India and the US are making last-ditch efforts to break an impasse over a few ticklish issues at critical talks on the 123 agreement to implement their landmark civil nuclear deal.
A team of senior Indian officials including National Security Advisor MK Narayanan, Department of Atomic Energy Chairman Anil Kakodkar and Foreign Secretary Shivshankar Menon are having informal parleys at various levels Monday before plunging into a formal round on Tuesday.
The Indian team is expected to meet with US National Security Advisor Stephen Hadley at the White House Wednesday after a dinner Tuesday night by the key US negotiator on the nuclear deal under secretary of state for political affairs, R Nicholas Burns. He also "hosts" Tuesday's talks.
Both sides claim to be "making steady progress" on finalising the 123 agreement to implement the deal that would allow resumption of nuclear commerce between the two countries after a gap of 30 years. But a compromise formula has eluded them so far.
The sticky points essentially boil down to India's insistence on its right to reprocess US supplied nuclear fuel, conduct a nuclear test and guarantees for continued supply of fuel for the 14 civil reactors it has agreed to place under international safeguards under a separation plan. Eight other reactors designated military would not be subject to inspections.
Monday's parleys intriguingly begin with a closed door meeting with experts at the Carnegie Enodwment for International Peace, a leading US think tank which recently advised the US Congress not to "budge from the law it established last year to set parameters for a US-India nuclear cooperation agreement".
Testifying before a House committee recently George Perkovich, vice president for studies global security and economic development, said, "...The Hyde Act was imperfect, certainly from a non-proliferation point of view, but it was a decent balance of conflicting interests.
"Now India is pushing hard to depart from or alter the deal. The Administration may be tempted to yield to India or to fudge the matter in ways that would allow India to circumvent the minimal non-proliferation limits in the Hyde Act.
"Congress should stand firm. If it does not, many states will conclude that the rule-based non-proliferation regime is nothing but a sham - that US policy in truth is to bend the rules for itself and its friends such as India, while twisting other peoples' arms to impose the rules on states America does not like," Perkovich advised.
The Hyde Act is indeed the bone of contention with the Indian side contending that the Hyde Act restrictions go far beyond the scope of the joint statements issued by Indian Prime Minister Manmohan Singh and US President George Bush on July 18, 2005 and March 2, 2006 that set the ball rolling for the deal.
The US side, on the other hand, has been pleading its unwillingness or inability to sidestep restrictions placed on India by the act passed by the US Congress last December approving the deal in principle.
The US Congress has to again approve the final 123 agreement in an up or down vote before the nuclear deal is implemented. Making any changes in the law now are considered an uphill task with the Democratic controlled Congress at loggerheads with President George Bush though the India deal has broad bipartisan support.
Ahead of the talks, Washington has signalled its readiness "to resolve the remaining outstanding issues on the 123 agreement", with an unusual State department statement expressing confidence that "that with continued hard work, flexibility, and good spirit, we will reach a final agreement."
The two sides have also sought to give a political push to the long-stalled deal with Singh speaking to Bush Wednesday ahead of the talks. Bush is equally if not more keen on the deal that may go down as a major foreign policy success for the embattled president on par with Richard Nixon's opening up to China in 1972.
The two leaders also had a brief exchange on the sidelines of the G-8 summit in Germany where the Indian side came up with a proposal for setting up a stand-alone dedicated facility for reprocessing US-origin fuel as a way out of the impasse.
Both sides are keen to conclude the deal at the earliest as there is only a small window left to present the 123 agreement to the Congress for final approval before it goes into another election cycle and President Bush leaves office in January 2009.
The composition of the Indian delegation that besides Narayanan and Kakodkar will include the ambassador to US Ronen Sen, New Delhi's envoy to Singapore and an expert in nuclear issues S. Jaishankar, and Venkatesh Varma, an official from the PMO, indicates a desire to get things going by keeping all the stakeholders in the loop.
The US too is leaving no stone unturned. Secretary of State Condoleezza Rice has cancelled a scheduled trip to the Middle East and Congo, while the meeting between two national security advisers is taking place at the White House.
Riding on the nuclear-and-technology proposal are tens of billions of dollars in potential deals for the American business in energy, aircraft, infrastructure and procurement sectors.