Though the fifth round of strategic talks were held under the shadow of widespread resentment over snooping of Indian government and opposition leaders and India’s conditional rejection of the Trade Facilitation Agreement under the WTO, the two countries seem to have given a big push to nuclear cooperation both at the ground and at the strategic levels, which are expected to reenergise the Indo-US relations, lying dormant since last few years. With the green signal to commence the commercial negotiations for the two Gujarat based reactors, the bilateral relations seems to be back on track.

The ground for reenergising the relations were prepared during the Kerry-Sushma fifth bilateral strategic dialogue The six-year long logjam over the issue of nuclear liability law seem to have been removed, though, the two countries have not come out clean on this issue. However, the way the Indian government has surreptitiously announced the commencement of commercial negotiations for the two nuclear plants between US company Westinghouse and Indian NPCIL, has pleasantly surprised Indian strategic circles, as it has the potential of restoring the lost momentum in bilateral relations which were given a big push after the famous White House invite to Manmohan in November, 2009 when President Obama hosted his first State reception for a Head of State.

The decision to award the two US nuclear reactors to Gujarat, Narendra Modi’s home state is indeed significant, because of the fact that Modi’s BJP as opposition group in Parliament had staunchly opposed the nuclear deal with US. Now Modi seems to have reversed his stand and wants to be the first beneficiary of the Indo-US Civil nuclear cooperation agreement. On July 28, the Minister of State in the MEA General (Retd) V.K. Singh announced in Lok Sabha, which has went unnoticed till now by the discerning strategic community and the media. General Singh had informed the lower house of Indian Parliament that Commercial negotiations between Indian NPCIL and the American WEC regarding the setting up of two reactors are taking place. Giving the background of the negotiation Gen Singh informed that “The 123 Agreement between India and the United States concerning Peaceful Uses of Nuclear Energy was signed on October 10, 2008. Subsequently an ‘Arrangements and Procedures’ agreement has been signed on July 30, 2010. A Pre-early Works Contract has been concluded between Nuclear Power Corporation of India Ltd (NPCIL) and Westinghouse Electric Company (WEC) of the US for construction of two nuclear power reactors at Mithi Virdi in Gujarat. A ‘Revised and Restated Confidentiality Agreement’ between NPCIL and WEC has also been finalised to clarify information sharing mechanisms.”

Later after the Kerry-Sushma talks the two countries issued a detailed joint statement, which did not refer to the Gujarat reactors by name but expressed firm commitment to execute the 2008 civil nuclear cooperation agreement. The Statement said, “The leaders reaffirmed their commitment to the full implementation of the India-US civil nuclear agreement. They welcomed the authorisation to proceed provided to Westinghouse to implement the pre-Early Works Agreement with NPCIL as of September 2013. Both sides urged NPCIL and US companies Westinghouse and General Electric-Hitachi to expedite the necessary work to conclude pricing and contractual details. They looked forward to advancing the government-to-government dialogue and facilitating the establishment of US-built nuclear power plants in India. Interestingly Kerry-Sushma talks also resulted in a firm commitment from the US side to support India’s entry to restricted nuclear regimes of the developed countries. The joint statement affirmed that the two leaders reviewed efforts since November 2010 toward India’s phased entry into the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement and the Australia Group. Secretary Kerry reaffirmed the United States’ support for India’s membership in these groups and welcomed India’s recent decision to ratify its Additional Protocol with the IAEA. The two leaders supported an early conclusion to these efforts. If the US takes a lead in promoting India’s case for membership in these regimes, India can certainly raise its international stature.

Describing the strategic talks as positive Ambassador Surendra Kumar, Founding President of the Indo-American Friendship Association said that the meeting went on predictive lines. Big picture will emerge when the Obama-Modi September end summit will conclude with some big announcements. As far as commitment expressed in the joint statement on taking forward the Indo US Nuclear deal, Surendra Kumar opined that India will have to make its stand flexible on the Indian Nuclear Liability Law.

Probably, this has led to the two governments giving green signal to the nuclear power companies of the two nations the Westinghouse Electric Company and the Indian NPCIL go ahead with the commercial talks for setting up two reactors in Mithi Virdi in Gujrat. The site will have six to eight nuclear reactors of 1,000 MW each and will entail investment of over $30 to $40 billion in the coming decade if the deal is finalised during the Modi regime.

This will strongly tie the two nations for decades to come and will probably lead to the conclusion of the Indo-Japan bilateral nuclear cooperation agreement without which US and French nuclear reactors cannot be established in India as most of the nuclear equipments are supplied by the Japanese companies Hitachi and Mitsubishi. The Japanese government is also aware of the fact that if the nuclear agreement is signed with India, it will revive the dwindling Japanese economy, still suffering from Fukushima disaster.

The Mithi Wirdi nuclear park allotted to the US Westinghouse in Gujarat, will station six to eight nuclear reactors, depending on the experience, will attract a further investment of $30 to $40 billion for the Andhra Pradesh reactors. The another site in Andhra Pradesh has been allotted to the General Electric (GE) company, with which negotiations are yet to commence. Probably this will be initiated after the Westinghouse contract is finalised. The Mithi Wirdi reactors agreement will act as template not only for the GE but also for the reactors from other countries. It is not clear how the Nuclear Liability Law will apply on the under negotiation nuclear reactors. When specifically asked, the spokesman of the External Affairs Ministry Sayed Akbaruddin said, “We already have our liability regime which is approved by the parliament. All that can be done is within the four corners of the legislation approved by the Parliament, the government of India can act. Our view has always been that our liability laws are not a hindrance to any investment in nuclear energy. And that is demonstrated by us already signing Kudankulam 3 and 4.

Thus decks seem to have been cleared for a deeper strategic partnerships between the world’s oldest and world’s biggest democracies who have common interests to safeguard from South China Sea to Afghanistan. An aggressive China requires the coming together of likeminded nations to protect their strategic, economic and national interests but India will have to formulate the contours of strategic partnership with US in a manner that does not give an impression that India has joined the anti-China alliance and has become a camp follower of the White House.

It is well understood by the strategic community that John Kerry visited India to revitalise ties as it sees India as a counterbalance to China’s rising power but rapid progress seems difficult in view of India’s confrontationist stand in WTO and the suspicion US has created in Indian mindset through its NSA surveillance programme.