the first page of a new and promising chapter in our relationship.

Political and domestic challenges often garner press headlines, but it is important to remember that this relationship has survived changes of the political landscape in both countries. No matter what the vicissitudes of domestic politics, both governments are fully committed to realizing the potential of our relationship in a way that will ensure peace and prosperity for, literally, billions of people. The future of the U.S-India partnership has never been brighter: driven by core strategic congruity, extraordinary people-to-people ties, and historic cooperation on civil-nuclear energy, it will only grow stronger in the century that lies before us.

Thank you.