India–United States Civil Nuclear Agreement

US President George W. Bush and India's Prime Minister Manmohan Singh exchange handshakes in New Delhi on March 2, 2006.

The Indo-U.S. civilian nuclear agreement is the name commonly attributed to a bilateral agreement on nuclear cooperation between the United States of America and the Republic of India. The framework for this agreement was a Joint Statement by Indian Prime Minister Manmohan Singh and U.S. President George W. Bush, under which India agreed to separate its civil and military nuclear facilities and place civil facilities under International Atomic Energy Agency (IAEA) safeguards and, in exchange, the United States agreed to work toward full civil nuclear cooperation with India.

On August 1, 2008, the IAEA approved the safeguards agreement with India, after which the United States approached the Nuclear Suppliers Group (NSG) to grant a waiver to India to commence civilian nuclear trade. The 45-nation NSG granted the waiver to India on September 6, 2008 allowing it to access civilian nuclear technology and fuel from other countries. However, India can commence nuclear trade with the United States only after the deal is passed by the US Congress and is likely to be the main focus of its last session which starts on September 8, 2008.

Overview

The Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, also known as the Hyde Act, is the U.S. domestic law that modifies the requirements of Section 123 of the U.S. Atomic Energy Act to permit nuclear cooperation with India and in particular to negotiate a 123 agreement to operationalize the 2005 Joint Statement. As a domestic U.S. law, the Hyde Act is binding on the United States. The Hyde Act cannot be binding on India's sovereign decisions although it can be construed as prescriptive for future U.S. reactions. As per the Vienna convention, an international treaty such as the 123 agreement cannot be superseded by an internal law such as the Hyde Act.

The 123 agreement defines the terms and conditions for bilateral civilian nuclear cooperation, and requires separate approvals by the U.S. Congress and by Indian cabinet ministers. According to the Nuclear Power Corporation of India, the agreement will help India meet its goal of adding 25,000 MW of nuclear power capacity through imports of nuclear reactors and fuel by 2020.

After the terms of the 123 agreement were concluded on July 27, 2007, it ran into trouble because of stiff opposition in India from the communist allies of the ruling United Progressive Alliance. The government survived a confidence vote in the parliament on July 22, 2008 by 275–256 votes in the backdrop of defections from both camps to the opposite camps. The deal also had faced opposition from non-proliferation activists, anti-nuclear organisations, and some states within the Nuclear Suppliers Group. A deal which is inconsistent with the Hyde Act and does not place restrictions on India has also faced opposition in the U.S. House and may not receive a vote until 2009. In February 2008 U.S. Secretary of State Condoleezza Rice said that any agreement would be "consistent with the obligations of the Hyde Act".

Background

Parties to the Nuclear Non-Proliferation Treaty (NPT) have a recognized right of access to peaceful uses of nuclear energy and an obligation to cooperate on civilian nuclear technology. Separately, the Nuclear Suppliers Group has agreed on guidelines for nuclear exports, including reactors and fuel. Those guidelines condition such exports on comprehensive safeguards by the International Atomic Energy Agency, which are designed to verify that nuclear energy is not diverted from peaceful use to weapons programs. Though neither India, Israel, nor Pakistan have signed the NPT, India argues that instead of addressing the central objective of universal and comprehensive non-proliferation, the treaty creates a club of "nuclear haves" and a larger group of "nuclear have-nots" by restricting the legal possession of nuclear weapons to those states that tested them before 1967, who alone are free to possess and multiply their nuclear stockpiles. India insists on a comprehensive action plan for a nuclear-free world within a specific time-frame and has also adopted a voluntary "no first use policy".

In response to a growing Chinese nuclear arsenal, India conducted a nuclear test in 1974 (called "peaceful nuclear explosion" and explicitly not for "offensive" first strike military purposes but which could be used as a "peaceful deterrence"). Led by the US, other states have set up an informal group, the Nuclear Suppliers Group (NSG), to control exports of nuclear materials, equipment and technology. Consequently, India was left outside the international nuclear order, which forced India to develop it own resources for each stage of the nuclear fuel cycle and power generation, including fast breeder reactors and thorium thermal breeder reactors. Despite successes in developing these new technologies, India continued to face shortfalls in nuclear fuel supply, particularly uranium. India was also forced to rely on its own resources and technology for nuclear weapons design and production.

India's nuclear isolation constrained its civil nuclear program, but left India relatively immune to foreign reactions to a prospective nuclear test. Partly for this reason, but mainly due to continued unchecked covert nuclear and missile proliferation activities between Pakistan, China and North Korea, India conducted five more nuclear tests in May, 1998 at Pokhran. The strategic objectives of these test include:

(1) To validate Indian nuclear weapons design, including miniaturization.

(2) To demonstrate India's Nuclear Deterrent capability as part of implementing an open transparent nuclear weapons program and doctrine commensurate with India's status as an emerging economic and military power.

India was subject to international sanctions after its May 1998 nuclear tests. However, due to the size of the Indian economy and its relatively large domestic sector, these sanctions had little impact on India, with Indian GDP growth increasing from 4.8% in 1997-1998 (prior to sanctions) to 6.6% (during sanctions) in 1998-1999. Consequently, in Q4 2001, the Bush Administration decided to drop all sanctions on India. Although India achieved its strategic objectives from the Pokhran nuclear weapons tests in 1998, it continued to find its civil nuclear program isolated internationally.

Rationale behind the agreement

Competition for conventional energy

The growing energy demands of the Indian and Chinese economies have raised questions on the impact of global availability to conventional energy..The Bush Administration has concluded that an Indian shift toward nuclear energy is in the best interest for America to secure 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 the current 1967 cutoff in the definition of a "nuclear weapon state" were pushed to 1975), other parties to the NPT are not likely to support such an amendment. As a compromise, the proposed civil nuclear agreement implicitly recognises India's "de facto" status even without signing the NPT. The Bush administration justifies a nuclear pact with India because it is important in helping to advance the non-proliferation framework by formally recognising India's strong non-proliferation record even though it has not signed the NPT. The former Under Secretary of State of Political Affairs, Nicholas Burns, one of the architects of the Indo-U.S. nuclear deal said “India’s trust, its credibility, the fact that it has promised to create a state-of-the-art facility, monitored by the IAEA, to begin a new export control regime in place, because it has not proliferated the nuclear technology, we can’t say that about Pakistan.” when asked whether the U.S. would offer a nuclear deal with Pakistan on the lines of the Indo-U.S. deal. [3] [4] [5] Mohammed ElBaradei, head of the International Atomic 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 nonproliferation regime". However, members of the IAEA safeguards staff have made it clear that Indian demands that New Delhi be allowed to determine when Indian reactors might 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 a share. It is India's stated objective to increase the production of nuclear power generation from its present capacity of 4,000 MWe to 20,000 MWe in the next decade. However, the developmental economic advising firm Dalberg, which advises the IMF and the World Bank, moreover, has done its own analysis of the economic value of investing in nuclear power development in India. Their conclusion is that for the next 20 years such investments are likely to be far less valuable economically or environmentally than a variety of other measures to increase electricity production in India. They have noted that U.S. nuclear vendors cannot sell any reactors to India unless and until India caps third party liabilities or establishes a credible liability pool to protect U.S. firms from being sued in the case of an accident 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 as Robert Blackwill, have requested increased strategic ties with India and a de-hyphenization of Pakistan with India.

While India is self-sufficient in thorium, possessing 25% of the world's known and economically viable thorium, it possesses a meager 1% of the similarly calculated global uranium reserves. Indian support for cooperation with the U.S. centers around the issue of obtaining a steady supply of sufficient energy for the economy to grow. Indian opposition to the pact centers around the concessions that would need to be made, as well as the likely de-prioritization of research into a thorium fuel-cycle if uranium becomes highly available given the well understood utilization of uranium in a nuclear fuel cycle.

Agreement

On March 2, 2006 in New Delhi, George W. Bush and Manmohan Singh signed a Civil Nuclear Cooperation Agreement, following an initiation during the July 2005 summit in Washington between the two leaders over civilian nuclear cooperation.

Heavily endorsed by the White House, the agreement is thought to be a major victory to George W. Bush's foreign policy initiative and was described by many lawmakers as a cornerstone of the new strategic partnership between the two countries. The agreement is widely considered to help India fulfill its soaring energy demands and boost U.S. and India into a strategic partnership. The Pentagon speculates this will help ease global demand for crude oil and natural gas.

On August 3, 2007, both the countries released the full text of the 123 agreement. Nicholas Burns, the chief negotiator of the India-United States nuclear deal, said the U.S. has the right to terminate the deal if India tests a nuclear weapon and that no part of the agreement recognizes India as a nuclear weapons state.

Hyde Act Passage in the U.S.

On December 18, President George W. Bush signed the Act into law. The Act was passed by an overwhelming 359–68 in the United States House of Representatives on July 26 and by 85–12 in the United States Senate on November 16 in a strong show of bipartisan support.

The House version (H.R. 5682) and Senate version (S. 3709) of the bill differed due to amendments each had added before approving, but the versions were reconciled with a House vote of 330–59 on December 8 and a Senate voice-vote on December 9 before being passed on to President G.W. Bush for final approval. The White House had urged Congress to expedite the reconciliation process during the current lame duck session, and recommended removing certain amendments which would be deemed deal-killers by India. Nonetheless, while softened, several clauses restricting India's strategic nuclear program and conditions on having India align with U.S. views over Iran were incorporated in the Hyde Act.

In response to the language Congress used in the Act to define U.S. policy toward India, President Bush, stated "Given the Constitution's commitment to the authority of the presidency to conduct the nation's foreign affairs, the executive branch shall construe such policy statements as advisory," going on to cite sections 103 and 104 (d) (2) of the bill. To assure Congress that its work would not be totally discarded, Bush continued by saying that the executive would give "the due weight that comity between the legislative and executive branches should require, to the extent consistent with U.S. foreign policy."

Political opposition in India

Main article: Opposition to the Indo-US civilian agreement in India

Indian parliament vote

Main article: 2008 Lok Sabha Vote of Confidence

On July 9, 2008, India formally submitted the safeguards agreement to the IAEA. This development came after the Prime Minister of India Manmohan Singh returned from the 34th G8 summit meeting in Tokyo where he met with U.S. President George W. Bush. On June 19, 2008, news media reported that Indian Prime Minister Dr. Manmohan Singh threatened to resign his position if the Left Front, whose support was crucial for the ruling United Progressive Alliance to prove its majority in the Indian parliament, continued to oppose the nuclear deal and he described their stance as irrational and reactionary. According to the Hindu, External Affairs Minister's Pranab Mukherjee’s earlier statement said “I cannot bind the government if we lose our majority,” implying that United Progressive Alliance government would not put its signature on any deal with IAEA if it lost the majority in either a 'opposition-initiated no-confidence motion' or if failing to muster a vote of confidence in Indian parliament after being told to prove its majority by the president. On July 08, 2008, Prakash Karat announced that the Left Front is withdrawing its support to the government over the decision by the government to go ahead on the United States-India Peaceful Atomic Energy Cooperation Act. The left front had been a staunch advocate of not proceeding with this deal citing national interests.

On 22 July, 2008 the UPA faced its first confidence vote in the Lok Sabha after the Communist Party of India (Marxist) led Left Front withdrew support over India approaching the IAEA for Indo-US nuclear deal. The UPA won the confidence vote with 275 votes to the opposition's 256, (10 members abstained from the vote) to record a 19-vote victory.

IAEA approval

The IAEA Board of Governors approved the safeguards agreement on August 1, 2008, and the 45-state Nuclear Suppliers Group next had to approve a policy allowing nuclear cooperation with India. U.S. President Bush can then make the necessary certifications and seek final approval by the U.S. Congress. There were objections from Pakistan, Iran, Ireland, Norway, Switzerland and Austria at the IAEA meeting.

NSG waiver

On September 6, 2008 India was granted the waiver at the NSG meeting held in Vienna, Austria. The consensus was arrived at after overcoming misgivings expressed by Austria, Ireland and New Zealand and is an unprecedented step in giving exemption to a country which has not signed the NPT and the Comprehensive Test Ban Treaty (CTBT) The Indian team who worked on the deal includes Manmohan Singh, Pranab Mukherjee, Shiv Shankar Menon, Shyam Saran, MK Narayanan, Anil Kakodkar, RB Grover, and DB Venkatesh Varma.

Versions of U.S. draft exemption

An August 2008 U.S. draft exemption would have granted India a waiver based on the "steps that India has taken voluntarily as a contributing partner in the non-proliferation regime". Based on these steps, and without further conditions, the draft waiver would have allowed for the transfer to India of both trigger list and dual-use items (including technology), waiving the full-scope safeguards requirements of the NSG guidelines.

A September 2008 waiver would have recognized additional "steps that India has voluntarily taken". The waiver called for notifying the NSG of bilateral agreements and for regular consultations; however, it also would have waived the full-scope safeguards requirements of the NSG guidelines without further conditions.

The U.S. draft underwent further changes in an effort to make the language more acceptable to the NSG.

Reaction inside the NSG

The deal had initial support from the United States, the United Kingdom, France, Japan, Russia, and Germany. After some initial opposition, there were reports of Australia, Switzerland, and Canada expressing their support for the deal. Selig S. Harrison, a former South Asia bureau chief of The Washington Post, has said the deal may represent a tacit recognition of India as a nuclear weapon state, while former U.S. Undersecretary of State for Arms Control and International Security Robert Joseph says the U.S. State Department made it "very clear that we will not recognize India as a nuclear-weapon state".

Norway, Austria, Brazil, and Japan all warned that their support for India at the IAEA did not mean that they would not express reservations at the NSG. New Zealand, which is a member of the NSG but not of the IAEA Board of Governors, cautioned that its support should not be taken for granted. Ireland, which launched the non-proliferation treaty process in 1958 and signed it first in 1968, doubted India's nuclear trade agreement with the U.S. Russia, a potentially large nuclear supplier to India, expressed reservations about transferring enrichment and reprocessing technology to India. China argued the agreement constituted "a major blow to the international non-proliferation regime". New Zealand said it would like to see a few conditions written in to the waiver: the exemption ceasing if India conducts nuclear tests, India signing the International Atomic Energy Agency's (IAEA) additional protocol, and placing limits on the scope of the technology that can be given to India and which could relate to nuclear weapons. Austria, Ireland, the Netherlands, Switzerland and Scandinavian countries proposed similar amendments.

After the first NSG meeting in August 2008, diplomats noted that up to 20 of the 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," a European diplomat said. A group of seven NSG members suggested including some of the provisions of the U.S. Hyde Act in the final waiver. Daryll Kimball, executive director of the Washington-based Arms Control Association, said the NSG should at a minimum "make clear that nuclear trade with India shall be terminated if it resumes testing for any reason. If India cannot agree to such terms, it suggests that India is not serious about its nuclear test moratorium pledge." It is believed that the U.S. will return with a new draft.

Richard Stratford, the regular U.S. Head of Delegation to the Nuclear Suppliers Group, said he had no expectations that a ‘clean’ draft would be the final version.” Indian Foreign Secretary Shivshankar Menon said in April 2008 that India would be willing to accept some conditions on the waiver and that the NSG would likely punish India if it tests nuclear weapons.

After India was granted the waiver on September 6, the United Kingdom said that the NSG's decision would make a "significant contribution" to global energy and climate security. U.S. National Security Council spokesman Gordon Johndroe said, "this is a historic achievement that strengthens global non-proliferation principles while assisting India to meet its energy requirements in an environmentally friendly manner. The United States thanks the participating governments in the NSG for their outstanding efforts and cooperation to welcome India into the global non-proliferation community. We especially appreciate the role Germany played as chair to move this process forward."

Chinese opposition to the agreement

Initially, there were reports of People's Republic of China analyzing the extent of the opposition against the waiver at the NSG and then revealing its position over the issue. On September 1, 2008, prominent Chinese newspaper People's Daily expressed its strong disapproval of the civilian agreement with India. India's National Security Advisor remarked that one of the major opponents of the waiver was China and said that he would express Indian government's displeasure over the issue. It was also revealed that China had abstained during the final voting process, indicating its non-approval of the nuclear agreement. In a statement, Chinese delegation to the NSG said the group should address the aspirations of other countries too, an implicit reference to Pakistan. There were also reports of India canceling the state visit of Chinese Foreign Minister Yang Jiechi. The Times of India noted that China's stance could have a long-term implication on Sino-Indian relations.

There were some other conflicting reports on China's stance, however. The Hindu reported that though China had expressed its desire to include more stern language in the final draft, they had informed India about their intention to back the agreement. In an interview to the Hindustan Times, Chinese Assistant Foreign Minister Hu Zhengyue said that "China understands India's needs for civil nuclear energy and related international cooperation."

Indian reaction

Indian PM Manmohan Singh is expected to visit Washington D.C. on September 26, 2008 to celebrate the conclusion of the agreement with US President George W. Bush. India's External Affairs Minister Pranab Mukherjee expressed his deep appreciation for India's allies in the NSG, especially the United States, United Kingdom, France, Russia, Germany, South Africa and Brazil for helping India achieve NSG's consensus on the nuclear deal. India also said that it would convey its special thanks to New Zealand's Governor General Anand Satyanand during his scheduled visit to New Delhi.

Bhartiya Janata Party's Yashwant Sinha, who also formerly held the post of India's External Affairs Minister, criticized the Indian government's decision to seek NSG's consensus and remarked that "India has walked into the non-proliferation trap set by the US, we have 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's former National Security Advisor Brajesh Mishra supported the development at the NSG and said that the waiver granted made "no prohibition" on India to conduct nuclear tests in the future.

Other reactions

More than 150 non-proliferation activists and anti-nuclear organizations called for tightening the initial NSG agreement to prevent harming the current global non-proliferation regime. Among the steps called for were:

• ceasing cooperation if India conducts nuclear tests or withdraws from safeguards
• supplying only an amount of fuel which is commensurate with ordinary reactor operating requirements
• expressly prohibiting the transfer of enrichment, reprocessing and heavy water production items to India
• opposing any special safeguards exemptions for India
• conditioning the waiver on India stopping fissile production and legally binding itself not to conduct nuclear tests
• not allowing India to reprocess nuclear fuel supplied by a member state in a facility that is not under permanent and unconditional IAEA safeguards
• agreeing that all bilateral nuclear cooperation agreements between an NSG member-state and India explicitly prohibit the replication or use of such technology in any unsafeguarded Indian facilities

The call said that the draft Indian nuclear "deal would be a nonproliferation disaster and a serious setback to the prospects of global nuclear disarmament" and also pushed for all world leaders who are serious about ending the arms race to "to stand up and be counted."

Dr. Kaveh L Afrasiabi, who has taught political science at Tehran University, has argued the agreement will set a new precedent for other states, adding that the agreement represents a diplomatic boon for Tehran. Ali Ashgar Soltanieh, the Iranian Deputy Director General for International and Political Affairs, has complained the agreement may undermine the credibility, integrity and universality of the Nuclear Nonproliferation Treaty. Pakistan argues the safeguards agreement "threatens to increase the chances of a nuclear arms race in the subcontinent." Pakistani Foreign Minister Shah Mahmood Qureshi has suggested his country should be considered for such an accord, and Pakistan has also said the same process "should be available as a model for other non-NPT states". Israel is citing the Indo-U.S. civil nuclear deal as a precedent to alter Nuclear Suppliers Group (NSG) rules to construct its first nuclear power plant in the Negev desert, and is also pushing for its own trade exemptions.

Brahma Chellaney, a Professor of Strategic Studies at the New Delhi-based Centre for Policy Research, argued that the wording of the U.S. exemption sought 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 being tied to compliance with the entire set of NSG rules. India would acquiesce to its unilateral test moratorium being turned into a multilateral legality. He concluded that instead of the "full" civil nuclear cooperation that the original July 18, 2005, deal promised, India's access to civil nuclear enrichment and reprocessing technologies would be restricted through the initial NSG waiver.

Consideration by U.S. Congress

The Bush Administration told Congress in January 2008 that the United States may cease all cooperation with India if India detonates a nuclear explosive device. The Administration further said it was not its intention to assist India in the design, construction or operation of sensitive nuclear technologies through the transfer of dual-use items. The statements were considered sensitive in India because debate over the agreement in India could have toppled the government of Prime Minister Manmohan Singh. The State Department had requested they remain secret even though they were not classified. Secretary of State Condoleezza Rice also previously told the House Foreign Affairs Panel in public testimony that any agreement "will have to be completely consistent with the obligations of the Hyde Act". Both the Assistant Secretary of State for South and Central Asian Affairs Richard Boucher and the Former Assistant Secretary of State for Legislative Affairs Jeffrey Bergner have also said the agreement would be in conformity with the Hyde Act.

Howard Berman, chair of the U.S. House Foreign Affairs Committee, in a letter to US Secretary of State Condoleezza Rice has warned that an NSG waiver "inconsistent" with the 2006 Hyde Act will "jeopardise" the Indo-US nuclear deal in US Congress. Speaker of the House of Representatives Nancy Pelosi and Senate Majority leader Harry Reid have set September 26, 2008 as the adjournment date for Congress. Congressional officials have said the White House may be able to work with lawmakers to expedite a vote before Congress goes in to recess, while a hurdle for the White House is that a Democratic congress might not be inclined to give President Bush a significant victory during his waning days in office. Representative Berman has said he will push for more information about the negotiations in Vienna before expediting a vote.

See also

• Indo-American relations
• Energy policy of India
• Nuclear power in India
• Energy security

External links

U.S. Government links

• S. 3709: United States-India Peaceful Atomic Energy Cooperation Act - Senate version (govtrack.us)
• H.R. 5682: United States Additional Protocol Implementation Act - House version (govtrack.us)
• U.S. Government Printing Office: The text of the Hyde Act
• U.S. House: Letter from Chairman Berman to Secretary of State Rice about the U.S.-India Nuclear Agreement
• U.S. House Foreign Affairs Committee (January 2008): Questions for the Record submitted to Assistant Secretary Bernger by Chairman Tom Lantos

India Government links

• Indian Ministry of External Affairs (August 2007): Text of the preliminary Indo-U nuclear agreement (meaindia.nic.in)

Nuclear Suppliers Group links

• Nuclear Suppliers Group (August 2008): NSG Public Statement – Extraordinary Plenary Meeting
• Nuclear Suppliers Group (November 2007): INFCIRC/254/Rev.9/Part 1
• Nuclear Suppliers Group (March 2006): INFCIRC/254/Rev.7/Part 2