LEMOA, nuclear plants, MTCR… Modi junks baggage
Though it is not clear whether US firms will actually invest the $42 billion they have promised to over the next three years – Amazon’s $3bn investment pledge makes it more believable – the success or failure of prime minister Narendra Modi’s 5-nation tour goes far beyond this. Apart from the fact that Modi seems to have completely shrugged off the shameful treatment meted to him in the past by the US government, as he put it in his address to the US Congress, both nations appear to have overcome the ‘hesitations of history’. India and the US have been talking of a Logistics Exchange Memorandum of Agreement (LEMOA) for close to a decade – this allows Indian and American military units to use facilities in each others’ bases for re-fuelling and berthing of aircraft and warships subject to mutual agreement and represents a big check on Chinese aggression – but this has been finalized only now. As part of the increased cooperation between the two countries, the US has recognized India has a Major Defence Partner which means India can buy the same armaments other close US allies can and, thanks to US nudging, Italy has dropped its objections to India’s entry into the Missile Technology Control Regime which will facilitate India selling its Brahmos missiles as well as buying sophisticated US Predator drones that, in turn, will allow India to completely rethink its conventional aircraft acquisition strategy. While the US has backed India’s entry into the Nuclear Suppliers’ Group, Modi managed to get Switzerland and Mexico’s backing during his 5-nation tour – whether the US will then be able to get China to change its position remains to be seen.
The ghost of Bhopal made India come up with a very strict Indian Civil Liability for Nuclear Damage (CLND) Act which ensured that India couldn’t really capitalize on the nuclear deal signed by Prime Minister Manmohan Singh and President Bush, but good progress was made by India signing the Convention on Supplementary Compensation (CSC) for Nuclear Damage earlier this year, apart from setting up a Rs 1,500 crore nuclear insurance pool. While GE CEO Jeff Immelt was dismissive of this during his last visit to India, India’s external affairs ministry (MEA) argued CLND was in conformity with CSC. While the initial damages are to be borne by the Nuclear Power Corporation of India Limited (NPCIL), MEA argued that since clause 17(b) of CLND which deals with supplier liability is part of a standard buyer-seller contract, concerns of suppliers like GE and Westinghouse could be addressed in the contract it signs with NPCIL. Given the Indo-US joint statement says NPCIL and Westinghouse will start engineering and site-design work immediately suggests considerable progress has been made – the contract arrangements are to be completed by June next year. India has agreed to formally accede to the Paris accord which, while implying strict adherence to various climate goals, is the only way to ensure global warming remains below 2 degrees centigrade. Totalization remains work in progress and there is nothing on the unfair visa fees. Mature nations, though, build upon the positives while leaving the negatives for either another day or another avenue – India is, in any case, exploring approaching the WTO on this.