IN THE FACE of U.S. efforts to maintain diplomatic and economic pressure on India and Pakistan for their May nuclear tests, Russia is moving ahead with plans to sell New Delhi two nuclear power plants, a deal that the United States claims is at odds with Moscow's obligations as a member of the Nuclear Suppliers Group (NSG). At the same time, Russia has also concluded a military-technical cooperation agreement with New Delhi following the new nationalist-led government's move to significantly increase military-, space- and nuclear-related spending.
On July 20, Russian and Indian officials signed a new contract, to begin engineering studies for the construction of two Russian light-water reactors (LWRs) in Koodankulam, in the state of Tamil Nadu. Russia maintains that the two 1,000-megawatt (electric) VVER-1000 reactors, which would be fueled with low-enriched uranium, would be operated under International Atomic Energy Agency (IAEA) safeguards and therefore pose no proliferation threat.
As a member of the NSG, Russia is obligated not to sell nuclear materials or technology to any non-nuclear-weapon state that does not have IAEA safeguards on all of its nuclear facilities (so-called "full-scope" safeguards), as required by the nuclear Non-Proliferation Treaty (NPT). As a non-signatory of the NPT, only a few facilities in India's large nuclear infrastructure are under IAEA safeguards. Moscow insists that because the agreement with New Delhi to build the reactors was reached in 1988, the deal, which is reportedly worth $2.6 billion, is "grandfathered" from the NSG's 1992 full-scope-safeguards condition for supply. Moreover, according to Russia's minister of atomic energy, Yevgeniy Adamov, to have held off on the nuclear deal would have looked too much like imposing sanctions, "which is not Russia's stand."
On June 22, State Department spokesman James P. Rubin said the reactor sale "is not consistent with Russia's obligations as a member of the [NSG]," and that it "sends precisely the wrong signal at the wrong time." Rubin claimed that despite Russia's decision, which he described as "too close to business as usual," sanctions imposed by the United States and other countries were having the desired effect on India's and Pakistan's economies and international standing.
The United States has long opposed the Russian-Indian nuclear deal. Last year, Deputy Assistant Secretary of State Robert Einhorn told a Senate sub-committee: "In our view [the deal] is not legitimately grandfathered. In 1988 there was no specific contract, no financial arrangements concluded."
Complementing the reactor deal, Moscow is also proceeding with a broad range of major weapons sales as part of a new 10-year bilateral military-technical cooperation agreement with India that was reached on July 23. Russian President Boris Yeltsin is expected to sign the agreement during a visit to New Delhi scheduled for early December. Included in the agreement are joint development of the S-300V anti-tactical ballistic missile system, multi-role Su-30 MKI fighters and MiG AT jet trainers; upgrades for MiG-21 fighters and T-72 tanks; integration of India's Akash surface-to-air missile with the S 300V; and purchase of T-90 tanks and airborne early warning systems, according to a July 1 report in Jane's Defence Weekly. Additionally, Moscow is likely to sell the aircraft carrier Admiral Gorshkov, with a detachment of MiG-29 SMT fighters, and an unspecified number of improved Krivak III frigates, Defense News reported on June 8.
In the wake of its nuclear tests, the Indian government released its new federal budget on June 1 that includes a 14 percent increase in defense spending. Although inflation (running at about 7 percent annually) is expected to halve the actual value of the increases, the budgets for India's army and navy will grow by 18.5 and 17 percent, respectively. Defense procurement and defense research will also be enlarged by 11.4 percent and 36.8 percent, respectively. The Indian air force, while receiving a 2.6 percent increase, will face a cut in real terms of 4.8 percent, according to Defense News. The total Indian defense budget is worth about $12.4 billion, equivalent to 19 percent of the total federal budget and 4.6 percent of India's economic output.
The most remarkable budget additions, however, belong to India's Atomic Energy Commission (AEC), which oversees both civil and military nuclear programs, and to the Department of Space, which controls commercial and defense rocketry efforts. According to a June 2 New York Times report, the AEC's budget will increase by 68 percent, while the Department of Space's budget will grow by 62 percent. Together, nuclear and missile research will grow from $262 million to $665 million. Indian Finance Minister Yashwant Sinha also announced June 1 that Prime Minister Atal Behari Vajpayee's government was prepared to request more money once decisions on nuclear "weaponization" had been made or, if necessary, to counter the effects of inflation.