An ‘Elite’ Nuclear Club Keeps India Out... For Now

At the end of last month, India was dealt one of the biggest diplomatic setbacks since Prime Minister Narendra Modi took office in 2014. A meeting in Seoul of the 48-member Nuclear Suppliers Group (NSG) adjourned with an impasse on the question of whether India should be admitted to the elite nuclear club. Interestingly enough, despite the support of a majority of the nuclear superpowers (France, Russia, the United Kingdom, and the United States), India’s bid was blocked by China. This of course, lays bare the festering geopolitical rivalry between the two countries. More concerning, however, is the impact the NSG’s indecision could have on India’s ability to ratify the climate change agreement reached in Paris last December.

What influence does the NSG wield?

The NSG, ironically, was formed in 1974 in response to India’s first nuclear test. As an unrecognized nuclear country under the Non-Proliferation Treaty (NPT), India had crossed the line and the international community swiftly moved to limit its ability (and any other non-nuclear states) from gaining access to nuclear equipment, materials, or technology. While India’s nuclear program was never halted, the formation of the NSG greatly curtailed its expansion especially on the civilian nuclear energy front, as India had to rely on limited domestic uranium reserves.

In a landmark bilateral agreement in 2005 forged by the George W. Bush administration, the United States committed to “work to achieve full civil nuclear energy cooperation with India as it realizes its goals of promoting nuclear power and achieving energy security.” In 2008, the Bush administration secured a “waiver” for India so the NSG could depart from its existing rules, which barred non-NPT signatories from engaging in nuclear trade with its member states.

How does NSG membership affect India’s ability to ratify the Paris Agreement?

Shortly after the decision came out of Seoul, the Indian external affairs ministry released a statement explicitly saying, “An early positive decision by the NSG would have allowed us to move forward on the Paris Agreement.” In the lead up to the meeting, Indian diplomats insisted that the country’s interest in NSG membership was purely to expand its civilian nuclear energy program, which they argued would be vital to meet the country’s nationally-determined target (40% of power generation capacity from non-fossil fuel sources by 2030) under the Paris Agreement. In fact, Prime Minister Modi just weeks before the Seoul meeting travelled to Washington, D.C. to announce a cooperative agreement with President Obama to build six new nuclear reactors and work to ratify the Paris Agreement by the end of this year.

Functionally, NSG membership would have little effect on India’s ability to fuel its nuclear reactors as the 2008 waiver has allowed it to enter long-term fuel supply agreements with a number of countries. When pressed, the external affairs ministry argued, “Membership of the NSG creates a climate of predictability with regard to rules for nuclear commerce with India, giving both Indian and foreign companies the confidence to commit the resources that will be needed for the expansion of nuclear power in India.” In addition to just predictability of rules, the ministry wrapped up with a financial justification stating, “India being a price-sensitive energy market, such an outcome also helps keep the cost of nuclear power within a reasonable band by lowering the risk premium.”

For the Paris Agreement to enter into force, at least 55 countries representing 55 percent of global emissions will have to ratify the agreement. As the world’s fourth largest emitter, India’s ratification of the Paris Agreement will be important not just for mathematical reasons, but also the symbolism that comes with the world’s fastest growing emitter committing itself to the new climate regime. Therefore, ratification of the Paris Agreement provides a great bargaining chip for India.

Needless to say, India’s aspiration to increase nuclear capacity from 7 GW today to 63 GW by 2032 is an ambitious one. A closer look at the numbers, however, suggests that India may be overplaying the importance of NSG membership for Paris Agreement ratification. This was corroborated by the Indian Environment Minister’s recent remarks claiming that India is on track to meet its Paris climate goals earlier than promised without any reference to the NSG.

What comes next?

Surely, India will continue to press for NSG membership as entry into the group will be a big step towards asserting itself as a legitimate nuclear power. India will, however, have to grapple with China’s blockade. The official line from China during the Seoul meeting was that the NSG needed to first agree on guidelines for admitting non-NPT signatories before India’s membership could be considered. Coupling NSG membership with the NPT allows China to claim that its interest is purely in protecting the international non-proliferation regime – a seemingly noble cause. Yet, India is unlikely to sign the NPT due to the structure of the treaty, which only allows the five original nuclear states (the victors of World War II) to possess nuclear weapons.

In 2008, it took a heavy diplomatic push within the NSG by the Bush administration (including direct involvement by then-Secretary of State Condoleezza Rice) to win broad support for India’s waiver. While the Obama administration has signaled its support for India’s NSG bid, high-level engagement on this issue is still yet to be seen. Considering President Obama intends to stake part of his legacy on the success of the Paris Agreement, India’s ratification of the agreement this year will be important. We can therefore expect a diplomatic blitz on behalf of India in the final months of the Obama administration.