DISARMAMENT: India’s Nuclear Tests Leave Moscow With A Dilemma

By IPS Correspondents Reprint | | Print |

Andrei Ivanov

MOSCOW, May 19 1998 (IPS) - Although clearly embarrassed by India’s nuclear tests, Russia intends to take no punitive action against New Delhi, either economic or diplomatic. There is just too much at stake.

“India let us down with its nuclear explosion,” admitted Russian president Boris Yeltsin after the news broke, “But I think that by working in a diplomatic way, by visits, we must secure a turnaround in their position.”

He said he would use his scheduled visit to India later this year “to solve this problem somehow.”

Russia is in the final throes of completing a multi-billion dollar deal for civilian nuclear power technology sales to India — a deal that would be certain to be targeted by any sanctions programme.

Russia’s ministry of atomic energy (MinAtom) deputy minister Viktor Mikhailov said he hoped the contract negotiations to build a Russian light-water nuclear power plant at Kudankulam in Tamil Nadu would continue without hindrance, despite the tests.

“Our contacts with India have very deep roots and the struggle in the world market for construction of nuclear electric stations is very stiff, so I hope that the leadership of the country will reserve this market for us.

“Ending of construction of the power unit would signify a severing of economic relations between Russia and India, which is improbable.”

Thus, while Kremlin spokesman Sergei Yastrzhemsky described the tests as “a major setback for hopes of global non- proliferation” and that Russia was “very displeased,” he added that “economic sanctions against India are inadmissible”.

Instead he expressed the hope that “India sooner or later — better sooner than later — will have to join the international convention on the comprehensive nuclear test ban.”

Just before the tests, on May 5, Russia had agreed to extend a soft and long-term credit line to India for the purchase of the two 1,000 megawatt (MW) reactors for a plant at Kudankulam.

The credit will cover 85 percent of the cost of Russia’s contribution to the three billion dollar plant while the remaining funds would be provided by the Indian government.

Negotiations for the plant have been going on for some time. Last December, the Indian government’s nuclear energy department accepted a Russian-brokered compromise formula involving payment of credit of 2.5 billion dollars for construction of the plant.

Some 25 percent of the credit will be repaid in the form of Indian goods but the rest will be paid in U.S. dollars.

The repayment scheme removed the last obstacles to the start of the project and the final document was to be signed during Yeltsin’s forthcoming visit to India.

The original agreement was signed 10 years ago in the days of the former Soviet Union, and Russian and Indian specialists had long ago agreed all the technical details.

Russia hopes that the nuclear plant deal will open the way for other major projects to revive Russia’s presently faltering trade with India.

Talks are under way on the modernisation of the metallurgical plant in Burnpur, a thermo-electric power station at Mayton in West Bengal and a hydro-electric power station at Teri. Russia has its eyes on billions of dollars worth of contracts over the ne xt five years, when India plans to raise its power generation capacity from a current 85,000 MW to 160,000 MW.

Russia’s trade with India has been falling heavily in recent years. India is paying off a debt to Russia in rupees, mostly in the form of soft commodities — tea, rice, coffee, cashew nuts, other agricultural products and medicines. Together they account for 50 percent of Indian exports to Russia. But this debt, of limited value to Russia, will be paid off by 2005.

India is still buying raw commodities from Russia, but less and less, year by year. Turnover of commodities exported to India declined from 5.5 billion dollars in 1990 to 1.4 billion dollars in 1996 and now makes up only 1.5 percent of Russia’s commodity export trade.

Coal also used to be a major Russian export to India. However, costs have increased dramatically due to high railway tariffs and India now buys coal elsewhere.

Moscow also cut economic aid to India by 75 percent in 1996 to a meagre 13.5 million dollars. Of what Russian exports still supplied, 60 percent are of four types of goods only: newsprint, ferrous and non-ferrous metals and mineral fertiliser.

Hence Russia’s interest in boosting its trade with India in the high technology market and its hostility to sanctions.

While foreign minister Yevgeni Primakov did say the tests were “totally unacceptable” and “guided by regional rather than global” concerns, he added that “Russia is very cautious about sanctions. They often have counter-productive results.”

Moscow’s existing nuclear trade with India first drew critical attention earlier this year when it became clear that India’s nationalist Bharatiya Janata Party planned to review the country’s nuclear policy after it won power in the country.

It was feared that spent nuclear fuel in India could be used to develop atomic weapons. Russia already supplies nuclear fuel for some of India’s other reactors, but these are covered by International Atomic Energy Authority safeguards.

However, Russia’s deputy atomic energy minister at that time, Yevgeny Reshetnikov, said he did not believe there was any threat.

“Yes, of course, you can obtain weapons-grade nuclear material from reprocessed fuel. But only two countries in the world today are capable of managing the expense and have the technologies to do this – the former Soviet Union and the USA.

“There is still no-one else capable of producing weapons-grade nuclear material from spent fuel, because this is exceptionally expensive and exceptionally complex,” he added.