Challenges and Opportunities for the Nuclear Suppliers Group

Amid the evolving geopolitics and great power competition, the Nuclear Suppliers Group (NSG) – a group of nuclear supplier countries voluntarily enforcing export guidelines to prevent nuclear proliferation – finds itself at a crossroads, grappling with challenges to its credibility and effectiveness. These challenges are multifold and involve both NSG member states and non-NSG countries that have not placed all their nuclear activities under the International Atomic Energy Agency (IAEA) safeguards. The increasing number of non-NSG states able to access the nuclear market coupled with the failure of NSG member states to advance non-proliferation norms has raised serious concerns about the group’s effectiveness. 

These issues have been compounded by the activities of great powers included within the NSG, with the United States, China, and Russia all having undermined the significance of nonproliferation norms of comprehensive safeguards –  that non-nuclear weapon states should benefit from peaceful nuclear technology access only if they place their nuclear activities under the IAEA safeguards.

In order to overcome these difficulties, the NSG should consider reforms which deepen inclusivity, clarify the terms for transfer of sensitive nuclear technology, and develop an effective means for bringing non-NSG states into the group; especially India and Pakistan.

Diversity and Inclusivity – A Challenge and an Opportunity for Decision-Making 

Decision making in NSG is likely to become more challenging in the future. The NSG was created in response to the 1974 Indian nuclear test. It originally closed some loopholes – including monitoring states’ access to nuclear energy market to prevent the possibility of utilisation of peaceful nuclear technology for building nuclear weapons – but issues still remain over nuclear safety, security and the global nonproliferation regime. A key challenge has been disparity between members – for example, Canada and the US required comprehensive safeguards as conditions for supply but many members did not, which provided opportunities for non-NPT parties such as Brazil and Argentina to play one supplier against the other and by giving contracts to the suppliers without any comprehensive safeguards. After the controversy of Iraq, the NSG updated its control list and allowed membership from a few advanced nuclear states to diversify the group geographically and politically.  The group now includes 46 countries but is still not diverse enough to include and regulate nuclear programs of many important non-NPT states.

Exploitation of the IAEA-Indian Nuclear Safeguards Agreement  – A Case Study 

The NSG currently faces the challenge of the adoption of new restraints on transfer of enrichment and making recipient states adopt the Additional Protocol (AP) of the IAEA. The comprehensive safeguards in 1992 also created a few loopholes in the group guidelines. One of them is, that the grandfather clause adopted at the time has requirements that apply only to subsequent nuclear cooperation and did not cover supply commitments agreed before the adoption of the safeguards. This loophole was exploited by Russia to justify nuclear sales to India. Moscow claims that they were grandfathered by the Russian-Indian agreement of 1988. This justification was given by Moscow in the late 1990s. In 2001, Russia again exported low-enriched uranium to India for fueling Tarapur reactors. The United States regards this export as a violation of Russia’s commitment to comprehensive safeguards guidelines. Russia signed another reactor deal with India in 2007 and delivered nuclear fuel to India even before the 2008 exemption of India from its comprehensive safeguards requirement of the NSG regulations.

Self-Interest Jeopardising the Purpose of the Cartel

A few NSG members have been exploiting their membership in the group for their own state interests while jeopardising the purpose of the cartel. For instance, the exemption that was provided to India by the NSG was a violation of the NSG regulations. Despite India’s commitment with the 2009 agreement between the United States and India, including signing the Additional Protocol (AP), India has not yet classified its reactors as military or civilian, despite having signed the IAEA Additional Protocol. India still hasn’t fully separated its nuclear reactors used for civilian and military purposes. At the facility level, India follows the policy of functional separation, which designates some nuclear sites for civilian use and reserving others for military or strategic uses. However, the lack of specificity at the reactor level between civilian and military reactors, and the refusal to bring Indian civilian reactors under IAEA safeguards caused serious concern in Pakistan, as they could be used for military purposes. Since then, India has still not fully separated its strategic and civilian nuclear reactors, as required by the Additional Protocol.  This creates a sense of mistrust between the two rival nations – India and Pakistan – creating a pro-nuclear proliferation environment and causing serious security concerns for Pakistan. This, in turn, has negative implications for regional security, and even risks instigating an Indian-Pakistani arms race, which would further challenge stability across South Asia. 

NSG Membership: Opportunity for Inclusivity 

NNon-member suppliers, the states outside the NSG that possess nuclear capabilities but lack effective export control measures, can challenge proliferation norms. But they also provide an opportunity for the NSG to evolve and include more diverse states. These states can be brought under NSG guidelines. The NSG should collaborate with more organisations like the Zangger Committee and support UN export control resolutions. The NSG also needs to include states – whether they are NPT signatories or not – to diversify the group and expand it to bring all states’ nuclear trade and access under its regulations. NSG members need to strengthen their export control systems, enact strict penalties for violations, and enhance intelligence sharing. As the NSG membership diversifies, reaching consensus on crucial matters becomes more challenging. Major nuclear powers may need to consult smaller powers to facilitate decisions, prioritising issues to reach inclusive decisions. Some view the NSG as a group favouring nuclear supplier states, hindering peaceful nuclear energy access for other states. Efforts to improve transparency and outreach are essential to address this perception.

The Geopolitics of NSG – A Challenge to its Effectiveness 

In the changing geopolitical landscape, the US refers to China as a “major competitor” and India as a “major defender” against China in its National Defence and Security Strategy documents (NDS and NSS). These strategies of great powers have been challenging the effectiveness of the NSG. A particularly clear example is how this geopolitical competition has been hampering the NSG membership bids of India and Pakistan. 

According to the NSG criteria, joining the suppliers group requires NPT membership. But with the evolving dynamics of the global nuclear order, it is an acknowledged necessity to bring the non-NPT states under the umbrella of the NSG. For this, the NSG member states have a task to consensually decide a formula to admit non-NPT states to the group without undermining the stability of any region. In the case of Pakistan and India’s membership bids, both states need to be provided membership together to maintain regional stability in South Asia and prevent any mistrust among the two rival nations. However, since 2008, the US has pursued a state-specific strategy to secure exemptions from NSG restrictions on nuclear trade, particularly for India. This effort aims to assist India, a non-NPT signatory, in gaining exemption from NSG regulations requiring international inspections of nuclear facilities. The US advocated for this waiver to strengthen strategic ties and enhance nuclear commerce, despite objections from some NSG members. Pakistan, despite its strong nuclear safety record, was not given similar treatment. In 2016, Pakistan opposed the US’s preferential treatment of India, advocating for NSG membership criteria to be based on objective standards rather than being country-specific. To address this challenge China proposed a consensus approach to NSG membership for non-NPT states. China blocked a proposal for an exemption for India at the 2016 meeting and supports a norm-based admittance with a “criteria-based approach” for all NSG entries, particularly those of non-NPT states. However, there is no consensus among the NSG member states to decide on what such a set of criteria might look like, especially for non-NPT states. As a result, the Chinese proposal does little to address the long-term issues facing the NSG. 

The fact is that Pakistan’s national security, as well as industrial development and economic progress, could be jeopardised if India joins the NSG before Pakistan. If any of the two states get the membership before the other, the admitted state will try to prevent the other state from entering the group. And this will disturb the stability of that region with one state having more access to nuclear material than the other. Even with all the NSG regulations, the non member state will mistrust the member state for getting more access to the nuclear market. It could ultimately lead into an arms race between the two states, with major consequences for the stability of the South Asian region. Failing to find a fair solution to the challenge of Indian and Pakistani accession to the NSG therefore endangers the cartel’s objectives; the current impasse is emblematic of the broader problems facing the NSG. 

A Way Forward

A way to increase the effectiveness and credibility of the group is to successfully resolve the Indian and Pakistani NSG membership bids case.  This can act as a best practice by NSG member states to be followed later for dealing with such cases. It can be done if the NSG members create and agree on an unbiased formula to provide both nations with NSG membership, bringing their nuclear trade under NSG regulations. One such formula can be an advanced criteria based approach which addresses all the challenges that are faced by the NSG today. Unlike the criteria based approach that is under discussion at the NSG, an advanced criteria with reforms addressing all existing challenges that have so far prevented the formation of a consensus must be discussed, in order to allow the inclusion of diverse members and bring all nuclear trade under the NSG regulations. The criteria can be inspired by IAEA regulations and safeguard standards. The IAEA is inclusive as well as effective. Even though both bodies are different and have different objectives, inspiration can be drawn from the agency’s working and inclusive yet safe agreements. Youth of the member states should be engaged to educate and train them as future leaders about the NSG mission. Another issue that must be addressed in this advanced formula is to increase openness and engage people, states and civil society of the member states into policy discussions which can help bring new ideas to the table for discussion. The potential benefits of this include establishing a process for integrating non-NPT parties into the nuclear trade regime in the long term, thereby enhancing effectiveness by bringing more nations within the group and ensuring global peace. This expansion could ensure regional stability and strengthen the non-proliferation regime.

How the NSG approaches India and Pakistan’s case amid the growing great power competition is a key litmus test for whether the export control group can effectively collaborate to bring about a solution oriented approach to both interstate competition and its existing structural challenges. It remains a question if the NSG member states will be able to impartially assess the case of non-NPT states especially Pakistan and India’s membership bid through a criteria-based approach or not. If NSG did not advance its strategy to include the non-NPT states and diversify the group under a framework then it might become ineffective in the emerging geopolitical structure, destabilising regions, instigating arms race around the world and losing the credibility of the cartel in the global perception.