The Saga of the Civilian Nuclear Deal: How the 123 Agreement Came into Being

THERE IS no question that India needs the nuclear energy option, provided it can exercise it wisely and safely. As a rapidly growing economy, we are going to require large amounts of energy. We need to generate this energy fast and from all possible sources, including nuclear reactors. As of now, only around 3 percent of the 140 GW of electricity being consumed by our country is nuclear.

The Department of Atomic Energy (DAE) has repeatedly failed to meet announced capacity deadlines partially because the nuclear programme has had to face genuine difficulties due to the 1974 Pokhran test. It led to our being ostracised by the international community and denied any form of nuclear commerce, whether it be for technology or nuclear fuel.

A major casualty of this was uranium shortage. The rate at which we were extracting uranium from our own mines is barely enough to fuel the reactors we have now. We could not have even fuelled the few additional reactors currently under construction, let alone increase production from the present level of 4 GW to, say, 30 GW. Even that target would amount to just 10 percent of the total electrical capacity needed by 2030. It was also clear that getting foreign players to build some reactors, if sanctions could be lifted, would speed the process.

It is against this backdrop that one must assess the value of the civilian nuclear deal that India signed with the US in late 2008. The NDA government had earlier approached the Americans to seek removal of the nuclear sanctions against India. But, not much happened during the Bill Clinton era; what the Americans offered then was just not acceptable to us.

The final nuclear deal was the culmination of a long and laboured process, which began in July 2005, when Manmohan Singh visited Washington. I happened to be in the US at that time. We were lamenting about how most American newspapers barely mentioned the Indian prime minister’s official visit. Consequently, everyone was surprised when the very next morning, on 18 July 2005, Manmohan Singh and President George W Bush announced a major agreement. It had many items in it, including a promise of nuclear cooperation, which eventually crystallised into the nuclear deal as we know it now.

The agreement required India to identify some of its nuclear facilities as ‘civilian’ and place them under the International Atomic Energy Agency (IAEA) safeguards. The implication was that those facilities could not then be used for making nuclear weapons. In return, the US executive would try to persuade its Congress to lift the restrictions on nuclear trade with India. More importantly, the US would also persuade other countries in the Nuclear Suppliers Group (NSG) to lift their own sanctions against us.

This was followed by three years of intense negotiations between India and the US on the details of the deal. Agreement on which of our nuclear facilities would be placed under IAEA safeguards already consumed nine months, with the status of our fast breeder reactor being the most contentious item. This list was to be announced during President Bush’s visit to New Delhi in March 2006, but even as he landed in the Capital, it had still not been finalised. The deal had to be rammed through overnight.

Compared to initial expectations, the ‘civilian’ list was pruned in India’s favour. The breeder reactor was allowed to stay beyond the reach of IAEA inspectors, along with the eight other reactors. All existing plutonium stocks and the three reprocessing units were also kept outside IAEA supervision. Hence, all the material and facilities could, if we so chose, be used to make weapons. Contrary to some unwarranted fears expressed in India, there was never any question of the deal capping India’s strategic arsenal.

The US President then went back to the US Congress armed with India’s willingness to place its civilian plants under IAEA supervision, and sought modification of existing US laws that were preventing the country from nuclear commerce with India. This took another nine months of hectic negotiations within the US, between their executive branch and the Congress. Finally, the US administration, aided by the increasingly powerful NRI lobby, pushed the Hyde Act through, and the US sanctions against India were finally lifted by December 2006. This enabled the US executive to negotiate the actual bilateral treaty (the so-called 123 Agreement) containing detailed terms of the deal, which the two countries would sign. This too was done by the summer of 2007.

But, after all the hard negotiations with the US had been completed, further progress was stymied by a rapidly growing domestic opposition within India to the deal. That in itself is an interesting side-story. As the various stages of the deal unfolded, the Indian media gradually deepened its coverage of the issues. Journalists, diplomats and politicians, not known earlier for their devotion to scientific matters, had to quickly learn about the thorium fuel cycle, reprocessing units, uranium enrichment, breeder reactors and so on. It was a good time to be a physics professor in Delhi!

Soon there was a crescendo of editorials and Op-Eds on all aspects of our nuclear programmes, civilian and military. Such public debate on technical nuclear policy issues was unprecedented in India. The shrouds of opacity that had surrounded the activities of the DAE were gradually lifted, hopefully forever. This beneficial aspect of the deal, of bringing more transparency to nuclear issues in India, has remained largely unnoticed by analysts.

BECOMING INCREASINGLY fluent with technical details, our opposition leaders kept raising the ante on what the government should demand from the US. Although these demands made the government’s task more difficult, they did help them maintain a tough negotiating stance and improve the terms of the Agreement. At various points, the deal looked dead, because of seemingly excessive demands from India. But the US negotiators had their arms bent backwards by their own leadership to accede to Indian demands. The Indian negotiating team should also be congratulated for sticking to its guns and the deal got better at each stage from the Indian point of view.

Despite that, after all the hard negotiations had been completed, the Left parties announced an unqualified fatwa against the deal. This was no longer because of specific objections to its terms, but because of fundamental opposition to any liaison with the US. When the UPA government announced its decision to push ahead with the deal, the Left withdrew support to the coalition. The rest of the story — about how the government survived a no-confidence motion — is well known.

Finally, after New Delhi went ahead with signing the safeguarding formalities with the IAEA, the US canvassed the NSG members into lifting their sanctions against India. As a nonmember, India had to lobby from the outside. But the Americans managed to overcome all the opposition, including the crafty Chinese with their double-speak on the issue. The NSG resolution removing sanctions against India was passed unanimously in September 2008, leaving the door open for all countries, not just the US, to do nuclear trade with India.

Today, the process of rapidly increasing our nuclear energy capacity is on its way, despite some hurdles involving the Nuclear Liability Bill. We are in the process of purchasing uranium from several countries and contracting to build about six new reactors in collaboration with France, Russia and the US. The former had openly acknowledged that they would rely on the US to do all the heavy lifting to remove NSG sanctions, so that they too could sell nuclear technology to India.

The Manmohan Singh government had worked very hard to steer the deal delicately around many obstacles. The role of President Bush was also crucial in overcoming considerable resistance from US legislators and not letting India’s stringent demands derail it.

Bush is justifiably vilified for several of his actions around the world. But it would be churlish not to acknowledge his role in appreciating India’s place in the emerging world order and lifting the nuclear sanctions against us. We have named roads in Delhi for people who have done less.


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