Reflections on the U.S. Proposal to Exempt India from NSG Guidelines

Last week, the Bush administration began circulating its proposal to exempt India from NSG rules barring nuclear trade with countries that do no accept full-scope safeguards over all of their nuclear facilities. Much like most other aspects of the U.S.-India nuclear deal, the proposal is a nightmare. As ACA Executive Director Daryl Kimball puts it:

The Bush administration’s proposed India-specific exemption is a nonproliferation disaster that could effectively end the NSG as a meaningful entity.

Amazingly (or perhaps more accurately, not surprisingly) the proposal is even weaker than the pre-decisional draft circulated by the U.S. in 2006. The Hindu’s Siddharth Varadarajan provides a nice summary of the key differences:

Gone is the paragraph calling on NSG members to strive for the earliest possible placement of all Indian nuclear facilities under international supervision. Gone also is the conditionality that had been built into the earlier draft, wherein nuclear sales were allowed so long as member states were satisfied India continued fully to meet its non-proliferation commitments. The proposed NSG exemption is still linked to India abiding by its commitments, but not in a way that could conceivably allow for immediate suspension of supplies in case an individual member believes India has reneged on its promises. Further, India’s adherence to future NSG guidelines has been qualified, albeit indirectly, by linking implementation to its participation in the decision-making process, and Indian access to dual-use items — regulated by Part 2 of the NSG’s guidelines — has now explicitly been brought in.

The draft guidelines do not exclude enrichment and reprocessing equipment. And they make no reference to a cut-off mechanism in case of any action by India, though there is a new reference to the maintenance of “contact and consultation” by NSG members “on matters connected with the implementation of the Guidelines taking into account relevant international commitments and bilateral agreements by India.”

India has demanded a “clean” and “unconditional” exemption and that is exactly what the U.S. proposal would give it. Of course, such an exemption flagrantly contravenes the conditions and restrictions contained in the Hyde Act. Which begs the question: Why has the Bush administration been so quick to cave to India’s demands? I’ve encountered four different interpretations (not all of which are mutually exclusive):

1. The Bush administration actually believes that the exemption is absolutely consistent with U.S. law.

2. Cognizant of the significant opposition to the deal within Indian domestic politics, the Bush administration is hesitant to do anything (e.g. insist that the terms of the exemption comport with the Hyde Act) that could compromise Prime Minister Singh’s tenuous hold on power or otherwise derail the deal.

3. According to diplomats from certain NSG member states, the Bush administration is circulating a weak proposal as “a tactical U.S. move to overcome India's aim to win a ‘clean and unconditional’ waiver by prompting resistance from NSG states.” Varadarajan also sees such a strategy at work.

4. The Bush administration is pushing for a clean exemption at the NSG as a way to force Congress to undo the conditions contained in the Hyde Act. The idea here, says Center for American Progress National Security Analyst Andy Grotto, is that “by getting the NSG to approve an exemption devoid of conditions, the administration sets up the Congress as the obstacle standing before American industry doing business with India while the French and the Russian nuclear industries go on a feeding frenzy there.” Thus, “there is no way the U.S. Congress will allow French and Russian companies to get all the contracts-and the Bush administration knows it.”

In any event, the proposal is generating strong opposition from several NSG member states. Here’s to hoping that it is enough to derail the deal.