As simple as 1, 2, 3

8226; India is not an NPT signatory, so how does it qualify for such an agreement?

The US Atomic Energy Act draws a distinction between nuclear weapon states and non-nuclear weapon states as defined in the NPT. One of the conditions for entering into the 123 Agreement is that all nuclear installations in the country concerned should be covered by a safeguards agreement with International Atomic Energy Agency. Nuclear weapon states, as listed in the NPT, are exempt from this requirement as they can only put their civilian nuclear installations under safeguards, not those which are part of its military programme. The July 18 joint statement between India and US laid the basis for such an exemption for India too even though it was not a NPT signatory. This meant a special law would have to be passed by the US Congress giving legitimacy to such a move. All this took over a year, leading to the passing of the Hyde Act in December making a special exemption for India. So, the US Administration is now authorised to enter into an agreement with India.

8226; Are there any other conditions in the 123 Agreement that India is exempted from?

Section 123 of the US Atomic Energy Act lays out nine conditions. The Hyde Act exempts India from one of these nine conditions, which permits India to keep its nuclear installations involved with the strategic programme out of IAEA safeguards. India still has to meet the remaining eight conditions.

8226; What are the remaining eight conditions?

Guarantee that safeguards will apply on all equipment, nuclear material and supplies from US; that supplies from US or any material produced using these supplies will not be used for military purposes; that the US shall have right of return of any material supplied through this agreement in case India tests; supplies from US should not be passed on to a third party with US consent or any other 8216;8216;unauthorised8217;8217; person or entity and adequate physical security to all U-origin material transferred. The last three conditions: guarantee that any US-origin nuclear material will not be altered without 8216;8216;prior approval8217;8217; of the US; also US approval for places where US-origin fuel would be stored and a guarantee that the cooperating country will respect the conditions that the US President will have to fulfill obligations towards US non-proliferation goals.

8226; Is India comfortable accepting these conditions?

Not exactly. India wants an exemption from the sixth condition on rights to reprocess US-origin nuclear fuel. The third condition of giving US the 8216;8216;right of return8217;8217;, which means US can take back all that it has exported in case the deal is terminated for some reason or the other is also problematic.

8226; What is the significance of the negotiations on 123 Agreement this week?

This is the first round of talks after the Hyde Act was passed last December, which means concrete results will be expected from now on. The brief for the US delegation is clear that it works out an agreement that meets all these eight conditions. India is also looking at finding common language on most of these conditions though the reprocessing issue is unlikely to be resolved in this round of negotiations.

8226; If both sides come up with an agreement, can nuclear trade begin?

No, once the agreement is reached, the document will go back to the US Congress for approval.

8226; Can India do business with other countries on this sensitive subject even before the agreement with the US is through?

Technically, India can do business with any country that is willing to cooperate. But politically, matters will move forward only after India finalises a safeguards agreement with the IAEA and obtains an exemption from the Nuclear Suppliers Group NSG, which has guidelines followed by all suppliers.