This puts to rest doubts that had arisen after the Barack Obama amendment was voted into the Hyde Act, qualifying that fuel supply to India would be commensurate with “reasonable reactor operating requirements”.

With the first couple of US drafts on the agreement unclear on meeting all fuel assurances listed in the Separation Plan which was agreed during US President George W Bush’s visit to India, there was considerable doubt here over Washington’s interpretation of the Hyde Act on this issue.

In fact, matters reached a point where the Department of Atomic Energy made it clear that it will not start serious negotiations on the IAEA Safeguards Agreement until the US position on fuel assurances in the 123 Agreement are in line with the Separation Plan. For India, the decision to place all civilian reactors under permanent safeguards is linked to US assurance on permanent fuel supplies.

So when Foreign Secretary Shiv Shankar Menon said in Washington that there was “considerable progress” in his talks with US Under Secretary of State for Political Affairs Nicholas Burns, fuel assurances was one aspect where this was visible. It’s learnt that both Secretary of State Condoleezza Rice and Burns have assured India that the Bush Administration will not go back on this commitment. This is the first time that Washington will be putting down such assurances in a bilateral nuclear cooperation agreement with any country. However, officials cautioned that no certainty must be attached until the final draft is negotiated.

With one more draft already exchanged ahead of a visit by Burns, apparently during the week starting May 20, the effort is to work on the ideas discussed during Menon’s visit to iron out differences over other tricky issues.

After talks at Cape Town and Washington, there is recognition on the Indian side that US negotiators cannot go beyond the Hyde Act while US agrees that the final shape of the agreement must be in line with its commitment for “full civilian nuclear cooperation” with India.

On the other key issue of reprocessing rights, it is now accepted that neither the Hyde Act nor any other law prevents US from giving consent on reprocessing to India. All that the law states is such transfers will be with US consent. Rice, in her letter to members involved in reconciliation of the Bill last December, had urged Congressmen not to ban such technology to India and advised that “it would not be appropriate to single out India, which is a responsible steward of its nuclear technology”.

As a result, no ban was placed. And given what the views of the Bush Administration are on this issue, the move now is to obtain a “permanent consent” for reprocessing through the agreement but leave the arrangements of such transfers for later. Tying up such arrangements take time. It took 12 years with Euroatom, over five years with Japan and similar timeframe for other countries. Besides this, other ideas like setting up a consultative mechanism that will get into action in case India tests a nuclear device are also on the table and likely to find a place in the agreement.

Down to 4 issues

• Testing: While US will have to stop cooperation in line with the Hyde Act if India tests, proposal being worked out is for a “consultative mechanism”.

• Right of return: Move to have a multi-layered consultative process to deal with consequences of testing like this particular right which allows US to take back all its supplies to India. While this will remain, it can be made difficult to implement.

• Safeguards: After an arrangement with IAEA, a separate safeguards arrangement will not be acceptable. India’s case appears strong here.

• Fuel assurances: US will have to help build a strategic fuel reserve for lifetime supply to Indian reactors.