NEW DELHI: India and the United States are looking at a range of proposals aimed at bridging their differences on the 123 agreement but it is not clear how the "considerable progress" claimed by Foreign Secretary Shiv Shankar Menon in Washington on May 1 will translate into textual consonance when negotiations resume later this month.

The next round of talks is slated to begin here on May 21.

One of the most serious obstacles in the way of a final agreement on bilateral civil nuclear cooperation is the U.S. insistence on including a "right of return" clause in the 123 agreement. Under this, India would be obligated to return any imported equipment or material in the event of the agreement being terminated.

The inclusion of such a clause is mandated by Section 123(a)(4), for which no specific waiver was included in the Hyde Act passed last December. Indian officials say that although they were aware of this "right of return" requirement from the outset, they did not focus their attention on it directly because the main preoccupation of the Indian side was to push for the exclusion of any legally-binding reference to a future Indian nuclear test.

"All or nothing"

Thus, though the draft 123 omits any direct reference to detonation by India, the "right of return" issue remains and has now emerged as a major headache with the U.S. side declaring that a legislative waiver for this requirement is not possible.

One "creative" end-run around this requirement that is being looked at is to "cushion" the "right of return" so that it would be practically impossible for the U.S. to ever invoke it. In other words, the "right of return" could be drafted in such a way that it would require the "all or nothing" return of imported American equipment and material. In other words, instead of being able to demand the return of one or two critical components — thereby disabling an entire nuclear plant — the U.S. would have to ship back each and every U.S.-origin or U.S.-obligated item and component, including the concrete, spent fuel, radioactive material, contaminants etc. and pay India "fair market compensation" for the same.

A second "cushion" might be an elastic timeframe for the exercise of this right by the U.S. in the event of an Indian nuclear test.

But even these proposals would involve India agreeing to give a bilateral legal character to its unilateral moratorium, something the Manmohan Singh Government has been reluctant to accept. Some officials feel that one way to mitigate this problem might be to qualify the continuation of India's unilateral moratorium by a reference to all other countries with "advanced nuclear technology" also abiding by a nuclear test moratorium. Such a qualification would be fully consistent with the July 2005 joint statement. India had said it was "ready to assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States" and it is only in that context that its moratorium is mentioned. In other words, India's offer of "continuing" its unilateral moratorium was explicitly made as part of the enumeration of what the "responsibilities and practices" of other leading countries with advanced nuclear technology consist of.

The incorporation of such a qualification would still expose India to the danger of the U.S. invoking its "right of return" following an "unprovoked" Indian detonation. But if another country with advanced nuclear technology were to ever conduct a nuclear test, India would not be under any obligation to continue its own moratorium and should thus not be subject to any penalties.

New proposal

On "full" civil nuclear cooperation — a problem area because of America's refusal to include the sale of enrichment and reprocessing technology in the scope of the agreement — a new proposal being looked at is to use language that is "neutral," neither ruling out such cooperation nor explicitly ruling it in. The U.S. side says that its official policy is not to provide such equipment or technology to any other country and that it would not be discriminating against India by excluding the fuel cycle from the purview of the July 2005 deal. Accordingly, the suggestion has been made that the 123 agreement could state that any cooperation between the two countries in this field would take place in a manner consistent with each side's national policies in this regard.

At the same time, Indian officials caution that even if the U.S. has a policy of not selling such equipment to any country, it must provide an assurance that it would not stand in the way if some other Nuclear Suppliers Group member wishes to sell safeguarded reprocessing or enrichment technology, equipment or components to India in a manner consistent with its own national policies. In other words, the proposed NSG rule change must not exclude "full" civil nuclear cooperation.

While a number of ideas were thrown around during Mr. Menon's meeting with Under Secretary Nicholas Burns in Washington, D.C., earlier this week, including on reprocessing consent rights, senior Indian officials here say it is difficult to evaluate the merit of any one proposal without considering the "overall package" that emerges.

Though both men are travelling, officials said Mr. Menon had already briefed National Security Adviser M.K. Narayanan in London about the Washington talks. But a full evaluation of where the process stands would only be possible when the Foreign Secretary and other senior officials return to New Delhi on Friday.

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