Here, I intend to write what comes to my mind about India. This could be about anything, politics, religion, movies or remote happenings. Feel free to check this blog for updates, who knows some could be of some interest to you.

Sunday, July 20, 2008

ABC of 123, Indo - US (-IAEA) nuclear deal

I have to first say that I don't know the ABC of this, still it doesn't stop me from trying to form an opinion when the ruling coalition of the central government is at the brink of falling from power.

Why is this called the 123 agreement?

Section 123 of the United States Atomic Energy Act of 1954, titled "Cooperation With Other Nations", establishes an agreement for cooperation as a prerequisite for nuclear deals between the US and any other nation. Such an agreement is called a 123 Agreement.



1974, India conducted nuclear test for first time in Pokhran. Although the ripples of energy was well controlled, the political energy that followed affected the planet forever. India's nuclear test demonstarted that non-weapon nuclear technology could be readily turned to weapon development, this caused the nuclear super-powers to get together and create NSG-Nuclear Suppliers Group. Along with USSR, USA, China, France and UK, Japan and Canada were a part of the group/cartel. They provided guidelines to IAEA (International Atomic Energy Agency-1957) for the export/import of nuclear technology to non-nuclear nations. Over years many nations have become members of NSG.

India's stance so far:

Since 1974, for decades India has managed and overcome pressure from the nuclear super powers to succumb to their NPT regime. India has been saying that it is unfair for the 'haves' to stop the 'have-nots' from acquiring nuclear power. It will be fair only if all work towards a complete non-nuclear (weapons) world.

Current situation:

India growing at a rate of about 8% per annum is in dire need of better infrastructure. Electricity, the basic need of industries is very much in short. With the soaring oil prices and speculated fossil fuel dry-up, it is time to think of a better energy source that is also not adding to global warming. The world says that as of now nuclear is the way to go. Though non-convetional and renewable energy is consdered the safest they are seen to be too expensive.

The agreement:

At a very high level as I understand as per the IAEA agreement India will have to declare and enlist the civilian nuclear installations it wants to be brought under the agreement. These installations will then be closely monitored for all the inputs that goes into it like the fuel and equipments being imported, consumed, disposed, transferred, etc. India is obliged to keep an account of all these and report back periodically. Nothing could move from the enlisted installations to a non-listed installation without IAEA's approval. Once this is agreed, the 45 and odd IAEA member countries and US's friends will be ready to ensure a constant supply of fuel for the listed installations and technology as needed.

The doubt:

India recently submitted a draft of the safeguard agreement (http://www.armscontrol.org/pdf/20080709_India_safeguards.pdf) to IAEA and its member's for review. India has raised the question of what if once the deal is done and there is for some reason no constant supply of fuel as agreed? A particular clause added by India has raised debate by members that it is unclear of what India means by saying "India may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies."

IAEA says that the agreement must not be approached with doubt but with 'trust' which I think is quite applicable to IAEA on India too.


Though this is a question to be clarified before going ahead the agreement is seen to still have many loose ends that could be a trap into which India would fall if we are not clear about it. The questions being raised by the opposition (or the Left party who are opposing) are:

• In case the U.S. or other countries in the NSG renege on fuel supply assurances for imported reactors, will we have the ability to withdraw these reactors from IAEA safeguards?
• If U.S./NSG countries renege on fuel supply assurances, can we withdraw our indigenous civilian reactors from IAEA Safeguards?
• If we have to bring nuclear fuel from the non-safeguarded part of our nuclear programme for these reactors in case of fuel supply assurances not being fulfilled, will we have the ability to take it back again?
• What are the corrective steps that India can take if fuel supplies are interrupted by the U.S./NSG countries?
• What are the conditions that India will have to fulfill if the corrective steps are to be put into operation?

Other questions that needs to be known are:

  • What if India for some reason breaks the agreement?
  • 123 agreement will be withdrawn and the favors could be demanded to be returned back. Can India return the fuel and technology acquired until then? If the agreement fails, can it sustain the installations built purely depending on the IAEA supplies?

  • Is this agreement a dolled-up version of NPT which India has consistently refused to sign since the 70s?
  • By going for this is India about to hand over the control of its deterance to the west?
  • With China being a part of the NSG and Pakistan a close ally of US, will this be a disaster?

    There is a clause in the agreement:
'An essential basis of India's concurrence to accept Agency safeguards under an India-specific safeguards agreement is the conclusion of international cooperation arrangements creating the necessary conditions for India to obtain access to the international fuel market, including reliable, uninterrupted and continuous access to fuel supplies from companies in several nations, as well as support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India's reactors.'
  • In the absence of these 'international cooperation arrangements', isn't the India-specific IAEA Safeguards agreement itself legally invalid?
  • Wouldn't to vote on a nuclear deal without the above two crucial documents (the Additional Protocol and international cooperation agreements with key NSG members) be a charade?
Finally, Is it all worth the trouble?

There are many argument and counter-arguments about the effectiveness of nuclear energy. There are reports that shows that the number of nuclear power plant orders and proposals have dwindled. The majority of installations was between 60s and the 80s. Even US has not built a reactor in the recent past.

The environmental hazard and risk of human life is too high than any other option. Can India stand a Chernobyl?


Nuclear power currently accounts for 3.10% of our total energy output. If the 123 Agreement is signed, that figure will crawl up to 6% (around 16,000 mw) by 2020. (Remember: over 25% of India's power output is lost in transmission and distribution). In return for the miniscule accretion of 2.9% to India's total energy output over 12 years, is the country about to surrender its independent nuclear deterrent?

In particular the World Bank states:
"Bank lending for the energy sector requires a review of sector investments, institutions and policies. Nuclear plants in the power sector would not be economic; they are large white elephants".

The Asian Development Bank as a policy does not finance Nuclear power projects because of the political and safety risks involved.


The problems of reactor safety are three fold:

Reactors approaching the end of their design lives are a recognised hazard which is not being addressed.
The poor safety management appears to be endemic in some national industries and an ongoing problem.
The safety of current and future reactor designs cannot be demonstrated to the necessary degree given the serious consequences of a nuclear accident.

  • Can India protect its installations from the constant and growing terrorist activities?
  • Would more nuclear reactors mean more risk to human life in case of an accident given the population density of India which is very high compared to other nuclear nations?
  • Have we done all the home-work ?
  • Has Dr.Manmohan Singh and his coalition done all the home-work and research before passing the bill?

I personally feel that it would be useful to have more nuclear power plants but safety is the biggest concern.

If the government goes down fighting then the failure will be seen as one of the weaknesses of a coalition government whereas if the government gains majority and signs a deal which if is a sugar coated trap. The government will be remembered forever for the wrong reasons.

It is not at all an easy job but it is a responsibilty to be done well by whoever reached the seat by all means.