This is by far the best deal we could have got

The Indo-US nuclear deal, with its attendant ‘123 Agreement’, the India-specific International Atomic Energy Agency safeguards and Nuclear Suppliers Group waivers, need to be seen as building blocks of an extended process through which India is being brought into the mainstream of global politics.
Critics of the agreement have parsed every full-stop, comma and preposition to delineate its faults. They have sought to play up fears and put forward worst-case scenarios to undermine the agreement. In the coming years, as India intensifies its nuclear power programme in a big way, there will be many occasions when there will be differences of opinion on various clauses and agreements.
But let’s be clear that if the US has its interpretation of the 123 Agreement or the NSG waiver, so will India. More important, US generosity and Indian diplomatic tenacity has ensured that we have got as much of a level playing field as could have been provided for an outlaw country in the nuclear arena. From now onwards, its future will be shaped not by the fears of its critics but the practical use we make of the opportunities it provides.

Agreement

What does the agreement do? First, and most immediately, it will allow India to import natural uranium fuel to run our existing and planned nuclear power plants at full capacity. Second, it will allow us to resume collaboration with Canada to upgrade the CANDU design on which most Indian reactors are based. The Indian reactors are typically 220, or now 540 MW, while Canada has developed 740 MW reactors and has a 1,000 MW unit on the drawing board. Third, India can import modern units from France, Russia or the US, along with financing to set them up.
Fourth, Indian engineers and researchers will be permitted to work or collaborate with their counterparts in advanced nuclear nations without any special restrictions. Fifth, it provides India’s own industry such as Larsen & Toubro or the NPCIL the opportunity to become suppliers of key reactor items or even reactors. Sixth, it will enable India to acquire hitherto forbidden dual use technology which is critical for our ambitious space and high-tech industry programmes.
In the US, critics like Joseph Cirincione of the Center for American Progress and Daryl Kimball of the Arms Control Association have claimed that US-supplied uranium fuel would free up India’s limited uranium reserves for use in its nuclear weapons programme. The views of these professional non-proliferation lobbyists were echoed on Wednesday in the US Senate by Senators Byron Dorgan and Jeff Bingaman. This claim flies against the face of facts. If India was interested in fabricating nuclear weapons it could have done so in the 1960s, to start with. Even after its single test explosion in 1974, it did nothing.
There were two reasons why it was compelled to change course. First, New Delhi got information of the extent to which China was assisting Pakistan in making nuclear weapons. This was a shocking development, because no country in the world had knowingly transferred nuclear weapons technology to another — not the US to UK or France, nor Russia to China. As a recent issue of Physics Today has disclosed, not only did China transfer a weapons design in 1982, but it also tested a weapon that had been made in Pakistan in its own test site in 1990.
Second, following the end of the Cold War and the scare over Saddam Hussein’s nuclear ambitions, the US began to move in a concerted way to lock up India’s options. The Nuclear Non-Proliferation Treaty — which acknowledges nuclear weapons possession only by five big powers — was extended “in perpetuity”. India was not affected as we are not signatories. But the second step was more compelling — the Comprehensive Test Ban Treaty was approved. This would ensure that India and other threshold powers would never be able to test their weapons.
Though we categorically rejected the treaty, it decreed that unless forty threshold countries, which included India, Pakistan, Israel, also signed and ratified it, it could not come into force. The pressure for ratification became intense as all significant countries signed up, though some key countries like the US and China did not ratify it.

Mirror

These pressures pushed India to test. The first attempt by the P.V. Narasimha Rao government in December 1995 was foiled when the preparations were discovered, and the second came apart when Mr. Atal Bihari Vajpayee’s 13-day government collapsed in 1996. The tests were eventually carried out in May of 1998, a quarter century after the Pokhran I test.
This was hardly the behaviour of a power bent on making nuclear weapons. In any case even today if India did want to make lots of nuclear weapons, it could simply take its 14-odd power reactors out of the electricity grid and use them in a “low burn-up” mode to produce plutonium for nuclear weapons.
There is a mirror-version of this critique in India. There are those who say that the agreement has taken away our right to test and that it will come in the way of constructing our nuclear arsenal. The test issue would be clear to anyone who has bothered to read the various documents associated with the deal — there is nothing in there which prevents India from testing. As for the weapons, the most knowledgeable authority — K. Santhanam of the DRDO who steered the programme to the tests at Pokhran II has made it clear in an article last year that India already has all the nuclear material it needs to construct a “credible minimum deterrent.” R. Chidambaram, the chief of the DAE at the time, too, stated last August that the tests met all the scientific community’s requirements for fabricating the arsenal that was needed.

Nuances

It doesn’t take much common sense to see that while we do have the sovereign right to test, there will be diplomatic consequences of the event. While countries like France and Russia may not react at all, the US will, though its position is not as absolute as it appears. On the face of it, the US is required to terminate cooperation and seek the return of its nuclear and non-nuclear material, technology or components.
Practically, however, Article 15(6) of the 123 Agreement would require the US party to compensate at “fair market value” of the equipment and pay for the costs of the removal. As Department of Atomic Energy Chairman, Anil Kakodkar has pointed out, “It is practically not possible [to remove reactor vaults, steam generators, coolant channels etc that make up a nuclear power station]. It is nuanced too by Article 14 which commits the US to consider the context of the termination. In other words, the US reaction would be graded if India resumed testing because of China or Pakistan
doing so.
There are bound to be geopolitical consequences of the agreement. The US has its reasons for what it has done, and India has its own for what it is doing. If there is congruence, well and good, if there isn’t well, the world will not end. But to assume that India is so beholden to the US that it will now be subservient to its interests is to be blind to contemporary reality in which India is the strongest economically and militarily that it has been in 60 years. As for the US, well it would be unfair to extrapolate from its present infirmities.
This article appeared in Mail Today October 3, 2008

Indo-US nuclear deal: the opposing view

"It is a sobering read (the Indo-US 123 Nuclear Agreement) and tells us much about the administration's thinking. In summary, there isn't much of a deal here at all, India gets what it wants. The agreement not only fails to seek any constraints on India's nuclear weapons program, it goes out of its way to make clear that what goes on in the nuclear weapons program is off the table and not to affect at all the agreement's execution."

writes Ivan Oelrich, the Vice-President for Strategic Security Project at the Federation of American Scientists. Anyone who thinks that India got the short end of the stick in the Indo-US nuclear deal should read his comment in detail here.

The India-US 123 Agreement

The text is finally out. It can be seen here in the Ministry of External Affairs website where you may have to search for it a bit. I have it here as well in a web hosting service and is likely to be here for a month or so and more if people download it.

1. Supply assurances are contained in section 5.6 2.2b and 5.4 and they belie the claim made by critics that the Obama amendment to the Hyde Act would somehow prevent these from being made by the US.

2. Reprocessing is contained in section 6.3 and the fear that the US will string us along has been belied by specific commitment that negotiations will begin in 6 months of an Indian request and be completed within a year thereafter.

3. Consequences of nuclear testing is in article 14 and it is not absolute, but is conditioned by circumstances and the impact on Indian security. 14.3 belies the claim that the US will terminate or slow down cooperation based on foreign policy divergence. This section says that only a material breach of the agreement, as determined by the IAEA board, could lead to this. In other words, no capricious termination.

4. Right of return is in 14.5 and is clear that it will be through a consultative process and conditioned by the need for uninterrupted operation of reactors. It will also provide for compensation and 14.8 ensures that it will not be in derogation of 5.6 (supply assurances)

6. Non-hindrance clauses. 2.4 provides that the “purpose of this agreement is to provide peaceful nuclear cooperation and not to affect the unsafeguarded nuclear activities of either party.” So the agreement cannot be interpreted to affect either India’s indigenous programe, or military programme.
7. Fallback safeguards. Critics said that this could be used by the US to conduct inspections of Indian facilities. 10.4 says that the determination that the IAEA is indeed unable to do so would be made by the IAEA Board of Governors and no other party. And should this happen, the supplier and the recipient will consult to agree on “appropriate verification measures.”

7. Nuclear trade. This is one area that is qualified. While 5.1 provides for nuclear materials, including low enriched uranium, 5.2 says that “sensitive nuclear technology” which means reprocessing, enrichment and heavy water production technology” and certain critical components for such facilities will require an amendment to the 123. While some may see this as falling short of Indian demands, the provision is actually more than what other Nuclear Weapons States get.
8. Nuclear by-products. Clearly the US had enormous concerns about the issue of reprocessing rights for India. Page 22, the last page of the agreement, seems to be an addendum in the form of an "agreed minute" that has two technical sections that relate to the use and by-products of US-origin nuclear and non-nuclear material.
   

India-US 123 Agreement: A summary

Article I is mainly about definitions.

Article II – “Scope of Cooperation “ is important, especially it’s clauses point to the gains beyond nuclear materials and technology.

Section 2 ‘a’ talks of “advanced nuclear energy” R&D, section ‘c’ of “facilitation of exchange of scientist… and collaborative research” – all areas that had been closed to us till now.

Section 2‘d’ clarifies that “full civil nuclear cooperation” means activities relating “to reactors and aspects of associated nuclear fuel cycle”

Section 2‘e’ notes that it will involve the “development of a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors.”

Section 4 is important because it says that “nothing in this agreement shall be interpreted” as affecting India’s indigenous programmes, both civil and military.

Article V deals with the transfer of nuclear materials and technology—the heart of the agreement.

Section 2 makes it clear that the US will not provide India with enrichment, reprocessing or heavy water production technology. To do so, India would have to seek an amendment of the ‘123 Agreement.” India has all these technologies and is not seeking them. However, it is seeking components of these “sensitive” technologies, but this is a matter that has been left for further negotiation. Considering that the US does not give such technology to anyone, their decision to leave the matter for negotiation in the future is a gain for India.

Section 4 says that the quantity of material transferred related to the “operation of reactors for their lifetime.”

Section 6 puts in a legal binding form, the American commitment of July 18, 2005 to “to create the necessary conditions for India to have assured and full access to fuel for its reactors.” So under section 6b the US has expressed its willingness to incorporate these assurances in the 123 Agreement, and to support India to develop a strategic reserve of nuclear fuel” to prevent disruption of supply.

If the disruption still occurs, the US would join India to set up a group of friendsly suppliers like Russia, France and UK to “pursue such measures as would restore fuel supply to India.”

Article VI deals with the nuclear fuel cycle issues and the agreement gives India the “front end” right to enrich uranium, as well as the back-end right to reprocess the spent fuel.

Section i) is important because it allows India to enrich Uranium to 20 per cent, which is what is required for a power plant.

Section iii) is the right to reprocess the spent fuel. This is conditional on India setting up a new national reprocessing facility and will require the parties to agree on “arrangements and procedures” to reprocess in this facility. To ensure that the process is not open-ended, the two are required to begin consultations on the arrangements in six months of the Indian request and to conclude the process within a year.

Articles VII and VIII deal with the issues of storage and physical protection of the nuclear materials and equipment. Article IX commits India not to use any material or equipment to produce a nuclear explosive device or any other military purpose.

Article X relates to IAEA safeguards.

Besides committing itself to ensuring safeguards in perpetuity through the special India-IAEA agreement, Section 4 makes it clear that if the IAEA declares that it is unable to carry out its duties, India and the US will consult on the best way to meet the need for verification.

Article XI related to environmental protection, Article XII to its implementation
Article XIII commits the two to consult each other and do everything they can to ensure the honest implementation of the agreement.

Article XIV is the termination or cessation clause which is there in every agreement.

Section 1 says that either party can terminate the agreement after 1 years notice. This is a standard kind of a clause.

Section 2 is the important because it qualifies the important issue of a cessation that may occur because of another nuclear test by India. Without mentioning nuclear testing, the agreement says that the parties would consult with each other before termination and would “take into account” whether the reasons for seeking the termination were related to “a party’s serious concern about a changed security environment or as a response to a similar action by other states which could impact national security.” In other words a Chinese, Pakistani or even US nuclear test preceding an Indian one would not necessarily lead to the termination of the agreement.

Section 3 emphasises that other grounds for termination would have to be nothing short of a “material violation or breach” of the IAEA safeguards agreement, one that is declared so not my the US, but by the IAEA Board of Governors.

Section 5 deals with the return of US-origin material and equipment in the event of a termination of an agreement. This would have to be done after consultation and the US would have to give “special consideration” to the requirements of “uninterrupted operation of nuclear reactors”.

Section 8 explicitly states that the purpose of this article is not to “derogate” from the rights of the parties under article 5.6

Articles XV, XVI and XVII relate to the standard requirement of settlement of disputes, entry into force and duration (40 years) and the administrative arrangements relating to the agreement.