Why is NSG membership important for India?

If you have been following the political news at all in the last week of June, you would be aware of India’s failure to secure admission to the NSG, or ‘Nuclear Suppliers Group’. Between the demonization of China and the crowing of those who see in this only a diplomatic failure, an understanding of what the NSG is and why it is important to India is being missed somewhere.

Firstly, we need to understand that the NSG was formed in 1974 specifically in order to isolate India after we had conducted the Nuclear Test (supposedly ‘peaceful’, but no one outside India actually believed that) in Pokhran. The entrenched nuclear powers felt that India had violated international norms by conducting such a test, or rather by obtaining the materials necessary to conduct it. Therefore, they formed a cartel of countries that had the technology and raw materials required for creating viable nuclear power, whether for weapons or for power generation, trying to ensure that only ‘friendly’ countries had access to this technology.

The main reason why India is not considered a part of the privileged group of countries has been our consistent refusal to sign the NPT (Nuclear non-proliferation treaty). Signing this treaty would mean a commitment not to weaponise nuclear technology. This is a commitment India is not willing to make as long as it is surrounded by hostile countries. The NSG, on the other hand, has made membership of the NPT a requirement for membership under its guidelines.

If India is able to obtain membership of this group of 48 countries, it will derive the following advantages:

1. It will become a player in the international market for nuclear supplies including technology

2. Needless to say, this will give a boost to Indian manufacturing as well as the ‘Make in India’ strategy.

3. At the moment, though India has the technology, it lacks the raw materials to harness nuclear power in a viable manner to be used for power generation. Such little supplies as we are able to garner are no doubt diverted for defence use. In the absence of a continuous supply of raw material, it does not make sense for India to invest heavily in power generation using nuclear power. As a part of NSG, India could easily import the necessary raw materials from supplier countries.

4. Presently the technology being used by India is indigenously developed, which while commendable, is not as efficient for power generation as that being used by other countries like Japan and Germany and USA. Having access to the same is only possible of India becomes a part of the NSG.

In the event, however, India has been unable to obtain membership of this group, despite the best efforts of our Prime Minister. It is unfortunate that not only China, which has it’s own vested interests in denying India the membership, countries like Mexico, Switzerland and New Zealand also backtracked from their commitments, assuming they had made any (we really only have the word of the Government for it).

That being said, it is important to remember than India does have a waiver for trading with members of the NSG without full membership. It has been in place since 2008, a deal that was clinched by the UPA government in what was seen as a major diplomatic achievement at the time (though it seems to have been forgotten now). Neither is it realistically likely that even with NSG membership, any member countries will actually transfer technology to India.

Nonetheless, it is a diplomatic loss for India, and it has now become more than ever a matter of India’s prestige. It can be hoped that in subsequent rounds of negotiations, a consensus is reached and India does become a part of this elite group.

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Kunal is an ex-banker with a (largely self-proclaimed) flair for writing. He is an associate member of the Institute of Chartered Accountants of India and an MBA from Narsee Monjee Institute of Management Studies (NMIMS), Mumbai.


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