UNCLAS SECTION 01 OF 03 MUMBAI 002075

SIPDIS

SENSITIVE

SIPDIS
DEPT. OF ENERGY FOR U/S GARMAN, S. JOHNSON, T. CUTLER, A. SCHEINEMAN
DEPT OF COMMERCE FOR U/S F. LAVIN, A/S VINEYARD,J.NEUHOF

E.O. 12958: N/A
TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY PGOV ECON
BEXP, IN
SUBJECT: NPCIL TELLS SEN. SPECTER THAT IT APPLAUDS NUCLEAR LAW, YET
CITES SCIENTISTS' CONCERNS

REF: MUMBAI 2064

MUMBAI 00002075 001.2 OF 003


Summary

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1. (SBU) S.K. Agrawal, director of projects at the Nuclear Power
Corporation of India (NPCIL), told Senator Arlen Specter on
December 16 that the civil nuclear law passed by Congress would
not restrict the company's expansion plans. Without the
agreement, the NPCIL's growth would even be slower and limited
in the near to mid-term, he said. Agrawal was reacting to
public statements, made a day earlier by retired Indian nuclear
scientists, that the law prevented "full nuclear cooperation"
with the U.S. The scientists' concerns were real but did not
affect the NPCIL because the company was not involved in the
enrichment or reprocessing of fuel, he said. Agrawal urged the
U.S. to take the scientists' concerns seriously since they
reflected widespread public sentiment and would influence the
domestic debate on the agreement. The scientists were mainly
concerned about the restrictions on enrichment and nuclear
testing, and on Iran, Agrawal said. Specter said the U.S.
supported India's emergence as a world power, and saw civil
nuclear cooperation as a tool to strengthen the bilateral
relationship. Diversion of imported fuel to military purposes
remained a concern for the U.S., as did India's relationship
with Iran, Specter said. End summary.



NPCIL "Euphoric", But Others Are Concerned

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2. (SBU) Agrawal told Senator Arlen Specter on December 16 that

the NPCIL was "euphoric" at the passage of the civil nuclear
legislation. The final version of the bill would "in no way"
restrict the expansion plans of the NPCIL, Agrawal emphasized.
Anil Kakodkar, secretary of the Department of Atomic Energy
(DAE) and chairman of the Atomic Energy Commission, shared these
views, Agrawal added.




3. (SBU) While the NPCIL had no issues with the legislation,
others within the country's nuclear establishment clearly did,
Agrawal said. He referred to local press reports of a December
15 meeting between retired nuclear scientists and Kakodkar.
According to press reports, the scientists told Kakodkar that
the bill would prevent "full nuclear cooperation." The
scientists' were concerned with the restrictions the law placed
on India's ability to reprocess any fuel it imports, Agrawal
told Specter. Many felt that the agreement would give India far
less flexibility than it has today. However, the NPCIL was not
involved in either the enrichment or reprocessing of nuclear
fuel, he said, and hence it had no issues with the legislation.
It leased all its fuel from other DAE-controlled companies and
returned the spent fuel back to the DAE for further use, he
added.



Scientists' Concerns Reflect Public Sentiment, Agrawal Argues

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4. (SBU) Agrawal said the scientists' statements were a
reflection of a domestic sentiment. There was continued general
concern among the "people" about what the agreement meant for
India, Agrawal said. Many were fearful that the deal would tie
India down, prevent it from protecting itself, or bring the
country too closely into the orbit of the U.S., he added. The
U.S. should take the scientists' concerns seriously, as they
would play a role in the further domestic debate on the
legislation. In addition to the restrictions on reprocessing of
fuel, the scientists were mainly concerned with the provisions
on further nuclear testing and on Iran, he said.




5. (SBU) On Iran, Specter told Agrawal that the U.S. continued
to expect Indian support of the worldwide effort to prevent Iran
from acquiring nuclear weapons. Agrawal said India agreed that
Iran should not acquire nuclear weapons, but the provisions of
the nuclear deal "were not necessary." India had always been a
responsible state with regard to non-proliferation, and many in
India did not understand why the U.S. was insistent on linking
Iran to the civil nuclear deal. Many people asked why the U.S.
was not as insistent that Pakistan stop manufacturing nuclear
weapons. Specter replied that, if it could, the U.S. would get
Pakistan to eliminate its nuclear arsenal. Like Iran, Pakistan
did not have a good non-proliferation record, Specter said, but
unlike Iran it was not a state sponsor of terrorism, it did not
advocate the destruction of Israel and it did not support groups
like Hezbollah.



Specter: Law Important Milestone

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6. (SBU) Specter told Agrawal that the agreement marked a
historic milestone in U.S.-Indian relations. The U.S. greeted
India's emergence as a world power. The U.S. understood India's
energy needs. For the U.S., the agreement was a tool to help
meet those needs, but it was also an instrument to create closer
ties as a whole. The U.S. understood the potential for
commercial nuclear ties between the two countries. At the same
time, the U.S. wanted continued assurances that civil nuclear
technology and fuel would not be used for military purposes.



NPCIL: Without Deal, Growth Limited in Short Term

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7. (SBU) Agrawal gave Specter an overview of the NPCIL's
expansion plans (see reftel). Specter asked Agrawal whether
India needed the civil nuclear agreement to meet its ambitious
expansion plans. Agrawal said the agreement would allow the
NPCIL to grow faster, because it would allow the company to

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augment its indigenous program with foreign technology. Without
the agreement, growth would be slower and limited in the short
term, since the country had only finite reserves of natural
uranium to fuel its indigenously built reactors, and because the
planned establishment of a closed fuel cycle with its fast
breeders and thorium reactors would still take many years to
become reality. (Note: In earlier discussions, the NPCIL
admitted that it needed to import roughly 6-8 reactors to reach
its goal, formulated before the July 18 joint statement, of
creating 20 gigawatts of generation capacity by 2020. End
note). Agrawal said India's vision of a closed fuel cycle was
"very clear." India had a concrete policy to reprocess spent
fuel from its pressurized heavy water reactors (PHWR) for the
planned fast breeders. The more PHWRs and light water reactors
it had, the more fuel it could channel to its planned fast
breeders, he said.




8. (U) Senator Specter's staff cleared this cable.
KAUFFMAN