VZCZCXRO0809
PP RUEHTRO
DE RUEHBI #0195/01 1021121
ZNR UUUUU ZZH
P R 121121Z APR 07
FM AMCONSUL MUMBAI
TO RUEHC/SECSTATE WASHDC PRIORITY 5271
INFO RUCNNSG/NUCLEAR SUPPLIERS GROUP
RUEHNE/AMEMBASSY NEW DELHI 6459
RUEHCG/AMCONSUL CHENNAI 1379
RUEHCI/AMCONSUL KOLKATA 1259
RUEHBI/AMCONSUL MUMBAI 0205
RUEHKA/AMEMBASSY DHAKA 0737
RUEHIL/AMEMBASSY ISLAMABAD 0740
RUEAIIA/CIA WASHDC
RUEHII/VIENNA IAEA POSTS COLLECTIVE
RHMFIUU/CDC DEPT OF ENERGY WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGV/USMISSION GENEVA 0104
RUCNDT/USMISSION USUN NEW YORK 0096
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 03 MUMBAI 000195 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PARM TSPL KNNP ETTC ENRG TRGY IN
SUBJECT: CODEL LOWEY SIGNALS CONGRESSIONAL SUPPORT FOR NUCLEAR DEAL 
WHILE CITING CONCERNS 
 
REF: NEW DELHI 1676 
 
MUMBAI 00000195  001.4 OF 003 
 
 
Summary 
------- 
 
¶1. (SBU) In a meeting with the Nuclear Power Corp. of India 
(NPCIL), Codel Lowey expressed general support for the planned 
U.S.-India civil nuclear cooperation, yet cited concerns that 
members of Congress still have about the deal.  Congressman 
Edward Royce told the NPCIL leadership that India must reign in 
the scientists who continue to insist on a right to test nuclear 
weapons. Granting India the right to test was incompatible with 
U.S. law, a notion that India and its scientists must 
understand, he said.  Members of the delegation noted that, even 
in the most optimistic projections, nuclear power would still 
play a modest role in India in the future, behind even 
hydropower and renewable energy.  Congressman Adam Schiff said 
Congress remained concerned that civil nuclear cooperation could 
allow, indirectly if not directly, the diversion of resources to 
India's strategic program.  That, Schiff said, would be "a 
disaster."  S.K. Jain, NPCIL Chairman, outlined the growth plans 
for nuclear power in India and argued that the percentage of 
non-safeguarded reactors would fall dramatically in the coming 
years, and that there was therefore no competition between civil 
and military usages of India's limited uranium resources.  Jain 
said that, for energy security reasons, India would remain 
committed to its vision of a three-stage nuclear program with a 
closed fuel cycle even if the deal with the U.S. becomes 
reality.  The massive procurement of foreign reactor technology 
will ultimately be a bridge used by India to meet the country's 
surging power demand before the three-stage program becomes 
reality, Jain said.  End summary. 
 
Lowey: Congress "big fans" of U.S.-India Relationship 
--------------------------------------------- -------- 
 
¶2. (SBU) During an April 11 meeting in Mumbai, Congresswoman 
Nita Lowey told the leadership of the NPCIL that the members of 
her bipartisan Congressional delegation were all "big fans" of 
the U.S.-India relationship.  All saw the importance of the 
relationship in a changing and increasingly challenging world, 
and its role in strengthening the world's non-proliferation 
regime.  The delegation took non-proliferation very seriously, 
she said, and recognized the opportunities provided by nuclear 
power, which she said was now indispensable in many parts of the 
world. 
 
Royce:  India Must Reign in its Scientists 
------------------------------------------ 
 
¶3. (SBU) Congressman Edward Royce said that India must reign in 
the small group of scientists who continued to oppose the civil 
nuclear deal if the cooperation is ever to become reality.  The 
United States had its own experience with a military-industrial 
complex interested in the development and expansion of a 
military nuclear arsenal.  President Eisenhower was the first 
president to recognize the need to subject such scientists to 
strong political and civilian control, he told S.K. Jain, 
chairman of the NPCIL.  A small group of Indian scientists 
remained interested in expanding the country's nuclear arsenal, 
and in continued testing of nuclear weapons, since that was 
their job and their calling.  U.S. law would never permit an 
agreement that did not contain an Indian obligation to cease 
testing, however, and these scientists, and India, should not 
think that it can hope to get both the agreement and a continued 
ability to test nuclear weapons, he said.  Indian industry had a 
valuable role to play in lobbying the government to reign in the 
scientists, Royce told Jain.  He encouraged the NPCIL and other 
Indian companies to weigh in with their government to highlight 
the benefits of the proposed agreement and to demonstrate the 
downside that India would incur if it fails to get the agreement 
because of the obduracy of its scientists and its 
military-industrial complex.  Jain responded by saying that 
Indian industry strongly supported civil nuclear cooperation 
with the U.S., and made its views clearly known to the GOI. 
Private companies were interested in expanding into nuclear 
power generation, and the large number of companies that supply 
the NPCIL's construction activities also saw the opportunities 
 
MUMBAI 00000195  002.4 OF 003 
 
 
opened up by the deal. 
 
CODEL Asks About Limited Role of Nuclear Power in the Future 
--------------------------------------------- --------------- 
 
¶4. (SBU) Lowey, Royce and Congressman Adam Schiff all inquired 
about the NPCIL's expansion plans, noting that India's most 
optimistic projections foresaw only a limited role of nuclear 
power in the country's power mix in the future.  Jain had 
explained that the GOI's most recent projections foresaw a need 
for 700 gigawatts (GW) of generation capacity by 2032.  In this 
scenario, nuclear power would contribute 63 GW or 9 percent. 
Coal/gas would contribute 390 GW, hydro 150 GW and renewable 
sources 97 GW.  Lowey asked whether the relatively small role of 
nuclear power reflected a policy decision or was governed by 
other restraints.  Acknowledging that 63 GW of nuclear power was 
"very ambitious" and "a dream," Jain replied that the figure 
reflected a capacity constraint.  India could not build reactors 
any faster.  In any case, Jain added, the relative contribution 
of nuclear power to the country's energy needs would continue to 
grow rapidly in the coming years. 
 
Final Congressional Support Depends on Text of 123 Agreement 
--------------------------------------------- --------------- 
 
¶5. (SBU) Schiff told Jain that he supported the agreement, but 
remained on the cautious side.  Schiff said he didn't see much 
benefit in the agreement for the U.S. except for the commercial 
opportunities it opened up for U.S. companies.  Still, the 
agreement was important in the context of overall U.S.-India 
relations.  He will make his support of the final agreement 
contingent on the final 123 draft and on India's agreements with 
the Nuclear Suppliers Group and the IAEA.  Hence his support for 
the Hyde Act must be seen as a vote to allow the discussions to 
go forward.  Schiff said that he, and other members of Congress, 
did not view India as a problem, since India had been 
responsible with its nuclear program.  Instead, Congress was 
concerned about the impact that the U.S.-India deal could have 
on the world's non-proliferation regime, and on India's ability 
to expand its nuclear arsenal.  In particular, it would be a 
"disaster" if the agreement ultimately allowed India to expand 
its military nuclear capabilities. 
 
Separation of India's Civil and Military Programs 
--------------------------------------------- ---- 
 
¶6. (SBU) Schiff and staffer Thomas Sheehy asked Jain how India 
was planning to separate its military and civilian nuclear 
programs, and in particular whether scientists and others worked 
on both programs simultaneously.  Schiff said he understood that 
India's indigenous sources of natural uranium were limited; 
hence there must be competition between civil and military uses 
of the fuel.  He asked Jain whether the agreement would 
ultimately free up domestic uranium resources for military use, 
since the civil nuclear sector could begin purchasing uranium on 
the world's markets. 
 
¶7. (SBU) Jain acknowledged that in many cases the same personnel 
still worked in both civil and military aspects of India's 
nuclear program.  He added, however, that the NPCIL was a pure 
utility.  It did not own the fuel it burned in its reactors. 
Instead, it leased it from the GOI and returned the spent fuel 
to the GOI for reprocessing or storage.  All fuel purchased for 
India's four safeguarded reactors remained under safeguards 
after it was used, and would do so in perpetuity.  Jain also 
said that, when the plants currently under construction go 
online, India will have 7 GW of nuclear generation capacity.  Of 
that, roughly 65 percent or 5 GW will come under safeguards in 
accordance with the separation plan worked out with the USG, 
leaving only 2 GW outside of safeguards.  Looking forward, the 
percentage of generation capacity not under safeguards will drop 
significantly, since all imported reactors and their fuel will 
be safeguarded, as will all new indigenously built pressurized 
heavy water reactors.  Hence in the foreseeable future roughly 
90 percent of the generation capacity will be under safeguards; 
the role of non-safeguarded reactors will drop, and in any case 
not much fuel was needed to supply the military program.  Hence 
 
MUMBAI 00000195  003.4 OF 003 
 
 
there was no competition between the military and civilian uses 
of nuclear fuel, Jain said.  Schiff asked whether the planned 
fast breeder reactors would come under safeguards. Jain replied 
that India would put breeders under safeguards if they used 
spent fuel from safeguarded reactors. 
 
The Three-Stage Vision and Closed Fuel Cycle 
-------------------------------------------- 
 
¶8. (SBU) The delegation inquired about India's vision of a 
closed fuel cycle complete with fast breeders and ultimately 
thorium reactors.  Jain replied that the closed fuel cycle was 
imperative for energy security reasons.  India had finite 
supplies of natural uranium, yet nearly unlimited supplies of 
thorium.  For the past 50 years it has been policy to recognize 
the opportunities, and limitations, of the domestic natural 
resource base and implement a closed fuel cycle that will allow 
India to develop significant nuclear generation capacity without 
reliance of foreign fuel.  India would remain committed to the 
three stage vision even after civil nuclear cooperation becomes 
reality, Jain said.  India views the large scale importation of 
foreign reactors and fuel under the deal as a bridge, or a tool 
to meet the country's growing power needs before the three stage 
vision becomes reality by the middle of the century.  Of the 63 
GW foreseen by 2032 in the GOI's newest planning, 45 GW would 
come from imported reactors, 10 GW from indigenous PHWRs and 8 
GW from fast breeders.  Thereafter, until the middle of the 
century, the role of fast breeders will grow and the first 
thorium reactors would come on line.  With the three stage 
program nuclear power could contribute 25 to 30 percent of the 
country's power needs by 2050, Jain estimated. 
 
¶9. (SBU) Codel Lowey cleared this cable.OWEN