India Expands Strategic Trade in East Asia to Balance China

India Expands Strategic Trade in East Asia to Balance China
Photo: Indian Prime Minister Manmohan Singh (Agência Brasil photo by Ricardo Stuckert, licensed under the Creative Commons License Attribution 2.5 Brazil).
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. India already engages in several International Atomic Energy Agency-led technical cooperation programs in Asia and has until now favored the multilateral research and training approach in the region. However, since it re-entered the international nuclear trade in 2008, India has concluded civil nuclear agreements with South Korea, Mongolia and Kazakhstan, and more such deals are on the way. There is now a view in New Delhi that India should use its proficiency in the nuclear arena to enhance its nuclear trade in places like East Asia, with a focus on research and manufacturing, as a means of indirectly securing access to other resources. For instance, a nuclear energy park in Indonesia, a country that generates more than 40 percent of its electricity from oil and gas, would allow Jakarta to divert more of the same for export to Indian shores. India can also use nuclear technology partnerships to secure access to hydrocarbons in Southeast Asian waters. Currently, India’s only real bilateral agreement to share nuclear technology in ASEAN is with Vietnam, in the form of a study to process uranium ore. In concert with Russia, however, India is likely to become much more deeply engaged in Vietnam’s nuclear build plans. The Russian nuclear player Atomenergomash has been negotiating with Indian industry to provide equipment for two Russian-origin nuclear reactors planned for Vietnam. Significantly, a new fuel fabrication facility being set up in India for its own Russian-technology reactors could be used to supply fuel to Vietnam in the next decade. On the military side, Vietnam could also become one of the first recipients of the Indo-Russian Brahmos cruise missile. Some of the more hawkish Indian analysts are of the opinion that, given its profile, Vietnam should be groomed to play the role of “India’s Pakistan,” in other words, a strategic partnership with a strong military component along China’s border. Interestingly, it is not only Indian hawks who advocate supplying Vietnam with nuclear-capable missiles like the Prithvi. Last December, India for the first time allowed its Defense Research and Development Organization to showcase some of its wares at the ADEX-2013 arms exposition in Seoul. Prominently displayed was the Pragati missile system, an export variant of the Prahar standoff strike weapon, which is an Indian equivalent to the U.S. Army Tactical Missile System. The Pragati is expected to first be offered to countries in ASEAN. While the Prithvi’s payload capability is significantly greater, even the Brahmos and Pragati can theoretically be armed with a lightweight nuclear warhead. All told, it seems New Delhi is now willing to broaden the strategic options it offers countries on China’s periphery in order to forge closer ties to balance Beijing. These developments, however, are unlikely to go unnoticed in Australia and Japan, both of which are in negotiations to conclude civil nuclear treaties of their own with India. Any move by Indonesia to increase its military-strategic capabilities is likely to cause Canberra to engage in consultations with India, with the lure of Australia’s uranium reserves in the background. Even more important, though, will be Japan’s viewpoint on this matter. Japan is Vietnam’s other key civil nuclear partner, after Russia, and is likely to supply reactors to Vietnam in the second half of this decade. Japanese acquiescence in India’s regional moves could potentially lead to trilateral relationships similar to Indo-Russian ties with third parties in Asia. New Delhi seems to be taking a leaf out of Beijing’s playbook, upping the “strategic quotient” in its relationships with countries on the latter’s flanks to help secure market access with countries already trading heavily with China. This new dimension can complicate China’s long-term planning, forcing Beijing to decide whether it needs to engage India more closely on matters pertaining to East Asia or continue to exhibit reluctance every time India is ready to enter into an East Asian regional body. However, any “power play” politics of this nature is bound to also raise the eyebrows of India’s other dialogue partners in the Indo-Pacific. Nevertheless given China’s recent revanchist impulses, a window exists for this particular Indian policy approach to actually find takers, especially in Japan. Saurav Jha studied economics at Presidency College, Calcutta, and Jawaharlal Nehru University, New Delhi. He writes and researches on global energy issues and clean energy development in Asia. His first book for Harper Collins India, "The Upside Down Book of Nuclear Power," was published in January 2010. He also works as an independent consultant in the energy sector in India. He can be reached at Photo: Indian Prime Minister Manmohan Singh (Agência Brasil photo by Ricardo Stuckert, licensed under the Creative Commons License Attribution 2.5 Brazil).

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