An attempt by American negotiators to re-open parts of the ‘123’ agreement governing nuclear commerce with India has emerged as the main obstacle, as the two countries seek to finalise a deal on the conditions under which U.S.-origin spent nuclear fuel can be reprocessed in Indian facilities.

After five rounds of talks, the last of which was held on the eve of Prime Minister Manmohan Singh’s visit to Washington last month, Indian and American negotiators remain stuck on two issues, one minor and one major, Indian officials say. And though National Security Advisor M.K. Narayanan told reporters on November 29 that the agreement would be finalised in “10-12 days,” U.S. and Indian officials say the next round of talks is yet to be scheduled.

The biggest sticking point remains the conditions under which the U.S. can suspend reprocessing consent rights.

These rights will be “brought into effect” by the construction of an Indian reprocessing facility and the conclusion of an agreement on “arrangements and procedures” under which reprocessing will take place in the new facility. The question of suspension is addressed in Article 14(9) of the 123 agreement, which vaguely states that “the arrangements and procedures … shall be subject to suspension by either Party in exceptional circumstances, as defined by the Parties…”

In the negotiations, India has taken the stand that these “exceptional circumstances” have to be linked to the obligations it undertakes with respect to reprocessing — such as the implementation of safeguards, physical security and safety — and not to circumstances extrinsic to reprocessing. The Indian side noted that the 123 agreement already provides for fairly open-ended conditions under which bilateral cooperation can be terminated, and that Article 6(3) granting reprocessing consent has been explicitly included in the list of Articles which “shall continue in effect” even after termination.

India’s agreements with France and Russia both provide for safeguarded reprocessing and have no provision for suspension or termination of consent.

Indian officials believe the stand being taken by the U.S. is tantamount to rewriting the 123 agreement, a charge, they say, their American interlocutors readily own up to. Members of the U.S. negotiating team recalled how the reprocessing consent which they did not want to grant India was included in the 123 text only after President George W. Bush and his national security adviser Stephen Hadley overruled them. New Delhi’s assessment today is that by reopening some of these clauses, State Department officials hope the Obama administration will be less accommodating of India.

In written answers provided to Congressman Howard Berman in 2008, the Bush administration in fact clarified that it did not wish to grant India “permanent” reprocessing consent, that consent rights can be terminated by the U.S. and that a provision to this effect would be incorporated in the yet-to-be negotiated arrangements and procedures.

India is committed to the full implementation of IAEA safeguards at facilities where U.S. spent fuel may be reprocessed and is willing to pay the price if it ever violates those undertakings, say Indian officials. But the country is unable to accept any ambiguity about the permanency of reprocessing consent, especially when the scale of U.S.-supplied reactor operations is expected ultimately to reach 10,000 MWe and the amount of spent fuel that would be generated would be enormous. With the ghost of Tarapur, where vast acres of spent fuel have accumulated since the 1960s, still haunting them, Indian officials say any uncertainty on consent would be a deal breaker and would make the purchase of U.S. reactors next to impossible.

The second issue holding up the reprocessing agreement is a dispute over whether it will apply to a single new safeguarded reprocessing facility or all safeguarded reprocessing facilities India may choose to establish. Article 6(3) uses the singular when it says that “to bring [the reprocessing consent] rights into effect, India will establish a new national reprocessing facility dedicated to reprocessing safeguarded nuclear material under IAEA safeguards…”. But later in the same paragraph, the 123 agreement states: “The parties agree on the application of IAEA safeguards to ALL facilities concerned with the above [i.e. reprocessing] activities” [emphasis added].

According to Indian officials, there is no contradiction here. The reference to “all facilities” makes it clear that there could be more than one plant reprocessing U.S.-origin spent fuel and that the arrangements and procedures would apply to all. But to bring the consent rights into effect, all that India is required to do is to establish one plant and not all the reprocessing plants it may eventually wish to build.