U.S. Proposal for India-Specific Exemption from Nuclear Suppliers Group Guidelines Circulated August 2008

Note for Reporters by Daryl G. Kimball (202-463-8270 x107)
August 13, 2008

The Arms Control Association has obtained a copy of the U.S. proposal to exempt India from existing nuclear trade restrictions maintained by the 45-member Nuclear Suppliers Group (NSG). The proposed rule change would allow India to acquire nuclear technology and material previously off limits to it because of India’s misuse of past nuclear imports for peaceful purposes to conduct a nuclear explosion in 1974 and refusal to allow full-scope international safeguards.

Submitted August 6 to Germany, the current chair of the NSG, the proposal is the latest step in President George W. Bush’s effort to seek India-specific exemptions from U.S. and NSG nuclear trade restrictions on states that do not allow full-scope international safeguards.

The NSG is due to meet August 21-22 in Vienna for an extraordinary plenary meeting to discuss the U.S. proposal and may convene again to vote on the initiative as early as September. Traditionally, the group makes decisions by consensus. Several NSG members have raised questions about rewarding India with greater opportunities to engage in international nuclear trade while India continues to refuse to constrain its nuclear weapons program.

The new U.S. proposal is based closely on a March 2006 pre-decisional draft but has been weakened further as a result of U.S. acquiescence to Indian demands to delete or modify certain sections, particularly those that would link nuclear trade with India to its compliance with certain nonproliferation commitments.

The NSG’s existing guidelines for the export of nuclear material, equipment, and technology are also available online.

Brief Analysis

Generally speaking, any India-specific exemption from NSG guidelines would erode the credibility of the NSG's efforts to ensure that access to peaceful nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards. India has not agreed to abide by the standards and commitments expected of other responsible states, including full-scope IAEA safeguards, a meaningful Additional Protocol to its safeguards agreement, a legally-binding ban on nuclear testing, and a halt to the production of fissile material for weapons.

While India has agreed to IAEA safeguards on a few additional reactors by the year 2014, it has not declared which facilities would be safeguarded and it has not acknowledged that such safeguards apply to all civil facilities and materials on a permanent and unconditional basis. India has suggested it could withdraw from the agreement if fuel suppliers are cut off due to its resumption of nuclear testing. (See <http://www.armscontrol.org/node/3205> for an analysis of the agreement.) The IAEA director-general has failed in his basic responsibility to ensure there is a clear understanding between the Indians and the IAEA that the agreement is consistent with IAEA standards and practices for terminating safeguards.

The supply of foreign nuclear fuel to India’s civil nuclear sector would also free up India’s limited fuel supplies for use in its military production sector and allow India to increase its production of fissile material for nuclear weapons. (For further discussion on this point, see <http://www.armscontrol.org/pressroom/2006/20061115_Indian_Fissile>.) This would be inconsistent with NSG member states’ commitments under Article I of the nuclear Nonproliferation Treaty not to assist in any way the nuclear weapons program of another country.

If, as India is demanding, supplier states agree to help India amass a strategic reserve of nuclear fuel or agree to provide lifetime reactor fuel supplies, the current NSG exemption would allow India to resume nuclear testing without fear of losing access to nuclear fuel supplies. Contrary to the U.S. Henry Hyde Act—the 2006 U.S. law regulating future U.S. nuclear trade with India—the current U.S. proposal to the NSG fails to specify that if India resumes nuclear testing, nuclear trade with India would be terminated.

Trade with India involving sensitive nuclear technologies (uranium enrichment, spent fuel reprocessing, and heavy water production) and certain dual-use items on the NSG trigger list could also be used by India for weapons production purposes. Since IAEA safeguards cannot be relied upon to prevent the diversion or replication of these sensitive technologies for weapons-related purposes, the transfer of these items to India should be explicitly prohibited.

Regarding the current U.S. proposal, one of the most notable and troublesome features is the weak and very ambiguous language in section 2, which is ostensibly meant to outline what India has done that qualifies it for a special exemption from NSG guidelines. The proposal would simply “recognize” India’s commitments and actions that were outlined in the July 2005 joint statement by President George W. Bush and Prime Minister Manmohan Singh.

Section 3 would allow individual NSG members to engage in a full range of nuclear trade with India without any legally or politically meaningful requirement that would link nuclear trade with India to implementation and compliance with the commitments and actions mentioned in section 2.

The proposal would only require that: “Participating Government shall maintain contact and consult through regular channels on matters connected with the implementation of the Guidelines, taking into account relevant international commitments and bilateral agreements with India.”

This is a much weaker formulation than the already weak March 2006 U.S. draft proposal, which stated that: “Participating Governments may transfer trigger list items and/or related technology to the safeguarded civil nuclear facilities in India …as long as the participating Government intending to make the transfer is satisfied that India continues to fully meet all of the aforementioned nonproliferation and safeguards commitments, and all other requirements of the NSG Guidelines.”

Furthermore, the current U.S. proposal would leave it up to each individual NSG participant to decide whether India is or is not meeting these weak standards and loose commitments before they sell nuclear technology and materials (possibly including technologies the United States would not be willing to sell) to India.

To be effective, the NSG’s guidelines must establish clear and unambiguous terms and conditions for the initiation of nuclear trade and possible termination of nuclear trade with recipient states.

In essence, the Bush administration is proposing an NSG rule-change that would not only erode rules-based efforts to curb the spread of nuclear weapons, but it would also allow other states to interpret or ignore the India-specific NSG guideline as they see fit and undermine how U.S. lawmakers would like to see such a rule applied. For instance, Russia has already shown its blatant disregard for existing NSG guidelines by re-supplying India's two Tarapur light-water reactors in 2001 and 2006.

Section 4 of the proposal would effectively give India a veto over future NSG decisions even though it is not a member of the NSG. It states that: “Participation of India in the decisions regarding proposed amendments will facilitate their implementation by India.

The Bush administration’s proposed India-specific exemption is a nonproliferation disaster that could effectively end the NSG as a meaningful entity.


The current U.S. proposal should be flatly rejected by other NSG member states as unsound and irresponsible. If NSG states agree under pressure from an outgoing U.S. administration to blow a hole in NSG guidelines in order to allow a few states to profit from reactor and nuclear fuel and technology sales to India, they should at a minimum, support common sense restrictions and conditions on such trade, including but not limited to the following:

  • NSG states should establish a policy that if India resumes nuclear testing, or violates its safeguards agreements, trade involving nuclear items with India should be terminated and unused fuel supplies should be returned;
  • NSG states should expressly prohibit any transfer of sensitive reprocessing, enrichment, or heavy water production items or technology;
  • NSG states should actively oppose any arrangement that would give India any special safeguards exemptions that would in any way be inconsistent with the principle of permanent safeguards over all nuclear materials and facilities. NSG states should not take any decision unless India and the IAEA conclude a meaningful Additional Protocol to supplement its new facility specific safeguards agreement;
  • Before India is granted a waiver from the NSG’s full-scope safeguards standards, NSG states should call upon it to join with four of the five original nuclear-weapon states in declaring that it has stopped fissile material production and call upon India to transform its nuclear test moratorium pledge into a legally binding pledge, perhaps by signing the Comprehensive Test Ban Treaty.

Congress, the NSG, and the U.S.-Indian Nuclear Cooperation Agreement

Several member of Congress have urged the Bush administration not to support any NSG exemption for India that does not conform to the restrictions and conditions on nuclear trade established by the Hyde Act. Even if the NSG allows civil nuclear trade with India, Congress must still approve the proposed U.S.-Indian nuclear cooperation agreement and it may seek to amend or attach conditions on its implementation.

On August 5, the Chair of the House Committee on Foreign Affairs, Rep. Howard Berman (D-Calif.) wrote U.S. Secretary of State Condoleezza Rice that “the President should withhold support from any proposed exemption from India in the NSG guidelines that is not fully consistent with the Hyde Act and that does not incorporate a number of other key provisions, including: the immediate termination of all nuclear commerce by NSG states if India detonates a nuclear explosive device or if the IAEA determines that India has violated its safeguards commitments …” (The full text of the Berman letter is available from <http://www.armscontrol.org/node/3240>.)

Berman goes on to warn Rice that “any effort to consider the [U.S.-Indian nuclear cooperation] agreement outside of the requirements of current law will be impossible if the Administration accepts an NSG exemption that fails to include the Hyde Act conditions.”

It is clear that the current U.S. proposal to exempt India from NSG guidelines fails to include the Hyde Act conditions and restrictions.




Statement on Civil Nuclear Cooperation with India
[Text of Draft U.S. Proposal to NSG, August 2008]

1. At the _____ plenary meeting on ______ the Participating Governments of the Nuclear Suppliers Group agreed that they:

    a. desire to contribute to an effective non-proliferation regime and the widest possible implementation of the objectives of the Treaty on the Non-Proliferation of Nuclear Weapons

    b. seek to limit the further spread of nuclear weapons

    c. wish to pursue mechanisms to affect positively the non-proliferation commitments and actions of those outside the traditional nuclear non-proliferation regime

    d. seek to promote fundamental principles of safeguards and export control for nuclear transfers for peaceful purposes

    e. recognize the world's need for clean and reliable sources of energy for sustained growth and prosperity

2. In this respect, Participating Governments have taken note of steps that India has taken voluntarily as a contributing partner in the non-proliferation regime and they welcome India's efforts with respect to the following non-proliferation commitments and actions:

    a. Deciding to separate its civilian nuclear facilities in a phased manner and file a declaration regarding its civilian nuclear facilities with the International Atomic Energy Agency

    b. Conducting negotiations with the IAEA and obtaining approval of its Board of Governors regarding a Safeguards Agreement for application of safeguards to civilian nuclear facilities that is in accordance with IAEA standards, principles and practices (including Board of Governors document GOV/1621)

    c. Committing to sign and adhere to an Additional Protocol with respect to India's civil nuclear facilities

    d. Refraining from transferring enrichment and reprocessing technology to states that do not already possess these

    e. Having adopted a national export control system capable of effectively controlling transfers of multilaterally controlled nuclear and nuclear related material, equipment, and technology.

    f. Harmonizing its export control lists with those of the Nuclear Suppliers Group and committing to adherence to NSG guidelines

    g. Continuing its unilateral moratorium on nuclear tests and declaring its readiness to work with others towards conclusion of a multilateral Fissile Material Cut-off Treaty.

3. In view of the above, Participating Governments have adopted the following policy on civilian nuclear cooperation with the IAEA-safeguarded Indian civilian nuclear program

    a. Notwithstanding paragraphs 4(a), 4(b) and 4(c) of Infcirc/254 (Rev. 9) Part 1, Participating Governments may transfer trigger list items and/or related technology to India for peaceful purposes and for use in safeguarded civilian nuclear facilities provided that the transfer satisfies all other provisions of Part 1.

    b. Notwithstanding paragraph 4(b) of the Part 2 guidelines, Participating Governments may transfer nuclear-related dual use equipment, etc. for peaceful purposes for use in civilian nuclear facilities under IAEA safeguards, provided that the transfer satisfies all other provisions of Part 2.

    c. Participating Governments shall maintain contact and consult through regular channels on matters connected with the implementation of the Guidelines, taking into account relevant international commitments and bilateral agreements with India.

4. In order to facilitate the efforts of non-member adherents to Infcirc/254 Parts 1 and 2 to remain current in their implementation of the Guidelines, the NSG Chair is requested to review proposed amendments to the Guidelines with all non-member adherents on a non-discriminatory basis and solicit such comments on the amendments as a non-member adherent may wish to make. Participation of India in the decisions regarding proposed amendments will facilitate their implementation by India.

5. The NSG Point of Contact is requested to submit this statement to the IAEA DG with a request that it be circulated to all Member States.