Siddharth Varadarajan

Journalist | Writer | Analyst

A stake has been driven through the nuclear deal

An initial reaction to the latest evidence of American bad faith

Siddharth Varadarajan

On May 22, 2008, I wrote about HR711 and the “secret” clarifications the State Department had provided the House Foreign Relations Committee on the provisions of the 123 Agreement between the United States and India.

The “clarifications” were provided in January this year but kept under wraps for nine months at the request of the State Department, given the obvious sensitivity involved.

Well, two days before a crucial meeting of the Nuclear Suppliers Group where the terms of India’s nuclear engagement with the rest of the world are to be set, those clarifications have been made public. If you don’t have the patience to plow through them, Glen Kessler has a report in today’s WaPo.

The clarifications cover a lot of ground but essentially emphasise the Bush administration’s stand that:

1. All fuel supply assurances built in to the March 2006 separation plan and the 123 agreement become null and void for any disruption of fuel supply caused by an Indian nuclear test.
2. The U.S. will not work with friends and allies to make good any shortfall of fuel which results from US termination of cooperation following a test and actually intends to get all NSG states to end their cooperation as well.
3. Reprocessing consent rights are not permanent, as Prime Minister Manmohan Singh had said, but allow for termination. This will be spelt out in the yet to be negotiated “arrangements” to bring effect to the consent rights.
4. The U.S. has no intention of transferring dual-use items for any enrichment and reprocessing related facility in India.
5. The U.S. will press its “right” to fall-back safeguards even if the IAEA does not make a determination that safeguards on American supplied facilities or fuel are no longer in place.

In May, I wrote this about the ‘secret’ answers:

What does this mean for India, assuming the nuclear deal is able to pass the gauntlet of Left opposition and move on to the next stage? For one, that the U.S. will likely attempt to claw back the concessions it made in the 123 agreement and close the window on India getting at the international level what U.S. vendors are unable to provide under domestic law. India, for example, does not need enrichment and reprocessing technology from others but would like to import components for safeguarded fuel cycle facilities. The 123 agreement excludes this but the NSG at present has no separate bar on the sale of such components. Second, the Indian interpretation of many of the 123 agreement’s provisions — especially on the right of return — differ significantly from the American one. Since it is this deliberate ambiguity of language which allowed the 123 text to be sold by the two governments to their respective publics, any attempt to resolve these “differences of interpretation” could well lead to the agreement itself unravelling.

Until now, India was willing to swallow some of the unpleasant provisions of the 123 agreement because it knew that what mattered in the final analysis were the NSG guidelines. After all, the 123 agreement gets “operationalised” only when India buys nuclear equipment and fuel from the U.S. And so long as the NSG guidelines allow India to buy what it wants from other countries, a prudential strategy would be one which postpones this operationalisation for a few years. It is precisely this sequencing loophole in the nuclear deal that the U.S. is now trying to plug by denying India the “clean exemption” it wants from the NSG. All indications are that the NSG hurdle will be the hardest of all. But India will always have the option of walking away from the table if the nuclear cartel seeks to impose unreasonable restrictions on the country.

I think that moment is now upon us.

Was the releasing of the State Departmen’s answers on September 2 an act of unilateral disclosure by the HFRC’s Howard Berman (a known critic of the India-US agreement) or a bilateral provocation by Berman and the State Department to ensure the NSG does not approve terms more favourable than what the US has accorded to India? Either way, the consequences are devastating — for India’s chances at the NSG, for the political standing of Prime Minister Manmohan Singh, and for the bilateral relationship between New Delhi and Washington.

Why? Because the answers/clarifications show there is such a huge gap between the Indian and American perception of the 123’s provisions that no Indian government can afford to buy even one cent’s worth of nuclear equipment from the United States without first resolving these differences. The only insurance still left in India’s hand if the Americans push ahead with their interpretation on fuel supply assurances is to build a strategic reserve (of non-American fuel) to guard against supply disruptions caused by U.S.-led sanctions.

At a minimum, it is clear that the bilateral aspect of the US-India nuclear agreement is dead. Repeat. Dead. But if the bilateral part is dead, what chance is there for the multilateral part to survive?

In a nutshell, there are two scenarios from now.

Scenario 1: The NSG will demand a third draft waiver be produced in line with the formulations of the State Department document. An essential feature of this document will be automatic termination of all supplies by all NSG members if India were to break its testing moratorium. Plus other things that India also will be unwilling to accept. Result: Sudden death of the deal.

Scenario 2: The NSG approves the second draft as it stands (with perhaps minor changes) but India will not be able to proceed with the 123 agreement unless the conflicting interpretations are sorted out. Result: India will not buy American.

Scenario 3: NSG approves second draft, Congress approves 123 but India will simply not buy American because of the restrictions and dangers involved in developing a dependence on U.S. supplies.

Of these three scenarios, #1 is the most likely. If India likes, it can choose to make the deal’s ‘sudden death’ a more slow and painful process. But let us also be clear that there is politically no space in India for the Manmohan Singh government to engage in a third round of negotiations with the U.S. over the NSG draft waiver. Levels of distrust of the Americans are running incredibly high in political and bureaucratic circles as a result of the August 21-22 NSG fiasco. I had described that event as a double-cross. What has happened this time is the mother of all double-crosses. I mentioned this assessment to a senior Indian minister who phoned me from Delhi to find out what had happened. He agreed with my assessment, and that this denouement means major trouble for the bilateral relationship across the board.

Even the pro-American business community in India is likely to run for cover since the State Department’s answers show at best that India and the U.S. are on a different page altogether and at worst, that Washington has been negotiating in bad faith.

21 comments on “A stake has been driven through the nuclear deal

  1. Sukla Sen
    September 6, 2008

    The clarificatory “letter”, released by a known staunch opponent of the deal evidently to subvert the prospects of the deal, is clearly an insincere attempt by the Bush Administration to hoddwink the US Congress – to explain away the 123 Agreement in terms of the Hyde Act passed by the US Congress.Stubborn reluctance, and much more, of the Bush Administration to write their claimed understandings and interpretations of the bilateral deal into the multilateral (NSG) waiver as initiated and drafted by it is a clear give-away.The thesis of conspiratorial collaboration between Bush and Berman is of course as absurd as it sounds.It’s only a part of a psyop to pressurise the US to better its best – perhaps threaten to nuke Austria, New Zealand and Ireland unless they fall in line!It flies violently in the face of all available info.Here is a last moment statement from Jayantha Dhanapala:QuoteBrutal and unconscionable pressure has been exerted on the few countries who opposed the US-India draft at the Nuclear Suppliers Group (NSG) meeting in Vienna which is to be reconvened on Saturday 6th September morning in Vienna.I appeal to these countries and to all others in the NSG to remain faithful to the principles of the NPT in the face of nuclear weapons states interests and the commercial profit motives of nuclear technology and materials exporters.A gaping hole is being created in the NPT through which Israel and Pakistan will drive through unless the US Congress or a new US Administration revise the proposed deal ensuring the survival of the NPT beyond 2010.UnquoteJayantha Dhanapala is former United Nations Under-Secretary- General (1998-2003) and President of the 1995 NPT Review and Extension Conference.India needs to carry out further explosive tests only to graduate from the A-Bom level to the H-Bomb level – in order to be able to kill millions and millions in a single shot upgraded from the current level og hundreds of thousands. The obsession about retaining the “right” to carry out further tests is just not hugely demonic and utterly irrational – given the size of its nuclear arsenal; it also makes a complete mockery of its commitment to pursue the doctrine of “minimumcredible deterrence”.It clearly shows of what worth such “voluntary and unilateral commitments” are.Sukla Sen

  2. Anonymous
    September 5, 2008

    Why not keep things open and transparent Indian nuclear deterrent is non-negotiable and periodic testing with whatever related activities is a vital part of it, and must remain so. Some reactors were separated and classified for military use, just for that reason.India cannot stop perodic testing and mantain nuclear deterrent. No nuclear country can mantain reliable weapons without extensive testing underground or in copmuter simulations. India does not have copmuter simulations ability , also computer testing draws data from all past live tests. So moratorium on testing is just temporary at best. Any deals must agree in clear and open manner to that very fact or anything else in the deal becomes just irrelevant. Why are political mouth pieces pretending otherwise.

  3. Anonymous
    September 4, 2008

    By now, the result would be out, I guess. still..I think India got to go for gaining access to tech and hopefully making good use of it, and then even if India tests after 5 years and get a ban, India would still be better off than now.This is the critical thing rather than getting mired in issues with regard to pseudo selfrespect.Isn’t that a better thing if at all India gets a waiver!And if we do not, let’g go whole hog in developing the economy and defence.

  4. Anonymous
    September 4, 2008

    <>The State Department letter holds little significance beyond pacifying American politicians. I say this confidently because in nuclear matters American record has been to commit to one thing when intending to do something completely different, Viz. 1. Signing the NPT while never disarming after the fact.2. Negotiating the CTBT while intending to break the test ban via subcritical testing.3. Arming Pakistan while certifying it does not have nukes in the 80s.So the letter holds little significance given this track record. As was always apparent, the deal only enables India to make the best use of the emerging balance of power situation without unduly compromising the NPT.<>

  5. Anonymous
    September 4, 2008

    There is no reason for India to act in haste and approve the deal. I think India should adopt scenario#3. Why is it binding that everything hapen in Bush and Singh’s term ? They may have initiated it, but the technologits and beauracrats who will be dealing this with in future ; so we may as well wait for next govts. in both countries.

  6. Anonymous
    September 4, 2008

    Behind all this is the explicit, express acknowledgment and acceptance by the Government of India and the US Government of the provisions of the Hyde Act, which was passed with considerable assistance from lobbying interests working on behalf of the Government of India.For the GOI to push for exemptions from the Hyde Act provisions after it is passed with their support and assent, and then trying to pass that off to their respective public as a “clean and unconditional” deal, speaks of duplicity and double crossing by the Government of India. GOI knew all along that they are not going to get “clean and unconditional” out of the US.Maybe their game plan all along was to get the “clean and unconditional” NSG exemption and then try to split the NSG members by doing bilateral deals with Russia, France, etc. that on paper, conform to the NSG exemption knowing that US firms and interests would be cut out of any deals by the Hyde Act, the 123 Agreement and so on?Kind of sound like double crossing the US to me.

  7. Anonymous
    September 4, 2008

    I have higlighted this before – what is exactly sensitive, dual use technology ? Is it fuel, it is enrichment and reprocessing or something else related to reactors and peripherals? No beuracrats who are involved with negotiations on both sides really knows this. Even the technology-alert list(TAL) is classified document. Any technology involving reactors can be classified as dual-use/sensitive at a later date. So what technology is not going to be available to India? So what exactly are we going to not get because of binding to a restrictive deal. And these restrictions will not help in any way to make India’s safeguarded civiilan nuclear industry world class other than just a second rate consumer. Even if we agree to the ill-effects of nuclear testing which US has right to respond the safeguarded civiilan reactors should be unshackled, free and unrestricted in any way. That is in India’s interest to develop a world class nuclear industry.

  8. Anonymous
    September 4, 2008

    From the Indian perspective(whatever maybe US/NSG’s interest)it is not truly “separation” if there is any effect on the civilian facilities because of whatever the military does. Why should India’s security interest be dictated by US’s interests ? Even if we accept that US has the right to respond because of its laws related to non-proliferation I don’t think the right of return of material already sold to a civilian facility is an acceptable clause. This should be vehemently opposed by India. If this right of return is upheld by US then there shouldn’t be any purchase of US items that can jeopardize the development of a state of the art safeguarded civilian reactor ( not just consuming fuel). India’s interest in separation should be that its safeguarded civilian reactor be world class and be able to competer with the nuclear industries from other countries not a second rate consumer.

  9. Daryl KImball
    September 4, 2008

    Siddarth:I generally agree with your latest prognosis for the deal: scenario #1 is the most likely. Scenario #2 is very unlikely given the contents of the latest revised U.S. draft waiver proposal, which we obtained earlier today (Sept. 3) and which is posted on the site.Why? As I note in my analysis, I just don’t think the new waiver proposal comes close to what the group of skeptics (which I believe numbers around 12 or more) have proposed.Regarding the State Departments responses in the “secret” letter to the House Committee on Foreign Affairs, I think it would be far more accurate to say that the GoI and the Bush administration are BOTH complicit in hiding their common interpretation of the effect of the 123 agreement from their respective publics and parliaments. I find it hard to believe that the Singh government did not understand what the U.S. interpretation of the agreement is and vice-versa. These guys are professionals, big boys. Each of them erred in trying to twist the meaning of the words in the agreement to match the expectations and political requirements in each country. What is amazing is that both sides believed their fiction could be sustained. For instance, the State Department has known these responses would eventually be published (and you have to assume the GoI did too). They are only upset now because the release comes at a delicate stage in the process. I look forward to your dispatches from Vienna over the next couple of days.– Daryl Kimball

  10. Anonymous
    September 4, 2008

    India learns the true meaning of being a sepoy to the American sahib.

  11. Anonymous
    September 4, 2008

    Why were military plants separated ? If not used maintain nuclear weapons (aka deterance) that involves “testing” etc? If this is only a electricty generation only deal why link it to military activities. This is a deal primarily to take indias ability to keep nuke weapons out via back door methods. So this deal should be rejected in total.Anyone recomending otherwise is act of treason.

  12. Anonymous
    September 4, 2008

    To keep and maintain nuclear weapons (deterrence) testing is NEEDED, for refinement future. US/ China/Russia/France etc.. do that every now and then, sometimes via computers or underground. Why are they bothered if India tests with its own nuclear fuel. After all military plants are separated, why were they separated? If not to used maintain nuclear weapons?. So as long as India does not use their fuel it should not matter to them. If the deal is for power only and India like Chinas 123 agreement. This is a deal primarily to take indias ability to keep nuke weapons out via the back door ways. So this deal should be rejected .

  13. Anonymous
    September 4, 2008

    This is a good cop / bad cop game, by US & proxy Europeans, US playing the role of Good cop, while proxy europeans play bad cop with a clear aim at de-nuking India. Switzerland said it destroyed AQ Khan & Europeans joint venture files to protect US intrests, and we are to fall for this junk. If ithey succeed in de-nuking India it will be a Georgia of sorts, against China in future, begging for NATO cover. That may be what west wants , India to buy expensive protection. It will be a colossal mistake of the new century for a country of billion people strong India to give up nuclear weapons and submit to the goodwill and mercy of others, to dictate your defense. It will be stupid to sign away nukes or ability to mantain them in future. India has plenty of scientific brain to perfect and build thorium cycle reactors, to use for power generation. India has second largest reserves of thorium in the world. India needs to create a fully funded project even with whatever needed IITs involved to make this happen. Self reliance not begging through unjust treaties like CTBT/ NPT/ FMCT is the answer.

  14. gopinath
    September 3, 2008

    I think the American dishonesty is a world renowned truth. They will only do what is best for their country. Nothing else. Are we ready to do the same?Are we (our leadership I mean) stubborn enough like china to oppose US every turn, and still get away with it.I doubt. So the combination of the two dictates scenario #1.Also I think this wont impact the mutual relationship and the business prospects between the nations, as some people are predicting.

  15. Anonymous
    September 3, 2008

    Sid,It may be so that the people who do not want the deal to go through NSG have timed this disclosure.If we get a waiver, and move fast on gaining access to technology and mastering it, in addition to deploying it by building plants, we may go beyond a point of return to the old days of restrictive regime impacting our development.Ofcourse, by building a reserve of non-US fuel and not buying american tech(we must buy some airplanes though to make it a win win partnership).I remember China violated the terms and still got presidential waivers again and again.So, is it not that it all depends upon how fast we make good of the NSG waiver.Is the Indian media playing into our opponent’s trap by making too much out of this letter.What have we got to loose if get a non-conditional waiver.Your take?Cheers, MPS I like your blog.

  16. Sid
    September 3, 2008

    @Adithya – Of course the contents of the letter are wrong and dishonest. The 123 speaks of fuel supply disruptions. It does not define these. One party to an agreement cannot assert unilaterally a definition of what the phrase means and also then claim India concurs with that definition (which it most certainly does not). What the letter proves is that an agreement with the U.S. in such matters is not worth the paper it is written on. You have to insulate yourself from the Hyde Act and the erroneous interpretation of the 123 by 1. not buying American supplies and 2. Building a strategic reserve with non-US fuel.

  17. Adithya Das
    September 3, 2008

    Hi Siddharth,I am an avid supporter of the deal.The contents of the letter to the congress regarding the fuel supply assurances i blv r wrong and contradicts ur observations regarding the 123 agreement.What do u have to say to this?

  18. Anonymous
    September 3, 2008

    I would not call it betrayal.MMS has not betrayed because his job is to get an NSG Waiver for India on India’s terms. As only USA could have done this, he got USA to flex its muscle at the NSG.USA has not betrayed, because all the disclosures are right there in Hyde Act for all to read.Hyde Act and 123 Agreement do not matter, because India would not have bought the American nuclear reactors anyway, considering that there would have been no enrichment of reprocessing components to them, dis-assembly and return upon nuclear testing by India, no assured fuel-supply, litigation issues, etc.If US gets us an NSG Waiver, it is all fine and good, otherwise what have we lost, except some time and some naivety.

  19. Shivanand Kanavi
    September 3, 2008

    Nuclear Deal RIP. Scenarios 2&3 are remote. Either State has sabotaged White House or the whole thing has been in bad faith. Indo-US relations will not recover for another decade or two. It would be interesting to see France and Russia reacting to these developments….

  20. Anonymous
    September 3, 2008

    After years of hard work and time spent,from jaswant singh, its a shame that the deal is dieing.Now, what?. where do we go from here?. back to Re-emerging Russia.

  21. Anonymous
    September 3, 2008

    India still has a few hours left to formally request the NSG to withdraw the proposed exemption agreement.It is time to save face.

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This entry was posted on September 3, 2008 by in Nuclear Issues.



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