India reiterates ‘legally binding’ nature of 123 Agreement’s provisions

New York: Even as it signed a bilateral nuclear cooperation agreement with the United States on Friday, India sought to draw a line under assertions Washington has made about the “non-binding” nature of its fuel supply commitments by declaring that the “[123 Agreement’s] provisions are now legally binding on both sides once the Agreement enters into force”.

11 October 2008

India reiterates ‘legally binding’ nature of 123 Agreement’s provisions
Pranab Mukherjee signing statement links commercial deals to implementation of text

Siddharth Varadarajan

New York: Even as it signed a bilateral nuclear cooperation agreement with the United States on Friday, India sought to draw a line under assertions Washington has made about the “non-binding” nature of its fuel supply commitments by declaring that the “[123 Agreement’s] provisions are now legally binding on both sides once the Agreement enters into force”.

The agreement was signed at the State Department in a formal ceremony for which External Affairs Minister Pranab Mukherjee specially flew in. Secretary of State Condoleezza Rice signed the agreement on behalf of the U.S.

In a statement prior to the actual signing, Mr. Mukherjee noted that the Agreement was the “first step” to civil nuclear cooperation and trade between India and the United States. The Agreement, he said, was about civil nuclear cooperation “and reflects a careful balance of rights and obligations”. He then added: “The Agreement has been passed by the US Congress without any amendments. Its provisions are now legally binding on both sides once the Agreement enters into force. We look forward to working with US companies on the commercial steps that will follow to implement this landmark Agreement”.

In a second statement issued to the press after the signing, Mr. Mukherjee emphasised another key Indian position: “We intend to implement this Agreement in good faith and in accordance with the principles of international law and I am confident that the US will also do the same”.

These formulations, which took final shape after days of intense debate involving the Ministry of External Affairs, Prime Minister’s Office and the Indian Embassy in Washington, are intended to clarify four fundamental points considered important by the Indian side.

First, that India’s obligations under the 123 Agreement could not be separated from its rights and that the text itself reflected a “careful balance” between the two which was not to be disturbed.

Second, that India did not accept that the U.S. legislature had entered any reservations to the agreement. This did not mean Congress had not attached riders in passing HR 7081 – the law which approved the 123 Agreement -- but merely that India did not believe these allowed for any derogation of American commitments contained in the 123 text.

Third, that India regarded the 123 Agreement’s provisions as legally binding on both itself and the U.S., regardless of President Bush’s assertion in his letter to Congress on September 10 that the fuel assurances were only a political and not a legal commitment.

Fourth, that any commercial contracts with American companies would be possible once the agreement is implemented , obviously as per its legally binding provisions.

Taken together with the minister’s statement that India expects the U.S. to implement the 123 Agreement in accordance with the principles of international law, New Delhi has essentially served notice that American nuclear vendors cannot hope to do business in India unless the reactors they propose to sell come with legally binding fuel contracts as well as reprocessing consent.

India is likely to repeat these key formulations in the diplomatic note it will exchange with the U.S. at the time of the 123 Agreement entering into force.

Before the agreement can enter into force, however, HR 7081 requires the President to certify that it is the policy of the United States to work with members of the Nuclear Suppliers Group to further restrict transfers of equipment and technology related to uranium enrichment and reprocessing of spent nuclear fuel (ENR).

This restriction is not explicitly scripted to be India-specific but the U.S. has been pressing for a special ban on ENR equipment and technology to countries which are not signatories to the Nuclear Non-Proliferation Treaty. India is one of only three states who fall under that category. The NSG will meet again in November and it is understood that Washington will try and push for consensus on this issue, something it has not managed to do so far.

Even though such a policy runs counter to the U.S. promise of full civil nuclear cooperation with India and is seen by New Delhi as a breach of trust, Dr. Rice painted a rosy picture of a “vast potential partnership” between the two countries that could now “be fully realized”. In her remarks at the signing ceremony, she said that “what is most valuable about this agreement is how it unlocks a new and far broader world of potential for our strategic partnership in the 21st century, not just on nuclear cooperation but on every area of national endeavor”.

Mr. Mukherjee echoed the same theme of cooperation in diverse areas like defence and agriculture “gaining momentum” as a result of the signing of the nuclear agreement.