US embassy cable - 05NEWDELHI5680

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 005680 
 
SIPDIS 
 
PASS TO NRC 
 
E.O. 12958: DECL: 11/20/2012 
TAGS: ENRG, ETRD, IN, KNNP, PGOV, PREL, NSSP 
SUBJECT: PRIME MINISTER SINGH'S NUCLEAR LEADERSHIP 
 
REF: A. NEW DELHI 5616 
     B. SECSTATE 133163 
     C. NEW DELHI 5613 
 
Classified By: SCI-COUNS M. DICAPUA FOR REASONS 1.5 (B) and (D) 
 
1.  (C) Summary:  Our contacts in the Indian nuclear 
establishment welcomed the July 18 announcement of potential 
civil nuclear cooperation and are confident that Prime 
Minister Singh's experience with the nuclear sector will be 
critical to rapid implementation of the commitments that 
India made in the Washington Joint Statement (JS).  The 
inclusion of Atomic Energy Commission (AEC) Chairman Anil 
Kakodkar in the official Indian delegation was a clever move 
by the PM to obtain buy in from scientists in India's nuclear 
establishment who have devoted their careers to achieving the 
independence of India's nuclear programs in the face of the 
international embargo that India confronted after the 1974 
nuclear tests.  Early progress on the quid-pro-quos to allow 
India's access to fuel for a facility such as Tarapur, which 
is already under safeguards, will enhance credibility of an 
agreement that some in the Indian nuclear community perceive 
to have a significant political cost.  End summary. 
 
Managing The Nuclear Debate in India Will Require Strong 
Leadership 
--------------------------------------------- ---- 
 
2.  (C) The intensity of coverage (Ref. A) of the nuclear 
aspects of the July 18 JS (Ref. B) suggests that the PM, upon 
his return to Delhi, will have to muster a coalition of 
technocrats to keep the course of India's nuclear debate in 
the energy security direction.  The PM will have to work very 
hard to keep the debate away from debilitating arguments 
about how many warheads India requires for a minimum credible 
deterrent.  Such a debate, which will have to take place in 
parallel, will require a strategic thinker who can lead 
India's politico-military establishment through the process 
of determining what India's nuclear deterrent needs are vis a 
vis the environment of India's immediate neighborhood. 
 
3.  (C) The complexity of the nuclear energy debate will be 
heightened by the intense skepticism of an entire generation 
of Indian nuclear and space technologists who have devoted 
careers to programs that ensured the independence and 
viability of India's nuclear programs.  Entire Indian 
institutions developed in three decades of isolation that 
resulted from the US Nuclear Non-Proliferation Act of 1978 
(NNPA) and the erection of the Nuclear Suppliers Group (NSG) 
edifice that the US sponsored to make sure that the 
international export regime would harmonize with the NNPA. 
The PM's challenge will be to convince Indian scientists to 
redirect their efforts from a self-sufficiency regime to a 
regime where India's nuclear activities integrate with global 
efforts. 
 
4.  (U) The PM, through the creation of the Energy 
Coordination Committee (ECC) announced on July 13, may be off 
already to a running start in coordinating DAE and Nuclear 
Power Corporation of India Ltd. (NPCIL) nuclear power 
generation plans into an overall Indian energy strategy.  The 
ECC and a civil nuclear working group within the Energy 
Dialogue (ED) (Ref. C) could focus debate on India's nuclear 
energy future so implementation of the July 18 JS proceeds at 
a higher political level. 
 
PM Singh's Leadership is Critical 
--------------------------------- 
 
5.  (C) Conversations we have had with S.K. Jain, the 
Managing Director of NPCIL, and M.R. Srinivasan, a former 
Chairman of the Atomic Energy Commission (AEC) and former 
member of the Planning Commission, suggest that Prime 
Minister Manmohan Singh is uniquely qualified to focus the 
debate on the goal of bringing India's nuclear energy program 
in sync with worldwide nuclear programs.  In their view, PM 
Singh is also uniquely qualified to manage the political 
fallout that arises from attempting to bring a credible 
number of Indian nuclear facilities under IAEA safeguards. 
Both Jain and Srinivasan, who have had substantial experience 
with Prime Minister Singh during Singh's tenure as Finance 
Member of AEC while Singh was Secretary of the Department of 
Economic Affairs and later as Deputy Chairman of the Planning 
Commission, are confident that through Singh's leadership the 
process will proceed smoothly. 
 
Srinivasan: Joint Statement Implementable 
----------------------------------------- 
 
6.  (C) Srinivasan believes that, contrary to many 
commentaries in the Indian press, it is actually quite 
possible to segregate civilian and nuclear facilities in 
India and that implementing safeguards on Indian built 
facilities will allow incorporation of safeguarded imported 
fuel into the Indian nuclear fuel cycle.  The principal 
challenge, according to Srinivasan, will be for AEC technical 
personnel to adjust to new nuances of a program where Indian 
nuclear power activities integrate into world programs. 
Srinivasan's view in this regard are quite unique as he is a 
product of an era where India's nuclear establishment was 
firmly integrated into world programs.  Srinivasan, four 
decades ago, managed the construction activities of Tarapur 
in collaboration with Bechtel and General Electric. 
 
7.  (C) Srinivasan, who has been a key advocate of caution in 
managing the Indian Fast Breeder Reactor program, told us 
that he welcomes more openness of the breeder program which 
has been the self-sufficiency icon of nuclear India. 
Srinivasan told us that India's commitment to the breeder 
program need not be irreversible.  Experience with the 
construction and commissioning of the Prototype Fast Breeder 
Reactor (PFBR) will demonstrate whether implementation of a 
fast breeder program with multiple reactors will make 
technical and economic sense for India in the long run.  In 
Srinivasan's view, India's ability to acquire uninterrupted 
supplies of natural uranium for its nuclear power program 
will allow India to focus sharply on the cost/benefit trade 
offs of a technically challenging and very capital intensive 
breeder program. 
 
NPCIL: Delighted With Achievements in Washington 
--------------------------------------------- --- 
 
8.  (C) NPCIL is delighted with the achievements of PM 
Singh's visit to Washington.  NPCIL Managing Director Jain 
told us that NPCIL's total commitment is to maximize India's 
nuclear power output whether through India's indigenous 
technology or outsourcing plants from other countries.  NPCIL 
will do what it takes to implement IAEA safeguard 
requirements.  It has successfully interfaced with the World 
Association of Nuclear Operators (WANO), the Association of 
CANDU reactor operators, and engaged in collaborations with 
nuclear regulatory bodies on a worldwide basis.  NPCIL, 
according to Jain, has been increasingly successful in 
meeting its commitments to deliver electrical power to Indian 
consumers on a cost competitive basis.  The ability of NPCIL 
to access fuel and power plant equipment in worldwide markets 
will allow NPCIL to aggressively pursue the growth of nuclear 
power in India. 
NPCIL: Tarapur Fuel is Low Cost and High Pay-Off 
--------------------------------------------- --- 
 
9.  (C) According to Jain, renewed Indian access to enriched 
uranium for the Tarapur reactor would be a low political cost 
step with a very high political pay-off in India's perception 
of the JS.  Jain told SciCouns that a refueling of Tarapur 
will take place later this year and another refueling is 
planned for early next year.  At present, India has 
sufficient enriched uranium supplies to carry-out both 
refuelings to completion.  Empowering India to negotiate the 
acquisition of fuel for a subsequent Tarapur refueling will 
allow India to probe, in a systematic manner, the 
availability and price of enriched uranium from suppliers, 
which up to last Monday, were prohibited from interacting 
with NPCIL. 
 
10.  (C) As safeguards are in place for Tarapur, Jain argued, 
an early start of fuel procurement for Tarapur would be 
straightforward to implement and could quickly demonstrate to 
doubters that the US-sponsored rapprochement of India's 
nuclear power program with world nuclear power programs is 
indeed real.  We are making the point in reply to all our 
interlocutors that it serves India's interest to move quickly 
on the commitments the GOI undertook in the July 18 statement 
so that full normalization of our civil nuclear cooperation 
can occur. 
 
11.  (C) Commenting on debates in the Indian press regarding 
perceived strategic drawbacks of the commitments that India 
has made in the JS regarding the safeguarding of India's 
nuclear facilities, Jain said that the debate was natural. 
Under the leadership of PM Singh, who he views as a 
clear-headed person with hands-on experience on India's 
nuclear programs, this debate, in Jain's view, will be 
short-lived provided that some rapid motion will demonstrate 
advantages to India resulting from India's willingness to 
adhere to international nuclear regimes. 
 
DAE: Agreement Will Require A Joint Working Group 
--------------------------------------------- ---- 
 
12.  (C) R. Grover, Strategic Planning Director for the 
Department of Atomic Energy (DAE), was equally sanguine about 
the JS.  Grover believes that implementation of the agreement 
will have to rely upon a Joint Working Group (JWG) which can 
quickly move the process of implementation along.  The 
success of such a working group will depend on the latitude 
that JWG members will have to implement the agreement and 
bring along doubters within the Indian nuclear establishment. 
 In his view, early successes on the US multi-lateral and 
Indian sides will demonstrate to political doubters that 
implementation of the JS is indeed possible, that it will 
deliver benefits to India, and that India's political cost of 
keeping up the commitments will be commensurate with benefits 
that will accrue. 
 
BARC Director: India Will Remain Self-Sufficient 
--------------------------------------------- --- 
 
13.  (C) Our consulate in Mumbai contacted Dr. Srikumar 
Banerjee, the Director of the Bhabha Atomic Research Centre 
(BARC), and a member of AEC, told Mumbai EconOff that the JS 
was an interesting and welcome development.  Banerjee said 
that a lot of work remains ahead to implement the JS.  He 
added that the political criticism and apprehensions that 
have undergone extensive press coverage of the JS will impose 
a challenge to the implementation of the intentions of both 
leaders.  Banerjee, who is an old-school Indian 
self-sufficiency technocrat, stressed to Mumbai EconOff 
India's indigenous capabilities in nuclear research and 
development and reiterated that India's self-sufficient path 
"will continue unaffected." 
 
14.  (C) Comment: It was clear to EconOff that Banerjee does 
not want civilian nuclear cooperation with the US to replace 
India's own capabilities but to augment them.  In the 
conversation, Banerjee seemed to imply that India is 
perfectly capable of achieving energy security on its own, 
but closer cooperation with the US is highly welcome.  Such 
cooperation will allow India to achieve the goal of energy 
security more quickly.  Banerjee firmly believes in the 
promise of the Indian Fast Breeder Reactor program which will 
convert India's thorium resources to U-233.  This is an 
oft-repeated mantra that, in Mission's view, will be likely 
to undergo closer examination once India's nuclear power 
program is able to obtain reliable supplies of nuclear fuel 
from global markets.  End comment. 
 
AERB: The Agreement Will Speed Up Nuclear Safety Cooperation 
--------------------------------------------- --- 
 
15.  (C) S.K. Sharma, the Chairman of the Atomic Energy 
Regulatory Board (AERB), told Mumbai EconOff that the JS will 
invigorate the US-India nuclear safety dialogue, which has 
undergone steady improvement over the past two years.  Sharma 
modestly admitted that AERB as an agency for safety had not 
been a main player in the interaction that culminated in the 
JS.  Still, Sharma said, the JS coupled with the completion 
of NSSP, will allow AERB and the US Nuclear Regulatory 
Commission (NRC) to engage in deeper technical exchanges 
regarding nuclear reactor safety. 
 
Comment: Agreement on Conditions for Tarapur Fueling Critical 
--------------------------------------------- ------- 
 
16.  (C) The positive private reactions from senior Indian 
scientists contrast starkly with the more negative 
assessments of retired nuclear experts who have been quoted 
(usually without attribution) in the Indian media complaining 
about the PM's sellout of India's nuclear independence to the 
US.  We will need to continue educating our Indian 
interlocutors about the nature of the quid pro quos laid out 
in the July 18 JS.  But it is clear that influential voices 
in the Indian nuclear community see the virtue of proceeding 
quickly with our new framework in delivering carbon free 
energy to the Indian economy.  Since fuel for Tarapur has 
been singled out in the JS, we will need to decide quickly on 
the specific conditionality that will apply for fuel for the 
Tarapur reactors, so we can work towards an early success. 
 
17.  (C) In forging the July 18 JS in Washington, the 
economist in the PM came out.  Influenced by the Planning 
Commission, the PM recognized that this deal would bring 
large economic gains to India and set India on a path to 
satisfy its energy needs and de-carbonize the Indian economy. 
 
BLAKE