ABC of 123 Agreement

What is 123 Agreement?

Section 123 of the United States Atomic Energy Act of 1954, titled "Cooperation with Other Nations", establishes an agreement for cooperation as a prerequisite for nuclear deals between the US and any other nation. The US has entered into several (20+) other agreements under this section. United States-India Peaceful Atomic Energy Cooperation Act provides the legal basis for the Section 123.

Salient features of this agreement:
1. US and India will enter into a peaceful nuclear co-operation for civil purposes. US will help India acquire nuclear supplies to meet its growing energy demands. This is especially significant since India was a virtual pariah in the nuclear world because of its refusal to sign the NPT.
2. The above agreement will not impinge in any way on India’s other nuclear programme.
3. The agreement will last for 40 years and either party can terminate it giving the other notice of one year.
4. In the event that the US terminates this co-operation, US will help India locate other suppliers amongst NSG (Nuclear Suppliers Group) who will continue to supply to India.
5. In the event of termination, the party choosing to terminate may seek to recover all the nuclear material that has been transferred as part of this agreement. However, if such a case occurs, the other party may claim adequate compensation for the loss that may occur as part of this recall.
6. India will have to bring such civilian nuclear facilities that have been developed using the material transferred as part of this agreement, under the purview of the IAEA.

Benefits to the US:
1. India and China, the world’s two fastest growing economies have been clamoring for more than their fair share of the world’s energy resources. With India looking at nuclear energy to part fulfill its energy requirements, it will help the US secure its energy needs from fossil fuels.
2. US gets a strong ally in the region and a strong counter balance to China.
3. US and India share common problem of terrorism and both are vary of a strong China. Hence it is in US interest to have India on its side.
4. US expects that the $150 billion investment that India plans in upgrading its nuclear energy portfolio from 4000 MWe to 20000 MWe, US will get a share of the pie.

Benefits to India
1. India gets access to world class nuclear technology and supplies without worrying about giving up its closely guarded position that it will not stop its nuclear program and will not sign the NPT.
2. The repeat of 1974 situation is prevented by building in the stoppage of supply clause in the agreement.
3. India has a huge import reliance on the fossil fuels and to meet its growth needs, nuclear energy provides a safe way going forward.


Grounds for opposition in India:

1. Left parties hold that India is giving up its sovereign right to remain non-aligned by signing the 123 agreement. In embracing unto US, India may lose the right to independently decide the future course of its nuclear program. This objection is founded on the grounds that Hyde Act requires the US president to certify each year before congress that India is conforming to the requirements of the 123 agreement. In the eventuality that US feels India is not keeping its part of the bargain, the US may recall all its technical and material support that it may have provided to India. Further India will have to bring its civil nuclear facilities that use the material supplied in this agreement, under IAEA’s purview.
2. The other key element of the argument against the treaty is that by signing this agreement, India would be forced to toe the US line in foreign policy matters as it was in recent case related to vote against Iran.
3. Some scientists have written to the parliament that by signing this agreement, India may be actually sidelining some of the research that is currently being undertaken to explore usage of Thorium in place of enriched Uranium as the nuclear fuel. India has the world’s largest reserves of Thorium and relies on external supplies for Uranium as it has very little reserves of Uranium.

My view on the agreement:
1. The view that India is giving up its non-aligned stance is misplaced on two counts. Firstly the NAM has lost its relevance in the modern day scenario when world is no longer bipolar. NAM has lost steam since the late 80s when USSR was broken up. Secondly, India has to safeguard its interests. US has always done that and it is not suddenly that US has woken up and decided to take sides with India. They see lot of opportunity in this for their own self interest. So should India. Further, there are enough safeguards built into the agreement to guard against the 1974 situation.
2. India can still follow its own Foreign policy without succumbing to the US pressures. In case of Iran, India has still not been able to close the gas deal even after such a long time. The disagreement on price and the risk of the pipeline going though Pakistan are preventing any sort of a solution in the short term. The foreign policy towards Iran took this aspect in mind and it was not just arm twisting that led to India voting against Iran in the IAEA. As a matter of fact, almost all the countries voted against Iran at IAEA. In fact, nuclear co-operation will bring India the much needed recognition amongst the Nuclear Suppliers Group.
3. There is not enough evidence to either refute or accept the claim of the scientists. It is a genuine concern and Indian government should definitely not stop the research on using Thorium as it is in India’s national interest to reduce any kind of external reliance as far as its energy needs are concerned.