Siddharth Varadarajan

Journalist | Writer | Analyst

Lifetime fuel guarantee remains a sticking point in `123′ talks with U.S.

Differences on reprocessing right, language on testing have narrowed but there are still crucial obstacles to overcome in the bilateral nuclear cooperation agreement.

13 December 2006
The Hindu

Lifetime fuel guarantee remains a sticking point in `123′ talks with U.S.

Siddharth Varadarajan

New Delhi: U.S. and Indian negotiators have managed to narrow some of their differences over the text of the bilateral Peaceful Nuclear Cooperation Agreement but differences still remain on a number of key issues.

When finalised, the agreement — also known as the `123 agreement’ after the section of the U.S. Atomic Energy Act which mandates it — will have to be submitted to the American legislature for approval. Only after that can United States firms sell to India nuclear equipment, technology and material not explicitly barred by the agreement or the U.S. statute.

The two sides have held several rounds of discussion since the U.S. side presented its first draft of the agreement last March. According to officials familiar with the course of the negotiations, the areas where differences have narrowed are on India acquiring the right to reprocess spent fuel produced from imported U.S. reactors or material, as well as on avoiding a reference to India’s adherence to its unilateral moratorium on nuclear tests as a condition for cooperation.

But on the issues of life-time fuel guarantees as envisaged by the March 2 joint statement and Indian separation plan, the exclusion of equipment and technology related to enrichment, reprocessing and heavy water, and the scope of end-use verification and fallback safeguards, major differences still remain.

Manmohan’s statement

For the Indian side, the parameters of what the agreement must contain were spelt out by Prime Minister Manmohan Singh in Parliament on August 17. He said that “a reference to nuclear detonation in the [123] Agreement as a condition for future cooperation is not acceptable to us.” He also made it clear that India would not settle for anything less than “full civil nuclear energy cooperation”, including the right to reprocess spent fuel and access technology and equipment connected to the complete nuclear fuel cycle. Since the Henry Hyde U.S.-India nuclear cooperation Act does not grant India these rights, the Government hopes the 123 agreement will unambiguously address India’s concerns.

On the issue of testing, the U.S. has proposed language which allows either side to end its cooperation citing “supreme national interests”. The understanding is that for the U.S., this is shorthand for India conducting a nuclear test in the future. While Indian officials feel this formulation might meet the Prime Minister’s stipulation that there be no reference to an “Indian nuclear detonation”, there is concern about the U.S. also then insisting that India agree to return all U.S-origin facilities, equipment and materials, as well as their derivatives. The U.S. side says any return of exported items would be appropriately compensated but Indian negotiators are wary of acceding to any restitution clause.

Tarapur experience

Given the experience of Tarapur, where India has neither been allowed to reprocess the spent fuel accumulating there nor to return this fuel to the U.S., Indian negotiators are also insisting that reprocessing rights be an integral part of the 123 agreement rather than be granted in a subsequent agreement as the U.S. side had initially proposed. Under U.S. law, countries wishing to reprocess spent nuclear fuel derived from American imports must fulfil criteria spelt out by Section 131 of the Atomic Energy Act. This section also specifies a procedure for the return of spent fuel. According to Indian officials, the U.S. now sees the merit in one overall agreement and that the right to reprocess will figure in the 123 itself.

The one sticking point, however, is the conditions under which this would be permissible. The U.S. side is insisting on onsite verification of reprocessing going beyond the relevant International Atomic Energy Agency (IAEA) safeguards which are applied, say, when India will reprocess spent fuel produced by the Russian-supplied reactors at Kudankulam. In general, Indian negotiators are not inclined to allow the U.S. any access beyond what the End-Use Verification Agreement of 2004 already envisages — i.e. only to areas where nuclear material will not be present.

Citing the Kudankulam agreement, where India received sovereign and unqualified Russian guarantees for the lifetime supply of fuel for the reactors being imported, Indian negotiators have said a similar sovereign guarantee by the U.S. must be written into the 123 agreement if the March 2 joint understanding is to be fulfilled. The U.S. side, however, is only willing to provide guarantees against disruptions caused by market failure and imperfection and not the kind of unconditional guarantee India is seeking in exchange for in-perpetuity safeguards.

Finally, on the issue of “full” cooperation, as Secretary of State Condoleezza Rice testified in a written answer to Senator Richard Lugar on April 5, the Bush administration is clear that the 123 agreement “will not permit” the transfer to India of reprocessing, enrichment and heavy water technology and equipment. With Dr. Singh formally defining “full” to include these areas of cooperation, however, the Indian side says India cannot be party to a bilateral agreement which does not lift restrictions in all areas of civilian nuclear energy.

5 comments on “Lifetime fuel guarantee remains a sticking point in `123′ talks with U.S.

  1. khushnood
    December 20, 2006

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  2. Anonymous
    December 16, 2006

    Bharat Karnad, an expert on nuclear issues, is however unsparing in his critique of the final legislation, that was voted by two chambers of the US Congress Saturday morning, and contended that the legislation shows the US’ resolve to “cap and freeze India’s thermonuclear weapons programme”.

    “That’s what they wanted all along. And that’s what they have achieved through this legislation,” Karnad, a vocal critic of the India-US nuclear deal, said He also pointed to “several intrusive clauses” in the legislation that enables the US to gain an insight into India’s strategic programme. “They will get into the inside of our strategic programme under the guise of promoting proliferation. Otherwise, why do they want to know the quantum of uranium mined by India every year?”

    Karnad warned that there was no need to crow that some of the controversial clauses have now been moved to the non-binding section in the final legislation.

    “The trouble with non-binding clauses is that when the two sides sit down to negotiate the 123 agreement, they can’t ignore these clauses,” Karnad said.

    “And don’t forget that the 123 agreement will go to a Democrat-controlled Congress next year. Democrats are known for their hawkish views on non-proliferation and they will not allow India to pussyfoot around these issues,” Karnad said. He pointed out that the legislation restricted the transfer of cutting-edge technologies related to reprocessing, spent fuel and heavy water and, therefore, it did not fulfil the promise of full civilian nuclear cooperation as mandated by the July 18, 2005, nuclear agreement between Prime Minister Manmohan Singh and US President George Bush.

    Most importantly, the legislation expects India to accept safeguards in perpetuity on its civilian nuclear reactors — a practice that is applicable to non-nuclear power states, Karnad said.

  3. Anonymous
    December 16, 2006

    Whatever the statements our PM made in the parliament will not be met in the US-India nuke deal. Hence they are all total lies. This makes one thing very clear our PM also does not respect the statements he makes in our parliament.

  4. Anonymous
    December 16, 2006

    A Nuclear Strategy India Should Follow

    1. Conduct all the nuclear tests and make the thermonuclear completely functional.
    2. Start building two more Thorium based nuclear reactors.
    3. Negotiate a deal similar to the current deal.

    Manmohan Singh is turning out to be a complete disaster. AB Vajpayee had guts initally but buckled immediately after the tests.

    Pakistan will get all the benefits of the deal in one or two years after India signs the deal. Pakistan just needs to test a powerful nuclear weapon then US/China will immediately agree to give Pakistan the same benefits which India got.

  5. iamvisheshur
    December 14, 2006

    “suit the word to the action and action to the word”
    that seems to be the present problem.It is quite clear now what our PM said in the parliment is not going to be achived.
    and why do we need a deal with the US when for the past 3decades we have developed out nuclear capacity without any help??
    from the deal(s) it is quite obvious that the US wants to keep India under check.If the US wants to stop nations from testing why cant it try and set an example??
    Also this means that Pakisthan would be able to test when India cant.
    It also looks like the USA is insulting our country and being diplomatic isnt going to help.imagine the situtation if US had put across such a deal to North Korea or Iran.
    While we aim at stoping the testing of nuclear weapons or the creation of weapons of mass the USA is encouraging just that.So why go join a country as such??
    Also slowly the Europeans have started to seperate themselves from the US.THIS is more of stupidity than anything else.
    A better plan would be to form a dea;l with Iran(the gasline could be a good starting),north korea and Russia.Coordination between these countries can also help in bonding asia together rather than joining with the USA to do just the same.
    Another major point wolud be that USA is trying to contrrol everything and it is time to put a check to that

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This entry was posted on December 13, 2006 by in Nuclear Issues.



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