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India’s Growing Nuclear Industry

Canada’s recent decision to resume civilian nuclear trade with India after an absence of 36 years illustrates how far India has come since the international isolation following its 1974 nuclear test.

Canada and the US were among the first states to sign nuclear trade agreements with India, supporting the claims of the Indian government that nuclear power would usher in a new era of economic development and lift its communities out of poverty. New Delhi assured Washington and Ottawa that nuclear facilities built in India would be used for entirely civilian and peaceful purposes.

With this understanding, Canada helped establish India’s first CIRUS nuclear research reactor in 1954, and later sold India two CANDU reactors, fuelled by natural uranium. The US agreed to supply India with the ‘heavy water’ neutron moderator required for the CIRUS reactor to sustain stable nuclear fission.

India extracted plutonium from the CIRUS reactor and conducted a nuclear test in 1974. It depicted the nuclear test as a “peaceful nuclear explosion”, as part of a fig leaf “Plowshare” civilian program of testing new explosives for public construction works.

Realizing that facilities supplied to India were being used for military ends, the US and Canada gradually restricted their nuclear cooperation with India. Canada eventually terminated all nuclear trade with India. The Nuclear Suppliers Group was established to enforce export controls on nuclear technology, to prevent the Indian precedent of “peaceful nuclear explosives” being replicated by other states.

The international isolation faced by India following the 1974 tests, and accompanying restrictions on its nuclear trade potential, created limits on the size of its civilian nuclear infrastructure and arsenal potential. This was overturned with the 2005 US-India civil nuclear agreement, and the related exemption India secured from Nuclear Suppliers Group trade restrictions in 2008.

As part of the 2005 arrangement, India has agreed to place 14 reactors under IAEA monitoring, while reserving eight others for military purposes. India’s determination to take full advantage of the agreement, announcing bold plans to greatly expand its civilian nuclear power infrastructure with international assistance, creates new market opportunities for global nuclear power firms.

Stalwart states of the nuclear non-proliferation regime are currently considering entering the Indian nuclear power market. Japan is conducting talks with Indian diplomats regarding the possible sale of Japanese reactors to India. Australia is debating whether to sell uranium to India.

In this context, the recent Canada-India nuclear deal, opening the door for Canadian uranium and nuclear technology sales to India, is symbolic. Given that Canada’s previous experience with Indian nuclear commerce involved seeing Canadian nuclear aid directed to meet Indian military goals, the agreement represents a second effort from Ottawa to entrench peaceful nuclear trade as part of its bilateral India relationship.

However, this new wave of civilian nuclear trade with India could still have military impacts. As leading Indian strategist K Subrahmanyam has highlighted, the increased access to foreign uranium made possible by the lifting of nuclear trade restrictions allows India “to categorise as many power reactors as possible as civilian ones to be refueled by imported uranium and conserve our native uranium fuel for weapons-grade plutonium production.”

India is presently expanding military uranium enrichment facilities, and building a breeder reactor that could greatly contribute to its military plutonium stockpile.

Indian strategic thinkers are currently debating how India’s nuclear future will look. Recent discussions in domestic Indian strategic discourse have concerned conducting a new series of nuclear tests and abandoning its no-first-use declaratory doctrine.

It is unclear if Canada and other states considering entry to India’s civilian nuclear power market are fully aware of these potential consequences from their assistance. Increased nuclear commerce with India will generate revenue, but could free up Indian domestic uranium sources to be devoted to an accelerated military nuclear program. This could have destabilizing regional impacts.

Given the importance these states attach to their image as leaders of the global non-proliferation regime, these risks should be carefully considered and balanced before a decision is taken to invest in India’s uncertain nuclear future.

By. Frank O'Donnell




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