'The U.S. knew India had no more flexibility'

According to a senior Indian official, this is the core of the nuclear deal as far as the United States is concerned: “If they hadn’t agreed, then the deal would have collapsed and for another 20 years no one in India would be able to do anything with them... For a range of issues on which you now do business… in the Asia-Pacific, for example, they would have to count you on the other side.”

25 July 2007
The Hindu

‘U.S. knew India had no flexibility’

Siddharth Varadarajan

NEW DELHI: India and the United States were able to finalise the text of their nuclear cooperation agreement — also known as the 123 agreement — largely because Washington understood that the Indian side had no more flexibility and shifted gear to accommodate India’s concerns, senior Indian officials told The Hindu.

The officials said the fact that the United Progressive Alliance Government had no more room for manoeuvre was underlined by Prime Minister Manmohan Singh in his meeting with President George W. Bush at Heiligendamm and Under Secretary Nicholas Burns in Delhi last month. “The law of unintended consequences also operated,” said an official, with the strong opposition inside India serving to corroborate the Prime Minister’s assertion.

With the U.S. being told that India had “nothing more to give,” a deal was reached because “politically, the will to do it was very strong, from the very top,” the official said.

The U.S. had a strong economic incentive to complete the deal, given the billions of dollars India was likely to spend on new energy projects in the years ahead, the officials said.

“Clearly, the U.S. is calculating that the higher the technology involved, the greater will be the share for American companies.” But the officials concede, strategic considerations were not far behind. “If they hadn’t agreed, then the deal would have collapsed and for another 20 years no one in India would be able to do anything with them,” said one official. “For a range of issues on which you now do business… in the Asia-Pacific, for example, they would have to count you on the other side.”

Belying media reports of dramatic swings during the five days of negotiations, the senior officials say the outstanding issues were resolved sequentially one by one.

“When we went in, all the major issues were wide open and we weren’t sure there would be a deal”, said an official. But by the end of the first day of the marathon negotiating session, the fuel supply assurances issue was resolved. The second day produced an agreement on the question of reprocessing, the third on the termination and ‘right of return’ clauses and the fourth on fallback safeguards. The fifth day, say the officials, was used to produce and vet a consolidated text of the complete draft 123 agreement.