When he signed the Hyde Act in December last year, US President George W. Bush had said, “My approval of the act does not constitute my adoption of the statements of policy (in sections 103 and 104) as US foreign policy.” The text of the Indo-US 123 agreement, which lays out the nuts and bolts of civilian nuclear cooperation authorized by the Hyde Act, shows the US leader was true to his word.
The Hyde Act's statements of policy call for the US to block enrichment and reprocessing technology to India. They call for India’s policy on Iran to be brought into line with the US. It pushes for limits on India’s nuclear fuel reserves. None of these are in the 123 agreement.
In the broad scheme of things, the 123 shows skillful negotiations allowed both sides to fulfill different political parameters. On the US side, it was to stay within the binding parts of the Hyde Act. On the Indian side, it was to stay within the March 2 plan separating India’s nuclear programme. Both Bush and Manmohan Singh had to find means to persuade their bureaucracies to interpret political-level assurances given in the July statement into hard official text.
Indian and US diplomats are confident this is a “win-win” for both sides. The last round of talks had narrowed differences down to a few crucial issues.
First, and most contentious, was the right of India to reprocess spent fuel. Reprocessing has to be done at a higher level of safeguards, which existed in none of India’s existing facilities. India's offer to build a separate facility satisfied US’s desire for stronger assurances against the possibility of theft or diversion. Both sides made a gesture to each other: the US conceded a theoretical right, India promised to exercise it in a facility that doesn't yet exist.
Second was what could happen if India decided to carry out a nuclear test. Since it was impossible to change the US law that promised to break off cooperation if such a test was held, New Delhi's strategy had two prongs. One was to make breaking such ties difficult. So the 123 agreement ensures any US action will not be automatic: the two sides will consult and take into consideration the security environment at the time. The US will also keep in mind the need to keep a reactor cycle from being interrupted and compensate India adequately for any materials it took back under the “right of return”. Two, and more important, was to ensure the US did not interfere in India getting such nuclear fuel supplies from somewhere else. This has been guaranteed under the 123’s Articles 5.6 and 14.8. “This means India won’t be inclined to get US nuclear fuel — but our preference had always been for other countries,” said one Indian official.
Indians got other reassurances. On enrichment and reprocessing technology, the US agreed to “forward-looking language” whereby the two sides would work out such arrangements. It also won a clause of “non-interference” in India’s strategic programme.