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U.S.-Indian Nuclear Agreement: A Bad Deal Gets Worse
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Background Memo by Daryl G. Kimball & Fred McGoldrick

For Immediate Release: August 3, 2007

Press Contacts: Daryl G. Kimball, Executive Director, Arms Control Association, (202) 463-8270 x107; Fred McGoldrick of Bengelsdorf, McGoldrick & Associates (617) 298-2024 or 508-981-9112; or Alex Bollfrass, Herbert Scoville Peace Fellow, Arms Control Association (202) 463-8270 x103

After months of contentious negotiations, the U.S. and Indian officials have concluded -- and released the text of -- a formal agreement for peaceful nuclear cooperation. The proposed agreement (also known as a "Section 123" agreement) would give India assurances of supply and advance consent to carry out sensitive nuclear activities that are unprecedented. These U.S. concessions compromise long-standing U.S. nuclear nonproliferation policies and give India, a country that has refused to join the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), preferential treatment that the United States has not even given to states that have assumed all the obligations and responsibilities of the NPT.

Text of the Agreement

Several more difficult hurdles must be cleared before Congress formally considers the agreement. First, India and the IAEA must negotiate and the IAEA Board of Governors must approve an Indian-IAEA safeguards agreement. Then, the 45-nation Nuclear Suppliers Group must approve by consensus changes to its guidelines that currently restrict trade with non-nuclear-weapon states, such as India, that do not accept safeguards on all their nuclear activities. The rotating chair of the NSG is currently held by South Africa. The NSG is due to hold a "consultative group" meeting in Vienna this autumn. Germany will take over the chair when the NSG meets for its full Plenary session in the spring of 2008.

Congress and other nuclear supplier states must use their authority to carefully consider the proposal, get straight answers to their questions, weigh the alternatives, and close the proliferation loopholes that plague the proposed U.S.-Indian nuclear cooperation agreement.


The U.S.-Indian nuclear cooperation agreement would not have been possible if not for the Bush administration's decision, announced in July 2005, to seek changes in U.S. and international rules restricting nuclear trade with India, which violated its peaceful use commitments by using Canadian and U.S. civil nuclear assistance to conduct its 1974 nuclear bomb test.

After months of deliberation and debate, Congress approved legislation in late-2006 that would allow the President to waive the requirement for India to have comprehensive, “full-scope” safeguards over all of its nuclear facilities, as well as potential penalties for its earlier nuclear weapon test explosions. In that legislation, known as the Henry Hyde United States-India Peaceful Atomic Energy Cooperation Act, Congress established a set of minimal conditions and limitations on the scope and terms of civil nuclear trade with India and it retained relevant elements of AEA Sections 123 (governing the basic requirements for U.S. nuclear cooperation with others) and 129 (dealing with the grounds for the termination of U.S. nuclear cooperation).

In July 2005, India said it would allow "India specific" IAEA inspections for eight additional reactors by the year 2014, but will keep its extensive and secret nuclear weapons and materials production complex off-limits. So long as India continues to produce fissile material for weapons purposes, the supply of uranium fuel to reactors that will be safeguarded will allow India to use its limited domestic supply of uranium exclusively for weapons purposes and increase its rate of production of nuclear bomb material. India reiterated its pledge to maintain its de facto nuclear test moratorium and support U.S. efforts to negotiate a global treaty to cut off the production of fissile material for weapons (FMCT). However, this pledge may not be very meaningful since it will take years to negotiate such an FMCT, and it will place no real limits on Indian fissile material production for its nuclear weapons program for many years to come.

Further U.S. Concessions to India

Before the U.S.-Indian negotiations were completed on July 20, the two sides were at odds over key terms of the agreement for nuclear cooperation, including several areas that Congress was particularly concerned about:

  • the right of the United States to terminate nuclear cooperation and to require the return of materials and equipment subject to the agreement if India conducts a nuclear test;
  • the reprocessing of spent fuel produced from U.S.-origin nuclear fuel; and
  • assurances of the supply of nuclear fuel to India in the event that India suffers a disruption in supply.

Our preliminary analysis of the U.S.-Indian agreement for cooperation reveals that the administration appears to have – once again – agreed to virtually all of India’s demands at the cost of U.S. national security and nonproliferation interests.

Nuclear Testing, Termination of U.S. Assistance, Fuel Supply Assurances: Current U.S. law stipulates that the India-specific waiver of U.S. restrictions on trade with India would end if India resumes testing (Section 104a(3)(B) of the Hyde Act). Under Section 129 of the Atomic Energy Act the President would be obliged to terminate nuclear cooperation. Section 123 a(4) requires that agreements for cooperation contain a U.S. right to require the return of nuclear material and equipment subject to the agreement if India resumes testing or terminates or abrogates an IAEA safeguards agreement. NSG guidelines also provide for supplier suspension or termination of nuclear cooperation with states that have violated their nonproliferation obligations.

However, unlike other U.S. nuclear cooperation agreements, the proposed agreement for nuclear cooperation with India does not mention a U.S. right of return if India conducts a nuclear test. The formulation is unlike most other nuclear cooperation agreements, which unambiguously state that if the recipient country tests a nuclear explosive device, the United States can terminate nuclear cooperation and demand the return of equipment and material.

In this agreement, it is not clear that an Indian test explosion would be grounds for U.S. termination or return of U.S.-supplied material or equipment. By contrast, the Atomic Energy Act provides that the United States must have a clear and unambiguous right to require the return of materials and equipment subject to the agreement and an obligation to terminate nuclear cooperation if the non-nuclear-weapon state party to the agreement tests a nuclear explosive device.

What is more, to guard against a cut-off of fuel supplies due to renewed nuclear testing, India sought and got unprecedented concessions in the agreement. Article 5(6)b of the U.S.-Indian Agreement commits the United States to "support an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India's reactors."

The agreement also commits the United States to "join India in seeking to negotiate with the IAEA an Indian-specific fuel supply agreement" and to jointly convene with India, "a group of friendly supplier countries to include countries such as Russia, France, and the United Kingdom to pursue such measures as would restore fuel supply to India." These fuel supply assurances were apparently drafted by the Indians and were articulated by P.M. Singh in a speech to the Indian parliament on March 6, 2006. (See: <http://www.armscontrol.org/projects/india/20060306_Singh_Statement.asp>.)

The language of the agreement commits the U.S. to help India in securing fuel supplies if New Delhi suffers any disruption in fuel supplies, even if the disruption is due to India’s violation of its nonproliferation commitments. This is inconsistent with the intent of the Congress in the Hyde Act, which was to cut off U.S. assistance and seek the return of U.S. nuclear technology and fuel supplies if India resumes testing. In fact, Section 103 (a)6 of the Hyde Act explicitly states that it should be the policy of the United States to seek to prevent other countries from providing India with nuclear material or technology.

Moreover, Section 129 of the Atomic Energy Act requires the President to terminate nuclear cooperation with any non-nuclear weapon state that detonates a nuclear explosive device, terminates, abrogates or materially violates an IAEA safeguards agreement for nuclear cooperation with the United States. If India violates any of these nonproliferation norms, the United States should not be assisting New Delhi in securing nuclear fuel supplies.

State Department officials may argue that the fuel supply assurances language in the agreement does not bind the U.S. to do anything to help India if it resumes testing and is there only to assuage Indian domestic audiences that they will continue to have the flexibility to resume testing in the future. If so, such assurances have no place in the formal agreement otherwise the Bush administration should state for the record that no future administration will be bound to provide any assistance to India if it resumes testing for any reason, and that the United States would terminate all nuclear cooperation with India unless it would sign and ratify the Comprehensive Nuclear Test Ban Treaty (CTBT) or if it violates any of its nonproliferation commitments.

The fuel supply assurances that the United States is committed to giving India are not found in any other U.S. peaceful nuclear cooperation agreement, including those with parties to the NPT. In other words, with these fuel assurances the United States is giving preferential treatment to a non-NPT party that has assumed none of the obligations and burdens of the NPT. The United States should be giving preferential treatment to NPT parties instead.

Safeguards: In the Hyde Act, Congress also specified that before the President can waive current restrictions on trade with India, India and the IAEA must conclude and the IAEA Board of Governors must approve a plan that applies “safeguards in perpetuity in accordance with IAEA, principles, and practices.”

The agreement commits India to seek “India-specific” safeguards with the IAEA for the eight older reactors it has agreed to put on its civilian list by 2014. Also, Article 5(6)(c of the U.S.-India nuclear cooperation agreement states that India it will seek safeguards that provide for "corrective measures that India may take to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies."

What "India-specific" and “corrective measures” mean is not clear. Indian officials have suggested that they may be seeking a safeguards arrangement that would allow for the suspension of safeguards in the event that fuel supplies are interrupted.

There is no precedent or IAEA safeguards agreement that would allow for such an option, and it would be highly irresponsible for the IAEA member states to go along with such a hollow arrangement. It is not at all clear how the Indians intend to close the circle of permanent safeguards and India-specific safeguards that provide for suspension of such safeguards in the event of a supply interruption.

Reprocessing and Enrichment: Section 123 (a)(7) of the Atomic Energy Act requires U.S. consent for the reprocessing or alteration in form or content of nuclear material subject to U.S. agreements for cooperation. In the negotiations over the agreement, Indian officials insisted that the United States grant India advance, long-term consent to reprocessing so they can develop their "three-stage" nuclear fuel cycle, which would include fast breeder reactors. The United States has given long-term consent to reprocessing in only a few instances, namely in the case of Japan and EURATOM, who are NATO allies, and parties to the NPT.

The proposed U.S.-Indian agreement grants India long-term consent to reprocessing. This right will be implemented only after the parties agree to procedures for the application of safeguards to a facility that the Indians will dedicate for reprocessing used fuel under IAEA safeguards. This condition is far less comprehensive than those the United States required of its close allies and NPT parties in EURATOM and Japan. Here again, the proposed agreement grants preferential treatment to a non-NPT party.

Article 6 of the agreement also states that: "Any special fissionable material that may be separated may only be utilized in national facilities under IAEA safeguards." However, India has thus far refused to agree to place any part of its breeder reactor program -- the ostensible user of such reprocessed material -- under international safeguards. The Congress should demand a Presidential assurance that any plutonium or uranium recovered from reprocessed U.S.-origin fuel be subject to IAEA safeguards in perpetuity, including any such material used in or produced through the use of such material in India’s breeder reactors.

Article 5(2) of the proposed U.S.-Indian nuclear cooperation agreement states that: "Sensitive nuclear technology, heavy water production technology, sensitive nuclear facilities, heavy water production facilities and major critical components of such facilities may be transferred under this Agreement pursuant to an amendment to this agreement."

Even if dual-use technologies are destined for a safeguarded facility, the United States must take further steps to ensure that such technology from such transferred items is not replicated and used in an unsafeguarded sensitive facility.

Agreement Does Not Address Material Covered Under Prior Agreement: Under an earlier 1963 U.S.-Indian nuclear cooperation agreement, the United States supplied India with nuclear power reactors at Tarapur and fuel for those reactors. The spent fuel from those reactors is in storage and contains "reactor grade" plutonium. India has said it will reprocess the used fuel to extract plutonium for use as fuel for civilian power reactor fuel. But such reactor-grade plutonium, once separated, can also be used for nuclear explosive devices and there is enough plutonium from Tarapur's spent fuel for hundreds of them. Under the 1963 agreement, India must get U.S. approval to reprocess the spent fuel, but India has taken the position that since the agreement has expired, it is not legally obliged to maintain any of its nonproliferation commitments under that agreement.

The non-proliferation assurances and conditions in the new agreement should apply to the nuclear materials and equipment for the Tarapur reactors and nuclear material that the United States supplied under the 1963 U.S.-Indian agreement, which expired in 1993. The Indians refused to place items supplied under the expired agreement under the nonproliferation controls of the proposed new agreement, including peaceful nuclear use assurances and safeguards.

In all other U.S. nuclear cooperation agreements, cooperating parties have agreed to apply the controls and conditions of a new agreement to items subject to an expired or terminated agreement. India is the sole exception. This means that the Tarapur reactors and the tons of spent fuel there are not, as far as the Indians are concerned, subject to any legal obligation to the United States (e.g, safeguards, and reprocessing or retransfer rights).

Moreover, in light of India’s refusal to place the Tarapur reactors and fuel under the proposed new agreement, the Nuclear Regulatory Commission will have to determine whether it will be able to license exports to India. For example, Section 127 of the Atomic Energy Act provides that “No such material, facilities, or sensitive nuclear technology proposed to be exported or previously exported and subject to the applicable agreement for cooperation, and no special nuclear material produced through the use of such materials, facilities, or sensitive nuclear technology, will be used for any nuclear explosive device or for research on or development of any nuclear explosive device.”

The current U.S.-Indian nuclear cooperation agreement fails to resolve the status of the material covered by the 1963 U.S.-Indian agreement, and Congress should insist that the United States and India do so.

India Still Outside the Nuclear Nonproliferation Mainstream

India has been outside the international nuclear mainstream since it violated the peaceful use commitments it made to Canada and U.S. by using a Canadian-supplied reactor and U.S.-supplied heavy water to conduct its 1974 nuclear bomb test, refused to sign the nuclear Nonproliferation Treaty, and conducted additional nuclear tests in 1998. India made its choice and, as a result, it has been cut off from U.S. civilian nuclear cooperation since 1978 and most international assistance since 1992, when the Nuclear Suppliers Group adopted the comprehensive, full-scope safeguards standard for nuclear exports.

Under the terms of the U.S.-Indian nuclear cooperation deal, India is still outside the nonproliferation mainstream. The U.S.-India nuclear trade deal would grant India benefits not available to the non-nuclear weapon states parties to the nuclear Nonproliferation Treaty without even requiring it to meet all of the responsibilities expected of the five original nuclear-weapon states.

For example, unlike China, France, Russia, the United Kingdom, and the United States, India has refused to sign the 1996 Comprehensive Nuclear Test Ban Treaty and it has refused unilaterally to declare a halt to the production of fissile material for weapons -- as France, Russia, the United Kingdom, and United States have all done.

India's policies are still inconsistent with UN Security Council Resolution 1172. Approved unanimously in June 1998 following India's decision to resume nuclear testing, Resolution 1172 calls upon India and Pakistan to stop further production of fissile material for nuclear weapons. It also calls on the two countries to immediately stop their nuclear weapons development programs, refrain from weaponization or deployment of nuclear weapons, cease development of ballistic missiles capable of delivering nuclear weapons, and join other nations in a legally-binding nuclear test ban treaty.

By making a special exemption for India, the approach will make it even more difficult to enforce existing rules with states such as Iran and North Korea and to convince other states to accept tougher nonproliferation standards in the years ahead. India's neighbor, Pakistan, will surely accelerate its effort to keep pace with Indian fissile material production capabilities, which will stoke the already robust Indian-Pakistani nuclear and missile arms race.

Rather than ignore their own policies and practices, global treaties on nuclear nonproliferation, and UN Security Council resolutions, the United States and other countries should insist that leaders in New Delhi exercise greater nuclear weapons restraint and meet the same nonproliferation standards expected of other responsible, advanced countries before lifting restrictions on civil nuclear trade.

For more resources, documents, statements, and analysis, see the Arms Control Association’s special resource page on the U.S.-Indian nuclear deal at http://www.armscontrol.org/projects/india/

Daryl G. Kimball is executive director of the Arms Control Association; Fred McGoldrick is a Principal of Bengelsdorf, McGoldrick, and Associates, LLC and was a senior official with the U.S. Department of State.

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