9 November 2012

The Unveiling of Mahatma Gandhi’s Statue in Davie, Florida An address by Dr. A.P.J. Abdul Kalam, Former President of India

 I am delighted to participate in the unveiling of the Mahatma Gandhi statue in Orlando on this auspicious day of October 2, 2012 when the entire world is celebrating the millennium leader Mahatma Gandhiji’s birthday and taking an oath to follow the Gandhian philosophy in their day-to-day activities. My greetings to organizers, all the participants of this event, and distinguished guests. I would like to share few thoughts on the topic “A millennium statesman promotes universal love.”

Recently I participated in the inauguration of Gandhiji Memorabilia Exhibition organized by Gandhi World Foundation at Anna University, Chennai on June 6, 2012. When I visited the exhibition, I came to know about an important fact about Mahatma Gandhiji.

 I was extremely happy to see in that exhibition stamps, coins, photos and statues erected across the world, postcards, rare-photos and manuscripts pertaining to Gandhiji which are spreading the messages and teachings of Mahatma Gandhiji to the young generation. That exhibition spreads the message of great human values, ethics, peace, harmony and good conduct among the youth of the world. What was astonishing to me was, it seems 120 countries have released the stamp on Mahatma Gandhi, and over 70 countries have erected the statue of Mahatma Gandhi. No world leader other than Mahatma Gandhi has got such a recognition by the world community; it is because of the Ahimsa Dharma and non-violence system that he practiced and propagated to fight against Apartheid in South Africa and used the same principle in India to achieve independence from British rule.

Dear friends, today morning on the eve of Gandhi Jayanthi Celebrations, as a part of my lecture series, as a 5th lecture, I spoke on the topic “Can we evolve a world without war?”. My message to the young from the UCF Open forum was: “The humanity needs a great vision to forget all the conflicts and move towards a common goal of peace and prosperity for all the global citizens. We visualize the birth of world vision leading to “livable plant earth.” This vision will be greater than any other vision so far envisioned by the humanity.” India and US can work for promoting the concept of world vision leading to “Livable Plant earth” together.

That means your belief will lead to your destiny. Dear friends, you can see it is very important, if you have great aims in your life and it has multiple dimensions, finally it leads to your destiny.

Gandhiji’s quest for truth and non-violence was also a quest for harmony. He believed that every manifestation of truth must of harmonious in it and also be capable of promoting harmony in the environment. What didn’t have harmony was untruth and a source of violence. Modern authors understood that deepest admiration for those works of music, art and literature that reinforced the message of peace and harmony. This was the basis of Gandhiji’s respect for Rabindranath Tagore and admiration for his work. This explains why he stood transfixed in front of a statue of Jesus Christ on the cross at the Vatican Museum. This is why, Gandhiji admired and collaborated with Nandalal Gosh, one of the foremost artist in the era of India’s freedom movement. This also explains why Gandhi reached out to the best Indian musicians of his time to set the tune for the bhajans sung in the ashrams.

I have always believed that music and arts can bring universal harmony. I had even suggested Great musicians and artists to allocate exclusive time for performing in the presence of inmate of Jail, orphanages and old age homes. This has been followed by number of artists like Pandit Jasraj. I would like to share with you another experience with two Nadaswaram Vidwans - Sheikh Mahboob Subhani and Smt. Subhani. They gave an excellent Nadaswaram performance to the Rashtrapati Bhavan audience. After the recital I requested the couple to perform for the differently abled children, whenever they get an opportunity. They made it a point to perform for some of our special children in Chennai and I understand that it gave lot of happiness to these special children. This is a very noble cause and I would request the artists in US assembled here to follow this example whenever they get an opportunity.

 Gandhi envisioned rural development Mahatma Gandhi considered for India’s economic development, a sustainable development model which has to start from rural economy of almost 600,000 villages where 70% of people live. On these lines, a development model has already emerged through the mission of Provision of Urban Amenities in Rural Areas (PURA), which envisages creation of three connectivities namely physical, electronic, knowledge leading to economic connectivity. The number of PURA complexes for India is estimated to be 7000 rural complexes covering 600,000 villages. As a extension, I have also been advocating creation of such PURA complexes in different countries to upgrade the rural economy of the world as a whole.

Reaching out to millions
Friends, you know there are 98 collected works of Mahatma Gandhi and every year the literature on Mahatma Gandhi continuously added and this year on September 2012 a unique book has been added titled “Music of the Spinning Wheel Mahatma Gandhi’s Manifesto for the INTERNET AGE” written by Shri Sudheendra Kulkarni which was released by me.

Today, with high-bandwidth internet, thousands of paper can be electronically transferred from one research lab to anywhere in the world in the time, it takes to make mouse click which was totally impossible in Gandhi’s time. Today, with all the modern electronic communication, we can have all the information in the world at the convenience of a single mobile phone. I am inspired to know that how in 1920s when mobile phones were not even a dream, telephones were products of awe and amazement, when human and animal power transport was the order of the day, and when a foreign government was repressive, one individual was able to communicate with the entire nation, enlightened them, and mobilize them as one entity over a common agenda of a free India. Hence, what Gandhiji teaches us is that a leader lives in the hearts of the people who become his voice in every corner of the country. This is the message for the world leaders from a true statesman. Gandhiji, even with his limited communication channels, even while in house arrest, stood for complete personal transparency. Today, we are seeing a different time when the global leadership while having all the opportunity to use modern technology to be transparent and open, is wary of using them to connect to its people. This is the lesson we have to learn from Gandhiji.

Creative Leadership
Dear friends, when I see all of you in a beautiful environment of Davie, and the creative leadership in every walks of life in Davie, which is making this town a beautiful town. I am thinking of sharing with you about the creative leadership. I have seen three dreams which have taken shape as vision, mission and realization - Space programme of ISRO (Indian Space Research Organization), AGNI programme of DRDO (Defence Research and Development Organization) and PURA (Providing Urban Amenities in Rural Areas) becoming the National Mission. Of course, these three programs succeeded in the midst of many challenges and problems. I have worked in all these three areas. I want to convey to you what I have learnt on leadership from these three programs:
  •   Leader must have a vision.
  •   Leader must have passion to realize the vision.
  •   Leader must be able to travel into an unexplored path.
  •   Leader must know how to manage a success and failure.
  •   Leader must have courage to take decisions.
  •   Leader should have nobility in management.
  •   Leader should be transparent in every action.
  •   Leader must work with integrity and succeed with integrity.

For success in all your missions you have to become creative leaders. Creative leadership means exercising the vision to change the traditional role from the commander to the coach, manager to mentor, from director to delegator and from one who demands respect to one who facilitates self-respect. For a prosperous and developed India, the important thrust will be on the generation of a number of creative leaders from our educational institution.

Friends, it will be appropriate to have introspection by all of us about the social awakening needed for the national and international development. Every civilized society exists not for day-to-day, but lives with a clear perception for the future and the generations to come. Such a situation would pre-suppose that each individual in such a society would cherish and translate into practice noble ideals of constructive tolerance, positive fellow-feeling and a total commitment to live and let live. Albert Einstein could not have expressed this better, when he said: “Laws alone can’t secure freedom of expression; in order that every man presents his views without penalty, there must be spirit of tolerance in the entire population”.

On this day, let us all to work with the value and ethics propagated by Gandhiji all his life. My best wishes to all the participants success in your mission of nurturing and propagating Gandhi and values across the Atlantic Ocean.
May God bless you.

Indomitable Spirit
Excerpt from book by Dr. Kalam
  • I was swimming in the sea, Waves came one after the other
  • I was swimming and swimming to reach my destination.
  • But one wave, a powerful wave, overpowered me;
  • It took me along in its own direction,
  • I was pulled long and along.
  • When I was about to lose amidst the sea wave power,
  • One thought flashed to me, yes, that is courage
  • Courage to reach my goal, courage to defeat the powerful force and succeed;
  • With courage in my mind, indomitable spirit engulfed me With...

Parliament needs more ex-generals

Nov 09, 2012

Bharat Karnad

After a rough-hewn career in the field, politics should be pursued by soldiers as an avocation, not a vocation that the workaday politicians have made it

The Army has been in the news for a few years now not always for the right reasons. The succession trauma that saw Gen. Bikram Singh replacing V.K. Singh will be stretched out some more with Lt. Gen. Ravi Dastane, deputy chief of the Integrated Defence Staff, deciding to take the matter of the elevation of Lt. Gen. Dalbir Singh Suhag as the Eastern Army commander to the Armed Forces Tribunal.

Like the V.K. Singh episode, this one too can be expected to land up in the Supreme Court docket. While V.K. Singh, for reasons unclear, was satisfied with the Supreme Court merely “restoring his honour” rather than pronouncing on the larger principle at stake and which he went to the court for — which was that whether or not for career management purposes records of serving officers with the Adjutant General’s Office are paramount. It truncated his tenure as Army Chief without establishing the principle. But the Lt. Gen. Suhag promotion has prompted Lt. Gen. Dastane, who may insist on the Supreme Court being specific about promotion rules and criteria.
Worse, with V.K. Singh on the cusp of entering “politics” full-time, an unnecessary debate has been spurred about the propriety of retired military men entering the soiled political arena. Some veterans — with a lifetime’s habit of staying away from politics — have harrumphed that this is a bad precedent to set. Some fairly ludicrous suggestions have been floated by media commentators, among these that he should give up his rank. India is a bona fide democracy, not a banana republic as a bumptious bottom-feeder from the Congress Party president Sonia Gandhi’s household had the temerity to call the country. The Indian Army, moreover, is a volunteer citizen force of enormous historical weight, not some rag-tag group that is anybody’s plaything. As a citizen military, moreover, the regret is not that V.K. Singh seeks entry into the political ranks, but rather that more generals and colonels and majors are not already in politics.

The country needs more citizens with a military background in Parliament, not fewer. And after a rough-hewn career in the field, politics should be pursued by soldiers as an avocation, not a vocation that the workaday politicians have made it. Indeed, the bulk of persons with a military background have fared well in Parliament and in state legislatures. People like Jaswant Singh, former major, Central India Horse, and a foreign minister displaying diplomatic verve and finesse during the BJP coalition government, and Maj. Gen. B.C. Khanduri (Retd), an Army engineer, who as chief minister hauled Uttarakhand out of the pits, are role models. Generals in democratic politics have been an honourable station since the age of Pericles, who commanded two campaigns against Sparta in the Peloponnesian Wars and was freely elected by the Athenian people to lead their government twice.

If the Army has had a hard time of it in terms of controversy attending on leadership transitions at the highest levels, it has not been lucky in terms of augmenting its capabilities either. Leave alone not getting an offensive mountain corps, the very concept was gutted by defence minister A.K. Antony, who is proving to be one of the great mishaps the military has run into. He has both conspicuously failed in his one-point agenda to remove the taint of corruption, and with his risk-averse attitude has actually compounded the problem with decisions being delayed, or, when taken, having been controversial. He started with zero aptitude — and not being a quick study on issues alien to him — has not graduated over the years in office beyond the kindergarten-level in terms of understanding national security-related issues. Nor has he developed an instinct for making correct decisions. Worse, he has introduced the give and take of politics into military choices by configuring a grand bargain that saw him approve a full-fledged combat aviation arm for the Army in the face of severe resistance from the Air Force and then, to placate Vayu Bhavan, mooted a “joint solution” that the Army has been enjoined to work out with IAF, entailing the formal burial of the offensive mountain corps concept, because of the IAF’s belief that it can unleash its aircraft for punitive strikes against the Chinese Army in Tibet, and that this is enough to deter the hard-headed men running the People’s Liberation Army (PLA).

It puts one in mind of the joint air-land exercise put up by the 4th Infantry Division in Ambala in 1958 to over-awe the visiting Chinese military delegation headed by the PLA commander in Tibet. Screaming Hunter aircraft overhead in ground attack mode, dropped bombs, made repeated strafing runs and cleared the path for advancing infantry — all of which impressed the Chinese commander not a whit. “This is all very impressive,” the Chinese commander is reported as telling his Indian counterpart commanding the 4th Division, Maj. Gen. B.M. Kaul, “but, tell me, will you have the aircraft in a real war?” The PLA general got his answer three years later with the 7th Brigade of Kaul’s own 4th Division being decimated on the Namka Chu river at a time when Kaul himself was appointed commander of IV Corps created overnight for him by his distant uncle, Jawaharlal Nehru, the Prime Minister’s complaisant defence minister V.K. Krishna Menon and an “obedient” Army Chief, Gen. Pran Nath Thapar. All this happened, it must be remembered, as the IAF remained inert throughout the war.

Going by his recollections of his career, the IAF Chief in 1962, Air Marshal A.M. Engineer, did not push for the Air Force to go into action. Maybe, like his more recent successors, he too subsided in his belief that air action is inherently escalatory. What’s the guarantee that IAF won’t again escape, doing nothing in another showdown in the Himalayas? And then, the Army bereft of any real offensive capability that would have won the PLA’s respect, will be compelled to merely defend. We know where that will get the Army — another ignominious end.

The writer is a professor at the Centre for Policy Research, New Delhi

The Judge, the General, and Pakistan’s Evolving Balance of Power

 November 09, 2012

By Arif Rafiq 

In various ways, in both public and private, Pakistan’s elites are delineating the distribution of power.

The tenuous nature of Pakistan’s democratic transition was put on display this Monday when the country’s army chief and Supreme Court chief justice appeared to warn one another to not transgress their constitutionally-defined roles.

Pakistan’s Army Chief Gen. Ashfaq Parvez Kayani decried what he claimed were attempts to create divisions between the Pakistani military and its people. And he said that no individual or institution has a monopoly on deciding what is in Pakistan’s national interest. Later that day, the Supreme Court released the text of a speech given by Chief Justice Iftikhar Chaudhry in which he declared that the days of a military-dominated conception of national security are over.

An overt clash between the army and the Supreme Court is unlikely. Kayani is extremely cautious and has behaved with more restraint than his predecessors, who were far more intrusive in the political process. And though Chaudhry heads the most activist court in Pakistan’s history, he has been markedly less confrontational with the military since coming back into office in 2009, as compared to years before.

What we are witnessing is an indelicate — and, at times, unwieldy — process in which Pakistan’s elites are delineating the distribution of power and the rules of the game. This process is taking fold in multiple fora, both public and private, formal and informal, in parliamentary committees and via the television airwaves.

Kayani is seeking to establish red lines for the activist Supreme Court, which flexed its muscles this year when it disqualified a sitting prime minister from office. In multiple addresses this year, Kayani has warned of a clash of institutions, alluding to the conflict between the executive and the judiciary. Now, the army chief is concerned about whether the high court is setting its sights on the military. The Supreme Court ordered an investigation into whether former Chief of Army Staff. Gen. Aslam Beg and former Inter-Services Intelligence Director-General Lt. Gen. Asad Durrani manipulated elections in the early 1990s.

Kayani fears that the prosecution of retired senior army officers could dent the institution’s morale as it fights multiple insurgencies and seeks to rehabilitate its image in the year since the bin Laden raid. During Kayani’s five years in office, the army chief has assiduously worked to restore public confidence in the army which had eroded after years of military rule and an unpopular alliance with the United States.

Kayani also seeks to preserve the army’s institutional autonomy and self-accorded privileges, including its vast economic holdings. The army opposes being held accountable by civilian forces. In September, the military announced that it would take over investigations of retired army officers in a million dollar corruption scandal that were being conducted by the civilian National Accountability Bureau.

The army has historically seen itself as the guardian of Pakistan’s stability and as a cleansing force in politics. The Supreme Court has in many ways usurped that role, for example, by holding politicians accountable for corruption and pressing the military to present secretly detained prisoners. Despite Kayani having given almost unprecedented space for the political process to operate, he is still the product of a military ingrained with a caste-like group identity and sense of responsibility and privileges. Its corporate culture will need to evolve with the power shift in Pakistan.

Pakistan’s balance of power has been significantly altered in the past five years. During the 1990s, Pakistan was dominated by its two largest political parties — the Pakistan Muslim League (Nawaz) and the Pakistan Peoples Party — and the military-intelligence establishment, which generally had a pliant president in place. In 2007, two new forces entered onto the scene: an activist Supreme Court and a vigilant private media, including scores of television news channels. Together with civil society activists, they paved the way for the restoration of Chaudhry to the Supreme Court (he was deposed by military ruler President Pervez Musharraf twice in 2007), and for the eventual downfall of the once invincible Musharraf.

Following the 2008 elections, Pakistan’s parliament has been more proactive than ever. Bipartisan parliamentary committees have worked to produce three landmark constitutional amendments that have advanced political reform. The Parliamentary Committee on National Security produced a consensus-based roadmap on how to restore ties with the United States in the wake of last year’s deadly U.S. attack on a Pakistani military base. And with a hung parliament, smaller political parties have a disproportionate say in the political process given that they are essential coalition partners. The military no longer has its own man in the presidency.

Despite the apparent acrimony between Pakistan’s various power brokers, all seem to be cognizant of the changes that have taken place. In their addresses on Monday, both Kayani and Chaudhry called for a redefinition of the concept of national security and said that no single institution can dominate this process. This overlap was noted by opposition leader Nawaz Sharif, who has had a tense relationship with the military over the past twenty years and has allied himself with Chaudhry in recent years. The prime minister-led Defense Cabinet Committee, which acts like a national security council, and a number of parliamentary foreign policy, defense, and national security committees have played a more visible role in discussing and shaping national security policy.

Pakistan is possibly experiencing the end of military hegemony and the beginning of an era of consensus. But for these changes to crystilize, the country’s power brokers must purge themselves of hegemonic tendencies and a pathology of saviorhood. The army will have to concede that military officers can be as corrupt as civilian politicians. It will have to prepare itself for a time in which parliament will review its budget in detail. The Supreme Court will eventually have to temper its use of suo moto power and, for example refrain from determining the prices of compressed natural gas and sugar. And civilian politicians will have to recognize that corruption is bleeding an almost bankrupt Pakistan and empower an independent and competent accountability force.

In 2013, Pakistan’s power shift will be on even more tenuous ground as it could have a new prime minister, president, army chief, and Supreme Court chief justice. All of their tenures will come to an end next year. And a potentially new cast of characters will have to earn the trust of one another and evolve formal and informal mechanisms of collaboration. Working through consensus and making compromises are key. Pakistan’s power brokers acknowledge this, but next year, it will become more clear whether they really mean it.

Arif Rafiq is an adjunct scholar at the Middle East Institute and president of Vizier Consulting, LLC. He tweets at: @arifcrafiq.


Obama’s victory needs to be put in historical perspective
Swapan Dasgupta

In any contest involving the top political job, there are no prizes for the guy who comes second. On the contrary, the post-mortem exercise often leaves the runner-up even more bruised since the focus is invariably on his personal shortcomings, the strategic miscalculations of his team and his misreading of the electoral landscape. Moreover, there is an unending preoccupation with missed opportunities and the what-if questions.

Historians who have studied presidential elections in the United States of America have often thrown the what-if teaser to their readers. What if, it is often asked, Richard Nixon had cared to remove his six o’clock shadow and been a little more careful in choosing his suit for the legendary TV debate with John F. Kennedy in 1960? If nothing else, Nixon would certainly have appeared a less ghostly personality than his Democratic challenger who cut a dashing figure on the screen. Appearances mattered because the majority of those who saw the encounter on TV thought Kennedy was the clear winner, while the majority who heard the debate on radio thought that Nixon had prevailed. The issue is relevant because the results revealed a mere 0.2 per cent difference in the popular vote between the winner and the loser.

There is certain to be a similar, big what-if question that future studies of the 2012 presidential election are bound to throw up. Was President Barack Obama the luckiest presidential candidate, with god on his side? Consider the facts. For the week before Superstorm Sandy created havoc in the east coast of the US, Obama had witnessed Mitt Romney steadily closing the gap and, indeed, two days before the storm, overtaking him in most of the polls. Romney seemed to be on a roll and the president, far from being the silver-tongued inspirational orator, had become distinctly unfocussed. So much so that he had to summon the evergreen charmer, President Bill Clinton, to shore up his defences and rally the faithful.

Sandy halted the Romney momentum, allowed Obama to act presidential and bipartisan and, most important, reminded wavering voters that there are obvious pitfalls in taking the idea of less government to extremes. Sandy rehabilitated Obama both personally and ideologically. It is entirely possible that the Democrats would have won even without divine intervention. But the margin of victory would have been tantalizingly close. Sandy succeeded in informing many people who were disappointed by Obama’s performance, but who were averse to voting for Romney to take a second look at the president, help conclude that he wasn’t such a bad guy after all and, therefore, worth the effort of a vote.

If Sandy did indeed make the critical difference between a wafer-thin margin and a conclusive victory, it also calls into question the resulting over-interpretation of the implications of the president’s re-election. For a start, it is important to keep some elementary electoral statistics in mind. The margin of Obama’s victory (it may increase after the full Florida results come in) against Romney was 2.82 million votes (2.4 per cent). That this was nowhere near the awesome 9.52 million vote (7.2 per cent) margin separating him and Senator John McCain in 2004 need not be held against him. An under-performing presidency was lucky to just register a victory on November 6 and limit the loss in electoral votes to the states of Indiana and North Carolina. To my mind, what is more significant is that Obama polled nearly 9 million votes less than what he did in 2008. It may also be worth noting that the Republicans retained control of the House of Representatives and confined their net Senate loss to just two seats — including that of the bigot who made the bizarre comment about a conception from rape being a gift of god.

Ever since the exit polls suggested that Obama’s re-election was made possible by focussed mobilization of African Americans, Hispanics, students, sexual minorities and women (particularly single women), there has been a clamour to suggest that the president has ridden the crest of a social revolution. Elated by a victory they never imagined would be so conclusive, a section of the commentariat has argued that the 2012 election marks the death of social conservatism, fiscal conservatism and the so-called moral majority. In 2004, at a time the George W. Bush administration was on a high and scholars were describing the US as a ‘Right nation’, Samuel Huntington had warned of a steady erosion of the Judaeo-Christian values that had hitherto set the tone for America. Was his prophecy now unfolding?

The statistical evidence indicates a compelling need to be cautious about rushing to judgment. Over the years, some occupants of the White House have certainly redefined politics for future generations. President Franklin Roosevelt certainly created a New Deal coalition based on active state intervention in the economy. On his part, President Ronald Reagan demolished the Democratic consensus of yore and put self-improvement, low taxes and Christian values on top of the agenda. Indeed, in seeking re-election both FDR and Reagan improved on their majorities (just as Dwight D. Eisenhower, Richard Nixon and George W. Bush also did). This is the first occasion an incumbent president has been credited with a social revolution after actually losing votes.

Maps can often distort perspectives but a bird’s eye of the electoral map of the US doesn’t endorse the claims of a social upheaval. What the huge swathe of red states bordered on the north-east and west by blue borders point to is a deeply divided America. It is true, as the pundits in TV studios emphasized on election night, that states such as Nevada, New Mexico, Colorado and even Florida which should have been Republican, voted for Obama for two consecutive elections.

That new immigrants, particularly Hispanics who today account for nearly 10 per cent of the national electorate, perceive Republicans as less sympathetic to their interests and aspirations is undeniable. An emerging bloc of minority voters comprising Blacks, Hispanics and Asians may also, in time, become a reliable support base for the Democrats, particularly as the overwhelming white dominance of the country is diluted. However, those with a sense of history will readily admit, that voting blocs have never remained constant. Till the election of 1964, for example, the South, particularly the old Confederate states, was overwhelmingly committed to the Democratic Party so much so that Republicans didn’t even bother campaigning there. Yet the convulsions created by the Civil Rights legislation passed by President Lyndon Johnson resulted in the South becoming solidly Republican after 1968.

A historical perspective is necessary as a corrective to the impression that President Obama has crafted a new Democratic majority that will, in time, make Republicans unelectable to the White House. Certainly there are many lessons for the Republicans, not least of which is the need to tap the social conservatism of Hispanic voters and address the mismatch between gender and community. The Republicans also need to seriously deliberate on the wisdom of incorporating contentious social issues such as abortion and contraception into the larger political platform. Against this, however, there is an equal danger that an exultant Democratic movement may carry minorityism and social liberalism a bit too far and, in the process, project the metropolitan values of California and New York in places less inclined to appreciate the virtues of personal liberty over social cohesion.

In securing re-election against tremendous odds, President Obama has shown himself a crafty strategist. But has his victory turned existing politics on its head? The jury is still out on that question.

China and America’s Economic Challenge

By James Parker 
November 8, 2012 

In the United States, the world’s largest economy, President Obama has secured a second term as leader of the country. In China, the second largest economy, by this time next week new leaders will likely have been confirmed as well. In both cases, the new leaders will officially begin their terms in 2013, even if Obama has the luxury of being already on the job. The end of the leadership “contests” in both countries sees the end of a struggle for power which at times got pretty tough.

Obama has already been dealing with a sluggish post crisis-economy, and China’s incoming president and prime minister have also already been battling economic difficulties in their current roles in government. For both countries, whilst by this time next week the political-leadership struggles may be over, from an economic and financial standpoint, the real challenges are yet to come.

For the United States, the most pressing issue is the impending “fiscal cliff”. This is the term used to describe an automatic package of tax increases and spending cuts with a combined value of appx. U.S. $600 billion. Time is tight with only weeks before the deadline on 1st January 2013. Without a deal to either increase the U.S. government debt ceiling, or an extension of the deadline, the U.S. will almost certainly fall into a double dip recession in 2013.

The Republicans have lost the presidential election, and have some pretty hard soul searching to do as to why. Their control in the House of Representatives and ongoing ability to complicate matters in the Senate makes them extremely relevant though, especially since they can effectively kill any attempt to push the fiscal cliff further down the road.

China’s new leaders, face an equally daunting task. Whilst China’s growth rates still far outshine that of the U.S., the economy is facing structural issues which will take years, and a lot of political capital to resolve. The investment heavy growth model is unsustainable, even if one more burst of investment stimulus may be tempting to a new president and prime minister looking to consolidate their power next year.

China’s rebalancing must require households to get a larger share of the economic pie, allowing consumption to take over as a growth engine rather than debt-backed investment which is increasingly misallocating capital. The main challenge for the incoming leaders if they are serious about rebalancing is going to be overcoming the opposition of “entrenched interests” as key policies are reversed. These interests include those linked to state owned enterprises, the export industries, any employers relying on cheap labour, and any firms addicted to what is effectively “subsidized” credit.

If the U.S. tumbles over its fiscal cliff, the outlook for China will become that much harder. A double dip U.S. recession will further batter China’s export markets (pain which will also be felt by countries in China’s manufacturing supply chains) and rebalancing for Beijing will be much harder in the resulting dismal international environment.

One bit of good news for emerging markets is that Chairman of the U.S. Federal Reserve Ben Bernanke, whose looser monetary policies at the Fed have maintained a comfortable international liquidity situation, is now set to keep his job (whereas Romney had promised to remove him). In addition, with the fiscal cliff line up now unchanged, it is more likely than before that Bernanke will have to offset a fiscal rooted slowdown next year with even more monetary accommodation. Generally speaking, abundant liquidity in developed markets is positive for emerging market performance.

Hence neither the U.S. election result, nor the solidifying next week of China’s generational leadership transition will fully eliminate market uncertainties about two of the biggest economic issues facing the world today – China’s rebalancing and the U.S. Fiscal Cliff.

Chinese Aircraft Industry’s New J-31 Stealth Fighter: Implications for India


November 9, 2012


It has been established beyond all reasonable doubt that winning the air war to enable at least local air superiority if not full air superiority over the battle area is essential for victory. The tank battles between the Germans and Allies, most notably with General Rommel and General Montgomery commanding the opposing forces, in North Africa in World War II, the Indian operations in erstwhile East Pakistan in 1971, US operations in the First Gulf War of 1991, all serve to drive home this basic point. Hence, it is essential for the Indian Air Force (IAF) to be equipped and trained to achieve a dominant position over likely adversaries.

Chinese Developments in Modern Aviation Technology

The People’s Republic of China (PRC) has invested heavily in its indigenous aircraft industry over the years and the results of this investment are very evident today. On 11 January 2011, the PRC unveiled its first Fifth Generation Fighter Aircraft (FGFA), developed at the Chengdu Aircraft Corporation (CAC), a part of Aviation Industry of China-I (AVIC I).1 At that time there was speculation based on isolated inputs that the PRC was actually pursuing not one but as many as three separate FGFA projects, of which at least one was believed to be at the Shenyang Aircraft Corporation (SAC)—another major component of AVIC I. This speculation has turned out to be true today as the SAC developed J-31 FGFA (fuselage number 31001) reportedly carried out its first flight on 31 October 2012 at the SAC’s facilities in the North Eastern Chinese city of Shenyang. 2
This event makes PRC the first country in the world to achieve the milestone of developing two indigenous FGFA designs near simultaneously. Russia today has just the Sukhoi T-50 prototype of the Перспективный Авиационный Комплекс Фронтовой Авиации (ПAK ФA), approximately translated as [Prospective Aviation (K) Complex [for] Frontal Aviation (PAK FA)], 3 whose first public flight and was carried out and publicly acknowledged in August 2011. 4 This remains the first and only currently known Russian FGFA project. The USA has already developed the F-22 “Raptor” and inducted it into service. The F-22 first flew on 07 September 1997, 5 and the first F-22 was delivered to the US Air Force at Nellis Air Force Base on 14 January 2003. 6 The second US FGFA project is the F-35 “Lightning-II” Joint Strike Fighter (JSF). This aircraft has had a troubled developmental history, with several slippages in development milestones. The F-35 carried out its first flight on 15 December 2006. 7 Since then, the development phase has continued with deliveries of aircraft to the US Air Force commencing on 05 May 2011. 8 The timelines above illustrate the protracted development timelines and clearly bring out that the F-22 and F-35 were not actually simultaneous programmes. As noted, the F-35 carried out its first flight after the F-22 had already been inducted into frontline service. There is no other country with its own FGFA programme today. European aviation powerhouses are at the Fourth Generation or Fourth Generation Plus stage with the Eurofighter Typhoon and France’s Dassault Rafale. India has, as per press reports, tied up with Russia to be a part of the Russian T-50/PAK FA programme9 in preference over its proposed indigenous Advanced Medium Combat Aircraft (AMCA) 10 project. For several months now there has been no mention of the AMCA from either IAF or DRDO sources in public forums, possibly indicating the shelving of the programme in favour of the PAK FA. Even allowing for the fact that the United States was the pioneer in the development of FGFA technologies and so would have had to build the road itself thus taking more time to complete the FGFA programmes, the achievements of the PRC in this regard are impressive to say the least.

The PRC has been able to make the jump from producing improved versions of essentially 1950s Soviet technology in aircraft [J-6 variants (essentially MiG-19 copies), 11 J-7 variants (MiG-21 copies),12 J-8 variants (scaled up MiG-21 designs)] 13 to copying and improving upon Fourth Generation Soviet/ Russian designs such as the Su-27SK (J-11B, J-11BS) 14 and Su-33 (J-15) 15 and to now being able to simultaneously develop two FGFA designs—the J-20 and J-31, in parallel. This jump in capability from second to at best third generation fighter aircraft technology to fifth generation technology in a matter of a couple of decades is impressive to say the least. The dedication and single-minded focus of the personnel involved in the PRC’s aircraft industry is indeed praiseworthy.

Lessons from China’s Transformation of its Aviation Industry

It is easy, and often quite fashionable, to belittle the PRC’s aviation achievements by saying that these have been achieved through spying and stealing technology. However, at the end of the day, the fact remains that the PRC has proven that it has internalised cutting edge aviation technology and been able to apply it for practical solutions. In the real world it is force and power that counts and not a good behaviour certificate. 

There is a lesson here for other countries that aspire to develop a modern aviation industry. The PRC’s aircraft industry was helped by two different factors. Firstly, the PRC was under a virtual aviation technology embargo for most of the later half of the 20th century, thus forcing it to develop its own technology and equipment. (A similar thing happened with India’s nuclear and space programmes, which faced embargos for long periods of time.) Secondly, the People’s Liberation Army Air Force (PLAAF) gave full support to the aviation industry. The PRC saw the US and USSR as its main enemies. The PLAAF trained to fight these superpowers with its antiquated but indigenously built equipment. The confidence this built among the scientists and engineers involved in the PRC’s aviation industry must have been immense. Such displayed confidence would have spurred these people on to greater efforts. However, it should be borne in mind that the second factor above was in large part due to the first. Given the embargo in place, the PLAAF had no option but to go to its own industry as imports were totally ruled out.

Implications for India

The IAF is very aware of the fact that there are unresolved border issues between India and China. According to press reports, the IAF has been building up infrastructure in the North East close to the main or major in area disputed territory, the state of Arunachal Pradesh16 which is claimed in its entirety by the PRC under the ‘name’ “South Tibet”. 17 There are also efforts by the IAF to beef up its normal deployment of equipment in the region with Su-30MKI squadrons; currently the Su-30MKI is the IAF’s most potent aircraft. 18 At the same time, the IAF is moving to address its falling fighter strength through increased induction of Su-30MKIs over and above the numbers originally planned, extending the in-service life of other aircraft such as MiG-29s and Mirage-2000s through upgrades and pursuing the MMRCA selection process with gusto.

The IAF expects its own FGFA to commence entering service around 2020 onwards. This date, based on recent experience with Russia in the Gorshkov deal19 and upgrades to Il-38 Maritime Reconnaissance (MR) 20 aircraft, etc., cannot be taken as fixed. Russia has displayed an alarming tendency to demand more than earlier agreed upon funding, while at the same time pushing delivery dates further into the future. There is thus no certainty about the in-service date of around 2020 for FGFA21 to equip the first IAF squadrons being met. Looking ahead to a possible future “hot disagreement” over where the borders between Tibet and India lie, one can pit the equipment and technology equation as follows:
  • Su-30MKIs to counter J-10, J-11B/J-11BS
  • Su-30MKK, LCA with MiG-29UPG and Mirage-2000UPG to counter JF-17, J-8III etc and FGFA to counter the J-20.
So far, this equation gave me comfort in India’s ability to deny the PLAAF air superiority over the battle-area. The entry of a new factor in the form of the J-31 changes all that. A second FGFA platform would bring different, possibly supplementary to the J-20 capabilities, to the battle, quite apart from increasing the numbers of FGFAs to be faced.

Despite having been a staunch supporter of the MMRCA programme to bring the Rafale into service at the earliest, the entry of the J-31 makes me look afresh at the situation. The FGFA programme with Russia is expected to cost India about US $30 billion. 22 Can India afford to buy another FGFA at the same time? Probably not. However, India is in the process of committing about $10 to 20 billion23 to a fourth generation machine, the MMRCA Rafale, which cannot hope to match a FGFA in combat. Moreover, it should be understood that “co-development of FGFA” by India and Russia is a myth. The T-50 flew in 2011 and now there are reportedly three prototypes flying. How does one co-develop an already flying machine? The T-50, and PAK FA design, is thus obviously tailored towards a Russian Air Force requirement and not an IAF specification. 

Given the need to be prudent in spending, it may make sense to replace the MMRCA project with a single vendor deal through Government-to-Government contacts for the US F-35 “Lightning-II”. 24 This aircraft could possibly enter service earlier than the PAK FA and also give a naval equivalent through selection of the Short Take Off Vertical Landing (STOVL) 25 variant for INS Vikramaditya and the indigenous aircraft carrier. In fact, the selection of the F-35 could hep reduce the IAF’s base dependency through purchase of a mix of Conventional Take Off and Landing (CTOL) 26 and STOVL variants. The learning from the F-35 programme, especially in building it under license, could possibly re-energise the AMCA project to give the IAF the FGFA’s replacement from Indian design facilities.


The PRC has made major strides in the development of its indigenous aviation capabilities. The first flight of the J-31 signals that the PLAAF is ready to take its place as a first tier air force almost at par with the US Air Force and Russian Aviation forces. The ability of the PLAAF to field higher capability and numbers of cutting edge aircraft in the event of a “Local Border War under Informationised Conditions” will increase exponentially with two FGFA aircraft types in its service. In view of the unresolved border issues between the PRC and India, it would be prudent for the IAF to reassess its equipment plans. Instead of inducting another fourth generation aircraft under the MMRCA programme, it may be better to replace the MMRCA with a mix of F-35s and increased numbers of Su-30MKI and LCAs.
  1. 1. Robert Wall, “J-20 Completes First Flight”, http://www.aviationweek.com/Blogs.aspx?plckBlogId=Blog:27ec4a53-dcc8-42d..., accessed on 01 November 2012.
  2. 2. J. Michael Cole, “China’s J-31 Stealth Aircraft Takes Flight”, http://thediplomat.com/flashpoints-blog/2012/10/31/chinas-j-31-stealth-a..., accessed on 01 November 2012. Also see, “J-31 fighter roars off on maiden flight”, http://www.globaltimes.cn/content/741613.shtml, accessed on 01 November 2012.
  3. 3. Carlo Kopp and Peter Goon, “Assessing the Sukhoi PAK-FA”, http://www.ausairpower.net/APA-2010-01.html, accessed on 01 November 2012.
  4. 4. “Russian Sukhoi T-50 Stealth Fighter Jet Performs First Public Flight Demo”, http://www.nycaviation.com/2011/08/russian-sukhoi-t-50-performs-first-pu..., accessed on 01 November 2012.
  5. 5. “F-22 Raptor Soars in First Flight”, http://www.boeing.com/news/releases/1997/news_release_970907.html, accessed on 01 November 2012.
  6. 6. “Us Air Force F-22 Raptor Aircraft Pictures History And Facts”, http://www.aviationexplorer.com/f-22_raptor_facts.htm, accessed on 01 November 2012.
  7. 7. “F-35 is Airborne!”, http://defense-update.com/newscast/1206/news/151206_jsf.htm, accessed on 01 November 2012.
  8. 8. Stephen Trimble, “Lockheed delivers first production F-35 to US Air Force”, http://www.flightglobal.com/news/articles/lockheed-delivers-first-produc..., accessed on 01 November 2012.
  9. 9. “PAK-FA/FGFA/T50: India, Russia Cooperate on 5th-Gen Fighter”, http://www.defenseindustrydaily.com/india-russia-in-negotiations-re-next..., accessed on 02 November 2012.
  10. 10. “Advanced Medium Combat Aircraft (AMCA) - Feasibility Study Underway; Probable Specifications”, http://www.india-defence.com/reports-4827, accessed on 02 November 2012.
  11. 11. “Shenyang J-6 Was Nothing More than a Direct Copy of the Soviet Era Mikoyan-Gurevich MiG-19 Farmer Jet Powered Fighter”, http://www.militaryfactory.com/aircraft/detail.asp?aircraft_id=882, accessed on 02 November 2012.
  12. 12. “Jian-7 Interceptor Fighter”, http://www.sinodefence.com/airforce/fighter/j7.asp, accessed on 02 November 2012.
  13. 13. “Jian-8 Interceptor Fighter”, http://www.sinodefence.com/airforce/fighter/j8.asp, accessed on 02 November 2012.
  14. 14. Carlo Kopp, “Shenyang J-11B/BH/BS/BSH Flanker B/C+”, http://www.ausairpower.net/APA-SinoFlanker.html, accessed on 02 November 2012.
  15. 15. “J15 Naval Fighter Jet - PLA NAVY”, http://airforceworld.com/pla/english/J-15-naval-carrier-based-fighter-ch..., accessed on 02 November 2012.
  16. 16. “IAF to reactivate Vijaynagar airfield today”, http://www.echoofarunachal.com/?p=6512, accessed on 02 November 2012.
  17. 17. Bhaskar Roy, “An India-China Military Conflict – Part I”, C3S Paper No 940, February 9, 2012, http://www.c3sindia.org/india/2752, accessed on 02 November 2012.
  18. 18. “IAF To Raise 4 More SU-30MKI Squadrons”, http://www.defencenews.in/defence-news-internal.asp?get=new&id=1448, accessed on 02 November 2012.
  19. 19. “Russia further delays delivery of Admiral Gorshkov to India: A blow to India's efforts to quickly build up naval strength”, http://www.business-standard.com/india/news/russia-further-delays-delive..., accessed on 02 November 2012.
  20. 20. “Delays with Il-38SD and Sea Dragon upgrade sour India's love affair with Russian arms”, http://www.network54.com/Forum/211833/thread/1119016240/Delays+with+il-3..., accessed on 02 November 2012.
  21. 21. “Three year slip in FGFA”, http://spsaviation.net/exclusive/?id=111&h=Three-year-slip-in-FGFA, accessed on 02 November 2012.
  22. 22. Dave Majumdar, “India's FGFA stealth fighter set for 2014 roll-out”, http://www.flightglobal.com/news/articles/indias-fgfa-stealth-fighter-se..., accessed on 02 November 2012.
  23. 23. “Manmohan Singh, Francois Hollande talk India's $20-billion plane deal”, http://articles.economictimes.indiatimes.com/2012-06-20/news/32335874_1_..., accessed on 02 November 2012.
  24. 24. “U.S. open to selling F-35 jet fighters to India”, http://in.reuters.com/article/2011/11/03/idINIndia-60286320111103, accessed on 02 November 2012.
  25. 25. “Multirole Variants”, https://f35.com/the-f-35/f-35-overview/multirole-variants/, accessed on 02 November 2012.
  26. 26. Ibid

Kudankulam Nuclear Power Plant and Civil Nuclear Liability


Kapil Patil and G. Balachandran

November 9, 2012


The Russian President Vladimir Putin was expected to visit India in early November 2012. That visit has now been postponed to late December 2012. This postponement has been largely attributed to some of the unresolved issues in India-Russia relations, which include their differing perceptions over civil nuclear liability for Units III, IV, V and VI at the Kudankulam site in Tamil Nadu. On December 5, 2008, during the official visit of Russian President Dmitry Medvedev to India, an agreement was signed by the two countries on the construction of four additional units at the Kudankulam site and cooperation on developing new sites. This Intergovernmental Agreement was signed by Sergey Kirienko, Head, Rosatom State Corporation and Dr. Anil Kakodkar, Chairman, Atomic Energy Commission of India. In the said agreement, India had granted a liability exemption to Russian suppliers for nuclear damage. The exemption of Russian suppliers has, however, been challenged in the Supreme Court of India through a writ petition filed by a group of civil society activists. Taking cognizance of the writ petition, the Supreme Court has asked the government why such an exemption was granted to the Russian vendors as well as to clarify issues pertaining to civil nuclear liability. Against this backdrop, this Issue Brief examines the issue of civil nuclear liability in India in the context of the Kudankulam nuclear reactors, the rationale for such an exemption to Russia, and the potential negative repercussions on India insisting upon a revision of the India-Russia Intergovernmental Agreement of December 2008.
Evolution of India’s Nuclear Industry and Nuclear Liability Provisions

The Atomic Energy Commission (AEC), founded in 1948 under the Atomic Energy Act, is the apex body in charge of India’s nuclear policy. The Department of Atomic Energy (DAE), created in 1954, was charged with the task of design, construction and operation of nuclear power/research reactors as well as supporting nuclear fuel cycle technologies covering exploration, mining and processing of nuclear minerals, production of heavy water, nuclear fuel fabrication, fuel reprocessing, and nuclear waste management. The DAE set up India’s first nuclear reactor—APSARA—which went critical at Trombay on August 4, 1956. It was also the first research reactor in Asia. On July 10, 1964, India’s second research reactor CIRUS (40 MW) attained criticality at Trombay. CIRUS was built with assistance from US and Canadian nuclear suppliers.

However, in order to advance its commercial reactor programme, the DAE, in its initial years, sought technological assistance from various nuclear powers such as UK, Canada, USA, etc.

Prior to the formation of the Nuclear Power Corporation of India Ltd. (NPCIL), the design, construction and operation of nuclear power plants were carried out as a departmental activity of the DAE. Accordingly, when in 1962 India signed the nuclear cooperation agreement with the United States, under which the American firm, General Electric, agreed to supply two 200 MWe reactors to India to be constructed at Tarapur site near Bombay, the agreement was between the Government of India and the Government of the United States. By then the United States already had a well-established Nuclear Liability Law—popularly known as the Price Anderson Act—which was passed by the US Congress in 1957.

General Electric, chosen to build Tarapur, wanted an indemnity protection similar to what it was extended in the United States. As explained by Dr M.R. Srinivasan, who was then a lead member of the Indian team negotiating the Tarapur contract with the Americans:

Initially, it (i.e., General Electric) insisted that there should be legislative protection. On the Indian side, we felt it was premature to pass a law as we were then thinking of building only a small number of nuclear power units to demonstrate the economic feasibility of nuclear power under Indian conditions. We persuaded G.E. that a protection in the contract, which was in any case approved by the Government of India, would be adequate.1

Similarly, when India signed an agreement in 1965 with the Atomic Energy of Canada Limited (AECL) for building the first two reactors at Rawatbhatta site in Rajasthan, an indemnity protection was extended to AECL and its suppliers as well.

On the question of whether India was right in extending such an indemnity to suppliers, there is no doubt that without either of these two agreements India would not have been able to develop and become the self-reliant civil nuclear power industrial country that it is today. To quote Dr M.R. Srinivasan, one of the prime architects of the development of the Indian civil nuclear power industry in its formative years, on this issue:

If we had not done so, we would not have been able to import our first two reactors from the U.S., nor the second pair from Canada. There is no doubt whatever that India gained a great deal by building the Tarapur reactors with U.S. collaboration. India learnt early the problems of operating nuclear power units in our grid systems and also in managing a complex nuclear installation with our own engineers and technicians. In the case of cooperation with Canada, India was able to get the basic knowhow of the pressurized heavy water reactors (PHWR). Thereafter, we progressed on our own to design and build 16 PHWRs in seven locations. Now we are building four 700 megawatt PHWRs of our own design. Four more will follow soon and possibly another four will also be built, thus making a total of 12 PHWRs of 700MW each. Therefore, early cooperation with Canada helped us to become a designer and builder of nuclear power plants.2

As India’s civilian nuclear programme progressed steadily, the “Power Projects Engineering Division” was set up in 1967 within the DAE for the construction of power reactors indigenously as well as in collaboration with various foreign entities. The Power Projects Engineering Division was subsequently converted into the “Nuclear Power Board” and it became the Nuclear Power Corporation of India Limited (NPCIL)—as a public sector enterprise—on September 17, 1987. The NPCIL granted liability exemption to all its Indian supply contracts in line with the exemption hitherto granted to the American and Canadian suppliers for the construction of various power reactors in India.3 The NPCIL today relies heavily and exclusively on a variety of local suppliers for building Pressurised Heavy Water Reactors (PHWRs) in India. 

Nuclear Liability Provisions and India-Russia Nuclear Cooperation

During the initial years of its nuclear programme, India had limited nuclear cooperation with the erstwhile Soviet Union. In 1961, India and the USSR signed an agreement for “Scientific and Technical Cooperation in the Field of Peaceful Utilization of Atomic Energy” and in 1968 India signed a protocol with the USSR on the “Mutual Deputation of Scientists and Experts of the Indian Atomic Energy Commission and the USSR State Committee for the Utilization of Atomic Energy”. However, these agreements were restricted mainly to the exchange of scholars and visits. The first substantive bilateral nuclear cooperation agreement between India and USSR was signed only after India’s Peaceful Nuclear Explosion in May 1974, following which Canada had suspended nuclear cooperation with India. Canada formally ended its nuclear relationship with India in May 1976, after an unsuccessful attempt to persuade India to accept full-scope safeguards on its nuclear programme.4 After the Canadian withdrawal, when India was desperately looking for international supplies of heavy water, the USSR readily agreed to supply heavy water for the Rajasthan Atomic Power Station (RAPS-I&II) through a bilateral agreement signed in September 1976.

In the aftermath of its Peaceful Nuclear Explosion conducted in 1974, India came under a range of sanctions from major international suppliers, which severely impacted its civilian nuclear programme. One major international fallout of India’s 1974 nuclear test was the formation of the Nuclear Suppliers Group (NSG), whereby the major nuclear suppliers sought to control the nuclear trade for peaceful purposes in a manner consistent with their nuclear non-proliferation policies.5

In fact, a number of countries terminated their ongoing nuclear cooperation agreements with India, including Canada which terminated the 1963 agreement in May 1976, and Brazil which terminated the India-Brazil 1968 Agreement on Co-operation Regarding the Utilization of Atomic Energy for Peaceful Purposes in March 1975. In the face of such opposition from many countries to conduct nuclear commerce with India, the Soviet Union was the only country willing to provide assistance to India’s civilian programme. In fact, post-1974, the Soviet Union was the first country to sign an agreement—Agreement between the Government of India and the Government of the Union of Soviet Socialist Republics regarding Peaceful Uses of Atomic Energy, signed in January 1979—for nuclear cooperation with India.

The next major nuclear commerce agreement that India signed after the 1974 test was also with the Soviet Union; this was on November 20, 1988 for the construction in India of a nuclear power station composed of two pressurized light water reactors, each of 1000 MWe. Although the agreement was formally signed only in November 1988, the two governments had made the arrangement for such a construction much earlier and India had accordingly requested the International Atomic Energy Agency (IAEA) to apply safeguards in connection with the supply of the reactor facilities by the Soviet Union to India and to the nuclear material to be used therein. The Board of Governors of the IAEA acceded to that request on September 14, 1988 and a safeguards agreement6 was signed with the IAEA on September 27, 1988. However, due to developments in the former Soviet Union, this agreement could not be effected for almost a decade. It was only on June 21, 1998 that the Government of India and the Government of the Russian Federation were able to sign a supplementary agreement to the 1988 agreement.

Meanwhile, the NSG, in its 1992 plenary meeting, modified the guidelines for transfers of nuclear-related dual-use equipment, material and technology. The new NSG guidelines required that nuclear supplier states require, as a necessary condition for the transfer of relevant nuclear supplies to non-nuclear weapon states (NNWS), the acceptance of IAEA safeguards on all their current and future nuclear activities (i.e., full-scope safeguards, or comprehensive safeguards).7 However, the major bone of contention between India and the NSG was the former’s unwillingness to accept full-scope safeguards (FSS) on its civilian nuclear programme. India’s opposition to FSS was driven fundamentally by its opposition to the Nuclear Non-proliferation Treaty (NPT) which it regarded as discriminatory, and accepting FSS would be tantamount to accepting the control regime of the Treaty itself. In the light of the NSG’s guidelines, the major challenge for Russia—being an NSG member—was to implement the 1988 inter-governmental agreement.8 The NSG vehemently opposed the 1998 supplement to the 1988 agreement and the implementation of the plan to construct two reactors in India as per the agreement. A substantial majority of NSG members contested the legality of the supplementary agreement as a violation of its modified guidelines. The Russian government, however, contended that the implementation of the project did not invoke FSS requirements as it pertained to an agreement which predated April 3, 1992, when the new NSG guidelines entered into force. Thus, despite the vehement opposition from other NSG members, Russia implemented the 1988 agreement and proceeded with construction activities at the Kudankulam site.
International Supplies, Civil Nuclear Liability and Kudankulam

A new issue that has cropped up recently in the public debate on Kudankulam is on the question of nuclear liability in case of an accident at Kudankulam with offsite implications. Although all the contracts relating to the Kudankulam nuclear plants are not in the public domain, it has been reported that the Russian suppliers were given indemnity from any liability arising out of any accident at the Kudankulam plants I and II, and they were given similar assurances in respect of Kudankulam III and IV as well in addition to other plants that may be built with Russian assistance at Kudankulam.

Before discussing the specific Kudankulam case, it is worthwhile recalling some of the international practices in respect of civil nuclear liability. By the time the first Kudankulam contract was signed sometime in 1998, all countries with nuclear power plants, with three notable exceptions—China, India and Russia—had operating in their territory one of three types of nuclear liability laws: their own nuclear liability laws, such as in the USA and Canada, or one of the two international civil liability instruments—the Paris Convention on Third Party Liability in the Field of Nuclear Energy of 1960 established under the auspices of the Organisation for Economic Co-operation and Development (OECD) or the Vienna Convention on Civil Liability for Nuclear Damage of 1963 established under the auspices of the IAEA. While the OECD treaty is regionally confined, the IAEA treaty is worldwide in its application. Notwithstanding the type of the liability laws, all incorporated two important principles: (i) liability of the operator was absolute, and (ii) the liability was channelled exclusively to the operator.

China began its civil nuclear power programme only in the 1980s. First, a nuclear power plant, with a capacity of 300 Mwe, was self-designed and constructed at Qinshan, Zhejiang Province. Then another project with a capacity of 2 × 900 Mwe, was built at Shenzhen Daya Bay with French-designed and- supplied reactors. In the process of contract negotiation on the Daya Bay nuclear power project, the French put forward the issue of nuclear third party liability arising from nuclear accidents. To clarify this question, the State Council adopted an Official Reply Relating to Nuclear Third Party Liability (Guo Han, 1986, No. 44). The Official Reply, as an administrative regulation, is the legal basis on how to deal with nuclear third party liability issues.

The Official Reply used the pertinent provisions of the international conventions as reference. Basically, the principles of the Official Reply—(i) The Principle of Absolute and Exclusive Liability; (ii) The Principle of Limited Liability; and (iii) Rights of Recourse—were consistent with those of the international conventions. In particular, in respect of the Right of Recourse, the Official Reply stated that: “If nuclear damage is caused by a third party’s intentional act or omission, the liable operator only will have a right of recourse against that third party.”

The Russians, for their part, engaged in nuclear commerce as a buyer only in the late 1980s when they entered into a nuclear cooperation agreement with Germany. In the absence of a nuclear liability bill in Russia in line with international nuclear liability conventions, the Germans demanded and obtained from the Russians an assurance exempting German suppliers from any liability arising out of any accident at any of the German supplied facilities, in line with the international conventions. The Russian Federation gave an undertaking that it would not institute liability proceedings against Germany or any German supplier in case of a nuclear incident in Russia.9 This agreement did include a clause stating that the exemption clause will not apply once the legislation has entered into force in the Russian Federation, which is in accordance with the provisions of the Vienna Convention and the Joint Protocol on the Application of the Vienna and Paris Conventions, or with the provisions of another relevant international legal instrument to which Germany is a Party. Russia had signed the Vienna Convention in May 1996 but ratified it only in May 2005. The Russians gave a similar undertaking to France and French suppliers in 2000.

The Russian decision to go ahead with the supply of two reactors to India was of immense political significance to India. This was a unique instance—the first of many—of Russia, in complete disregard of the NSG’s opposition, assisting India’s Civilian Nuclear Programme. In 1998, the NPCIL and Rosatom finalized the Russian VVER design and engineering supervision arrangements for the construction of two reactors at Kudankulam. The issue of the liability of the Russian suppliers in case of an accident was raised by the Russians as India did not have any nuclear liability laws at the time. Drawing upon their own experience with the German suppliers, the Russians insisted on a similar exemption from liability for Russian suppliers.

The supplementary agreement finalized in 1998 gave such an assurance to the Russian suppliers. There were many reasons for this. First, by 1998 the NSG had amended its Guidelines for nuclear supply prohibiting members from engaging in nuclear commerce with India. With the NSG comprising of all nuclear suppliers with the exception of India and China, the NSG had essentially closed all options for India to engage in any nuclear commerce either with regard to nuclear fuel or nuclear facilities and components. The only country able and willing to engage in nuclear commerce at that time was Russia. India was faced with the classic “Hobson’s’ Choice”: either agree to Russian terms or place itself outside of international nuclear commerce with adverse implications for its civilian nuclear future. By then all the traditional suppliers of enriched uranium required to fuel the Tarapur I and II reactors had also withdrawn from the suppliers list to India. Once again, only the Russians were willing to supply fuel for Tarapur in the face of strong opposition from the rest of the NSG community. Therefore, had India refused the Russian condition on nuclear liability—it must be again stressed that the request was in line with all international conventions either then or now—it would have faced not only a total boycott from international suppliers with respect to nuclear facilities and systems but also, more importantly, with respect to fuel for Tarapur I and II. Further, it must be stressed that Indian suppliers to its nuclear facilities were already enjoying such an exemption from nuclear liability. Accordingly, the Government of India decided to accede to the Russian request for exempting Russian suppliers from all nuclear liability. It was a decision taken in India’s national interest, taking into account the full range of factors then operating against Indian interests in the nuclear field.

In July 2005 the India-US nuclear deal was announced jointly by the Indian Prime Minister Manmohan Singh and US President George W. Bush during the former’s visit to Washington. While the process of allowing for nuclear trade with India by the NSG members was in progress, during President Putin’s visit to India in January 2007, the two governments signed a Memorandum of Intent on Development of Cooperation in the Construction of Additional Nuclear Power Plant Units at Kudankulam site as well as on the construction of Russian Design Nuclear Power Plants at New Sites in the Republic of India. Towards an agreement to implement these intentions, the two governments negotiated and agreed on a text in February 2008 on the eve of the visit to India of Victor Zubkov, Chairman of the Government of the Russian Federation. Although the text of the agreement was finalised in February 2008, the agreement could be signed formally only after the NSG lifted its restrictions on the supply of nuclear materials and technologies to India in September 2008. The Intergovernmental Agreement was signed on December 5, 2008 during the official visit of Dmitry Medvedev, President of Russia, to India by Sergey Kirienko, Head of the Rosatom State Corporation and Anil Kakodkar, Chairman of the Atomic Energy Commission of India.

Even at this time, as late as December 2008, India did not have any domestic nuclear liability legislation in force, although such legislation had been contemplated by the Indian government for almost a decade since 2001. Even an initial draft of a “Civil Liability for Nuclear Damage Bill 2009” was circulated only in late June 2009. As a consequence, when the two governments negotiated the text of the agreement on cooperation in the construction of additional nuclear power plant units at Kudankulam site as well as in the construction of Russian designed nuclear power plants at new sites in February 2008, the issue of civil nuclear liability was once again raised by the Russians. It was decided to follow the earlier practice and exempt the Russian suppliers from all liability.10
Consequences of the Indian Nuclear Liability Legislation

The Indian legislation on civil nuclear liability—The Civil Liability for Nuclear Damage Bill, 2010—was finally passed by both Houses of Parliament in late August 2010. Questions have been raised now by some in the judiciary and others in the civil activism sector about the validity/reasonableness of granting such liability exemptions to the Russians. It is to be hoped that cooler heads will prevail and that the “imperious immediacy of interest”—as the American sociologist Robert K. Merton characterised instances of someone wanting the intended consequences of an action so much that they purposefully choose to ignore the unintended consequences; in this case the desire of the plaintiffs to block any civilian nuclear future power in India—does not result a situation in which India finds itself at a disadvantage in areas far removed from civilian nuclear power. This needs some elaboration.

It must be admitted at the very outset that the Indian nuclear liability law is completely out of line with all major international conventions and indeed the nuclear liability laws prevailing in all other countries. One of the reasons is the Right of Recourse embedded in the Indian law. It is not surprising, therefore, to find that more than four years after the NSG granted exemption from its former guidelines to enable nuclear commerce with India, India has not been able to finalise a single contract with any of the countries with which it has signed nuclear cooperation agreements for any nuclear facility. Not only have foreign suppliers been unwilling to supply India with any nuclear facility or system or component, except for fuel supply agreements, more recently, the domestic indigenous suppliers of such facilities, systems and components to the Indian nuclear power industry have also been expressing their reservations about the Indian nuclear liability law, and hence their unwillingness to engage in nuclear supply trade with Indian operators.

This means that both the foreign and domestic suppliers of nuclear equipment, systems and components will be unwilling to assist the Indian nuclear power programme in the future. Without such commerce, the Indian nuclear power facility operator(s) cannot expand their power capacity and, for all practical purposes, the Indian civil nuclear power programme is set to decline in the coming years. In the current environment of free trade and uniform treatment of both domestic and foreign suppliers, it will not be possible to grant exemption from liability to domestic producers only.

Can India revoke the liability exemption given in respect of Kudankulam I and II? These contracts were finalised in the late 1990s. It would be difficult for India to apply laws passed in 2010 to contracts finalised more than a decade earlier. If India were to justify the exercise of such a right now, it would have consequences far beyond the nuclear field. When India tested a nuclear device in 1974 without violating any of its international commitments, the USA amended its Atomic Energy Act to bar nuclear commerce with India, although it had signed a contract to the effect that it would supply Tarapur I and II with spares and fuel for the life of the reactor. India had then objected vehemently about this retrospective application of laws passed subsequent to a legal agreement. India can hardly invoke the same rights now. Additionally, Kudankulam I and II are ready for commissioning now. If Russia were to choose to go to an international court to press its charges against India in respect of any change to the 1998 agreement, it is very likely that the final judgement would be against India. We can also assume that for all practical purposes the 1998 liability exemptions would be upheld by Indian courts as well.

What about Kudankulam III and IV and subsequent Russian power plants that are covered by the 2008 Intergovernmental Agreement?

The contracts for these power plants are yet to be inked. Therefore, a case can be made that NPCIL, a public sector company owned by the Government of India, cannot now enter into a contract which violates or at least does not conform to the sentiments of a law passed by the India Parliament. A case can be made that the 2008 and subsequent India-Russia agreements in respect of nuclear power plants need to be renegotiated. In that case, the Russians can also insist that they too need to revise some sections of such agreements. What would these be, and what would be the impact if the Russians were to insist on their rights as well?

The first would, of course, be a revision in the contract prices. The Russians would insist on an escalation of the costs of the supplies. The size of such increase would depend on the bargaining strength of the two sides. Given that none of the other suppliers of nuclear facilities are ready to engage in nuclear trade with India on nuclear facilities, it is obvious that the Russians have the advantage in any revisions to the cost aspect of the contract.

Second, there are far more serious potential repercussions if the Russians were to carry forward their demand of revisions. Two sections would see an immediate impact: Sections 6.2 and 6.3 of the Agreement between the Government of the Republic of India and the Government of the Russian Federation on Cooperation in the Use of Atomic Energy for Peaceful Purposes that was signed by the two governments on March 12, 2010 and ratified on September 20, 2010.

Section 6.2 of this Agreement states that “The Indian Party shall store and reprocess spent nuclear fuel obligated to the Russian Federation under IAEA safeguards in national facilities in the territory of the Republic of India with the aim to store and use reprocessed materials in the Republic of India.” This means a front-end acceptance by Russia of the Indian right to reprocess spent fuel from the Russian reactors and Russian fuel for use in India’s Fast Breeder Reactors. As is well known, the future Indian nuclear power programme, if it is to be successful, will have to rely substantially on the reprocessing of spent fuel from imported reactors. If Russia were to renegotiate this section to deny India the right to reprocess spent fuel, it would result in a big blow to the Indian nuclear power programme. Therefore, this is one way in which Russia could inconvenience India, and that too in a much more substantial manner.

The second direct effect of the re-opening of the Agreement would be on Section 6.3 of the Intergovernmental Agreement. Section 6.3 states that “The Parties shall conclude a separate agreement for the transfer of technology and facilities for chemical reprocessing of irradiated fuel, isotopic uranium enrichment and heavy water production.” By this, Russia agreed to or expressed its willingness to transfer sensitive nuclear technologies, equipment and components to India. India is especially in need of reprocessing equipment and systems if it is to fully utilise the spent fuel from its future nuclear power programmes. After the NSG gave exemption for nuclear trade with India in September 2008, it passed another amendment to its Guidelines for export of nuclear facilities and equipment in July 2011. According to the amended Paragraph 6 of the new Guidelines on Special Controls on Sensitive Exports:

Suppliers should exercise a policy of restraint in the transfer of sensitive facilities, equipment, technology and material usable for nuclear weapons or other nuclear explosive devices, especially in cases when a State has on its territory entities that are the object of active NSG Guidelines Part 2 denial notifications from more than one NSG Participating Government.

(a) In the context of this policy, suppliers should not authorise the transfer of enrichment and reprocessing facilities, and equipment and technology therefor, if the recipient does not meet, at least, all of the following criteria:

(i) is a Party to the Treaty on the Non-Proliferation of Nuclear Weapons and is in full compliance with its obligations under the Treaty[.]

Thus, since July 2011, NSG members are barred from transferring sensitive nuclear technology, facilities, equipment and parts to India. In fact, Russia had incorporated these same conditions of supply in its domestic laws on export of nuclear facilities, equipment and technologies as early as December 2009 and, of course, now it is obliged to follow the NSG Guidelines. Since the Intergovernmental Agreement was signed in March 2010, Russia could have invoked the “Grandfather” clause of NSG and supplied such sensitive technologies to India as per the March 2010 agreement. However, if India were to invoke a re-opening of the February 2008 Intergovernmental Agreement as a result of its own volition or a judiciary ruling, then the Russians too can invoke their international obligations and repudiate Sections 6.2 and 6.3 of the March 2010 Intergovernmental Agreement. In that case, India would be left alone without any foreign supplier willing to trade with it on these sensitive technologies. Again, the major loser in any re-opening of the India-Russia Intergovernmental Agreements would be India, with far reaching consequences to its future energy security.

Finally there is another matter to be considered. India has been at the receiving end of various technology control regimes. India is not a member of any of the following restrictive regimes: the Nuclear Suppliers Group (NSG), the Wassenaar Arrangement (WA), the Missile Technology Control Regime (MTCR), and the Australia Group (AG). After much effort by India and its supporters, there is a move in these export control regimes to include India as a member. Unfortunately, admittance of new members in all these regimes requires a consensus decision; moreover, there are a few existing members of these regimes who are not sympathetic to the proposed Indian membership. Even at the time of the 2008 NSG amendments, it took the common efforts of the major powers—USA, Russia, UK and France with the exception of China—for the NSG to carry through its amendments to assist India in nuclear commerce. If, however, Russia were to indicate its opposition to India’s membership in these export control regimes, then the chances of India gaining membership are almost zero. In such a case, India would be the net loser with high technology trade and transfers becoming a major factor in international trade and the growth of economies such as its own and that of China.

Thus one of the unintended consequences of any attempt to ram through an amendment to the India-Russia Intergovernmental Agreements to effect a unilateral change in the liability exemption clauses would be far-reaching damages to India’s hopes and aspirations to be a global economic and technological power in future and one with a secure energy security option. 

1. M.R. Srinivasan, “A Liability for Our Nuclear Plans”, The Hindu, October 15, 2012.
2. Ibid
3. As per Section 6.9 of NPCIL’s GENERAL CONDITIONS OF CONTRACT (FORM NO. GCC/Supply-1/Rev.1):
6.9 Limitation of Liability
6.9.1 Except in cases of criminal negligence or wilful misconduct,
(a) the Contractor shall not be liable to the Purchaser, whether in contract, tort, or otherwise, for any indirect or consequential loss or damage, loss of use, loss of production, or loss of profits or interest costs, provided that this exclusion shall not apply to any obligation of the Contractor to pay liquidated damages and/or any other penalties/recovery etc. specifically provided for in the Contract, to the Purchaser
(b) the aggregate liability of the Contractor to the Purchaser, whether under the Contract, in tort or otherwise, shall not exceed the total Contract Price, provided that this limitation shall not apply to the cost of repairing or replacing defective equipment, or to any obligation of the Contractor to indemnify the Purchaser with respect to IPR infringement.
4. David Martin, “Canadian Nuclear Cooperation with India & Pakistan”, available at http://www.ccnr.org/india_pak_coop.html.
5. Guidelines of the Nuclear Suppliers Group can be viewed on the official website of the group at http://www.nuclearsuppliersgroup.org/Leng/02-guide.htm.
7. INFCIRC/254/Rev.2/Part 1*/, dated October 1995, “Guidelines for the Export of Nuclear Material, Equipment and Technology”, available at http://www.iaea.org/Publications/Documents/Infcircs/Others/inf254r2p1.shtml
8. See “Russia, India Sign Secret Nuclear Energy Accord”, Arms Control Today, November 2000.
9. Article 3 of the June 8, 1988 Agreement between the Government of the Russian Federation and the Government of the Federal Republic of Germany on Nuclear Liability in connection with deliveries from the Federal Republic of Germany for Nuclear Installations in the Russian Federation stated:
(1) The Russian Party shall bring no claims against the German Party or against suppliers on grounds of nuclear damage resulting from a nuclear incident which has taken place within the territory of the Russian Federation.
(2) The Russian Party shall grant the German Party and suppliers appropriate legal protection and shall exempt them from liability for damages in the event of claims by third parties on grounds of nuclear damage resulting from a nuclear incident which has taken place within the territory of the Russian Federation.
10. Article 13.1 of the Agreement states: “The Indian Side and its authorized organization at any time and at all stages of the construction and operation of the NPP power units to be constructed under the present Agreement shall be the Operator of the power units at Kudankulam site and be fully responsible for any damage caused both within and outside of the territory of the Republic of India caused to any person and property as a result of a nuclear incident occurring at NPP and also in relation with a nuclear incident during the transportation, handling or storage outside the NPPs of nuclear fuel and any contaminated materials or any part of nuclear NPP equipment both within and outside the territory of the Republic of India.”