U.S. - India Civil Nuclear 123 Agreement

Mitesh Agrawal
February 20, 2015

Submitted as coursework for PH241, Stanford University, Winter 2015


Fig. 1: U.S. President G. W. Bush and India's PM Dr. Singh at the event of their joint statement on civil nuclear cooperation (Source: Wikimedia Commons)

An agreement which establishes co-operation as a prerequisite for nuclear deals between the United States and any other nation as described under the Section 123 of the United States Atomic Energy Act of 1954 is called a "123 Agreement". [1] Such an agreement was reached upon by United States of America and the Republic of India in 2008 and is known as the U.S. - India Civil Nuclear Agreement. The deal is considered of huge worldwide political significance as the terms of the deal add a new dimension to international non-proliferation efforts. The deal was first introduced in a joint statement released by then U.S. President Bush and Indian Prime Minister Manmohan Singh in 2005 and the deal took more than three years to materialize which lifts a three decade U.S. suspension on nuclear trade with India. [2] As a part of this deal, the Nuclear Suppliers Group (NSG) was approached by the United States to grant a waiver to India which made India the only known country with nuclear weapons which is not present in the Non-Proliferation Treaty (NPT) but is still allowed to conduct nuclear commerce deals with other countries. [3] The U.S. administration under George W. Bush in 2008 petitioned for the US Congress to legislate a waiver to allow for co-operation with India. This enabling legislation known as the Hyde Act was passed in US Congress by an overwhelming majority in December 6, 2006. This legislation allowed the administration to navigate certain requirements of the 123 law to permit civil nuclear co-operation between US and India. [4]

Overview of the deal

Listed below are certain challenges which the deal faced followed by the provisions made in the deal to navigate these questions and challenges.

  1. India's right to conduct nuclear tests was one thing the Indian negotiators fought for. Although India pledged in July 2005 to continue a nuclear testing moratorium, New Delhi opposed any explicit provision in the 123 agreement terminating cooperation if it conducts a nuclear test in the future. Such termination provisions are standard features of U.S. agreements with non-nuclear-weapon states. The India-U.S. agreement does not contain the word 'test' and it is suggested that countries will maintain cooperation in "accordance with its national laws." [6]

  2. Another major point on which discussions were held was the point of fuel re-processing. Re-processing involves separation of plutonium from nuclear fuel after it has been used in a reactor and plutonium can be used to make nuclear weapons and is as such considered a proliferation risk. The agreement does grant consent to India for fuel reprocessing although, as mentioned before, it has to be under IAEA safeguards in a new national reprocessing facility. [6]

  3. One of the unique points of this 123 agreement was the feature of inclusion of fuel assurances for India. In this deal, US has assured India on fuel supply in case of a fuel disruption and negotiating with IAEA on India specific fuel supply agreement. This is an important feature of the India-US agreement as generally, 123 agreements do not contain fuel guarantees. [6]


Currently, only 3% of India's energy needs are met via nuclear sources accounting to about 3700 MW. In its 2020 vision for India's energy sources, it plans to produce about 20,000 MW through nuclear energy. [7] With India's uranium supplies very limited, India needs to import uranium to support the above 2020 vision to come to fruition.

The Indo-US nuclear deal had to pass through various stages before it reached where it is now. These include the Indian Nuclear Separation Plan (March 2006), the Hyde Act (December 2006), the 123 Agreement (August 2007), India-IAEA safeguards agreement (August 2008), and ultimately a waiver by the NSG (September 2008). [6] In conclusion, India's acceptance into the nuclear club, even though through un-orthodox ways will pose as many questions as it will provide answers in front of the world's nuclear powers. It will be an interesting study to see the effect of this deal on the future of non-proliferation regime and strategic stability of the east.

© Mitesh Agrawal. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] C. E. Behrens, "Nuclear Nonproliferation Issues," Congressional Research Services, Issue Brief for Congress, IB10091, May 2002.

[2] Z. Mian et al., "Fissile Materials in South Asia and the Implications of the U.S.-India Nuclear Deal," Science and Global Security 14, No, 2-3, 117 (2006).

[3] M. V. Ramana, "The Indian Nuclear Industry: Status and Prospects," Centre for International Governance Innovation, Waterloo, ON, Nuclear Energy Futures Paper No. 9, December 2009.

[4] "Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006," United States Public Law 109-401, 18 Dec 06 (22 U.S.C. 8001 et seq.).

[5] J. Müller, "The Signing of the U.S.-India Agreement Concerning Peaceful Uses of Nuclear Energy," Göttingen Journal of International Law 1 179 (2009).

[6] M. Sultan and M. B. Adil, "The Henry J. Hyde Act and the 123 Agreement: An Assessment," South Asian Strategic Stability Institute, SASSI Policy Brief 11 September 2008.

[7] P. Garg, "Energy Scenario and Vision 2020 in India," Journal of Sustainable Energy and Environment, 3, 7 (2012).