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U.S. delivers 123 blow to India

Siddharth Varadarajan

Fuel assurances not binding: Bush

New Delhi: The United States has diluted the fuel supply assurances contained in the ‘123 agreement’ on nuclear cooperation with India, with President George W. Bush formally declaring, in his September 10 message to Congress, that all American commitments to the Indian side in this regard were not “legally binding.”

As part of the process of completing the U.S.-India civil nuclear cooperation initiative, Mr. Bush forwarded the text of the 123 agreement to Congress with a covering note and a separate memorandum containing seven ‘determinations’ that India had conformed to the non-proliferation commitments it had made in July 2005.

But the covering note had a sting in its tail on the question of fuel assurances, which India sees as an essential component of the interlocking set of commitments and obligations both sides have undertaken since 2005.

“In Article 5(6) the Agreement records certain political commitments concerning reliable supply of nuclear fuel given to India,” President Bush’s statement says. “[The] Agreement does not, however, transform these political commitments into legally binding commitments because the Agreement, like other U.S. agreements of its type, is intended as a framework agreement.”

This formulation, say Indian officials, is completely at odds with the understanding India has that the assurances are indeed meant to be legally binding. “After all, India has committed itself to binding commitments like safeguards,” said an official. Officials also reject the notion that the Indian 123 could be treated “like other U.S. agreements of its type” since fuel supply assurances figure only in the Indian agreement. And the need for legally binding fuel assurances arose because India — which is not obliged to place all its reactors under safeguards or withdraw them once placed, unlike other countries with which the U.S. has signed agreements — was voluntarily accepting IAEA supervision.

Since the signing of the 123 agreement is meant to be the highlight of Prime Minister Manmohan Singh’s forthcoming visit to the U.S., Indian officials are now scrambling to find ways of undoing the damage caused by the Bush message.

The administration’s formulations, say sources, ensures that even if the 123 agreement is rapidly approved, its provisions will remain a virtual dead letter given their negative implication for the commercial viability of any reactor imports from the United States.

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