1. Mr Arun Shourie’s first argument based on the 123 Agreement is related to Article 2, which states: “Each party shall implement this Agreement in accordance with its respective applicable treaties, national laws, regulations, and license requirements concerning the peaceful uses of nuclear energy for peaceful purposes.”

Mr Shourie fails to appreciate the fact that the 123 Agreement is not subject to national laws. It is not subject to either the Atomic Energy Act of 1954 or, for that matter, the Hyde Act of December, 2006. Article 2 in the 123 Agreement says that the implementation of this Agreement will be in accordance with the respective applicable treaties, national laws, regulations, and licence requirements concerning the peaceful uses of nuclear energy for peaceful purposes. It follows that the export of source materials, use of that source material in India for generation of civil nuclear energy, controls in respect of exports, the manner of importation, the setting up of a dedicated reprocessing facility, will all be mandated by the laws of the respective nations. There is clearly a difference between treaties being subject to the laws of a country and a treaty being implemented according to the laws of the respective countries. Once this distinction is appreciated, the foundation of the argument falls apart. The implementation of the Agreement by two sovereign states must be in accordance with the respective national laws and international obligations. Article 2.1 of the Agreement between the US and China contains a similar clause without having the effect of Chinese determinations under the Agreement being subject to US laws.

2. The second argument of Mr Shourie relates to the Agreement falling short of the PM’s assurance in Parliament regarding all aspects pertaining to the nuclear fuel supply cycle. All aspects of cooperation and technology transfers pertaining to a complete nuclear fuel supply cycle comprises three aspects, which are set out in Prime Minister’s assurance in Parliament on July 18. They will help ensure supplies of nuclear fuel, which is guaranteed under the 123 Agreement, supply of nuclear reactors, which India is free to buy pursuant to the 123 Agreement and the right to reprocess the spent fuel, which is also granted under the 123 Agreement. What Mr Shourie is talking about is with reference to Article 5(2) of the 123 Agreement. This stipulates that sensitive nuclear technology, heavy water production technology, sensitive nuclear facilities, major critical components of such facilities and the like may be transferred under this Agreement to India including transfer of dual use items, which could be used in enrichment, reprocessing or heavy water production facilities subject to applicable laws and which would entail a further amendment to the 123 Agreement. This is beyond the assurance given by the PM. In fact, the PM should be applauded that his team has been successful in persuading the US to consider amending the Atomic Energy Act of 1954 in order to make an exception for India by considering the transfer of sensitive nuclear technology, heavy water production technology, sensitive nuclear facilities, heavy water production facilities and major critical components thereof. This is a major achievement considering that no other nuclear weapon State or non-nuclear State has had the benefit of such an assurance by the United States of America. Consequently the 123 Agreement delivers much more than the PM’s assurance.

3. The third argument of Mr Shourie is that unlike the 123 Agreement with China, the US can invoke the provisions of its internal laws as a justification for its failure to perform under the treaty. This again is misleading. The 123 Agreement represents the entire understanding between the parties including all rights and obligations. In the event of any failure by either party not to comply with the terms of this Agreement, the consequences are set out in this Agreement itself. In other words, no party need invoke any provision of any internal law to seek a termination and cessation of cooperation for all that is set out in Article 14. There can be no conflict between the national laws of US and the 123 Agreement because this 123 Agreement has to be ultimately approved by Congress, i.e., the Senate and the House of Representatives and will be an Agreement under section 123 of the Atomic Energy Act of 1954. This Agreement, if it is approved by Congress in its present form, will override all other rights and duties under the respective national laws of India and the US, except that those will apply for the implementation of the 123 Agreement. Under US law, a treaty obligation if approved by Congress becomes the Supreme Law.

4. The fourth argument of Mr Shourie is that the PM has not lived up to his assurance about the strategic reserves on which we could fall back in the event of disruption of market supplies. This again is unfounded. Article 5(6) of the 123 Agreement conveys the US’s commitment to reliable supply of fuel to India consistent with the July 18, 2005 joint statement, which stipulates assured and full access to fuel our nuclear reactors under Safeguards. The US under the said Article is committed to seeking agreement with the US Congress to amend its domestic laws and work with friends and allies and to adjust practices of the Nuclear Suppliers Group to create the necessary conditions for India to obtain access to the international fuel market including reliable, uninterrupted and continual access to fuel supplies from entities in member states who are part of the Nuclear Suppliers Group (NSG). In fact, the 123 Agreement commits the US to assure continuous uninterrupted access to fuel supplies from any source anywhere available. Further, under article 5(6)(b):

• the US will take the following additional steps in incorporating assurances regarding fuel supply in the bilateral US - India Agreement on peaceful usage of nuclear energy under section 123 of the Atomic Energy Act of 1954, which will be required to be submitted to the US Congress because that would be an exception under the said act.

• US will join India in negotiating with IAEA an India-specific fuel supply Agreement.

• The United States will support India’s effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supplies over the lifetime of Indian reactors.

• In the event, despite this, if there is disruption, then India and US are committed to jointly convene a group of friendly supplier countries to restore fuel supply to India.

Article 5 incorporates the assurance of the PM of strategic reserves which we can fall back on in the event of disruption of fuel supplies. As far as references to section 102(13), section 103(4) and section 103(6) are concerned, they either relate to policy statements or to situations arising consequent upon violation of the 123 Agreement. There can be no assurance, under any valid contract, of supplies, in the event of a violation of the Agreement by a party, which seeks such supplies. However, the assurance of strategic reserves enables India to store strategic reserves for the lifetime of the reactors, mitigating any disruption of supplies.

5. The fifth objection relates to reference to the Hyde Act under which non- proliferation of nuclear weapons remains a vital objective. Mr Shourie perhaps has overlooked Article 2(4) of the 123 Agreement, which stipulates that nothing in this Agreement shall be interpreted, affecting the rights of the parties to use for their own purposes, nuclear material, non-nuclear material, equipment, components, information or technology produced, acquired or developed by them independent of any nuclear material, non-nuclear material, equipment, components, information or technology transferred to them pursuant to this Agreement. This Agreement shall be implemented in a manner so as not to hinder or otherwise interfere with any other activities involving the use of nuclear material, non-nuclear material, equipment, components, information or technology and military nuclear facilities produced, acquired or developed by them independent of this Agreement for their own purposes.

This means no steps can be taken under the national laws of any of the parties to interfere in the nuclear weapons programme and technology of the other party based on technologies and material, nuclear and non-nuclear, equipment and components and information or technology independent of the 123 Agreement.

6. Sixth, Mr Shourie argues that the Prime Minister in allowing American inspectors to roam around our nuclear facilities has failed to fulfil his assurance to Parliament. He, in this context, refers to article 10(4) and 12(3) of the 123 Agreement. Article 10(4) does not refer to American inspectors. It only talks about consultation measures to be agreed upon. Perhaps if the NDA comes to power, they may well choose to allow American inspectors, but that is for the NDA to deal with. Article 12(3) only talks of exchange of experts.

7. The last objection of Mr Shourie is again with reference to Article 8(2) of the Agreement between US and China, which is an Agreement between two nuclear weapon states. Mr Shourie says that India is not being recognized as a nuclear weapon state. This again is factually incorrect. The affirmation in the preamble of the 123 Agreement is: “Affirming that cooperation under this Agreement is between two States possessing advanced nuclear technology, both Parties having the same benefits and advantages, both committed to preventing WMD proliferation.”

Article 2(4), clarifies this position further. The 123 Agreement with India is in fact a unique Agreement which recognizes India’s status as a nuclear weapon state and without signing the NPT allows us access to all aspects of the nuclear fuel supply cycle to fulfil our nuclear fuel energy needs and requirements. It may also be mentioned that the fuel supply cycle assured in this agreement, to which the US has committed, is not found in any other US civil nuclear cooperation Agreement for peaceful use of nuclear energy including with those who are parties to the NPT and China. Further, there is no precedent of an IAEA Safeguards Agreement, which allows a party to take corrective measures in the event there is a disruption in fuel supplies. This has been specifically allowed in the 123 Agreement. This is set out in article 5(6)(c) of the Agreement, which allows India to provide for corrective measures in order to guard against withdrawal of Safeguarded nuclear material to ensure uninterrupted operation of its civil nuclear reactors in the event of a disruption of fuel supplies. This again is a unique provision not incorporated in any other Agreement between US and any other NPT or non-NPT country.

Besides, there are several provisions in the 123 Agreement, which provide us with enormous opportunities for collaboration with the US in a host of activities relating to research and development in the field of nuclear science, biological research, medicine, agriculture, industry, environment and climate change. And of-course cooperation in the field of thermal, nuclear fusion including multilateral projects and other areas of mutual interest as agreed upon. This opens the doors for transfer of technologies in each of these areas.

None of the objections raised thus far are tenable.