Indo-US nuclear deal and the Issue of Uninterrupted Fuel Supplies

Indo-US nuclear deal (from Rusin speaks)

On the issue of continued fuel supply in the event of termination of the agreement, the critics of the nuclear deal are jumping the gun when they say that the US would prevent other Nuclear Suppliers Group (NSG) countries from continuing with their supply of fuel and other supplies to India if the agreement is terminated under US laws. The issue is an important issue that needs to be discussed. However, the ‘Statements of Policy’ or ‘Sense of Congress’ found in the Hyde Act are not the proper reference points for discussion on the issue.

What Indian decision makers need to be concerned about is the nature of exception to be provided by the Nuclear Suppliers Group (NSG) as well as the bilateral civil nuclear agreements that India will sign with other supplier countries like Russia, France, Canada and Australia. Another point which should be taken into account is that currently there is no NSG requirement which stipulates that if one member terminates cooperation other member countries have to follow suit.




The 123 agreement drawn up between India and US is only the first of several agreements for cooperation that India will have to negotiate and sign with other supplier countries before nuclear trade can actually commence. The fact of the matter is that neither the 123 agreement nor the Hyde Act has any provision that prevents India from procuring fuel for building a strategic reserve from say, Russia when the reactor has been supplied by the US.

The critics are also missing the fact that it is upto the supplier countries to decide whether they want to take back the fuel supplied by them in case of a termination of cooperation by the US. It is not upto the US to decide the course of action of other ‘friendly’ supplier countries in case it terminates the civil nuclear cooperation agreement. In fact, it has been reported that the Russia-India nuclear agreement for Kudankulam does not require any return of Russian material even in the event of an Indian test as long as India does not use any Russian material in the test.

The case of the 1974 Indian PNE leading to a disruption of American fuel supplies at Tarapur is oft cited. One does not seek to dispute the American action. However, what one should also be cognizant of is the fact that it was the same Americans who arranged for alternative supply of fuel for the reactor. The US did not do this because of any great love for India. They did because they wanted the reactor to remain under safeguards for the duration of the agreement. If they had terminated the agreement, the concurrent safeguards agreement would also have come to an end.

The next meeting of the NSG is scheduled for October-November 2007. It will probably be at this meeting that the group discusses the issue of granting an exception to India. The nature of exception to be provided by the Group is still unclear. There are reportedly four drafts circulating within the Group on the issue of granting India an exception. It remains to be seen what form the exception takes. The American draft submitted to the NSG, provides for an India specific exception. It is reported that China seeks to lay down criterion for granting such an exception without naming India.

The left parties in their joint statement issued on 7 August 2007, say that "The clause 5.6 on disruption of supplies therefore seems to be limited to "market failures" and not to cover a disruption that takes place under the clauses of the Hyde Act." This is an incorrect reading of the 123 agreement. The 123 agreement in Article 5 (6) (c) clearly states that "India can take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies. Such corrective measures could be termination of the IAEA Safeguards agreement.

Conducting any future nuclear tests is a sovereign Indian decision. It is generally believed that India will not conduct an ‘unprovoked’ test. However, in case India does test as a result of similar actions by other states (testing by the US, China, Pakistan) which "impacts national security" or due to "serious concerns about a changed security environment," the US will be skating on thin ice if it decides to terminate the agreement. In any case, even if the agreement is terminated, it does not prevent India from using its own fuel supplies or the strategic reserve supplied by other supplier countries.

The critics of the deal are putting the cart before the horse when they say that 'Statement of Policy' found in Hyde Act [Sec. 103 (5) and (6)] deemed advisory by even the US Presiden Bush in his Presidential signing statement of 18 December 2006, will force current or future administrations to work with other NSG members to stop nuclear supply. The focus of domestic debate should be on the nature of modification of the NSG Guidelines providing an exception for India and ensuring that provisions of future agreements for cooperation on civil nuclear energy are similar to those which exist in the Indo-Russian agreement for the Kudamkulam project.

Share: