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Mainstream, Vol XLVI No 34

Renegotiate What?

Sunday 10 August 2008, by G. Balachandran


[(The issue of renegotiating the 123 Agreement between India and the US has come to the fore of late. We reproduce here the following article appearing in The Indian Express (July 22, 2008) and publish its rejoinder by a distinguished scientist. —Editor )]

About the Indo-US nuclear deal, it is time to call a spade a spade—especially the assertions made by political parties and personnel from the Department of Atomic Energy, the IFS and others that the Indo-US nuclear deal will be renegotiated by them if they are in charge—none of them stating clearly what will be renegotiated. The deal as negotiated cannot be bettered in the short to medium term, given the current international scenario.

There are three elements of the process so far that have attracted criticism. They are the Hyde Act; the India-US 123 Agreement; and the India-IAEA Safeguards Agreement. Let us take them in order.

The Hyde Act

No analyst of any repute has even remotely suggested that the international embargo on civil nuclear trade as a result of NSG guidelines could have been removed without US initiative. Even Russia and France, staunch supporters of India in the NSG, have admitted this.

After India conducted its first nuclear test in 1974, the US amended its Atomic Energy Act (AEA) effectively terminating all US-India civil nuclear trade. Many amendments were formal restatements of existing laws, accepted earlier by India in its Tarapur agreement. There were, however, two sections which were are and might be relevant to India-US nuclear commerce. The first, Sec. 121(a) (2), requires fullscope safeguards on all nuclear activities in a non-nuclear weapon-state (NNWS) with whom US can trade… Since India is a NNWS under NPT, thus this US law effectively puts a stop to all US-India civil nuclear cooperation. Another section added to the AEA was Sec. 121(a) (4) which effectively required the US to take back all material and facilities exported in case such a NNWS conducted a nuclear test. Sec. 121 also required that all these elements be included in any 123 Agreement concluded with that country.

The Hyde Act removed the requirement of Sec. 121(a) (2) enabling US-India civil nuclear commerce. It did not exempt India from the requirements of Sec. 121(a) (4). However, the subsequent 123 Agreement that was negotiated by the Indian Government, in line with the Prime Minister’s promise to Parliament, did not refer to testing in its text. However, there can be no doubt that the US retains the right to require implementation of Sec. 121(a) (4) for all practical purposes.

The fundamental question is: will any future Indian Government be able to negotiate a 123 agreement that will have a written promise that the US will not impose any sanctions on India if India were to conduct a test in future? No analyst from any political party or professional fraternity has gone on record to state that that this is possible.

What about the Hyde Act? It is already part of US law. While there may be many who are unhappy with the Act, no one seriously suggests that they will be able to influence the US Congress to modify it or pass another law.

Therefore, there is nothing anyone in this government or future government, be it of the BJP, BSP or the Marxists, can do about the Hyde Act. On the other hand, it is purely a US domestic law and has no relevance for India.

The 123 Agreement

As mentioned earlier, there is no question of the 123 Agreement formally renouncing any action against India if it were to conduct a future test. However, the text has leeway in it for a future US Government to exercise restraint with AEA rights; it also formally recognised India’s right to an independent nuclear programme and did not mention tests. Again, there can be no substantive improvement over the negotiated language.

Finally, assurances on fuel supply. The only sanction left for the US in case of a test will be to withhold nuclear fuel. No future Indian Government can negotiate a 123 Agreement that will promise unimpeded supply of nuclear fuel to India even if India were to conduct a test. However, India can include sufficient penalities for stopping fuel in the commercial contract that it will negotiate for specific imports it already has for Tarapur.

What about supply of sensitive nuclear technologies: reprocessing and enrichment technologies? Those who mention the US-Japan Agreement have simply not paid attention to the very intrusive conditions in that agreement. Further, reaching that agreement took a decade; it is far better that India chose to postpone this issue, although the India. US 123 Agreement does include requirement that the US consider such proposals favourably. The fundamental question is this: can any future Indian Government negotiate a prior consent for sensitive nuclear technologies without the attendant restrictive safeguards, some of them bilateral? Here again no analysts of any repute, Indian or otherwise, would dare publicly suggest that it is possible.

The India-Specific IAEA Safeguards Agreement

Much has been made of the absence of “corrective measures” that India will take if fuel supply assurances are not kept. The fact is the safeguards agreement is a bilateral agreement between India and the IAEA: merely an intermediary not owning any nuclear fuel or technologies. The terms and conditions of fuel supply assurances are a matter of negotiation between the supplier and the purchaser. If that agreement specifies that India can take whatever “corrective measures” it chooses, including withdrawal of the supplied item from safeguards, then so be it. The negotiated IAEA safeguards agreement incorporates this element, and can do no more explicitly.

In short no critic of the Indian Government’s negotiating posture can say, in public, with any degree of confidence that they will be able to negotiate a better agreement on any of the specific points noted above. n

The author is a Visiting Fellow at the IDSA and National Maritime Foundation.

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