The Senate approval traverses a major hurdle towards India's ambitious plans to expand its nuclear generation capacity over the next decade.
The US Senate has approved the Indo-US Civilian Nuclear Agreement by an overwhelming majority. More importantly the Senate, which is still Republican-dominated as the newly elected members would take charge only next year, has passed the legislation without the suggested amendments which would have altered the nature of the agreement significantly.
The Senate passed the Bill by an 85-12 margin and rejected three amendments. The proposed amendments called for India to halt its military cooperation with Iran and stop production of fissile material besides requiring the US president to certify that India is not using US-origin equipment and technology to develop nuclear weapons.
However, the Senate passed an amendment, which requires the US president to confirm that India is fully and actively participating in international efforts to stop Iran from developing nuclear weapons.
The Bill was earlier passed by the US House of Representatives by a 359-68 vote and now has to be approved by a joint conference of the US Congress. Once that hurdle is also crossed, maybe by December end, the US president can sign the Bill into law.
The Indo-US Civilian Nuclear Agreement provides for increased nuclear cooperation between the countries and supply of nuclear fuel to India. In return, India has agreed to allow international inspections at its designated civilian nuclear installations and help in stopping the spread of nuclear weapons.
The agreement is widely seen as a formal acceptance of India as a member of the nuclear weapons club. It is also an acceptance of the country's civilian nuclear capabilities and its exemplary record in not allowing proliferation of nuclear weapons technology.
The US and other major countries had imposed sanctions against India after it conducted its second nuclear test in 1998, which prompted similar action from Pakistan. Gradually these sanctions were eased as India became more and more integrated with the world economy and emerged as the second fastest growing economy after China.
There was some criticism of the agreement as India is not a signatory to the Nuclear Non-proliferation Treaty (NPT) and has not given any commitment to cap its nuclear weapons programme. India is also not required to open its nuclear defence establishments for international inspections. Critics argued that agreements like this condone irresponsible behaviour and would encourage other countries like Iran to develop nuclear weapons.
The Senate vote was seen as a major test of the newly developing relationship between two of the world's largest democracies, which have become increasingly closer over the last decade, after many decades of mutual mistrust. Today, the US views its relationship with India as one with strategic significance. The two countries now regularly conduct joint military exercises and are believed to have started sharing intelligence as well.
US president George Bush, who is on his way to attend the APEC summit in Hanoi, has welcomed the Senate vote. "The US and India enjoy a strategic partnership based upon common values. Today, the Senate has acted to further strengthen this relationship by passing legislation that will deliver energy, non-proliferation, and trade benefits to the citizens of two great democracies. The agreement will bring India into the international nuclear non-proliferation mainstream and will increase the transparency of India's entire civilian nuclear programme," he said. The president added that he is looking forward to sign the Bill very soon.
Boost for power sector
For India to get the full benefits of the agreement, it has to be approved by the International Atomic Energy Agency (IAEA) and the Nuclear Suppliers Group (NSG). IAEA officials have been supportive of the deal and it is expected that the organisation would approve it.
The NSG is a grouping of countries, which produce and export nuclear fuel. Some leading members of the NSG like Australia are still not open to supplying nuclear material to India.
The deal is significant for the domestic power sector as the country would be able to procure scarce nuclear fuel from abroad. After decades of circumspection following the Chernobyl and Long Island accidents, most major countries are now planning more nuclear reactors to reduce the dependence on fossil fuels. Modern nuclear reactors are also considered to be far safer.
India has ambitious plans to expand its nuclear generation capacity over the next decade. The country is planning many new nuclear plants and may also allow private companies to set up nuclear plants. Companies like Tata Power and Reliance Energy have already said they would be interested in nuclear energy, if allowed. PSU power generation major NTPC also has plans to set up nuclear power plants in future.
The Indo-US deal is significant for the American corporate sector also. US-based companies like GE and Westinghouse (controlled by Japanese major Toshiba) are among the largest suppliers of nuclear reactor equipment and technology. They would definitely have an edge over rivals like French company Areva, when India floats tenders for nuclear reactors.