Paying Dividends: The U.S.-India Nuclear Deal Four Years On
Image Credit: White House Photo by Pete Souza

Paying Dividends: The U.S.-India Nuclear Deal Four Years On


The 2008 Indo-U.S. Civilian Nuclear Agreement was supposed to mark a watershed moment for India – U.S. relations, ending the two democracies long-standing estrangement and ushering in a new era where New Delhi and Washington would be “indispensable partners.” But four years after the deal came into effect, much of the initial enthusiasm that it engendered has dissipated. Especially in American foreign policy circles, many feel that the nuclear agreement has failed to meet expectations.

From India’s perspective, nuclear cooperation was a sine qua non for any meaningful growth in India-U.S. ties in other areas. That being said, there was also a genuine expectation in the U.S. that assimilating India into the nuclear mainstream would reap enormous economic, political and strategic dividends for the country. However, many of the deal’s strongest proponents at the time of its signing now claim that these gains failed to materialize.

Economically, the U.S. was attracted to the vast potential India’s large and growing nuclear energy market had for domestic nuclear firms. This viewpoint failed to take into account India’s domestic nuclear liability law, which obliges nuclear suppliers to be liable for damages their equipment results in. Many U.S. companies have balked at this requirement, and the economic gains of the deal have failed to materialize accordingly.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

For many in Washington, the nuclear deal similarly failed to tie India closer to the U.S.-led global non-proliferation and arms control architecture. India has defied American expectations by making no concerted effort to sign the Comprehensive Test Ban Treaty (CTBT), and has shown no interest in voluntarily halting its production of fissile materials (enriched uranium or plutonium). More troubling for many in Washington is India’s continued refusal to parrot the American line regarding Iran’s nuclear program.

Sign up for our weekly newsletter
The Diplomat Brief