Last lap in nuclear deal gets slippery; India, US will hardtalk in ten days

One key issue on table is permanent right to reprocess: US says no, India says you made exception for Japan, Switzerland

The final stretch in the long journey towards the landmark India-US nuclear deal is turning out to be the most tricky one with Washington indicating it cannot let India get “permanent rights” for reprocessing spent fuel.

A commitment on securing these rights coming from Prime Minister Manmohan Singh himself in Parliament means that, finally, the issue may have to be addressed at a political level. Washington’s case is that allowing India to reprocess could open a window for possible diversion while India argues that US has given such rights, with “prior approval” to Japan, Switzerland and the European Union.

So hard negotiations lie ahead for a crucial round of talks from March 26 to March 30 when the US team is here, led by Richard Stratford, Director of Nuclear Energy, Safety and Security in the State Department. This will be the first round of talks since the US Congress passed the Hyde Act enabling full civilian nuclear cooperation with India last December.

Section 123 of the US Atomic Energy Act, which provides for peaceful nuclear cooperation with other countries, lays down nine conditions that need to be met for the US to enter an agreement with India. The Hyde Act exempts India from the second condition in this list that requires all reactors to be placed under safeguards. But India has to still meet the remaining eight. (See chart)

The other key issue for India is the fourth condition in this section. According to it, the US will have the “right to require the return of any nuclear materials and equipment transferred…and any special nuclear material produced” in case India detonates a nuclear device or “abrogates” any condition of the IAEA Safeguards Agreement.

While India says it’s committed to a unilateral moratorium on testing and is unlikely to violate IAEA commitments, sources said this “right to return” clause will need explanation. For this could allow US to reclaim a range of equipment, fuel and whatever has been produced from it in case it decides to terminate cooperation for some reason or the other.

It’s in this context that the issue of testing has become important. Sources clarified that there is no question of making a voluntary moratorium binding on India through this agreement, as has been interpreted by some quarters. The issue is to deal with the implications that would automatically get triggered in case India were to test a device. While these are issues that need to be resolved through negotiations, Washington is said to have been “disappointed” with the first Indian draft of the agreement. Clearly, the Department of Atomic Energy broadened the area of divergences through this draft that was passed on to the US when Foreign Secretary Shiv Shankar Menon went there last month.

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Thereafter, Menon and US Under Secretary of State for Political Affairs Nicholas Burns, who is the principal US negotiator on the n-deal, have been carrying out regular consultations over the phone. With the US not too excited by India’s first draft, these conversations were important in laying the grounds for formal negotiations. Both sides are keen that the March 26 talks take matters forward and not end up in a stalemate.

POINT-COUNTERPOINT

1. US: Guarantee that safeguards will apply on all equipment, n-material and supplies from US.

India: Agreed to sign a permanent safeguards agreement with IAEA. Won’t accept extra bilateral safeguards.

2. US: Safeguards on all nuclear facilities as per law for non-nuclear weapon states.

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The Hyde Act exempts India from this and recognises India’s separation plan.

3. Guarantee that supplies from US or any material produced using these supplies will not be used for military purposes.

India has agreed to only civil nuclear cooperation with US. No question of diverting material to strategic programme that will remain indigenous.

4. US shall have right of return of any material supplied through this agreement in case India tests or violates safeguards.

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India wants clarity on this as US could terminate agreement citing supreme national interest. Prospect of returning all that has been supplied may not be acceptable

5. Supplies from US should not be passed on to a third party without US consent or any other “unauthorised” person or entity.

India has similar domestic laws. Not a point of difference.

6. Adequate physical security to all US-origin material transferred.

India has high standards for security of sensitive material and shares US perceptions on this.

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7. Guarantee that any US-origin nuclear material will not be altered or reprocessed without “prior approval of the United States”.

This is a key area of difference. PM has made it clear that India wants full reprocessing rights. India will seek pre-approval.

8. US approval for places where US-origin fuel would be stored.

India has no great issue with this. It has already been followed when fuel was provided for Tarapur.

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9. A guarantee that India will respect conditions that the US President will have to fulfill towards US non-proliferation goals.

This opens the scope for a bilateral safeguards agreement that India would be opposed to, but is equally committed to non-proliferation.