India Expands Strategic Trade in East Asia to Balance China

India Expands Strategic Trade in East Asia to Balance China

In the past few years, India has been strengthening its civil nuclear cooperation with countries bordering China. This trend, when taken together with India’s interest in marketing surface-to-surface missiles in Asia, clearly signals a shift in New Delhi’s policy stance. China’s latest wave of nuclear exceptionalism toward Pakistan seems to be pushing India to abandon its traditional self-imposed limits on trade in strategic technology, with the result that India is now willing to broaden strategic technology options for countries on China’s periphery in order to secure Indian geoeconomic interests.

New Delhi’s approach is somewhat reminiscent of the early 1980s, when it looked to break the isolation that followed its 1974 test of a nuclear device by engaging in nuclear dialogue with other countries in Asia. One result of that outreach was a 1980 nuclear energy cooperation agreement between India and Indonesia. India’s subsequent advocacy, under Rajiv Gandhi, of global nuclear disarmament and ASEAN’s treaty establishing a nuclear weapons free zone meant that the deal ended up gathering dust. But Prime Minister Manmohan Singh’s visit to Jakarta last October saw both sides agreeing to renew it.

A renewed pact will very likely include provisions for joint research into the nuclear fuel cycle, as self-sufficiency in at least the technological aspects of the fuel cycle is highly sought after in today’s nuclear trade. Various “gold standard” proposals by the U.S. for cooperation agreements with emerging nuclear countries often seek to move fuel cycle activities offshore on nonproliferation grounds. But offers to set up nuclear research activities can prove crucial in securing reactor deals. South Korea’s victory in securing nuclear contracts with the United Arab Emirates and Russia’s agreement to help Vietnam build a 15 megawatt research reactor at Da Lat, even as Vietnam buys Russian reactors known as VVERs, are examples of this dynamic at work.

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