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.

Some more thoughts on the India-US nuclear deal

The slow and deliberately choreographed movement towards revealing the text of the Indo-US 123 Agreement has now reached it’s penultimate stage. Next week, in all likelihood, it will be made available to all. The Indian government has worked to build up opinion across the board through selective briefings (voluntary disclosure: I was in one of them). Two important public briefings have also taken place in New Delhi ( you will have to look in the press briefings for July 27, 07 for the text) and Washington DC. In New Delhi, National Security Advisor M.K. Narayanan, Department of Atomic Energy Chief Anil Kakodkar and Foreign Secretary Shiv Shankar Menon were the briefers, in Washington DC it was US Undersecretary of State Nick Burns.

They are targeting the political class which has been largely ignorant of the issues involved. The Markey riposte was par for the course for the "non-proliferation ayatollahs" in the US. In India, the Left’s reaction has been muted, because it knows that only by bringing down the government can the agreement be blocked. The BJP’s ‘sensible’ wing is for the agreement, though as of now they have merely commended the government’s negotiating prowess. But it has been equally important to get the Congress party on board, and that has been done in Congress-style, by a briefing to the Congress Working Committee and a congratulatory resolution hailing the PM.

There is still a great deal of confusion about the nature of the deal. Let us take up the issues one by one.

Prior Consent for reprocessing: The US has provided such consent to the EURATOM and Japan, and now India. The essence of the arrangement is the belief that leakage of material in the reprocessing area is a far more serious problem than a breach in other safeguards procedures. They are based around the “timely warning” principle. This is what a US State Department publication has to say on this, “ While the assurances of peaceful use that safeguards provide cannot be absolute, it is vital that such safeguards be as robust and effective as possible, for the risk of detection makes diversion more difficult and helps deter the pursuit of illicit nuclear programs. It is essential to the integrity and the objectives of the NPT regime that safeguards be able to provide timely warning of diversion, enabling an effective international response to be mounted.”

Towards this end, India offered the US a dedicated national facility, that will not only come under IAEA safeguards, but one that that will, be built to their specifications. When a batch of US-origin fuel is ready for reprocessing, India will call for a meeting, which the US will have to convene within 6 months, and the modalities and safety issues will be discussed. The US will okay the plan, or provide reasons as to why it cannot do so, all within the space of another year. The presumption is that subject to safety and security and non-diversion, the reprocessing permission will be available.

The fact is that such a situation remains in the realm of the future as of now. India will first have to acquire a US reactor, fuelled by US-origin fuel and run it till it accumulates a certain amount of spent fuel so as to reprocess it. An optimistic process would see this happening in 10-15 years from now. In the meantime, India will have time to build the promised facility and build up US confidence levels that the procedures in the plant are transparent and diversion proof.

Termination of cooperation: The US is bound by law to terminate cooperation with India if it conducts a nuclear test. As the Prime Minister told the CWC, India retains the right to conduct nuclear tests, just as the US reserves the right to react to an Indian test as per its laws. At the same time the US has agreed that it is committed to the “continuous operation of reactors” it may supply. In other words, it will not block India’s efforts to keep the reactor going with fuel from other sources. In that sense, the termination of the Indo-US cooperation will really mean the cessation of Indo-US cooperation, not that with the NSG. In any case there could be loopholes here too, because the Bush administration is no admirer of the Comprehensive Test Ban and would not like to hold the sword of sanctions over India should, say, China resume testing, or more piquantly, the US itself decided to resume testing.

Fallback safeguards: This has been a contentious issue between the two parties. The US Congress which is asked to cough up funds for various world bodies is worried that if the IAEA goes broke, it may suspend inspections on Indian facilities. So there were calls for “fallback” safeguards, possibly by the US itself. This is anathema to India which has since accepted the possibility that it may, in such a circumstance, provide the funds to the IAEA to carry out it’s Indian inspections !

Some larger issues:

In the July 18, 2005 agreement “ President Bush conveyed his appreciation to the Prime Minister over India's strong commitment to preventing WMD proliferation and stated that as a responsible state with advanced nuclear technology, India should acquire the same benefits and advantages as other such states.”

By and large the US has kept this promise. India is now getting the treatment that EURATOM, Japan or Switzerland get. One important aspect of the negotiations is that this has not come to India as a right. As a non-signatory to the Nuclear Non-Proliferation Treaty (NPT), India could not demand that it be treated as a signatory. The Nuclear Suppliers Group cartel has effectively embargoed India and squeezed our programme enormously—we have more installed wind energy than nuclear energy despite huge expenditures in the nuclear front.

It is our fortune that the geopolitical trends impelled the US to lead the effort to lift the embargo. But to extrapolate that this means that we were always “right” and they were “wrong” is to miss the point. International politics is rarely about rights and wrongs. They need us geopolitically, and we need them, if we are to have a viable nuclear power programme, to provide us nuclear materials and technology. This is a fair exchange.

But many, especially the old scientists who had borne the brunt of the US embargo, allowed the bitterness to overcome rational thinking. They began to place demands that would be tantamount to the US and the NSG community eating humble pie and admitting that they had been “wrong” and India “right.”

Fortunately, Prime Minister Manmohan Singh and his officials realized that a “need- based” approach works better than a “rights- based” one, especially since the rest of the world doesn’t feel we have the right to anything as non-signatories to the NPT. It is this need-based approach that finally persuaded the US to give us prior-consent for reprocessing and saving the agreement. India explained that we need reprocessing rights, not only because we need plutonium to use in our fast-breeder programme, but also to take care of accumulations of spent fuel that will result from the burgeoning of large-size reactors that could come in the wake of the agreement.

Indo-US Nuclear Deal: The last lap

(This has been revised in the past 12 hours)

As readers of this blog know, I have been, and remain, a strong supporter of the Indo-US nuclear deal. Many of my articles of the past two years can be found in this blog archive. I was 100 per cent sure that the US will concede all the major issues—right to reprocess nuclear fuel, accepting the concept of perpetual supply of fuel for reactors in exchange for our placing our civilian reactors under perpetual safeguards, linked to this ensuring that the deal is not automatically held hostage to the consequences of another Indian nuclear test, and the issue of fallback safeguards that would be needed if the IAEA failed to carry out it's duties.

My reasoning is that the US is not motivated by a desire to get a slice of the Indian nuclear power industry pie, or on capping India’s nuclear weapons programme. It based on a strategic calculation that requires a friendly India. This is not because we are ‘good’ and ‘deserving’ or even a democracy, but because our size, economic potential and location makes us just about the only large country that can offset the powerful gravitational pull being exerted by China. Our political ethos, not dissimilar to that of the US and the western world is a bonus. The problem for the US was that not only was India was subject to a host of US technology restrictions, but that most of the history of Indo-US relations was one of the Americans seeking to contain India, in alliance with Pakistan and even China. (see the previous post) You cannot befriend a country you also embargo and contain.

An awareness of the need to change this made the many US concessions possible. As for India, it sees the deal as a huge “confidence building measure” on the part of the Americans, or a token of atonement of the many wrongs they have inflicted on us in the past. India's new breed of realpolitik leaders don't want ritual apologies, they prefer to follow the Chinese style of extracting what you can when the situation is in your favour.

Now India has nothing to complain about the nuclear deal, and everything to celebrate. It's not surprising that on Wednesday, the Cabinet Committee on Political Affairs and the Cabinet Committee on Security met jointly and quickly approved of the draft agreement. External Affairs Minister Pranab Mukherji declared that all of India's concerns had been met in the recent round of talks in Washington DC.

Now, the world's sole super-power, one is willing to loosen the tight nuclear embargo it had placed on the civil part of our nuclear programme. The effect of the Indo-US nuclear agreement will be that while India remains a non-signatory to the Nuclear Non-Proliferation Treaty the US has agreed to resume nuclear cooperation in trade in the civil nuclear side, even while giving a specific commitment that it will not hamper India's weapons' programme. It has agreed to actively work to persuade the rest of it's cartel, the Nuclear Suppliers Group to do the same.

"It's too good to be true," said a senior official involved in the negotiations who spoke on background to this blogger earlier this week. The US decision has rescued the Indian civil nuclear programme as well, because India lacks natural uranium and its three-stage programme aiming at self-sufficiency through using the Thorium-Uranium cycle was in serious jeopardy. As it is, the American-led embargo had seriously crippled the programme both in terms of size and technology.

Because, say officials who went for the talks, the deal was wide open on all the three counts listed above when the team led by Indian National Security Adviser Narayanan and Foreign Secretary Shiv Shankar Menon went to Washington on July 17. There, in addition to the official-level talks, the Indian team leaders held parallel discussions with top US officials, Cheney, Hadley and Rice. By all accounts the talks were extended for a fourth and fifth day because of these discussions and in the end we have a “frozen text”—a draft agreement which, though already approved formally by India, must now be approved by the the US system.

The political push so vital for the agreement came from the very top-- President George W. Bush in the US and Prime Minister Manmohan Singh in India. Note the key role played by US Vice-President Dick Cheney and US National Security Adviser Steve Hadley and Secretary of State Condoleezza Rice in breaking the log-jam in Washington.

The latest report by one of the agreement’s more knowledgeable and balanced critics Siddharth Varadarajan of The Hindu indicates that the ‘frozen text’ now with the Indian and US governments has met all the many requirements that were set for it and more.
Already two nuclear scientists, Placid Rodrigues and M.R. Srinivasan who attacked the July 18 Agreement have come out to declare it a success. See this report.

A senior official involved in the negotiations says that the deal meets India's goals because:

1. It places no hindrance on our strategic or military programme. 2. It does not hinder our cherished indigenous three-stage nuclear power programme and finally 3. It is in consonance with all the assurances given by Prime Minister Singh in Parliament.

The senior official says that the agreement now contains “specific language” declaring that the aim of the agreement is not to hinder any “unsafeguarded nuclear activity” on the part of India-- in other words the military part of our programme. In fact he says the deal has ‘no language on nuclear tests’ . While the US is required by it’s law to halt all cooperation with countries that conduct nuclear tests, the Hyde Act has given an exemption that covers the May 1998 tests. While India is aware that another test will have consequences, the Indo-US 123 agreement remains silent on the issue, a fact that tells it's own story.

The ghost of Tarapur

In the frozen agreement according to the senior official, the US has agreed to give India “prior consent” to reprocess US-origin nuclear fuel. This is an issue that had bedeviled the past couple of rounds of talks because, first, the US did not understand India’s need for reprocessing (this is linked to making plutonium to fuel fast-breeder reactors for stage II of India’s power programme). The US prior consent is conditional on India creating a dedicated national facility for reprocessing fuel which will be safeguarded by the IAEA to it’s declared standards on reprocessing, storage, safety and security.

Such a consent was available for the US-supplied Tarapur reactors as well. But when India called for consultations on the issue of reprocessing in the 1970s, the US simply refused to sit down and talk and the result was that India has had to bear the cost of storing the US-origin spent fuel.
To ensure this does not happen the current agreement has a provision which requires consultations to begin within 6 months of the Indian request, and within a year an agreement will be reached.

Cessation of cooperation

Any agreement worth it’s salt must have some way of coping with a breakdown. In this case, the guiding star is again the Tarapur agreement. The US Atomic Energy Act insists that should this happen, it should get back all the equipment and materials supplied. This seems logical, but is impractical. Uprooting a nuclear power plant is simply not possible. The only option is to entomb it. As for materials, especially spent fuel, most suppliers would rather not have it back because of problems of storage.

The current agreement contains an elaborate schema for any “cessation of cooperation” situation. According to the senior official, it will have a “many-layered” process of consultation after the cessation. This will focus on safety and compensation, with US commitment to the “continuous operation of the reactor” of US origin. In other words, the US government will not seek to uproot or halt its’ operation. It could demand the return of US-origin fuel, but only after India was satisfied that it had made up the deficit from alternate sources. Here again the process would not be interminable. The US would be committed to stating what it wants back within a year and compensating India for the return.

What the draft agreement has not given us

The “frozen agreement” does not as yet enable trade in enrichment and reprocessing(ENR) technologies. The US prohibits their export to all countries, but says the senior official, India already has these technologies. What India wants, however, are components but this can only happen through an amendment to the current agreement. Parliament is also bound to question the “prior consent” framework for reprocessing saying that there is always a chance that the US may renege at the last moment. Officials say that the issue will really come up after a decade and more because this presumed that India will, first, have to buy a US reactor, then use it for several years and accumulate sufficient spent fuel for reprocessing. At the same time it would have to build the dedicated facility for reprocessing it. So why hold the agreement hostage to speculative possibility, namely that India will indeed buy a US reactor ?

The Real Prize

India now needs to work out an agreement with the International Atomic Energy Agency and get the approval of the 43-member Nuclear Suppliers Group cartel. This should happen by October or November. Then the draft agreement, the IAEA India-specific Additional Protocol and the NSG's new rules on nuclear trade with India would be together sent to the US Congress and the 123 Agreement would be subjected to an "up or down" vote. This means that there will be no discussion or amendment, simply a vote on whether the Congress approves or disapproves of the agreement.

The NSG is the real prize. The Indo-US Agreement is merely the key that will unlock the global embargo on our programme. When the embargo is lifted, India will have the option of nuclear trade with several countries who are not as finicky as the US on nuclear issues. It is not that they are less committed to non-proliferation and will not insist on stringent safeguards on us, only that they will not have onerous rules of the type listed in the US Atomic Energy Act. Further, and perhaps more important, they have more advanced nuclear power technology-- Russian reactors are cheaper and the French more sophisticated.

Could the US use the NSG to pin India down on issues it has conceded in the ‘123 Agreement’?
Unlikely, say Indian officials, they have tried in the past but failed. Indeed, they are actually obligated by the July 18, 2005 agreement to push India’s case in the NSG. The US will give it in writing to India that it will not press the NSG to cut off cooperation with India, should the Indo-US agreement be terminated in some future date for some unspecified reason.

Domestic fallout

“Success has many fathers, but failure is an orphan”. You will soon be reading about those who played a sterling role in working out the Indo-US nuclear deal. The actual fact is that barring Prime Minister Manmohan Singh himself, no senior political figure backed the deal openly, though External Affairs Minister Pranab Mukherji played a key behind-the-scenes role in promoting it. One reason was that many in the ruling coalition did not understand the deal and its implications and some didn’t bother to think about it. Among political parties only Left understood what it meant—the route to closer Indo-US ties—and so opposed it vehemently.

The BJP’s hostile stance is part of its addled post-2004 politics. The opposition of the “retired nuclear scientist” lobby ranged from senility to xenophobia. Many of those involved forgot their own record of incompetence and disservice to the Indian nuclear programme whose true history remains to be written. The mendacity of some of them has been truly astonishing.

And as for our bomb programme....

Those who claim that the deal will undermine our minimum credible deterrent should read the article here written by K. Santhanam, the DRDO scientist who steered the Indian nuclear weapons programme through the 1990s. He says "The accumulated weapons-grade plutonium in about 40 years of operating the CIRUS reactor (40MWt) and the relatively new Dhruv reactor (100MWt) has been estimated to be sufficient for the MCD (Minimum Credible Deterrent)."