On my drive home, I was listening to a Bloomberg Radio program called Simply Put, where they were discussing the recent Nuclear Accord that India and US have signed. They were saying that this accord is of bigger signifance than Vietnam War, Iraq War & Katrina and that US is giving preferential treatment to India who has not signed Nuclear Non-proliferation Treaty (NPT) and that this would wrong signals to countries like Iran and North Korea.
While I consider that India definitely got the better side of this deal, I certainly don't think it was preferential. Whether US wants to accept or not, India is a nuclear-state with decades of responsible nuclear policy -- that of "no-first strike" and "nuclear minimum deterrent". India's reasons for not signing the NPT are well founded and it's not the only country which hasn't signed the NPT either. From a purely economical point of view, this deal makes perfect sense. In the next 50 years, India is poised to be the fastest growing nation in the world with an annual GDP growth of 5-8%. And with a rise in the middle class, India's energy needs are going to increase. India currently produces only 5% of its energy needs through nuclear power. Unless this changes, India would use up a lot of coal that world produces - fast. Nuclear energy is an obvious and economical solution to this problem. And guess who's the other country who will need a lot of coal for producing energy - the US. And with everchanging world alignment, I think US wants India to counterbalance against China in that part of the world.
The deal is not done yet as it has to be approved by the US Congress as there's a law (Atomic Energy Act) which has to be amended to allow this deal to go through. While it is going to be a tough fight, I think this legislation would get through. It doesn't end there. The deal has to be approved by NSG which is again going to be difficult.
While, India works out the nuclear separation plan, it needs to be careful and negotiate hard on the finer details -- particularly on the perpetuity clause. It also needs to keep its strategic nuclear programme (Fast Breeder Reactor) away from inspections. And I am sure, there are some guarantees that are built-in (although invisible) from India favoring the US. Let's hope that its not something huge.
While it is controversial, I think this is a win-win deal. But the timing of this deal couldn't have been worse - right in the middle of the Iran Nuclear Controversy.