issues & controversies of recent indo-us nuclear agreement (123 agreement)

7/29/2019 Issues & Controversies of Recent Indo-US Nuclear Agreement (123 Agreement)

1/54

NALSAR UNIVERSITY OF LAW, HYDERABAD

SUBJECT:PUBLIC INTERNATIONAL LAW

PROJECT WORK ON THE TOPIC:

ISSUES & CONTROVERSIES OF RECENT INDO-US NUCLEAR AGREEMENT

SUBMISSION TO:

PROFESSOR V. BALAKISTA REDDY

(PROFESSOR OF LAW & PROCTOR)

SUBMITTED BY:

PARUL PRASAD

1ST

YEAR

LL.M COURSE

ROLL NUM:

2012-28

DATE:

9/10/2012


2/54

2

Table of Contents

HYPOTHESIS ..................................................................................................................... 3

A BRIEF OVERVIEW ........................................................................................................... 4

BACKGROUND .................................................................................................................. 6

WHAT IS A 123 AGREEMENT? ........................................................................................... 8

IMPORTANT FEATURES OF THE AGREEMENT .................................................................. 11

WHAT ARE THE ESSENTIAL TERMS OF THE DEAL? ............................................................ 13

TERMS AND CONDITIONS ............................................................................................... 14

WHAT U.S.A. GETS FROM THIS AGREEMENT? ................................................................. 16

WHAT KIND OF TECHNOLOGY WOULD INDIA RECEIVE IN RETURN? ................................. 18

WHY INDIA NEEDS THE DEAL? ......................................................................................... 19

WHO APPROVED THE AGREEMENT? ............................................................................... 21

ADVANTAGES OF 123 DEAL TO INDIA.............................................................................. 24

DISADVANTAGES OF DEAL TO INDIA ............................................................................... 26

CHRONOLOGY OF THE INDO-U.S. NUCLEAR DEAL ............................................................ 27

RATIONALE BEHIND THE AGREEMENT............................................................................. 31

CONTROVERSY IN INDIA OVER NUCLEAR DEAL WITH U.S.A. ............................................ 33

POLITICAL OPPOSITION TO THE DEAL IN INDIA................................................................ 39

THE U.S. DOMESTIC DEBATE ON THE INDO-U.S. NUCLEAR DEAL ...................................... 41

MAJOR ISSUES ................................................................................................................ 46

CONCLUSION .................................................................................................................. 51

BIBLIOGRAPHY ............................................................................................................... 53


3/54

3

HYPOTHESIS

The 123 agreement between India and USA refers to Sec. 123 of the U.S. Atomic Energy

Act. There is a ban on transfer of nuclear technology to other countries under this Act. TheHyde Act was passed by U.S.A to make an exception for India, to enable transfer of

technology for civil nuclear energy. The 123 Agreement is the terms of engagement which

operationalizes the treaty agreement between india and u.s.a for transfer of civil nuclear

technology. The next step is to enter into agreement with the IAEA ( international atomic

energy agency) for safegaurds of the civil nuclear reactors to be set up under the 123

agreement and to enter into an agreement with the NSG ( nuclear suppliers group) for supply

of nuclear fuel i.e uranium for the civil nuclear reactors. Once India completes the

agreements with IAEA and NSG, then the U.S. Congress will vote on the 123 agreement.

Once it is approved by the U.S. Congress, then the deal is complete and India and U.S.A can

enter into nuclear commerce i.e supply of nuclear reactors, transfer of technology, supply of

nuclear fuel etc.

TYPE OF LEGAL RESEARCH:

I have followed the impact method of research.


4/54

4

1

A BRIEF OVERVIEW

On 18th July, 2005, United States of Americas President George W. Bush & Prime Ministerof India Dr. Manmohan Singh had made a public & formal declaration about a negotiated &

binding nuclear trade agreement that would help widen bilateral pursuits relating to civilnuclear energy & nuclear-use technology. The Henry J. Hyde United States-India PeacefulAtomic Energy Cooperation Act of 2006, also known as the Hyde Act, is the United Statesmunicipal law that modifies the requirements of Section 123 of the United Nations AtomicEnergy Act (UNAEA) to permit nuclear assistance with IIndia & in specific to negotiate a123 Agreement. As an internal United States law, the Hyde Act is binding on the UnitedStates. The Hyde Act cannot be made binding on India, although it can be interpreted as a

prescription for future United States reactions. According to the Vienna convention, an

international treaty like the 123 agreement cannot be replaced by a municipal local law suchas the Hyde Act. The 123 agreement lays down the terms & specifications for a bilateralcivilian nuclear agreement & requires compulsory assent of the United States Congress & ofthe Indian cabinet ministers. According to the Nuclear Power Corporation of India, thecivilian nuclear agreement will assist India in meeting its target of adding 25,000 MW ofnuclear power through imports of nuclear reactors & fuel by 2020. After the essential terms& specifications of the bilateral civilian nuclear agreement were concluded on 27th July,2007, it ran into trouble because of strong political resistance in India. In 2008 The Indiangovernment gathered a confidence vote in the parliament by 275256 votes in the event ofdesertion by some parties. The deal also faced opposition from non-proliferation activists,anti-nuclear organisations, & some states within the Nuclear Suppliers Group. The agreement

was signed on October 8, 2008 between the United States & India.

Under the U.S.-India Civil Nuclear Agreement, better known as the 123 agreement signed between the Republic of India & the United States of America, India agreed to put allits civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards & inexchange the United States agreed to work toward full civil nuclear cooperation with India.[1]This nuclear deal took more than three years to come to realization as it had to go throughvarious complicated stages, including amendment of U.S. domestic law, specially the AtomicEnergy Act of 1954, an India-IAEA safeguards (inspections) agreement, a civil-militarynuclear Separation Plan in India, & the grant of an exemption for India by the NuclearSuppliers Group, an export-control cartel that had been formed mainly in rejoinder to India's

first nuclear test in 1974. In its final step, the nuke deal provides permanent safeguards tocivil nuclear facilities & permits broad civil nuclear cooperation, while excluding the transferof sensitive equipments & technologies, including civil enrichment & reprocessing itemseven under IAEA safeguards.

On 2nd February, 2009, India signed an India-specific safeguards agreement with the IAEA.[2] Once India brings this agreement into force, inspections began in a gradual manner on the

1

Office of the Press Secretary "Joint Statement between President George W. Bush and Prime Minister Manmohan Singh"(http://georgewbush-whitehouse.archives.gov/news/releases/2005/07/20050718-6.html)2

India Safeguards Agreement Signed (http://www.iaea.org/NewsCenter/News/2009/indiaagreement.html)


5/54

5

35 civilian nuclear plants India has identified. [3] This nuke deal introduces a new aspect inU.S.-India relations to international non-proliferation efforts. On 1st August, 2008, the IAEAapproved the safeguards agreement with India, after which the United States of Americaapproached the Nuclear Suppliers Group (NSG) to grant a waiver to India to initiate civiliannuclear trade.[4] The 45-nation NSG granted waiver to India on September 6, 2008 permitting

it to make use of civilian nuclear technology & fuel from other countries.[5

] The execution ofthis waiver made India the only country in the world with nuclear weapons which is not a

party to the Non Proliferation Treaty (NPT) but is still allowed to carry out nuclear trade withthe rest of the world. The US House of Representatives passed the bill on September 28,2008.[6] On October 1, 2008 the United States Senate sanctioned the civil nuclear agreementallowing India to purchase nuclear technology & fuel from the United States of America.[7]George W. Bush, United States President, signed the bill on the Indo-US nuke deal, into law,

better known as the United States-India Nuclear Cooperation Approval & Non-proliferationEnhancement Act, on October 8, 2008.[8] On 10th October, 2008, the agreement was signed

by then Indian External Affairs Minister Pranab Mukherjee & his counterpart then Secretaryof State Condoleezza Rice. Ten days later, U.S. President George W. Bush transmitted two

certifications in order for the two governments to exchange diplomatic notes required as perby P.L. 110-369. New Delhi & Washington exchanged diplomatic notes & the Indo-US civilnuclear agreement came into force on December 6, 2008. The 123 agreement states that thegovernments of United States of America and the republic of India must beginconsultations, to be concluded within one year, on the relevant arrangements and

procedures within six months of a request from India. India had made such a request onFebruary 3, 2009. India and the United States completed negotiations on the agreementMarch 29, 2010[9] The Indo-US nuke deal lifts a three-decade U.S. moratorium on nucleartrade with India. It provides United States aid to India's civilian nuclear energy program, &widens U.S.-India cooperation in energy & satellite technology.

3 "Implementation of the India-United States Joint Statement of July 18, 2005: India's Separation Plan"

(http://www.iaea.org/Publications/Documents/Infcircs/2008/infcirc731.pdf)4

Outlookindia.com (http://www.outlookindia.com/pti_news.asp?id=321896)5

"Nuclear Suppliers Group Grants India Historic Waiver MarketWatch"

(http://www.marketwatch.com/news/story/nuclearsuppliers-group-grants-india/story.aspx?guid={BA6E4022-DBC8-4B43-

B9DE-62608913CB8A}&dist=hppr)6

"House of Reps clears N-deal, France set to sign agreement-USA-World-The Times of India"

(http://timesofindia.indiatimes.com/USA/House_of_Reps_clears_N-

deal_France_set_to_sign_agreement/articleshow/3536151.cms)7The Times of India (http://timesofindia.indiatimes.com/US_Senate_approves_Indo-

US_nuclear_deal/articleshow/3551691.cms) Senate approves nuclear deal with India

(http://edition.cnn.com/2008/POLITICS/10/01/us.india.nuclear/)8

"Bush signs bill on N-deal on October 8" (http://georgewbush-

whitehouse.archives.gov/news/releases/2008/10/20081008-4.html)9http://www.state.gov/p/sca/rls/139194.htm


6/54

6

2

BACKGROUND

Indias known ores are of low grade & the price of uranium produced in India is more thanfive times the international price. If we depended only on our own resources of uranium, wewill have a slow growth of nuclear power capacity. Given the constraints on empting coal

based power (through CO2 burden in the atmosphere), on gas (due to limited availability &imported LNG prices being linked to crude oil price) & on hydro electricity (due toopposition against dams because of rehabilitation & submergence questions), India urgentlyneeds to rely more on nuclear energy to enlarge the electrical generation capacity. Indiasinterest in fast reactors is because it opens a way of utilizing the energy potential of thorium.However substantial quantities of plutonium are required to start off the fast reactors. This

plutonium can come from natural uranium heavy water reactors (such as the ones we have

built & are building) or from low enriched uranium light water reactors. The need to importnatural uranium arises because the total amount of uranium available in India, as of now, isnot large & thus India has entered into a civil nuclear agreement with United States ofAmerica. [10]

Countries party to the Non Proliferation Treaty (NPT) have an established right of admissionto peaceful use of nuclear energy & a responsibility to cooperate on civilian nucleartechnology. The Nuclear Suppliers Group (NSG) has also agreed on guidelines for nuclearexports, including reactors & fuel. Those guidelines are designed to certify that nuclearenergy is not deflected from peaceful use to military use for weapons programs.

In 1968, India refused to sign the NPT, claiming it was biased. In 1974, India tested its firstnuclear bomb, showing it could develop nuclear weapons with technology transferred for

peaceful purposes. As a result, the United States isolated India for twenty-five years, refusingnuclear cooperation & trying to convince other countries to do the same. But since 2000, theUnited States has moved to build a "strategic partnership" with India, increasing cooperationin fields including spaceflight, satellite technology, & missile defence.

Although India have not signed the NPT, India argues that the NPT creates a club of "nuclearhaves" & a larger group of "nuclear have-nots" by confining the legitimate possession ofnuclear weapons to those states that tested them before 1967, who alone are free to own &increase their nuclear stockpiles.[11] As a result, India was left outside the international

nuclear order, which forced India to evolve its own resources for nuclear fuel & powergeneration, including fast breeder reactors & a thorium breeder reactor.[12] Nuclear isolationcoerced expansion of Indias civil nuclear program, it left India comparatively immune toforeign reactions to a forthcoming nuclear test. India conducted five nuclear tests in May,1998 at Pokhran, due to continued unchecked nuclear & missile proliferation activities

between China, North Korea & Pakistan. India was given international sanctions after itsMay 1998 nuclear tests. Indian GDP growth increased to 6.6% (during sanctions) in 1998-1999 from 4.8% in 19971998 (prior to sanctions). However, due to the size of its economythese sanctions had little impact on India. As a result, at the end of 2001, the U.S.

10

www.cfr.org/india/us-india-nuclear-deal/p966311http://www.indianembassy.org/policy/CTBT/embassy_non_proliferation.htm

12http://www.ans.org/pubs/journals/nt/va-133-1-1-32 and http://www.rediff.com/news/2005/aug/25nuke.htm


7/54

7

Administration decided to drop all sanctions on India. Although India accomplished itsstrategic purpose from the Pokhran nuclear tests in 1998, it continued to find its civil nuclear

program isolated internationally.

India has always insisted on the plan for a nuclear-free world & has adopted a voluntary "no

first use policy". The NSG has been set up to control exports of nuclear materials, equipment& technology, in addition to propelling India to accomplish success in developing newnuclear reactor technologies. The NSG official permission provided India with the incentiveto continue developing its own nuclear weapons technology with a definite goal of attainingself-sufficiency for weapons design, testing & production. With an estimate that India possessreserves of about 80,000112,369 tons of uranium, India has enough material to supply itsnuclear weapons program, even if it restricted Plutonium production to only 8 of the country's17 current reactors, & then further restricted Plutonium production to only 1/4 of the fuel coreof these reactors.[13] It has been valuated that although India's estimated reserve of uraniumamounts to only 1% of the world's known uranium reserves, yet India has the capability to

produce a enormous nuclear armoury while remaining well within the lowest valuation of its

known uranium reserves.[14] The uranium export restrictions of NSG has affected Indiannuclear power generation capacity. It challenges India's long term plan to exp& its civilnuclear power generation capacity from its current output of about 4 Giga Watt electricity toa larger output of 20 Giga Watt electricity by 2020.

According to the Joint Statement released on 18th July, 2005, President George W. Bush saidhe would work to achieve full civil nuclear energy cooperation with India & would alsoseek agreement from Congress to adjust US laws &policies. On Indias part, Prime MinisterDr. Manmohan Singh stated that India would take on the same responsibilities & practices& acquire the same benefits & advantages as other leading countries with advanced nucleartechnology, such as the United States. Thus, these responsibilities & practices consist of: Identifying & separating civil & nuclear facilities & programmes in a phased manner &filing a declaration regarding its civilian facilities with the International Atomic EnergyAgency (IAEA). Taking a decision to voluntarily place its civil nuclear facilities under IAEA safeguards. ContinuingIndias unilateral moratorium on nuclear testing, & Working with the United States for the conclusion of a Multilateral Fissile Material Cut offTreaty. [15]

The 123 Agreement between India and the U.S. reflects deepening relationship between thetwo countries. The 123 civil nuclear agreement, the third such pact ever undertaken by the

U.S. with another country, grants India advance consent to reprocess spent fuel of U.S. originand fuel burned in U.S. reactors. This agreement would have broader impact in the India-U.S.ties. [16]

13http://www.carnegieendowment.org/files/atomsforwarfinal4.pdf

14http://en.wikipedia.org/wiki/Indo-US_civilian_nuclear_agreement

15

www.usindiafriendship.net/viewpoints1/nuclearagreement2007.htm16www.thehindu.com/news/international/article321649


8/54

8

3

WHAT IS A 123 AGREEMENT?

In order for the United States to engage in civilian nuclear cooperation with other states, itmust conclude a framework agreement that meets specific requirements under Section 123 of

the Atomic Energy Act (AEA). The AEA also provides for exemptions to these requirements,

export control licensing procedures, and criteria for terminating cooperation. Congressional

review is required for Section 123 agreements. [17]

The 123 agreement between the republic of India and United States of America refers to Sec.

123 of the United States Atomic Energy Act (AEA) of 1954 (as amended; P.L. 95-242; 42

U.S.C. 2153 et seq.)[18] Section 123 of the Act establishes the conditions and outlines the

process for major nuclear cooperation between the United States and other countries. In orderfor a country to enter into such an agreement with the United States, that country must

commit to a set of nine non-proliferation criteria. The United States has entered into nuclear

cooperation agreements with: Argentina, Australia, Bangladesh, Brazil, Canada, China,

Colombia, Egypt, India, Indonesia, Japan, Kazakhstan, Morocco, Norway, South Africa,

Switzerland, Taiwan, Thailand, Turkey, and Ukraine, as well as the 27-member European

Atomic Energy Community (EURATOM), and the International Atomic Energy Agency

(IAEA).[19]

Section 123 of the AEA specifies the necessary steps for engaging in nuclear cooperation

with another country. [20] Section 123 of the AEA provides:

Section 123 a. states that the proposed agreement is to include the terms, conditions,duration, nature and scope of cooperation and lists nine criteria that the agreement must meet.It also contains provisions for the President to exempt an agreement from any of severalcriteria described in that section and includes details on the kinds of information theexecutive branch must provide to Congress.

Section 123 b. specifies the process for submitting the text of the agreement to Congress.

Section 123 c. specifies how Congress approves cooperation agreements that are limited in

scope (e.g., do not transfer nuclear material or cover reactors larger than 5 MWe). This reportdoes not discuss such agreements.

17http://www.fas.org/sgp/crs/nuke/RS22937.pdf

18The Atomic Energy Act (AEA) was amended by the Nuclear Nonproliferation Act of 1978 (NNPA) (P.L. 95-242) to include

stringent nonproliferation requirements for significant U.S. nuclear exports. For example, the act required nonnuclear-

weapon states to have full-scope International Atomic Energy Agency safeguards as a condition for entering into nuclear

cooperation agreements with the United States. For existing and future agreements, the NNPA added a provision for

Congress to review export licenses. The act also included a provision for halting exports if a country tested a nuclear

device, violated safeguards agreements, or continued nuclear weapons-related activities.19http://www.armscontrol.org/factsheets/AEASection123

20www.nrc.gov/reading-rm/doc-collections/nuregs/.../sr0980v1.pdf


9/54

9

Section 123 d. specifies how Congress approves agreements that do cover significant nuclearcooperation (transfer of nuclear material or reactors larger than 5Mwe), including exemptedagreements.

Section 123a. paragraphs (1) through (9), lists nine non-proliferation criteria that an

agreement with a non-nuclear weapon state must meet unless the President determines anexemption is necessary.[21]These include guarantees that:

Nuclear material [22] and equipment transferred to the country must remain undersafeguards in perpetuity.

Non-nuclear-weapon states partners must have full-scope IAEA safeguards,essentially covering all major nuclear facilities.

A guarantee that transferred nuclear material, equipment, and technology will nothave any role in nuclear weapons development or any other military purpose, except

in the case of cooperation with nuclear-weapon states.

In the event that a non-nuclear-weapon state partner detonates a nuclear device usingnuclear material produced or violates an IAEA safeguards agreement, the UnitedStates has the right to demand the return of any transfers.

U.S. consent is required for any re-transfer of material or classified data. Nuclear material transferred or produced as a result of the agreement is subject to

adequate physical security.

U.S. prior consent rights to the enrichment or reprocessing of nuclear materialobtained or produced as a result of the agreement.

Prior U.S. approval is required for highly-enriched uranium (HEU) and plutoniumobtained or produced as a result of the agreement.

The above non-proliferation criteria apply to all nuclear material or nuclear facilitiesproduced or constructed as a result of the agreement.

The above nonproliferation criteria apply to all nuclear material or nuclear facilities produced

or constructed as a result of the agreement.

The President may exempt a proposed agreement from any of the above criteria upondetermination maintaining such a criteria would seriously prejudicial to the achievement ofU.S. non-proliferation objectives or otherwise jeopardize the common defense and security ofthe United States.[23] Exempted 123 agreements would then go through a different process

21http://www.armscontrol.org/factsheets/AEASection123

22Nuclear material means (1) plutonium, uranium enriched in the isotopes 233 or 235, and any other material that is

determined to be special nuclear material, but does not include source material, or (2) any material artificially enriched byany of the foregoing, but does not include source material.23

http://www.fas.org/sgp/crs/nuke/RS22937.pdf


10/54

10

than non-exempt agreements, [24] requiring a congressional joint resolution approving theagreement for it to become law. To date, all of the Section 123 agreements in force are non-exempt agreements. Prior to the adoption of P.L. 109-401, the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, the President would have needed toexempt the nuclear cooperation agreement with India from some requirements of Section 123

a. P.L. 109-401, however, exempted nuclear cooperation with India from some of the AEAsrequirements.[25]

In 2006, U.S. Congress passed the Henry J. Hyde United States-India Peaceful AtomicEnergy Cooperation Act (also known as the Hyde Act) which amended the AEA permitnuclear cooperation with India, a country which is not a member of the nuclear

Nonproliferation Treaty (NPT) and does not maintain full-scope safeguards. The Hyde Actwas passed by U.S.A to enable transfer of technology for civil nuclear energy. The 123Agreement is the terms of engagement which operationalizes the treaty agreement betweenIndia and U.S.A. for transfer of civil nuclear technology. The next step is to enter intoagreement with the IAEA ( international atomic energy agency) for safeguards of the civil

nuclear reactors to be set up under the 123 agreement and to enter into an agreement with theNSG ( Nuclear Suppliers Group) for supply of nuclear fuel i.e. uranium for the civil nuclearreactors. Once India completes the agreements with IAEA and NSG, then the U.S. Congresswill vote on the 123 agreement. Once it is approved by the U.S. Congress, then the deal iscomplete and India and U.S.A can enter into nuclear commerce i.e. supply of nuclearreactors, transfer of technology, supply of nuclear fuel etc.[26]

24Nuclear cooperation agreements with nuclear weapon states recognized by the NPT are provided for in the AEA, and are

therefore non-exempt agreements. The NPT defines nuclear weapon states as those that exploded a nuclear weapon or

other nuclear explosive device prior to January 1, 1967: China, France, Russia, the United Kingdom, and the United States.25

CRS Report RL33016, U.S. Nuclear Cooperation with India: Issues for Congress, by Paul K. Kerr. The agreement enteredinto force in December 200826

http://www.oecd-nea.org/law/nlbfr/documents/087_090_USAtomicEnergyAct.pdf


11/54

11

4

IMPORTANT FEATURES OF THE AGREEMENT

Following are the salient features of the 123 Agreement [27] signed between the republic ofIndia and the United States of America on civil nuclear energy cooperation:

Nuclear material, equipment and components transferred pursuant to the Agreementand nuclear material and by-product material used in or produced through the use ofany nuclear material, equipment and components so transferred should not be used bythe recipient party for any nuclear device, for research on or development of anynuclear device or for any military purpose.

The United States is willing to incorporate assurances regarding fuel supply in thebilateral India-US agreement on peaceful uses of nuclear energy which would besubmitted to the US Congress.

The United States will join India in seeking to negotiate with the IAEA and India-specific fuel supply agreement.

The United States will support an Indian effort to develop a strategic reserve ofnuclear fuel to guard against any disruption of supply in the lifetime of India'sreactors.

If despite these arrangements, a disruption of fuel supplies occurred, the US and Indiawould jointly convene a group of friendly supplier countries including Russia, UKand France, to pursue measures to restore fuel supplies to India.

An India-specific 'safeguards agreement' would be negotiated between India and theIAEA, providing for safeguards to guard against withdrawal of safeguarded nuclearmaterial from civilian use at any time as well as providing for corrective measuresthat India may take to ensure uninterrupted operation of its civilian nuclear reactors inthe event of disruption of foreign fuel supplies. Taking this into account, India would

place its civilian nuclear facilities under India-specific safeguards in perpetuity andnegotiate an appropriate safeguards agreement with the IAEA.

The nuclear material and equipment transferred to India by the US pursuant to theagreement and any nuclear material used in or produced through the use of nuclearmaterial, non nuclear material, equipment or components so transferred shall besubject to safeguards in perpetuity in accordance with the India-specific SafeguardsAgreement between India and the IAEA and an additional protocol, when in force.

Under the Agreement, India would establish a new national re-processing facilitydedicated to re-processing safeguarded nuclear material under IAEA safeguards andthe two countries will agree on arrangements and procedures under which such re-

processing will take place in this new facility.

27http://news.oneindia.in/2007/08/03/salient-features-of-123-agreement-between-india-and-us-1186146576.html


12/54

12

The provisions of the agreement will not be used to interfere with the nuclear policyor programmes for the promotion of the peaceful uses of nuclear energy includingresearch and development.

The agreement which remain in force for 40 years, and continues thereafter for anadditional period of ten years each.

Either country will have the right to terminate the Agreement prior to its expiration onone year written notice to the other country. The Agreement would terminate one yearfrom the date of the written notice. The country seeking termination would ceasefurther cooperation if it determined that a mutually-acceptable solution of outstandingissues had not been possible or could not be achieved through consultations. If acountry seeking termination, cited violation of IAEA safeguards agreement as thereason, a crucial factor would be whether the IAEA Board of Governors had foundnon-compliance. Following the termination, either Party would have the right torequire the return of any nuclear or non-nuclear material or component throughconsultations. However, efforts would have to be made to resolve any dispute throughnegotiations.


13/54

13

5

WHAT ARE THE ESSENTIAL TERMS OF THE DEAL?

The essential terms of the U.S.-India civil Nuclear Agreement are: [28]

India agreed to separate its civil and military nuclear facilities and place its civilfacilities under IAEA safeguards and, in exchange, the United States agreed to work

toward full civil nuclear cooperation with India.

India must keep its military reactors separate from the Civilian. The use of technologyis only for civilian purpose. (To make power)

India cannot use the nuclear technology for military purpose (Making NuclearBombs)

India commits to strengthening the security of its nuclear arsenals. The companies from U.S and NSG countries will be allowed to build nuclear reactors

in India and provide nuclear fuel for its civilian energy program.

India commits to signing an Additional Protocol-which allows more intrusiveIAEA inspections-of its civilian facilities.

India works toward negotiating a Fissile Material Cut-off Treaty (FMCT) withthe United States banning the production of fissile material for weapons

purposes. India agrees to prevent the spread of enrichment and reprocessing

technologies to states that don't possess them and to support international

non-proliferation efforts.

U.S. companies will be allowed to build nuclear reactors in India and providenuclear fuel for its civilian energy program. (An approval by the Nuclear

Suppliers Group lifting the ban on India has also cleared the way for other

countries to make nuclear fuel and technology sales to India.)

28

www.cfr.org/india/us-india-nuclear-deal/p9663


14/54

14

6

TERMS AND CONDITIONS

The 123 civil nuclear agreement between India and U.S.A. has eight important terms andconditions: [29]

It gives the U.S. absolute right to terminate cooperation with India .The terminationcan come into effect at the end of one-year notice period although the agreementempowers the U.S. to suspend all cooperation without such a notice. The onlyrequirement is that the party sending a notice of termination has to provide the noticefor doing so.

This accord does not uphold a core principle of international law and is linked withthe national lines and regulations like the U.S. Hyde Act because there is no Indianlaw governing nuclear cooperation with the U.S. or any other specific country. Boththe U.S. and Indian sides have publicly acknowledged that the agreement is within thelegal framework of the India specific Hyde Act, which reigns, supreme in thisarrangement.

The provision of the nuclear testing has not been explicitly referred in the agreementalthough a test prohibition against India is clear through the incorporation of the U.S.right to demand the return of all supplied materials and item. The Hyde Act Section106 openly bans Indian testing.

The U.S. under the 123 agreement has not only the right to terminate cooperation inresponse to an Indian test but also can terminate that if according to Washington,India did not comply with the given conditions in the Hyde Act with regard to the

prescribed non -proliferation condition.

The agreement gives the exclusive right to the U.S. to unilaterally terminate,cooperate and demand the return of all equipment and fuel supplied in the past.However, the agreement states that before invoking the right of return, the concerned

party would "undertake consultations with the other party" and that the supplier statewould "compensate promptly that party for the fair market value" of the items and

materials it takes back.

While the U.S. has the right to terminate cooperation at will and withdraw from allobligations, India has been denied the right to withdraw from all its obligations, evenif the agreement was terminated at America instance. The agreement also includesIndia`s obligation to accept international inspection on its entire civil nuclear programincluding the indigenously built facilities it is voluntarily opening to external scrutiny.

The U.S. also maintains the right in the 123 agreement to unilaterally suspend thereprocessing-related "arrangements and procedures" which it intends to work out with

29http://www.indianetzone.com/7/123_agreement.htm


15/54

15

New Delhi in the years ahead once India has built a new reprocessing facility underIAEA (International Atomic Energy Agency) safeguards.

The agreement relating to `consultation` and uninterrupted fuel supply appear more tobe accord with the provisions of the national laws. The agreement as mentioned in

Art5 (4) does not allow India to build up lifetime reserves but only permits continuousfuel supply for the continuous operations of the reactors for their lifetime. A special

provision has been made in the case of India that is worth mentioning. There is a banon the transfer of nuclear technology under Section 123 of the US Atomic Energy Act.The Hyde Act was passed by the US to make an exception for India to enable transferof technology for civil nuclear energy. [30]

30http://www.indianetzone.com/7/123_agreement.htm


16/54

16

7

WHAT U.S.A. GETS FROM THIS AGREEMENT?

U.S. expects that such a deal could spur India's economic growth and bring in $150billion in the next decade for nuclear power plants, of which the US wants a share.

U.S. also expects Indias economic growth will make a counterweight to China. All in all the oldest democracy wants a strategic partnership with the largest

democracy.

In the best interest of U.S to secure its energy needs of coal, crude oil and natural gas.[31][32]

Economic benefits to US: [33]

Take for example the recently agreed IndoUS nuclear deal. If India sets up 10 largesize nuclear power plants, which is the intent in next 15 years, India will importtechnology and hardware from US for at least half of these projects (technology forthe remaining may come from elsewhere). Each of these plants at a green field sitewill cost about $4 billion. In short, orders worth $15-20 billion will be placed with theUS companies in next 6 to 8 years. Remaining orders may go to France, Germany,Canada and UK. Monies for these installations will come to India either in form ofFDI or soft & commercial loans. Banks and equipment manufacturers abroad will be

delighted to make this money available to India. In return India will pay it back withgoods and services export. Same way as China does it for the past 25 years. It is awin-win situation for the US lenders and US suppliers. Further expansion of businessdealings on both sides will follow.

Another example of emerging Indo-US co-operation is in the area of aerospaceindustry. Order for $8 Billion worth of commercial airplanes has been placed withBoeing of Seattle. Another big order for 125 military planes is on the way. US

parliamentarians have to work these big business deals in their thinking prior theirvote.

The high tech manufacturing industry is at a take off stage in India. In last 3 months,announcements by big US companies totaling $7 billion dollars investment have beenmade. This has gone far beyond Indias expectations. This sector together with ITservices and BPO will power the US industry and businesses into higher profitabilityand help India accelerate its growth.

Co-operation in auto parts, pharmaceuticals, R & D and defense industry cannot beruled out. For each of these US is looking for a low cost supplier. China does not fit

31

www.dpcc.co.in/pdf/nuclearenergyprogramme.pdf32http://www.slideshare.net/ashishnangla/indo-us-nuclear-deal-presentation

33www.ivarta.com/columns/OL_060324.htm 3/


17/54

17

the bill as too many eggs go into one basket, hence another supplier has to be locatedand developed. India fits the bill.

Political Benefits to US: [34]

With a few strokes of pen, President Bush eliminated a major Cold War irritant fromthe scene. India is not politically and diplomatically aligned with US as the Europe is,

but India as a strategic partner in ensuring safety of sea-lanes of the Indian Ocean isvery valuable. At the moment and as long as US stays in Iraq and Afghanistan, theworld will perceive US as big bully. A major regional power, with a different outlookthan the European and the US is needed to cool the tempers off. India has to step in to

prevent further sliding of the Middle East into anarchy. Hot heads in Washington arelooking at each development in the region as a threat. This mindset has earned USdemerit points on the international diplomatic chessboard. Muslim sympathy for USafter 9/11 has evaporated. That is why Osma Bin Laden is still free and Mullah Omaris beginning to make inroads into Afghanistan. Further escalation in Iran will worsen

the situation. Hence, India has to do what it has done best for the last 50 years i.e.advise a respite and cool thinking. Any development, which will extricate US out ofIraq and now Iran, will be welcomed by US.

Military Benefits to the US: [35]

US will benefits immensely with India as a major military power. Forty percent ofworlds oil and commerce passes through the Indian Ocean sea-lanes. These today areunprotected. Pirates in the Red Sea and at the Malacca Straits prey on commerce.Moreover, angry Iran could block Straits of Hormuz and prevent oil shipments. USalone cannot police all the sea-lanes of the world. They need India to be there in theIndian Ocean to ensure free flow of commerce.

Rising China as a military power is a menace. There defense expenditure of $85billion a year and rising is nothing short of a desire to dominate East Asia. In-spite ofUS having its 6th Fleet in the area, they will be powerless to prevent capture ofTaiwan by China if they so wished. Only Chinas commercial and export interests areholding them back. Hence containing China should be the major goal of USs China

policy. India is the lynch pin of this policy. Suitably armed and ready to defend, Indiawill easily neutralize China together USs 6th Fleet and Japan. Chinas politicalinfluence in Indian Ocean Littoral States, bar Pakistan is minor. Pakistan has no

scruples. Thanks to President Bush, he has sent the first message to the Pakistanileaders in 55 years that Indo-US - Pakistani relations have permanently beendehyphenated.

Future military expansion in India to take up its role as a regional player bids well forthe US military hardware suppliers. They will gain immensely over next 20 years.

34www.ivarta.com/columns/OL_060324.htm 3/

35Ibid.


18/54

18

8

WHAT KIND OF TECHNOLOGY WOULD INDIA RECEIVE IN

RETURN? India would be eligible to buy nuclear technology from NSG countries which includes

the USA. (There are 45 countries in nuclear suppliers group)

India will get Nuclear reactors and Fuel for making power for energy hungry India. India will become the only one country that gets nuclear technology without signing

NPT. [36][37]

36http://www.slideshare.net/santoshjnu/india-us-nuclear-deal-8343901

37http://www.slideshare.net/ashishnangla/indo-us-nuclear-deal-presentation


19/54

19

9

WHY INDIA NEEDS THE DEAL?

The Indo-US nuclear deal, apart from ending Indias three-decade-old nuclear apartheid,opens the door to high-end technology that will help propel industries ranging from pharmato bio-tech and from avionics to manufacturing. Specifically, it would pave the way to energysecurity for India. [38] [39]

17 existing reactors, which at 54 percent in 2007-08 had the lowest plant load factorin a very long time, will get access to imported uranium. This will help in overcomingthe paucity of fuel.

Access to imported fuel will fire three new reactors in Rawatbhata in Rajasthan. The deal will help in the expansion of the Kundankulam Atomic Power Project in

Tamil Nadu.

India will be able to access Canadas CANDU reactors that allow direct breeding ofthorium, a mineral that is available in abundance in India.

Apart from the above mentioned benefits the deal also gives access to dual use technologythat can be used in various industrial and scientific sectors. Some of the dual-use technologyand trigger list items that will now be available to India are: [40]

Sonar, used for undersea warfare can now be used for finding minute abnormalities inmammograms.

India can now have advanced computers having weather forecasting applications suchas CRAYXPM 14.

The countrys oil refineries can now access digital phosphorous oscilloscopes. We can get biotechnology that can improve public health, agriculture growth and

fasten economic development.

Hydrocarbon prices are rising by the day. A diversification of our energy basket willhelp in controlling inflation.

Benefits to India could be broadly categorized as economical, political and military. [41]

Economic benefits to India:38

http://www.visionofdate.com/2008_10_05_archive.html39

http://zeenews.india.com/news/archives/123-of-indo-us-nuclear-deal_467563.html40Ibid.

41www.ivarta.com/columns/OL_060324.htm


20/54

20

There is an urgent need in India for capital to build its infrastructure andmanufacturing base. And there is only one source to get it i.e. US & Europe. US andEurope at this moment are content with sending capital to China to supply them withconsumer goods. The former very cleverly have avoided exporting manufacturingtechnology to supply high priced, high technology capital goods to China. This

component together with auto-parts, pharmaceuticals and computer hardware couldherald India into big leagues in ten years and beyond. Commercial Aircraftmanufacture, ship building, factories to make giant power plants, steel making plants,mining & drilling hardware, petroleum & petrochemical plant building facilities could

be ultimately shared with India. The latter within ten years will have a workforcesufficiently skilled to undertake all the foregoing. It will be beneficial to US. Laborcosts in India, will always stay a third of US, and European costs. That will makeIndia an ideal candidate for this technology transfer. Opportunity of the KPO(Knowledge Process Off-shoring) is knocking at Indias door. Indian graduates ofScience and Engineering will play a major role in this expansion. In about 5 yearsKPO Off-shoring will grow immensely. India stands to benefit most from it. Thanks

to the edge, Indian science & technology graduates have established.

Political Benefits to India: [42]After 50 years of isolation, India will have the opportunity to say something, in worldforums like UN, WTO and World monetary lending institutions, and be heard. Thiswas not the case previously. ReasonsIndia had no clout. With western economies inthe future, tied more and more with India, the latters clout will improve. There will

be frequent inter-government exchanges on matters of mutual interest. India couldbecome a full member of the select group of G-8 members. Gone will be the days thatUS politicians will heap scorn on India, the way they are doing it today. The Indo US Nuclear deal is in fact dumping the past and unlocking the hidden potential of thefuture. In addition Pakistan may get the cue and begin a rethink of its policies towardsIndia.

Military Benefits to India: [43]Indian military is in dire need to diversify its sourcing of military hardware. Russiahas been a very reliable source for the past 40 years. This source has to be diversified.Ultimately all military hardware will have to be produced in India. But developmenttime in India is too long and success factor is low. This has to be speeded up. The

only way at Indias disposal is buy its immediate needs and import technology todevelop its own weapon system. It is a bit expensive up front but pays dividend lateras India joins the select group of countries as a source of military hardware.Additionally a well-equipped Indian military will preclude any repeat of 1962Chinese invasion or future conflicts with Pakistan.

42Ibid.

43www.ivarta.com/columns/OL_060324.htm


21/54

21

10

WHO APPROVED THE AGREEMENT?

The final terms of the nuclear deal were approved by the following bodies before they couldbe implemented: [44]

IAEA: India signed a safeguards agreement with the IAEA under which all nuclearmaterial and equipment transferred to it by the United States as a part of this deal shall

be subject to safeguards.[45] In August 2008, the IAEA's Board of Governorsapproved an India-specific 7/7/12 The U.S.-India Nuclear Deal - Council on ForeignRelations safeguards agreement (PDF).[46] The IAEA said it will begin to implementthe new agreement in 2009, with the aim of bringing fourteen Indian reactors underagency safeguards by 2014. The IAEA currently applies safeguards to six of these

fourteen nuclear reactors under previous agreements. IAEA Director GeneralMohamed ElBaradei says the IAEA and India are in dialogue concerning anadditional protocol to the draft safeguards agreement.

INDIAN PARLIAMENT: While the deal does not require a formal vote by theparliament, the coalition government has faced a confidence vote over it. Manyparliamentarians oppose the deal, arguing it will limit India's sovereignty and hurt itssecurity. Some Indian nuclear experts are protesting what they see as excessive U.S.

participation in deciding which of India's nuclear facilities to define as civilian, andopen to international inspections under the plan. [47]

THE NUCLEAR SUPPLIERS GROUP: On September 6, 2008 India was grantedthe waiver at the NSG meeting held in Vienna, Austria. The consensus was arrived atafter overcoming misgivings expressed by Austria, Ireland and New Zealand and is anunprecedented step in giving exemption to a country which has not signed the NPTand the Comprehensive Test Ban Treaty (CTBT). [48]

Reaction outside NSG over grant of waiver to India: More than 150 non-proliferation activists and anti-nuclear organisations across the world had called fortightening the initial NSG agreement to prevent harming the current global non-

proliferation regime. The call said that the initial version of the "deal would be a non-

proliferation disaster and a serious setback to the prospects of global nucleardisarmament" and also pushed for all world leaders who are serious about ending thearms race to "to stand up and be counted." [49] Critics have complained the agreementmay undermine the credibility, integrity and universality of the Nuclear Non-

proliferation Treaty. Pakistan argues the safeguards agreement "threatens to increasethe chances of a nuclear arms race in the subcontinent and Pakistan has also said thesame process "should be available as a model for other non-NPT states". Israel is

44http://www.docstoc.com/docs/48018827/The-Indo-US-civilian-nuclear-agreement

45http://delhipolicygroup.com/pdf/Charting_an_India-US_Relationship.pdf

46www.cfr.org/india/us-india-nuclear-deal/p9663 6/8

47

http://www.pptsearch365.com/coalition-government-in-india.html48en.wikipedia.org/wiki/U.S.India_Civil_Nuclear_Agreement

49Ibid.


22/54

22

citing the Indo-U.S. civil nuclear deal as a precedent to alter NSG rules to constructits first nuclear power plant in the Negev desert, and is also pushing for its own tradeexemptions. Brahma Chellaney, a Professor of Strategic Studies at the New Delhi-

based Centre for Policy Research, argued that the wording of the U.S. exemptionsought to irrevocably tether New Delhi to the nuclear non-proliferation regime. He

argued India would be brought under a wider non-proliferation net, with India beingtied to compliance with the entire set of NSG rules. India would acquiesce to itsunilateral test moratorium being turned into a multilateral legality. He concluded thatinstead of the "full" civil nuclear cooperation that the original July 18, 2005, deal

promised, India's access to civil nuclear enrichment and reprocessing technologieswould be restricted through the initial NSG waiver.

Reaction inside the NSG over grant of waiver to India: The deal had initial supportfrom the United States, the United Kingdom, France, Japan, Russia, and Germany.After some initial opposition, there were reports of Australia, Switzerland, andCanada expressing their support for the deal. However, former U.S. Undersecretary of

State for Arms Control and International Security Robert Joseph says the U.S. StateDepartment made it "very clear that we will not recognize India as a nuclear-weaponstate". After the first NSG meeting in August 2008, diplomats noted that up to 20 ofthe 45 NSG states tabled conditions similar to the Hyde Act for India's waiver to do

business with the NSG, there were proposals on practically every paragraph of NSG.A group of seven NSG members suggested including some of the provisions of theU.S. Hyde Act in the final waiver. Indian Foreign Secretary Shivshankar Menon saidin April 2008 that India would be willing to accept some conditions on the waiver andthat the NSG would likely punish India if it tested nuclear weapons. [50]

Indian reactions over NSG waiver: Indian PM Manmohan Singh visitedWashington D.C. on September 26, 2008 to celebrate the conclusion of the agreementwith U.S. President George W. Bush. He also visited France to convey hisappreciation for the country's stance. [51] India's External Affairs Minister PranabMukherjee expressed his deep appreciation for India's allies in the NSG, especiallythe United States, United Kingdom, France, Russia, Germany, South Africa andBrazil for helping India achieve NSG's consensus on the nuclear deal. Bhartiya JanataParty's Yashwant Sinha, who also formerly held the post of India's External AffairsMinister, criticized the Indian government's decision to seek NSG's consensus andremarked that "India has walked into the non-proliferation trap set by the U.S., wehave given up our right to test nuclear weapons forever, it has been surrendered by the

government". However, another prominent member of the same party and India'sformer National Security Advisor Brajesh Mishra supported the development at theNSG and said that the waiver granted made "no prohibition" on India to conductnuclear tests in the future. [52] A leading advocate of the agreement was India's mosteminent strategic affairs analyst K. Subrahmanyam, he argued that the convergence ofstrategic interests between the two nations forced such a remarkable gesture from theUS, overturning its decades-long stand on non-proliferation, and that it would beunwise on India's part to spurn such an overture. [53] He also argued that notrecognizing new geo-political realities would be even more foolhardy on the part of

50en.wikipedia.org/wiki/U.S.India_Civil_Nuclear_Agreement

51

Ibid.52

Ibid.53

www.endusmilitarism.org/indo-us_nuclear_agreement_wikipedia_090608.html


23/54

23

the Indian elite. Former President of India and noted Indian scientist, APJ AbdulKalam, also supported the agreement and remarked that India may break its"voluntary moratorium" on further nuclear tests in "supreme national interest".However, analyst M K Bhadrakumar demurred. He said that the consensus at NSGwas achieved on the "basis" of Pranab Mukherjee's commitment to India's voluntary

moratorium on nuclear testing and by doing so, India has entered into a "multilateralcommitment" bringing it within "the ambit of the CTBT and NPT". The NSGconsensus was welcomed by several major Indian companies. Major Indiancorporations like Videocon Group, Tata Power and Jindal Power saw a $40 billion(U.S.) nuclear energy market in India in the next 1015 years. On a more optimisticnote, some of India's largest and most well-respected corporations like Bharat HeavyElectricals Limited, National Thermal Power Corporation and Larsen & Toubro wereeyeing a $100 billion (U.S.) business in this sector over the same time period. [54][55]

U.S. CONGRESS: In October 2008, the U.S. Congress gave final approval to thebill. Under the U.S. Atomic Energy Act, which regulates the trade of nuclear material,

congressional approval was needed to pass the exemptions to U.S. laws required forthe nuclear deal to be implemented.[56] Some members of Congress were resistant,and called for India to commit to strict limits on its nuclear weapons program beforethe deal went through. There is a potential area of dispute with India over the termsfor suspending the agreement. Before clearing the bill, the U.S. Senate rejected anamendment that would require U.S. nuclear supplies to be cut off if India tests nuclearweapons. The deal does not explicitly impose that condition, though it is part of a2006 law known as the Hyde Act, which gave the deal preliminary approval.[57]

54en.wikipedia.org/wiki/U.S.India_Civil_Nuclear_Agreement

55

www.endusmilitarism.org/indo-us_nuclear_agreement_wikipedia_090608.html56http://www.cfr.org/india/us-india-nuclear-deal/p9663

57http://www.docstoc.com/docs/48018827/The-Indo-US-civilian-nuclear-agreement


24/54

24

11

ADVANTAGES OF 123 DEAL TO INDIA

Advantages of Indo-U.S. civil nuclear cooperation agreement to India are:

Indias economical growth is 8- 10% a year and in 10 years we wont be able to keepup without clean nuclear energy. In order for India to become a developed nation, we

must have nuclear energy. [58]

Reliable power brings more foreign investments to India just like our reliable IT firmsbringing Billions of rupees.

No power means no factories, no manufacturing plants, no growth and no job. Thus itwill bring more and more job opportunities to India.

Energy produced from 1kg of Uranium = 1500 tons of coal Enables India to access nuclear technology and fuel from NSG Less pollution Strong business tie-ups with the US. Global recognition. The Indian government hasplanned to go ahead with this nuclear deal .We want to be the worlds manufacturer

like China.

This agreement makes the world to accept India as a Nuclear power. After 50 years of isolation, India will have the opportunity to say something, in world

forums like UN, WTO and World monetary lending institutions, and be heard. There

will be frequent inter-government exchanges on matters of mutual interest. India

could become a full member of the select group of G-8 members. [

59

]

Indian military is in need to diversify its sourcing of military hardware. Russia hasbeen a very reliable source for the past 40 years, but it needs to be diversified for

Indias upcoming future.

58

http://www.slideshare.net/ashishnangla/indo-us-nuclear-deal-presentation59http://www.slideshare.net/akshat018/india-us-nuclear-deal


25/54

25

Much of our nuclear facilities are working below their capacity due to the ban onIndia imposed by the nuclear countries, after it test bomb. You will have more

uranium, materials, and other equipments for making more nuclear power.

Our energy requirements are going up with increase in population and economicadvancement. We need to find more and more and cheaper energy sources. Nuclear

energy is clean and free from environmental issues.

It is necessary for us to come out of the isolation imposed by the world communities.Any recognition to our needs in nuclear field by them without going through the NPT

route is welcome and our nuclear scientists are going to be benefited. And our

scientist will no longer be treated as pariah and there could be more exchange

programmes between Indian scientists and US and other countries.

This will be a stepping stone for being recognised as nuclear weapon state. This is a unique arrangement where India, due to its strategic importance for India and

in recognition of its record as a responsible nation in not disseminating the nuclear

technology to other forces, is being offered this arrangement outside the NPT

regime.[60][61][62]

60http://www.slideshare.net/ashishnangla/indo-us-nuclear-deal-presentation

61

http://www.southasiaanalysis.org/%5Cpapers18%5Cpaper1740.html62http://www.ukessays.com/essays/sciences/indo-us-civilian-nuclear-deal.php


26/54

26

12

DISADVANTAGES OF DEAL TO INDIA

Disadvantages of Indo-U.S. civil nuclear cooperation agreement to India are:

India has to disclose its all nuclear power plant secrets and also agree to 14 of ournuclear power plants to be under the scanner of International Atomic Energy Agency.

Those 14 power plants will continue to be under the scanner of IAEA irrespective of

the status of the agreement. [63]

On the other hand, if any of the commitments given by USA is breached bythem, then there is no clause for cancelling this agreement. The agreement is

apparently like this... USA can either hug India or slap India. India will not ask whyare we hugged or why are we slapped. [64] On the other hand, India cannot hug or slap

USA for breach of agreement.[65]

Estimated expenditure: For 20,000 MW production 4 lac crores. Per unit cost: Rs5.50

Insecure transportation. Logistics management implementation problem If India does nuclear test, then this agreement gets cancelled. And USA will take backall the machinery/ equipment/ technology supplied to India thus far. On the other

hand, if any of the commitments given by USA is breached by them, there is no

clause for cancelling this agreement. Thus US have an upper hand. [66]

After this Agreement USA will supply all fuel, machinery, equipment& technology to India for producing Nuclear Power.[67] But upon signing this

Agreement 14 of our Nuclear Power Plants to be under the scanner of International

Atomic Power Organisation(IAPO). The fuel utilised to produce Atomic Power can

be recycled for reuse and this plant will be under direct supervision of IAPO. [68] [69]

63http://in.answers.yahoo.com/question/index?qid=20080723222236AAtMvxL

64http://in.answers.yahoo.com/question/index?qid=20080723222236AAtMvxL

65http://rparmanik.wordpress.com/2008/08/04/indo-us-civilian-nuclear-agreement/

66http://21cvision.blogspot.com/2008/07/n-deal-prize-for-us-firms-over-100.html

67http://freddiemaize.wordpress.com/a-page-hodler/me-myself-mysociety/the-first-nuclear-bomb-attack-on-india/

68

http://rivr.sulekha.com/nuclear-energy-is-bad-we-should-not-have-accepted-it-we-are-killing-ourselves_356928_blog69http://sagribow.sulekha.com/blog/post/2008/08/what-is-123agreement.htm


27/54

27

13

CHRONOLOGY OF THE INDO-U.S. NUCLEAR DEAL

Following is the chronology of events in the landmark Indo-US nuclear agreement [70] [71]since US President George W Bush and Prime Minister Dr. Manmohan Singh conceived thedeal in July, 2005:

July 18, 2005: President Bush and Prime Minister Singh first announce their intention toenter into a nuclear agreement in Washington.

March 1, 2006: Bush visits India for the first time. March 3, 2006: Bush and Singh issue ajoint statement on their growing strategic partnership, emphasising their agreement on civilnuclear cooperation.

July 26, 2006: The US House of Representatives passes the 'Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006,' which stipulates that Washingtonwill cooperate with New Delhi on nuclear issues and exempt it from signing the Nuclear

Non-proliferation Treaty.

July 28, 2006: The Left parties demand threadbare discussion on the issue in Parliament.

November 16, 2006: The US Senate passes the 'United States-India Peaceful Atomic EnergyCooperation and US Additional Protocol Implementation Act' to "exempt from certainrequirements of the Atomic Energy Act of 1954 United States exports of nuclear materials,equipment, and technology to India."

December 18, 2006: President Bush signs into law congressional legislation on Indianatomic energy.

July 27, 2007: Negotiations on a bilateral agreement between the United States and Indiaconclude.

August 3, 2007: The text of the 'Agreement for Cooperation between the Government of theUnited States of America and the Government of India concerning peaceful uses of nuclear

energy' (123 Agreement) is released by both governments.

August 13, 2007: Prime Minister Singh makes a suo motu statement on the deal inParliament.

August 17, 2007: CPI (M) General Secretary Prakash Karat says the 'honeymoon (withgovernment) may be over but the marriage can go on'.

September 4, 2007: UPA-Left committee to discuss nuclear deal set up.

70

http://articles.economictimes.indiatimes.com/2008-10-09/news/27714736_1_civil-nuclear-cooperation-exports-of-nuclear-materials-bush-visits-india71

http://en.wikipedia.org/wiki/U.S.%E2%80%93India_Civil_Nuclear_Agreement


28/54

28

February 25, 2008: Left parties say the UPA would have to choose between the deal and itsgovernment's stability.

March 3, 2008: Left parties warn of 'serious consequences' if the nuclear deal isoperationalised.

March 6, 2008: Left parties set a deadline asking the government to make it clear by March15 whether it intended to proceed with the nuclear deal or drop it.

March 7, 2008: CPI writes to the Prime Minister, warns of withdrawal of support ifgovernment goes ahead with the deal.

March 14, 2008: CPI (M) says the Left parties will not be responsible if the government fallsover the nuclear deal.

April 23, 2008: Government says it will seek the sense of the House on the 123 Agreement

before it is taken up for ratification by the American Congress.

June 17, 2008: External Affairs Minister Pranab Mukherjee meets Prakash Karat, asks theLeft to allow the government to go ahead with International Atomic Energy Agency (IAEA)safeguards agreement.

June 30, 2008: Prime Minister says his government prepared to face Parliament beforeoperationalising the deal.

July 8, 2008: Left parties withdraw support to government.

July 9, 2008: The draft India-specific safeguards accord with the IAEA circulated to IAEA'sBoard of Governors for approval.

July 10, 2008: Prime Minister calls for a vote of confidence in Parliament.

July 14, 2008: The IAEA says it will meet on August 1 to consider the India-specificsafeguards agreement.

July 18, 2008: Foreign Secretary Shivshankar Menon briefs the IAEA Board of Governorsand some NSG countries in Vienna on the safeguards agreement.

July 22, 2008: Government is willing to look at "possible amendments" to the AtomicEnergy Act to ensure that the country's strategic autonomy will never be compromised, saysPrime Minister Singh.

July 22, 2008: UPA government wins trust vote in the Lok Sabha (India).

July 24, 2008: India dismisses warning by Pakistan that the deal will accelerate an atomicarms race in the sub-continent.

July 24, 2008: India launches full blast lobbying among the 45-nation NSG for an exemptionfor nuclear commerce.

July 25, 2008: IAEA secretariat briefs member states on India-specific safeguards agreement.


29/54

29

August 1, 2008: IAEA Board of Governors adopts India- specific safeguards agreementunanimously.

August 21-22, 2008: The NSG meet to consider an India waiver ends inconclusively amid

reservations by some countries.

September 4-6, 2008: The NSG meets for the second time on the issue after the US comesup with a revised draft and grants waiver to India after marathon parleys.

September 11, 2008: President Bush sends the text of the 123 Agreement to the US Congressfor final approval.

September 12, 2008: US remains silent over the controversy in India triggered by PresidentBush's assertions that nuclear fuel supply assurances to New Delhi under the deal were only

political commitments and not legally binding.

September 13, 2008: The State Department issues a fact sheet on the nuclear deal saying theinitiative will help meet India's growing energy requirements and strengthen the non-

proliferation regime by welcoming New Delhi into globally accepted non-proliferationstandards and practices.

September 18, 2008: The Senate Foreign Relations Committee kicks off a crucial hearing onthe Indo-US nuclear deal.

September 19, 2008: America's nuclear fuel supply assurances to India are a "politicalcommitment" and the government cannot "legally compel" US firms to sell a "given product"

to New Delhi, top officials tells Congressional panel.

September 21, 2008: US financial crisis diverts attention from N-deal as both the BushAdministration and the Congress are bogged down over efforts to rescue bankrupt American

banks financial crisis in the country.

September 26, 2008: PM Singh meets President Bush at the White House, but was not ableto sign the nuclear deal as the Congress did not approve it.

September 27, 2008: House of Representatives approves the Indo-US nuclear deal. 298members voted for the Bill while 117 voted against.

October 1, 2008: Senate approves the Indo-US civil nuclear deal with 86 votes for and 13against.

October 4, 2008: Secretary of State Rice visits Delhi. India and the US unable to ink thenuclear agreement with New Delhi insisting that it would do so only after President Bushsigns it into a law, an occasion when it expects certain misgivings to be cleared.

October 4, 2008: White House announces that President Bush will sign the legislation on theIndo-US nuclear deal into a law on October 8.

October 8, 2008: President Bush signs legislation to enact the landmark US-India civiliannuclear agreement.


30/54

30

October 10, 2008: The signing of the US-India Civil Nulcear Cooperation Agreementpopularly known as 123 Agreement by US Secretary of State Dr. Condoleezza Rice andIndian External Affairs Minister Pranab Mukherjee. 123 Agreement is now operatinalizedand legally binding on both the countries.


31/54

31

14

RATIONALE BEHIND THE AGREEMENTCompetition for conventional energy:

The growing energy demands of the Indian and Chinese economies have raised questions onthe impact of global availability to conventional energy. The Bush Administration hasconcluded that an Indian shift toward nuclear energy is in the best interest for America tosecure its energy needs of coal, crude oil, and natural gas.

Nuclear non proliferation:

While India still harbours aspirations of being recognised as a nuclear power before

considering signing the NPT as a nuclear weapons state (which would be possible if thecurrent 1967 cut-off in the definition of a "nuclear weapon state" were pushed to 1975), otherparties to the NPT are not likely to support such an amendment. [72] As a compromise, theproposed civil nuclear agreement implicitly recognises India's "de facto" status even withoutsigning the NPT. The Bush administration justifies a nuclear pact with India because it isimportant in helping to advance the non-proliferation framework [73] by formally recognisingIndia's strong non-proliferation record even though it has not signed the NPT. The formerUnder Secretary of State of Political Affairs, Nicholas Burns, one of the architects of theIndo-U.S. nuclear deal said Indias trust, its credibility, the fact that it has promised to createa state-of-the-art facility, monitored by the IAEA,[74] to begin a new export control regime in

place, because it has not proliferated the nuclear technology, we cant say that about

Pakistan. when asked whether the U.S. would offer a nuclear deal with Pakistan on the linesof the Indo-U.S. deal. [75] [76] [77] [78] Mohammed ElBaradei, head of the InternationalAtomic Energy Agency, which would be in charge of inspecting India's civilian reactors has

praised the deal as "it would also bring India closer as an important partner in the non-proliferation regime". [79] However, members of the IAEA safeguards staff have made itclear that Indian demands that New Delhi be allowed to determine when Indian reactorsmight be inspected could undermine the IAEA safeguards system.

Economic considerations:

Financially, the U.S. also expects that such a deal could spur India's economic growth and

bring in $150 billion in the next decade for nuclear power plants, of which the US wants ashare.[80] It is India's stated objective to increase the production of nuclear power generationfrom its present capacity of 4,000 MWe to 20,000 MWe in the next decade.[81] However, thedevelopmental economic advising firm Dahlberg, which advises the IMF and the World

72http://www.indianembassy.org/US_Media/2000/pm_us/Armed%20India%20Can%20Help%20Stabilize%20Asia.hm

73Condoleezza Rice Packs a proliferation punch", Economic Times (2008-7-26).

74http://www.factualhelp.com/article/Indo-US_civilian_nuclear_agreement

75The Indo-US nuclear debate from www.gulfnews.com

76Joint Statement Between President George W. Bush and Prime Minister Manmohan Singh

77http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h5682enr.txt.pdf

78https://en.wikipedia.org/wiki/Indo-US_civilian_nuclear_agreement

79

U.S., India Reach Deal on Nuclear Cooperation. Retrieved on 2006-03-0380http://wpedia.goo.ne.jp/enwiki/Hyde_Act

81http://answers.yahoo.com/question/index?qid=20080720014515AAgQLea


32/54

32

Bank, moreover, has done its own analysis of the economic value of investing in nuclearpower development in India. Their conclusion is that for the next 20 years such investmentsare likely to be far less valuable economically or environmentally than a variety of othermeasures to increase electricity production in India.[82] They have noted that U.S. nuclearvendors cannot sell any reactors to India unless and until India caps third party liabilities and

or establishes a credible liability pool to protect U.S. firms from being sued in the case of anaccident or a terrorist act of sabotage against nuclear plants.

Strategic:

Since the end of the Cold War, The Pentagon, along with certain U.S. ambassadors such asRobert Blackwill, have requested increased strategic ties with India and a de-hyphenizationof Pakistan with India.[83] While India is self-sufficient in thorium, possessing 25% of theworld's known and economically viable thorium, it possesses a meagre 1% of the similarlycalculated global uranium reserves.[84] [85]Indian support for cooperation with the U.S.centres around the issue of obtaining a steady supply of sufficient energy for the economy to

grow. Indian opposition to the pact centres on the concessions that would need to be made, aswell as the likely deprioritization of research into a thorium fuel-cycle if uranium becomeshighly available given the well understood utilization of uranium in a nuclear fuel cycle. [86]

82http://palashkatha.mywebdunia.com/2011/07/20/hillarry_clinton_pushes_on_nuclear_liability_and_defene_deal.html

83http://in.answers.yahoo.com/question/index?qid=20080702092920AA22Did

84

http://ejournaljair.blogspot.com/85http://en.wikipedia.org/wiki/U.S.%E2%80%93India_Civil_Nuclear_Agreement

86http://www.endusmilitarism.org/indo-us_nuclear_agreement_wikipedia_090608.html


33/54

33

15

CONTROVERSY IN INDIA OVER NUCLEAR DEAL WITH U.S.A.

Behind the political storm triggered by the civil nuclear deal with the US lies deep-seatednational concern over its long-term implications for Indias security and strategic autonomy.The deal has divided India like no other strategic issue since independence.[87] After all, thedeal is not just about importing nuclear reactors for electricity. It will determine what kind ofIndia emerges in the years to come a major independent power with the requisiteeconomic and military strength, or a middling power trimming its sails to the prevailingAmerican winds and still relying on imports to meet basic defence needs.[88]

India stands out as the only large country still deeply dependent on arms imports, to theextent that it has emerged as the worlds largest weapons importer. The nuclear deterrent is

the only strategic programme it has pursued somewhat successfully. While its nuclear posturecalls for a credible minimal deterrent, the country still hasnt developed a minimal, letalone credible, deterrent against its main challenge, China. Yet, New Delhi blithely put thenuclear programme on the negotiating table to reach a deal that implicitly imposes qualitativeand quantitative restrictions on the Indian nuclear-weapons capability.[89]

India has already paid a very heavy price internationally for its nuclear programme. And thedeal seeks to exact a further price, in the name of freeing the country from some of therigours of US export controls. Americas technology controls and sanctions approach werefashioned largely in response to Indias 1974 nuclear test.[90] Today, the main target of that

policy has come full circle doubly. First, India has agreed to become part and parcel of the

US-led non-proliferation system just when that regime has begun to visibly corrode. India isto unilaterally adhere to cartels that still exclude it from their membership.

Second, in concluding a new accord under Section 123 of the US Atomic Energy Act, Indiahas paid no heed to the lessons from an earlier 123 agreement, signed in 1963. In the1970s, America had cut off all fuel supply to the US-built Tarapur reactors by enacting a newdomestic law that rewrote the terms of the 123 agreement.[91] The new, iniquitous 123agreement not only grants the US the right to suspend all supplies forthwith by merelyissuing a termination notice, but also omits a standard clause now found in Americas 123accords with other states that neither party will invoke the provisions of its internal lawas justification for its failure to perform the agreement.[92][93] India, gaining the right to be

merely consulted but granting America the right to take all final decisions, has put itself at thelatters mercy.

Let us look at the benefits the deal offers. India principally would be able to import powerreactors and fuel and in the process help revive the US nuclear-energy industry. India,however, would continue to face stringent US export controls on advanced and dualuse

87http://chellaney.net/2007/08/15/political-controversy-in-india-over-nuclear-deal-with-the-u-s/

88http://forums.bharat-rakshak.com/viewtopic.php?t=3372

89http://chellaney.net/2007/08/


91

http://chellaney.net/2007/08/92http://mahendrap.wordpress.com/2007/09/04/123-agreement-vs-hyde-act-2/

93http://www.hindu.com/2007/09/19/stories/2007091950081000.htm


34/54

34

technologies critical to rapid economic growth.[94] Even for its civil nuclear facilities, Indiawill not be able to buy enrichment, reprocessing and heavy-water components, howeverminor.

Now look at the price. First, India is set to replicate in the energy sector the very mistake it

has pursued on armaments by sinking into an imports dependency. India is today willing tospend tens of billions of dollars to import overly-expensive reactors when it can more

profitably invest that money to commercially develop its own energy sources. Second, suchimports will be a path to energy insecurity, since the reactor and fuel business is the worldsmost politically regulated commerce.[95]

Third, the deals strategic costs are exorbitant. Like its conventional weaponry, Indiasembryonic nuclear-arms capability will remain subcontinental in range. To ensure that, Indiahas been slapped with a nuclear test ban through a US law, with the 123 accord granting noreprieve. The US President is now required to annually certify to Congress that India is infull compliance with a long list of congressionally-imposed commitments and obligations.

India, for its part, has agreed to shut down by 2010 its newly-refurbished Cirus reactor, whichproduces a third of its weapons-grade plutonium.

Nothing better shows the patron-client ties the deal anoints than one simple fact: While theUS has an unfettered right to withdraw from allits obligations, Indias obligations are legallyirrevocable and never-ending. Even if cooperation is arbitrarily terminated by the US, Indiawill still be stuck with everlasting international inspections on its entire civil nuclear

programme. Little surprise thus that the deal has attracted increasing notoriety in India.[96]

New Delhi needs to realize time is on its side. As a rising power, India could easily get abetter deal, if it were patient and waited a few more years. Its interests, in any case, demand adeal not just restricted to what commercially appeals to America power reactors and fuel

but facilitating an end to the full range of US-inspired technology sanctions.

The prospect for India in this situation is very bleak but the government of India itself iscreating it.[97] In the case of nuclear deal with the US also, India just like in 1991 and 1995 isaccepting a subordinate position in relation to USA and the Western countries. USA willnever accept any inspection of its nuclear facility by the IAEA. It will carry on developingnew nuclear weapons and will test those in laboratory conditions. It has no separation ofnuclear facilities into military and civilian sectors. However, India is accepting inspection ofits nuclear facility by the American authority without demanding any corresponding right of

inspection of the American nuclear facilities by the Indian authority.[

98

] Just like other twotreaties, with IMF in 1991 and with WTO in 1995, this Indo-US deal on nuclear energy isunequal, discriminatory and unjust. The result will make Pakistan much stronger than India invery near future. That serves the geo-political interest of the United States with Pakistan asthe bridge to the Islamic world as Pakistan was the bridge to China in 1971, when both USAand China were about to attack India jointly to save East Pakistan.[99] The unfolding scenariowill ruin India in the process when India will be forced to surrender also to the demands of


95http://chellaney.net/2007/08/


97

http://www.ivarta.com/columns/OL_061219.htm98http://blogs.ivarta.com/Indo-US-Nuclear-Treaty-Its-Implications/blog-13.htm

99http://www.ivarta.com/columns/OL_061010.htm


35/54

35

Pakistan, a NATO ally of USA and China, the most important business partner of the U.Scorporations and on whom the fate of the US Dollar depends.[100]

The controversy over the The U.S.-India civil nuclear deal remains as fierce as ever, From thetime it was unveiled more than three years ago as an agreement-in-principle, its backers have

framed the deal in terms of broader strategic objectives.[101

] Supporters in India have arguedit will cement U.S.-India ties and facilitate technology transfers in fields beyond commercialnuclear power. Backers in the U.S. have argued the deal will make it easier for Washington tocall on India as a counterweight to Chinas influence, and expand commercial opportunitiesfor Americans. But none of these claims is entirely realistic. In fact, these arguments merelydistort the debate.

Some argue that it would have helped had Prime Minister Manmohan Singh done what hehad repeatedly promised: "build the broadest possible national consensus in favor of thedeal." He should not have turned the deal into an openly partisan issue, for it will have to beimplemented well after his governments term.The danger now is that if the opposition wins

the national election, it may re-open negotiations on the nuclear deal. That could risk sendingthe wrong signal about Indias general commitment to maintaining positive relations with theU.S., given the significance this particular deal has assumed in that relationship. Politicaluncertainty in India will continue to remain given the strong partisan opposition.

The deals backers in Washington have also been guilty of overselling it, albeit in differentways. On the strategic level, they have argued that the deal will bring India into the U.S.camp as a regional counterweight to Chinas growing influence. [102] But it appears unlikelythat India would allow itself to be used as a foil against an increasingly assertive China, lestBeijing step up military pressure along the long disputed Himalayan frontier and surrogatethreats via Pakistan, Burma and Bangladesh. India, as would any country, will continue tocraft policy based on its own interests. The Bush administration is also going overboard intouting the commercial benefits. The Bush administration letter to Congress states, the deal issupposed to help revive the U.S. nuclear-power industry through exports and "access toIndian nuclear infrastructure," allowing "U.S. companies to build reactors more competitivelyhere and in the rest of the world not just in India." With its acute shortage of nuclearengineers, the U.S. intends to tap Indias vast technical manpower. But not all of this isentirely realistic, especially expectations that India will be a boom market for U.S. nuclearexports. Even with the deal, nuclear power will continue to play a modest role in Indiasenergy mix. With the proposed import of eight 1,000-megawatt reactors within the next fouryears, the share of nuclear power in Indias electricity generation is unlikely to rise above the

current 2.5%.[

103

] The Indian economy will probably not get much of a boost from the deal asa result. Furthermore, private investment in nuclear power will be hindered by many factors.The messy terms of the deal itself, with its many eclectic provisions designed to assuage non-

proliferation concerns, will still impose many barriers on the transfer of nuclear fuel andtechnology, and not all of the conditions are even explicitly spelled out. Political uncertaintyin India will also remain given the strong partisan opposition.

100http://blogs.ivarta.com/Indias-Nuclear-Deal-Nuclear-Nonproliferation-Treaty/