PRIME MINISTER SINGH'S NUCLEAR LEADERSHIP

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 005680

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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
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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
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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
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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
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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
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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
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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.

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