I welcome this opportunity to present to such a distinguished audience some views on issues relating to nuclear non-proliferation and international security. At the outset, I would like to thank the Institute for Defence Studies and Analyses (IDSA) for inviting me to deliver this address. The Institute has a well deserved reputation as our premier strategic think tank and quite appropriately, they have focused on a subject that not only has a strong contemporary relevance but represents a long term challenge for India and the international community. There is a vigorous, and in my opinion, a healthy debate underway currently on a range of issues that relate to different facets of this subject. A number of recent developments including the Next Steps in Strategic Partnership (NSSP), the July 18 Agreement with the United States, the September vote in the IAEA and the recent deliberations of the NSG have contributed to that. While connecting the common threads, it is our case that India’s approach to nuclear non-proliferation has been a consistent one, a principled one and one grounded as much in our national security interests as in our commitment to a rule-based international system.

Commitment to Non-Proliferation

India’s commitment to nuclear non-proliferation is not new. Indeed, this is an area where we can truly claim to be among the founding fathers! The Indian leadership, particularly Jawaharlal Nehru, was among the first in the world to appreciate the dangers that nuclear weapons posed to humanity. As with the rest of the world, our understanding of the complexities of the challenges posed by nuclear weapons developed over time. Initially, Hiroshima and Nagasaki were responsible for a strong sense of moral outrage at a weapon of mass destruction. It took the Bikini atoll tests and the fate of the Japanese vessel The Fortunate Dragon to dramatize the dangers of radioactivity. As the number of nuclear weapon powers increased, and their rivalry acquired an increasingly adversarial character, there was a growing realisation of the political, military and eventually even existential nature of the problem. At the same time, nuclear technology offered a promise of development that could not be ignored, least of all by a society emerging from colonial rule and seeking to leapfrog in its development process. Bilateral cooperation programmes and the Atoms for Peace contributed to the spread of nuclear technology and its increasing application for power generation and other civil purposes. These two competing trends created the dilemma of how the benefits of the technology could be best harnessed without adding to the security challenges inherent in that spread. That is an issue that still confronts the international community and is one that is not confined to nuclear technology alone.

The initial debate about the control of nuclear weapons and technology focused on four issues: cessation of nuclear testing, creation of nuclear free zones, the problem of sharing nuclear weapons particularly within alliance structures, and the possibility of renunciation of nuclear weapons by nations that had not yet produced them. India took a position on each one of these issues, arguing strongly in favour of restricting both the spread and quantum of nuclear weaponry. Pandit Nehru’s call in 1954 for a ‘standstill’ to nuclear weapons tests and then for a test ban began a process that eventually led to the 1963 Partial Test Ban Treaty. En route, this debate also produced the 1959 Antarctica Treaty that created a nuclear free zone on that continent. The application of a nuclear free zone in other areas was not deemed viable by India given the proximate location of nuclear weapon powers, a position that continues to this day. The sharing of nuclear weapons, a prospect that seems so ludicrous today, was a serious possibility in the 1950s and 60s, and sharing of weapon technologies had actually taken place. India’s position was one of firm opposition, and this eventually became a global norm. It was the renunciation of nuclear weapons that became the most contentious issue in the non-proliferation proposal debate.

In 1956, India proposed the international control of military reactors and then co-sponsored the non-proliferation proposal in the United Nations. Nehru prophetically warned the world as far back as 1957 not only of nuclear proliferation but of connected dangers of terrorism. But from being an early and enthusiastic supporter of this concept, Indian reservations deepened as it watched the evolution of an international treaty conspicuously lacking, despite its strong urging, in a mutuality of obligations between the weapon states and non-weapon states. Finally, as you are all aware, India chose not to be a party to the NPT, precisely because of its inherently discriminatory nature.

This history is worth recalling, if only for the reason that it demonstrates that India had sensitivities about nuclear weapons from the very inception of that technology and that these were reflected in its approach to international security. In fact, India was prepared to advocate bold and radical measures to prevent the spread of nuclear weaponry, some would argue even at the cost of its own interests. Today, when other countries speak about non-proliferation, it may not be out of place to remind ourselves that our activism in this regard well predates the NPT. Developments since 1968 only further underline India’s non-proliferation credentials. Unlike some other states who eventually joined the NPT, India did not undermine the NPT even though it differed with many of its premises. At no stage did we support irresponsible theories that projected nuclear proliferation as a new version of balance of power. India, in fact, scrupulously followed all the basic obligations of an NPT member, resisting suggestions for nuclear cooperation that could have had adverse implications for international security. Indeed, in the four decades since NPT, our record contrasts favourably with NPT members, even of the weapon state category, some of whom encouraged and abetted proliferation for political or commercial reasons. Our export control performance during this same period also contrasts favourably with those of many developed nations who could not stop their companies from supporting clandestine WMD programmes. At a policy level, this was an important component of a larger commitment to disarmament enunciated most notably by Prime Minister Rajiv Gandhi’s 1988 Action Plan. As you are all aware, the indefinite extension of the NPT and the enactment of the CTBT finally compelled an exercise of the Indian weapon option in 1998.

Responsible Nuclear Power

As a responsible nuclear weapon state, we are even more conscious of our obligations to the international community on the control of WMD technologies and their delivery systems. This appreciation has guided many of the policy initiatives undertaken in recent days, but this may be an opportune occasion to spell out India’s current approach to global nonproliferation and international security, particularly as it has evolved since India’s emergence as a Nuclear Weapon State in May 1998. The key components of this approach are :

• While India is a Nuclear Weapon State, it remains committed to the goal of complete elimination of nuclear weapons. The model that could be followed in this regard is the Chemical Weapons Convention, which is both multilateral as well as non-discriminatory in the rights enjoyed by, and obligations it imposes, on parties to the Convention. We continue to believe that the best and most effective nuclear non-proliferation measure would be a credible and time-bound commitment to eliminate nuclear weapons from existing arsenals, including India’s own nuclear weapons. We have no desire to perpetuate the division between nuclear-have and havenots.
• A new global consensus on non-proliferation is called for, taking into account the new challenges that have emerged since the Nuclear Non-Proliferation Treaty was concluded. Clearly, some NPT members, both Nuclear Weapon States and non-Nuclear Weapon States, have not adhered to the provisions of the Treaty and this requires global norms that go beyond the NPT. For example, India has agreed in the Indo-US Joint Statement of July 18 that it would not transfer reprocessing and enrichment technologies and would support international efforts to limit their spread. We have accepted that a new global consensus would have to be based on new and more rigorous standards being observed in export controls on sensitive technologies. India has signaled its willingness to be part of this consensus by adopting a very comprehensive WMD Export Control legislation and harmonizing our export control lists with those incorporated in the Nuclear Suppliers Group (NSG) and Missile Technology Control Regime (MTCR) guidelines. This has enabled us to fulfill the obligations prescribed in the UNSC Resolution 1540.
• We believe that States should adhere to the commitments that they have made under international treaties and instruments and must be transparent in fulfilling their commitments. We are unable to accept as legitimate the pursuit of clandestine activities in respect to WMD related technologies. Our own security interests have been seriously undermined by the clandestine nuclear weapons programmes in our neighbourhood aided and abetted, or at the least, selectively ignored by some NPT signatories themselves. In seeking clarity on such clandestine activities, the international community must focus not merely on recipient states but on supplier states as well; otherwise our global non-proliferation effort would be undermined by charges of motivated selectivity and discrimination. With respect to the Iran nuclear issue, we welcome Iran’s cooperation with the IAEA in accounting for previously undeclared activities, but it is important that remaining issues which involve the Pakistan-based A.Q. Khan network are satisfactorily clarified as well. We see no reason why there should be an insistence on personal interviews with Iranian scientists but an exception granted to a man who has been accused of running a global ‘nuclear Wal-Mart’. These aspects must surely be considered for an objective assessment on this question.
• For the future, we believe we have the responsibility and the capability to participate fully and actively in global R&D efforts to evolve proliferation-resistant nuclear technologies, which enable us to derive the full benefit of nuclear energy, minimizing the risk of diversion to military uses. There are two critically important projects in which some key countries with advanced nuclear technology are members. One is the International Thermonuclear Energy Research (ITER) project, which is aimed at development of energy through nuclear fusion. The EU, US, Russia, China, Japan and South Korea are partner countries, and India is likely to be invited soon to join as a full partner. The other is the U.S.- led Generation IV initiative, which aims at creating reactor prototypes that are not prone to proliferation. India looks forward to join this cutting-edge effort as well. In both cases, India’s participation is welcomed not only in recognition of its advanced capabilities but also its record as a responsible nuclear state.

Dealing with Misperceptions

If you look at India’s recent actions against the backdrop of this approach, then a great deal of the apprehension and negative perception about India’s nuclear policy, would appear misplaced.

• First, there is a continuity and consistency in our approach that may sometimes be masked by the particularities of a specific decision;
• Secondly, what appears to some observers as inordinate external influence over our decision-making in sensitive areas is, in fact, rooted in our own well-considered and independent judgement of where our best interests lie. This is in keeping with our tradition of non-alignment;
• Thirdly, we must adjust to change, change inherent in our emergence as a Nuclear Weapon State, change inherent in the sustained dynamism and technological sophistication of the Indian economy, and, as a consequence, change in global expectations of India as an increasingly influential actor on the international stage.

Since 1998, a key challenge to India’s foreign policy has been to seek global recognition and understanding of its impeccable record on nonproliferation despite its decision to acquire nuclear weapons. This recognition is important though some may not see it that way. We live in an increasingly globalised world and as India’s economy shifts towards greater technological sophistication, it will need access to cutting-edge technologies in virtually all fields. In each of the recent initiatives India has taken, whether the NSSP, the July18 Indo-US Joint Statement, the applications to participate in ITER and Generation IV, Glonass and Galileo Satellite Navigation Systems, the Indo-U.S.Space Launch Agreement, and several others, this technological compulsion has been a major consideration. These would not have been possible, and India could have remained in a technological strait-jacket had it not backed up its commitment to non-proliferation with the adoption of global norms as has been done by other states with advanced nuclear technology. The cumulative results of the steps we have taken, such as enactment of the WMD Bill, the upgradation of the national export control lists so as to harmonize them with those of the NSG and MTCR, the proposed separation of our civilian and military nuclear facilities and the negotiation of an Additional Protocol with the IAEA, is to increase the confidence of the international community in the robustness and effectiveness of our export control systems making us a more viable destination of advanced dual use technologies. With the US, there is already a more liberal and predictable licensing of dual use technology for Indian industry.

Indeed, we have a situation today where the Government has created a favourable enabling environment and it is our end-users who should display greater vigour in taking advantage of resultant opportunities. China, with a much less favourable licensing regime, imports ten times the dual technology that we do from the United States. For our space and nuclear industries, the completion of NSSP resulted in the removal of many of our organizations from the Entity List, with consequent licensing benefits. Some organizations remain listed and we continue to work for their removal. The ‘NSG plus’ and ‘MTCR plus’ restrictions that were in place were also done away with. The space industry today is permitted direct cooperation for developing, producing, marketing and operating US commercial satellites and those of third nations that contain US origin components. It created the basis for discussions that we have currently on the conclusion of a bilateral space launch agreement with the US. It has also contributed to a useful dialogue on the subject of missile defence.

What does the international community gain in making an exception to the current regulations for India? How do we answer the proponents of the current global non-proliferation regime, who see the exception being made for India as the unraveling of this regime?

The exception for India is rooted precisely in its record on nonproliferation, even though it is not formally a member of the NPT. It is significant to note that the Indo-US understanding in civilian nuclear cooperation is prefaced by President Bush conveying his appreciation for India’s strong commitment to preventing WMD proliferation. He has acknowledged India as a responsible State with advanced nuclear technology. There is today no other State, which has this record of responsibility and is still denied non-discriminatory access to civilian nuclear technology, Secondly, our export controls are today at global standards and our policy of non-transfer of re-processing and enrichment technologies, in fact, put us in an “NPT plus” category, Thirdly, in considering its approach towards the resumption of full civil nuclear energy cooperation with India, the international community has to ask itself whether India is a partner or a target for the global non-proliferation regime. It clearly cannot be both at the same time. Our view is that India’s commitment and India’s record points to it being a partner. Technologydenial regimes that treat India as a target must, therefore, be abandoned, Fourthly, the international community also needs to ask whether the global non-proliferation regime is better with India inside the tent or outside. As a corollary, will civil nuclear cooperation with India strengthen the nonproliferation system or weaken it? Obviously, we cannot be inside the tent if we do not measure up to the required norms. We, of course, are convinced that we do, for the reasons that I have already enumerated.

The New Context

India is today a rapidly expanding industrial economy with a wide array of technologies that are relevant to proliferation. That in itself makes a case why our export controls and their effective implementation will matter more and more for global non-proliferation efforts. As a nuclear weapon state, our support for international norms is critical for their success. But it is not only in our controls and restraint that we can make a difference. The time when NPT was regarded as self-enforcing is long past. The spread of technologies cannot be controlled by cartelisation alone. There are enough examples to show that commercial and political incentives can defeat that. The challenge that the world currently faces requires more active endeavours. This is particularly so as the dangers of non-state actors acquiring nuclear weapons have given the WMD threat an added dimension. UNSC Resolution 1540 is one example of the global community’s response. There are others, among them a combination of national and trans-national efforts. The Container Security Initiative and Proliferation Security Initiative are two such examples. Advocates of nonproliferation must seriously examine whether the support of India towards global efforts is to their advantage. That support is difficult to muster if India perceives itself as unfairly treated despite its demonstrated commitment to a rule bound system.

A word about separation of our civilian and military nuclear facilities. Some non-proliferation advocates contend that since it is India which will determine what is civilian and what is military, this would open the door for flouting non-proliferation norms. This betrays a lack of understanding of the July 18 Joint Statement. The Indo-US Agreement is not about India’s nuclear weapon programme. It is about civilian nuclear energy cooperation. The objective of the agreement is to advance India’s energy security through full civilian nuclear energy cooperation. It is legitimate for our partners to expect that such cooperation will not provide any advantage to our strategic programme and hence the need to separate it from our civilian nuclear sector. But it makes no sense for India to deliberately keep some of its civilian facilities out of its declaration for safeguards purposes, if it is really interested in obtaining international cooperation on as wide a scale as possible. This would be quite illogical.

India is poised today to enter a new phase in its foreign policy. We aspire to be a permanent member of the Security Council. We are demonstrating a growing capability to shoulder regional and global responsibilities. Our focus is increasingly on trans-national issues that today constitute the priority challenges – whether it is terrorism or proliferation, pandemics or disaster relief. We cannot sit out the debates on the big issues of our times. Our interests demand a vigorous and articulate diplomatic effort that explains our positions and advances our interests. Nonproliferation is one area where we have a record to be proud of and I would conclude by emphasizing that it has been and will remain one of our principal contributions to international security.

Bangladesh’s relations with India are multi-dimensional - ideological, political and also economic. An extreme sense of distrust, insecurity and perceived domination by India has shaped Bangladesh’s foreign policy in recent years. It at the same time, hesitant and finds it uncomfortable to function within a bilateral parameter. Whether it is trade, export of gas, provision of transit or the water issue, Bangladesh has argued for multilateral arrangements. Though India played an important role in the creation of Bangladesh, it is primarily seen by the political class in Dhaka as a concern due to its overwhelming size and presence but more importantly because of the nature of domestic politics of the country. A divided polity polarised on ideological lines and an extremely sensitive political atmosphere has made Bangladesh’s relations with India subject to domestic dynamics.

Understanding the inner dynamics influencing the ongoing process of economic reform in China, especially the flexibility achieved by government bureaux is important for strategic policy makers in India. The brief study seeks to determine the relationships of dominance, correspondence, and contradictions as well as the direction of influence, the sequencing between government bureaux, and the end results of their joint operations by applying the micro-macro linkage approach. The dynamics of foreign economic policy-making, are revealed by the mutual influences as well as the channels and mechanisms between and among the micro and macro-level elements.

India’s September 24 vote in the International Atomic Energy Agency (IAEA) supporting the resolution moved by Britain, France and Germany (EU-3) on Iran’s nuclear programme has a raised a significant debate within the strategic studies community on the value and wisdom of the policy stance. While some commentators have accused the government of compromising the country’s established nonaligned stance and tilting towards the Western powers, most others have seen it as a clear stance on non-proliferation at a time when India is seeking to engage the major nuclear powers on cooperation on nuclear energy and nonproliferation. The vote has inevitably been linked to the July 18 Indo-US Agreement on nuclear energy cooperation and the consequent requirement that the US Congress approve the changes in laws so that the agreement can be implemented. The question has also been raised whether India’s vote reflected a considered position on the basis of the merit of the Iranian case or was aimed at influencing US Congressional opinion.

India’s Rationale

A closer reading of the Indian vote reflects a more circumspect posture than the debate so far would suggest. While the EU-3 resolution reflects the IAEA Director General and the Secretariat’s concern that Iran is not in full compliance with the agency’s safeguards norms and that it had breached its commitments on transparency and reprocessing, as required under the Safeguards system and the Additional Protocol, the Indian position only partially shared such a view. The Indian vote was accompanied by an explanatory note that stated the resolution was “not justified in finding Iran non-compliant in the context of Article XII-C of the IAEA statute” since it recognises that “good progress has been made in Iran’s correction of the breaches and in the Agency’s ability to confirm certain aspects of Iran’s current declarations.” However, it agreed with the resolution that the matter should not be immediately referred to the United Nations Security Council, more time needs to be given for diplomacy to succeed, and that Iran and IAEA need to work together to resolve all differences regarding transparency, and compliance commitments. A key objective of the Indian effort, as repeatedly stated by the government, was to de-escalate the situation, and promote dialogue and consensus building.

In terms of diplomacy, the vote is, of course, a clear statement of the dominant view within the country on non-proliferation and the need to pursue a foreign policy based on national interest in a distinct departure from an essentially value-determined posture characteristic of its past practice and policies in such matters. While the earlier stance, rooted in basic principles of disarmament and a critique of two-layered global power system, may have to an extent suited its foreign policy interests at a time when it had serious differences with the US, Europe and Japan on arms control, technology controls and sanctions imposed on India because of its nuclear weapons programme, that situation has dramatically changed following the Indian nuclear tests of 1998 and the July 2005 Indo-US nuclear agreement. There is a realisation — reflected in the Foreign Secretary’s October 24 speech to the IDSA in New Delhi (carried in this journal)— that principles now need to be interpreted to serve practical goals. Therefore, the stress on India’s strong commitment to nonproliferation on the one hand and on the other, the simultaneous emphasis on the need to pursue an interest based foreign policy in the new historical context. As many other states have long recognised there is often a tension between value based basic principle and the practical needs of the pursuit of strategic goals and interests, and this will be reflected in the political struggles within the country. India is clearly entering a new phase when foreign policy consensus will be at times difficult to build and there will be significant divergences on interpretation of national interest within the political class.

The Indo-US agreement itself is rooted in three positions: the Indian commitment on non-proliferation reflected in its decision not to transfer reprocessing and enrichment technologies and to support international efforts to limit their spread; the US recognition of that well-established principle, and the US commitment to undertake changes in its laws and international rules to facilitate nuclear energy cooperation with India. As a result of the dialogue with the US on nonproliferation, technology controls and energy cooperation, the Indian government has strengthened its export control regulations, and announced a firm non-proliferation policy that has been pragmatically de-linked from its basic position on disarmament. The Indian vote in Vienna has to be placed in this context. India, as its explanatory note states, recognizes Iran’s right to pursue a peaceful nuclear energy programme, calls upon it to adhere to its nonproliferation commitments, and welcomes its cooperation with the IAEA. No ambiguous and confusing signals therefore have been sent to either the US or Iran. If they had been the country would have lost in terms of its ongoing dialogue on nuclear issues with the US and Europe, and would have compromised its interests with Iran.

The Indian vote in favour of the September 24 IAEA resolution was of course in keeping with the position taken by the overwhelming majority (2/3rd) of the board members. Only one country opposed the Resolution (Venezuela). The 12 countries that abstained –including Russia, China, Brazil, South Africa, Malaysia and Pakistan – have neither supported nor opposed the resolution. In so doing they have allowed the Resolution to go through. None seemed to have favoured the Iranian position, or disagreed with specific points made on Iranian noncompliance. They also allowed the point made in the resolution that the situation is serious enough to deserve a reference to the UNSC to go through. These countries opted not to be part of the controversy, and almost all of them seek a solution within the IAEA. Both China and Pakistan have officially stated that they are against referring the problem to the UNSC where it is likely to become conflictual. In fact, the Resolution too sets no deadline for a reference to the UNSC and states that the matter will be revisited in November 2005 by the IAEA.

Russia and China are both members of the UNSC and by abstaining they made a political statement of not being in agreement with the EU and the US. Both have large interests in Iran. Russia is constructing a one billion dollar nuclear power plant in Bushehr and has long opposed any escalation of the standoff over Iran’s nuclear programme. However, its abstention on a resolution that it has not opposed and which is in tune with its basic position that consensus should be built and the issue should not be transferred to the UNSC at this point results from a ‘wait and see’ approach. By abstaining they avoided taking a position on the need for greater Iranian transparency than required under the IAEA safeguards system and Additional Protocol to the NPT. Both the countries also sent an unclear message to the 24 countries that supported the resolution (including the EU-3 and the US) about how the global system should deal with the issue of nonproliferation. The serious crisis over the North Korean nuclear issue–often threatening the outbreak of a war on the Korean Peninsula that would have dragged all major powers into a general war – cannot be allowed to be repeated in the Iranian and Gulf context. The costs to the world, including India, would be unsustainable. From this perspective, the abstention by Russia and China has not helped build confidence and consensus.

From an Indian perspective, the Iran vote cannot be seen in terms of a new global divide between the West and the Nonaligned. The nonaligned cannot be deemed to be a new pole – a clear contradiction in term. As indicated by the vote the developing countries are divided on the matter between support and abstention. Barring Venezuela, no other country supported Iran or opposed the IAEA resolution. There is no unified nonaligned position either. Malaysia –which heads the current nonaligned secretariat – does not speak on behalf of all the others in the absence of a unified Non-aligned resolution. Moreover, Iranian or North Korean noncompliance with their commitments under the IAEA or the NPT cannot be made a cause celebre by the Non-aligned states, all of whom, barring India and Pakistan, are part of the NPT system.

The Resolution accepts the Iranian position – and has the support of India and several other developing countries – that countries must have access to nuclear technology for peaceful purposes such as power generation. However, it also says that this has to be married to Article 1 and 2 of the NPT, or the compliance requirements under the treaty and the IAEA arrangements. Iran cannot expect to get such international cooperation without compliance, and is entitled to receive such technical help under safeguards once these concerns have been satisfactorily dealt with. In effect, the international system needs a new deal on the nuclear issue – something that has become evident from the problems and divergences that have crippled NPT Review conferences for some time now. It is a deal that would have to bring together satisfactorily the urge among some of the NPT members of the developing world to have international cooperation in nuclear energy and the security issues of nonproliferation that is the major concern for others within the NPT system, especially the United States.

The Role of Pakistan and China

Pakistan and China of course have been for many years involved in helping Iran with both its nuclear and missile programmes. There are extensive reports of the involvement of the A Q Khan clandestine network in illegal nuclear transfers to Iran that involved critical blueprints, technology and components for Iran’s centrifuges. Before the IAEA probe began in 2003, Iran conceded to the agency that it had received “crucial help from Pakistan.” Iran told IAEA inspectors once the investigation began that it received design plans for centrifuges in 1987 from Pakistan, and the transfer of technology appears to have continued for several years. The A Q Khan transfers continued between 1989 and the late 1990s.

As for China, it had through the 1980s and 1990s not only “helped Iran move towards becoming self-sufficient in production of ballistic missiles,” but had also supplied it materials for its nuclear programme. A US State Department report— corroborated later by Iranian officials— said that China supplied Iran one tonne of UF6 (uranium hexafluoride— meant for enrichment of uranium for centrifuges), 400kg of UO2 (Uranium Dioxide) in 1991. While enriched uranium can be used for both peaceful and weapon purposes, the supplies were not declared to the IAEA at that time, creating doubts about Iran’s aims. The Chinese supplies of nuclear reactors, nuclear and ballistic missile technologies had to be officially cut off following a US-China agreement in the mid-1990s under which the US promised not to supply certain categories of weapons to Taiwan in return.

China and Pakistan therefore have invested in their relations with Tehran and have high stakes in it. The Iranians see the Chinese relationship as a major factor of their strategy for dealing with the US pressures and sanctions. China is poised to replace Japan as Iran’s biggest customer of oil, and currently imports 14 per cent of its oil from Iran. In 2004 China signed a multi-billion dollar deal for LNG supplies over a 30-year period. The state-owned Sinopec oil company has acquired a 50 per cent stake in Yadavaran oil field. Much like India, China has also simultaneously developed strong ties with Saudi Arabia— its other major oil supplier in the Gulf. However, a consequence of China’s growing stakes in Iran would be a posture that seeks to protect Iran from the increased diplomatic pressures that may be generated if the issue is referred to the UNSC. China is not keen to make hard choices between Iran and the United States both within the IAEA and the UNSC and therefore is likely to abstain as it did on the Iraq issue. Most countries within the IAEA — Europe, India, Russia, China — are likely to oppose any generalized UN sanctions on Iran as it would hit their interest.

A China-Pakistan-Iran nexus however is not in India’s interest and it would have to take appropriate steps to neutralise it. Clearly, India needs to continue to engage Iran as well as initiate an active regional diplomacy that builds ties across West Asia, and with the US, Europe, Russia and Japan – major powers that have large stakes in the stability and security of the region— to preserve India’s long term regional security and energy interests. Current Indian trade with Iran is around $ 3.5 billion – a little lower than the Iran-China trade ($ 5 billion) and nine times higher than that between Iran and Pakistan. It is therefore not as if India does not have economic leverages.

The Political Challenges

The domestic critics of the Indian vote have argued that India’s stance is a reflection of its growing ties with the United States, and marks a fundamental shift in its nonaligned foreign policy. India’s IAEA vote however must not be made – as the critics have sought to do — a litmus test for India’s ‘independent foreign policy’. Nor must the pursuit of interests with the US be pitted against India’s interests with Iran. A specific policy posture in response to a well-considered position is as much a reflection of independence, as in opposing a position. The political divisions are inherent as mentioned earlier in India’s attempt to pursue an interest based foreign policy tied to certain specific needs – technology, energy cooperation, stronger ties with US, Europe, Russia and Japan; greater involvement in nonproliferation efforts, entry into the UNSC as a permanent member — that others believe contradicts their notions of ‘nonaligned’ principles and interests. There is clearly an ideological divide between the mainstream and the ‘left’ in India on this issue that has not gone away despite the government’s efforts to bridge the gap.

Iran does not represent an opposite pole to the US or the West, around which India has to rally. It is a regional power in the context of the Gulf with which India has interests but these interests are not in any manner more important than India’s extensive and growing interests with the US or Europe, or in working with global institutions, and in strengthening norms that enhance peace, security and conflict resolution. In criticizing the Indian vote as a sell out to the US, the critics make a case that would be unacceptable to any responsible government in New Delhi—treat the US as ‘imperialist’, do not build strategic ties with it, do not have nuclear and technology cooperation, do not agree with it on cooperation on regional and global security, or on energy. This is politically, economically and in security terms unacceptable and would be detrimental to the country’s interests.

The current Iranian nuclear posture is quite hazy. It has on the one hand stated that it does not want to build nuclear weapons. On the other its search for reprocessing and enrichment capabilities and technologies, and its lack of transparency in this regard for several years has led to questions regarding its intentions. A potentially nuclear Iran is likely to seriously complicate the security environment in West Asia and is unlikely to be in the security interest of the region. Such a development can heighten tension not only between the US and Iran, but also between Iran and the Arab world—especially Saudi Arabia, and between Iran and Israel. The effect would be severely felt on the stability, security and price of energy supplies, on global trade, and on the region’s states and peoples already hit hard by terrorism, conflicts and wars in Iraq and Palestine, and the large international community living in the Gulf and West Asia, with Indians being by far the largest. In short, India has reasons to be disturbed about such an outcome.

India’s stance therefore is not going to be unpopular in West Asia and Central Asia whose security would be affected if Iran were to either withdraw from the NPT or renege on its safeguards obligations under the IAEA. In other words, there is no single developing world perspective on the Iranian nuclear stance — positions vary across regions depending on the ties with Iran and the security consequences of its nuclear posture.

Prospects

Iran is not a strategic ally of India. It has not been really supportive of India on two of its core national security issues that have politically and diplomatically been so demanding: Kashmir and the nuclear question. Yet, India has had deep civilisational ties with Persia and has strong geopolitical, energy, security interests in modern Iran. It is keen to enhance these ties. Iran is also India’s bridge to Central Asia with projects planned to enhance port, trade and railway links. In June 2005, before the present government led by Mahmoud Ahmadinejad took over in Iran, New Delhi had signed an agreement to import 5 million tonnes of LNG per annum beginning 2009. The agreement is yet to be ratified by the board of National Iranian Oil Co, the firm that will execute it. But the Indian Petroleum Minister does not anticipate a problem on that front. He has been negotiating the price for a further 2.5 million tonnes of LNG supplies. Iran, Pakistan and India are continuing negotiations on the proposed 2,400-km pipeline and hope to finalise a tripartite agreement by the year-end for the project to take-off. Also, India has just acquired a 20 per cent stake in the Yadavaran field, which will be impacted if sanctions are imposed (as in the case of India’s stakes in Iraq oil fields after sanctions were imposed on Iraq).

Would the Indian vote have an impact on economic and other ties with Tehran? It will be difficult for Iran to withdraw from LNG and gas pipeline commitments once they are in place. Gas related investments are tied with the consumer and cannot be switched around. Also, the gas market unlike the oil market is not tight and there are others potential suppliers such as Australia for LNG to India. In any case India needs to seriously pursue gas supplies from Myanmar, Australia and possibly Indonesia. Disruption in oil supplies from Iran could also be met through diversification —from Africa, Latin America, Australia and other West Asian countries. But there could be an initial adverse price impact on the economy.

India’s vote for the IAEA resolution initially touched a raw nerve among some of the conservative politicians in Tehran. The knee jerk reaction by the Foreign Ministry spokesman Hamid-Reza Assefi too was critical of India and provocatively threatened to link Iran’s economic ties with voting behaviour. But Iran’s chief nuclear negotiator Ali Larijani cooled down the threats to drop all international nuclear commitments as well as the economic gesticulations. “India is our friend and we are therefore especially disappointed. But one incident should be no criterion to judge our friends,” Larijani said. Iran has major energy and petrochemical interests with India, and also needs to maintain strong and friendly ties with this major Asian power that has strong ties with the West Asian region.

Having taken a considered position in Vienna on Iran’s nuclear obligations, it would be a diplomatic folly if India were to back track because of pressures from Iran or domestic constituencies that take a highly ideological view of foreign policy. The onus is on Iran to sort out all misgivings with the IAEA over the next few months constructively, and on the US and the EU to respond positively. While India’s ties with Iran are important, its nuclear nonproliferation stance as well as its emerging ties with Europe, US, Japan in the areas of nuclear and defence cooperation, technology controls are far more significant and on the anvil of a qualitative change. The Indian position on all foreign policy issues therefore has to be based on merit and assessment of specific goals and interests. It cannot be made a prisoner of its Iran policy or the domestic ideological debate if all issues between IAEA and Iran are not resolved by November.

India nonetheless has high diplomatic stakes in preventing a breakdown of diplomacy between Iran and the EU-3. It is not in India’s or anyone else’s interest to have UN sanctions on Iran that will destabilize oil prices and severely hit the country’s energy interests. Sanctions any way are unlikely to work and will only worsen the tensions. The fall out of a military conflict too would be disastrous and uncontrollable as the Iraq case reveals. The US clearly understands the consequences. Secretary of State Condoleesa Rice in her joint interview with British Foreign Secretary Jack Straw told the BBC on October 23, 2005 that military action against Iran was not on the US agenda though President Bush has not ruled out any option. Therefore, a solution lies through negotiations and a diplomatic deal that meets core interests of all sides.

The EU-3 Resolution by not setting a deadline for reference to the UNSC gives the IAEA and Iran time to resolve issues. Iran, if it wants, can address all of them by enhancing transparency, ratifying the Additional Protocol, which it has signed, and fully cooperating with the Agency to remove misperceptions and concerns. Consensus building benefits Iran as well as the other states with large stakes in ties with Teheran – India, Russia, Japan, Europe, South Korea and China. It would also enable the US and Iran to avoid confrontation and conflict. Since it is an EU-3 resolution, it has the principal responsibility to engage Iran constructively. India needs to persuade EU-3 to re-examine their “package”, taking into account Iran’s proposal for joint ventures in civilian nuclear energy.

However, the crux of the problem lies between the United States and Iran, and the roots go back to the rise of the Islamic Republic in 1979, its visceral hatred of the ‘great Satan’ the US for its support for the Shah’s rule, and the taking of US hostages that has left a deep scar on America’s soul. The US in return has frozen Iranian dollar assets in US banks, and imposed several sanctions, and has targeted it as ‘rogue state’. The two countries have not had a normal diplomatic relationship for over two decades and have been hostile towards each other. Iran clearly suffers from a serious insecurity, while the US worries about Iran’s involvement with fundamentalist groups such as the Hezbollah and its nuclear programme. In such a situation, Iran may not be willing to give up its right to have an independent fuel cycle without significant dialogue with the United States and concessions on three issues: a security guarantee, an unfreezing of Iranian financial assets in the US, and access to secure assurance to aid for nuclear power generation. The US and Iran therefore would have to engage in diplomacy and negotiations sooner than later. In the North Korean case this was enabled by China through the six-party talks. In the Iranian case the EU and India can play such a role.

• The author gratefully acknowledges the valuable inputs and insights offered by Shebonti Ray Dadwal, Rajesh Mishra, Shah Alam and Sumita Kumar.