INTRODUCTION

The U.S. Congress on October 1, 2008, gave final approval to an agreement facilitating
nuclear cooperation between the United States and India. The deal is seen as a watershed in
U.S.-India relations and introduces a new aspect to international nonproliferation efforts. First
introduced in the joint statement released by President Bush and Indian Prime Minister
Manmohan Singh on July 18, 2005, the deal lifts a three-decade U.S. moratorium on nuclear
trade with India. It provides U.S. assistance to India's civilian nuclear energy program, and
expands U.S.-India cooperation in energy and satellite technology. But critics in the United
States say the deal fundamentally reverses half a century of U.S. nonproliferation efforts,
undermines attempts to prevent states like Iran and North Korea from acquiring nuclear
weapons, and potentially contributes to a nuclear arms race in Asia. "It's an unprecedented
deal for India," says Charles D. Ferguson, science and technology fellow at the Council on
Foreign Relations. "If you look at the three countries outside the Nuclear Non-Proliferation
Treaty (NPT)-Israel, India, and Pakistan-this stands to be a unique deal."

A number of issues must be resolved before U.S. companies can start nuclear trade with
India. The Indian parliament has yet to approve legislation granting civil liability protection
to U.S. energy companies. India would also like the United States to relax some of its
restrictions on technology transfer to India. But India appears intent to move ahead: In July
2009, New Delhi designated two sites for U.S. companies to build nuclear reactors in India.

SUPPORTER’S OF AGREEMENTS
The historic 86-13 Senate endorsement of the India-US civil nuclear deal came after a two-
and-a-half hour debate in which only seven speakers took part. This agreement with India is
as important as it is historic. It enables the United States and India to chart a new course in
relations between our two great democracies. There are compelling geopolitical reasons to
move forward in this relationship. India has become a major factor in the world, and it
increasingly sees itself in concert with other global powers, rather than in opposition to them.
It is an opportunity to build a strategic partnership with a nation that shares our democratic
values and will exert increasing influence on the world stage.

OPPONENTS:-

It’s a gravely flawed agreement that will almost certainly expand the production of nuclear
weapons by India and help dismantle the architecture of the Nuclear Non-Proliferation Treaty
(NPT). Never has something of such moment and such significance and so much importance
been debated in such a short period of time and given such short shrift. The US has deep and
very important ties with India, a great leader in technology that needs to be our ally on a
number of issues. Many in our high technology community were originally born in India. But
we draw the line on non-proliferation issues given its serious consequences. The agreement
would make India a defacto nuclear weapons power without the responsibilities of an NPT
signatory. India gets to eat its cake and eat it too. This is not a non-proliferation enhancement
act. It is non-proliferation degradation and weakening act. There is nothing in this agreement
to prevent India from continuing, on a parallel path, its robust nuclear weapons programme.
India is allowed to continue producing bomb-making material and is free to expand its
arsenal of nuclear weapons. Even worse, there is nothing in this legislation to prevent India
from resuming nuclear weapons testing.

$150 BN ‘OPPORTUNITY’

The US-India Business Council (USIBC) has hailed Congressional approval of the India-US
civil nuclear deal, saying the “historic vote” would open a “wide vista of opportunity” worth
more than $150 billion.”The benefits will be many and the impact profound, beckoning a new
era in US-India relations,” said Ron Somers, president of the industry association comprised
of 300 of America’s top US companies committed to a long-term partnership with India.“By
enabling US-India civil nuclear cooperation, India not only joins the international nuclear
non-proliferation mainstream, but now has the opportunity to achieve energy security, while
protecting the global environment,” he said. “A massive scope for commercial opportunity
between US and Indian companies will also be the result, valued at more than $150 billion
over the next 30 years, spurring a revival of the nuclear power industries of both countries
that will create as many as a quarter million high-tech US jobs for generations to come,”
Somers said.“Passage of today’s legislation clears the way for US companies to participate in
India’s civil nuclear opportunity,” Somers, said. “This sets US-India relations on a course that
will shape the democratic and economic destiny of the 21st Century.”
USIBC hailed the “historic vote ending 34 years of a ‘technology denial regime’ imposed
against India, opening a wide vista of opportunity for US-India collaboration in commerce,
civil nuclear research, technology transfer and nuclear fuel supply – essential inputs to power
India’s dynamic, fast-growing economy.”On the operational level, the Congressional
ratification of the implementing 123 Agreement sets the parameters for US Industry
participation in India’s civil nuclear build-out, but on a symbolic level represents a historic
breakthrough, it said It would shore up “a durable foundation upon which US-India relations
will flourish and America’s partnership will deepen with the world’s largest free-market
democracy,” the business advocacy organisation said

CHRONOLOGY - TWISTS AND TURNS

Here is a timeline of some key developments over the past three years:

* July 2005: Prime Minister Manmohan Singh and U.S. President George W. Bush agree in
principle to a landmark civilian nuclear cooperation deal. It reverses 30 years of U.S policy
opposing nuclear cooperation with India because it developed nuclear weapons and never
signed the Non-Proliferation Treaty, or NPT.

* March 2006: Bush pays a three-day visit to India during which the two countries agree on
India's plan to separate its civil and military nuclear reactors, a key requirement for the deal
to go through.

* Dec. 2006: U.S. Congress overwhelmingly approves the deal. Three other approvals --
from the 45-nation Nuclear Suppliers Group, the International Atomic Energy Agency
(IAEA) and a second time by Congress -- are still needed before nuclear transfers to India can
actually take place.

* Dec. 2006: Bush signs the law approved by Congress, which makes changes to the U.S
Atomic Energy Act. Analysts say the pact could be fully approved in roughly six months.

* July 2007: The two countries announce finalisation of the deal after months of tough
negotiations on a bilateral pact. India had objected to what it said were new conditions in the
agreement unacceptable to it.

* Aug. 2007: Text of the bilateral pact, called the 123 agreement, is unveiled
simultaneously in both countries. Indian analysts say it meets most of New Delhi's demands,
but communist allies of the government coalition threaten to withdraw support over the pact,
saying it compromises India's sovereignty. Singh defends the deal as crucial to India's
prosperity.

* July 9, 2008: India's left withdraws support for the government, and calls for a vote of no
confidence. India submits a draft nuclear safeguards accord to the IAEA governors for
approval, despite earlier assurances it would wait to do so until after winning the confidence
vote.

* July 10: Agreeing to demands from the left, Singh calls for a vote of confidence in his
government.

* July 22 - Singh wins confidence vote.

* Aug. 1 - IAEA governors approve India nuclear inspections plan.

* Sept. 6 - The 45 nuclear supplier states approve the U.S. nuclear deal, clearing a key
international hurdle.

* Sept. 27 - U.S. House of Representatives approves deal.

* Oct 1, 2008: Senate passes the approval bill 86-13.

*Oct 8,2008 - President Bush signs legislation to enact the landmark US-India civilian
nuclear agreement - The 123 Agreement between India and US is finally operationalized.

*Oct10,2008 - Deal is signed by External Affairs Minister Pranab Mukherjee and his
counterpart Secretary of State Condoleezza Rice in Washington D C.

INDIA – US NUCLEAR DEAL – The Economical Benefits

Economic benefits to US

If India sets up 10 large size nuclear power plants, which is its intent in next 15 years, India
will import technology and hardware from US for at least half of these projects (technology
for the remaining may come from elsewhere). Each of these plants at a green field site will
cost about $4 billion. In short, orders worth $15-20 billion could be placed with the US
companies in next 6 to 8 years. Remaining orders may go to France, Germany, Canada and
UK. Fund for these installations will come to India either in form of FDI or soft &
commercial loans. Banks and equipment manufacturers abroad will be delighted to make this
amount available to India. In return India will pay it back with goods and services export, in
the same way China did it for the past 25 years. It is a win-win situation for the US lenders
and US suppliers. Further expansion of business dealings on both sides will follow.

Another example of emerging Indo-US co-operation is in the area of aerospace industry.

Order for $8 Billion worth of commercial airplanes has been placed with Boeing of Seattle.
Another big order for 125 military planes is on the way. US parliamentarians have to work
these big business deals in their thinking prior their vote.

The high tech manufacturing industry is at a take off stage in India. In last 3 months,
announcements by big US companies totaling $7 billion dollars investment have been made.
This has gone far beyond India’s expectations. This sector together with IT services and BPO
will power the US industry and businesses into higher profitability and help India accelerate
its growth.

Co-operation in auto parts, pharmaceuticals, R & D and defense industry cannot be ruled out.
For each of these US is looking for a low cost supplier, that could be alternative to China.

Economic benefits to India

There is an urgent need in India for capital to build its infrastructure and manufacturing base.
And there is only one source to get it i.e. US & Europe. US and Europe at this moment are
content with sending capital to China to supply them with consumer goods. The former very
cleverly had avoided exporting manufacturing technology to supply high priced, high
technology capital goods to China. This component together with auto-parts, pharmaceuticals
and computer hardware could herald India into big leagues in ten years and beyond.
Commercial Aircraft manufacture, ship building, factories to make giant power plants, steel
making plants, mining & drilling hardware, petroleum & petrochemical plant building
facilities could be ultimately shared with India. The latter within ten years will have a
workforce sufficiently skilled to undertake all the foregoing. It will be beneficial to US.
Labor costs in India, will always stay a third of US, and European costs. That will make India
an ideal candidate for this technology transfer.

Opportunity of the KPO (Knowledge Process Off-shoring) is knocking at India’s door. Indian
graduates of Science and Engineering will play a major role in this expansion. In about 5
years KPO Off-shoring will grow immensely. India stands to benefit most from it. Thanks to
the edge, Indian science & technology graduates have established.

TERMS OF THE DEAL

The details of the deal include the following:

 India agrees to allow inspectors from the International Atomic Energy

Association (IAEA), the United Nations' nuclear watchdog group, access to its
civilian nuclear program. By March 2006, India promised to place fourteen of its
twenty-two power reactors under IAEA safeguards permanently. Teresita Schaffer,
director of the South Asia program at the Center for Strategic and International
Studies, says these will include domestically built plants, which India has not been
willing to safeguard before now. India has promised that all future civilian thermal
and breeder reactors shall be placed under IAEA safeguards permanently. However,
the Indian prime minister says New Delhi "retains the sole right to determine such
reactors as civilian." According to him: "This means that India will not be constrained
in any way in building future nuclear facilities, whether civilian or military, as per our
national requirements." Military facilities-and stockpiles of nuclear fuel that India has
produced up to now-will be exempt from inspections or safeguards.

 India commits to signing an Additional Protocol (PDF)-which allows

more intrusive IAEA inspections-of its civilian facilities.

 India agrees to continue its moratorium on nuclear weapons testing.

 India commits to strengthening the security of its nuclear arsenals.

  India works toward negotiating a Fissile Material Cutoff Treaty
(FMCT) with the United States banning the production of fissile material for weapons
purposes. India agrees to prevent the spread of enrichment and reprocessing
technologies to states that don't possess them and to support international
nonproliferation efforts.

 U.S. companies will be allowed to build nuclear reactors in India and

provide nuclear fuel for its civilian energy program. (An approval by the Nuclear
Suppliers Group lifting the ban on India has also cleared the way for other countries to
make nuclear fuel and technology sales to India.)

LITERATURE REVIEW

Krishnaswami S (2008) The eagerness of the Bush administration for moving ahead
with the deal being reflected through the sentiments expressed from time-to-time by U.S.
officials and recently through U.S. Secretary of State Condoleezza Rice’s statement that “it is
a landmark agreement which is good for both sides and we will continue to work on that
agreement” has also allowed people in India to discuss and probe the reasons of such
significance of the deal for the United States. There is no denying the fact that India’s
relations with the United States have entered a new phase in the present era. In fact, a decade
before no one could have imagined that the United States would be so keen to develop very
close ties and a strategic partnership with India, and that U.S. officials, particularly U.S.
Secretary of State Condoleezza Rice, would opine that the United States aims to assist India
emerge as a major power in the twenty-first century.

Mary K (2007) The U.S. interest in improving its relations with India was also
reflected in the U.S. desire of motivating India to play a global role and acquire its place in
the diplomatic world by becoming a strategic partner of the United States, and to fulfill the
U.S. global agenda and interests. As a result of these expectations, and America’s strategy to
rope in India as a (junior) partner to fulfil its global designs, the civil nuclear deal came in to
existence. The Bush administration in view of India’s problems about the flow and continuity
of the nuclear fuel has emphasized that the 123 Agreement (the present nuclear deal, named
for a clause in the Atomic Energy Act), is meant to provide India with the means to produce
clean energy, a major source to sustain India’s economic growth and also to curb the
emission of gases responsible for the global warming. It is also being seen as an act of tacit
recognition of India as a responsible nuclear power by the United States.

International Energy Agency (2004) One of the biggest constraints for the continuing
success of India’s fast-growing economy is the electricity shortage. Nuclear energy, which at
present accounts for only about 3 percent of India’s total electricity generation, is an
attractive alternative to coal and expensive imported oil and gas. The fourteen nuclear power
plants India has agreed to put under International Atomic Energy Agency (IAEA) safeguards
exemplify approximately 3,000 megawatts or 3 gigawatts of generating capacity. By 2020,
India plans to add another 12-16 gigawatts of nuclear generating capacity to increase its
current capacity. As presently nuclear power plays a very marginal role in India’s growth,
therefore in some quarters it is also being felt that even by 2020, nuclear power will
contribute only about seven percent of India’s total generating capacity and thus would make
only a very marginal difference in India’s electricity scene. It is also being argued that though
the nuclear power could help India in addressing its energy

Tongia R (2003) Unfortunately, though, 17 percent of the world’s population resides in

India but it has a very trivial portion of the world’s oil and gas reserves. Therefore in the
absence of a reliable source of electricity, industries and households mostly are dependent on
scarce and costly energy sources like petroleum, natural gas and coal to produce electricity to
meet its requirements. In view of India’s dependence on imported oil, gas and coal to produce
electricity which is not a very practical alternative for meeting India’s rapidly increasing
electricity and energy needs, it is being opined that these limited sources, besides hampering
India’s growth and development, would also add to India’s mounting pollution problems.

David R (2006) The U.S. stand towards the nuclear deal with India in the opinion of
some scholars presents agood case of the double standard, however U.S. policymakers have
not only rejected this argument but also said "We treat India, a democratic, peaceful friend,
differently than we treat Iran and North Korea and we're very happy to say that. India is
inviting the IAEA in, Iran is pushing the IAEA out. India is playing by the rules. Iran is not.
If that’s a system of double standards, we're very proud to establish that double standard on
behalf of a democratic friend."

Paul T. V (2007) Actually the U.S. move is driven by both strategic and economic
considerations. Strategically, Washington perceives India as a potential counterweight to
China, and by improving the nuclear relationship it aspires to bring changes in political
relations between the two states. In economic terms, the United States would like to help
India build a number of nuclear power reactors to fulfil the energy needs of its fast-growing
economy and cut the dependence on pollution-creating hydrocarbon fuels. As India is
expected to order several nuclear power reactors, therefore ultimately U.S. companies would
earn benefits from such sales to India.

Krishnaswami S (2007) A group of U.S. non-proliferation specialists expressing their

apprehensions and concerns about the deal wrote to members of Congress urging them to
reject any pact that falls short of American domestic laws. They feel that the result of such
pacts could be reduced accountability, increased Indian nuclear weapons production capacity
and damage to the credibility of U.S. non-proliferation efforts. Unlike 177 other states, India
has so far refused to sign the Comprehensive Test Ban Treaty and is, under no legal
obligation not to test. They urged the Congress to ensure that, 'the agreement for nuclear
cooperation must explicitly state that renewed nuclear testing by India would lead to the
termination of U.S. nuclear assistance.'
King N Jr. (2007) The opposition parties have also been demanding that the clause that
prohibits India from reprocessing any fuel provided for power plants be removed from the
text. They have also expressed dislike towards the clause that requires the U.S. President to
annually certify that India is complying with the rules as they believe that this would allow
for U.S. meddling in its nuclear program and also violate the sovereignty of India. Taking
note of objections by India and the delay in working on the modalities of the deal, U.S.
officials have opined that despite India’s reservations the United States would make no such
concessions to India that would run counter to the Hyde Act as the ball was in Indian court.
"We will honour every aspect of the Hyde Act. A collapse of the talks, would seriously
undercut our hopes for the relationship... The process has been held hostage to political
crosswinds in Congress and the Indian parliament. The U.S. approach has given another
reason for the opposition parties as well as the allies to rally together to oppose the deal.

Mukherjee P (2008) In order to assure the members of parliament about the fine points and
India’s obligations under the deal, Pranab Mukherjee stated in both houses of parliament that
“The Hyde Act is an enabling provision that is between the executive and the legislative
organs of the U.S. Government. India’s rights and obligations regarding civil nuclear
cooperation with the United States arise only from the bilateral 123 Agreement that we have
agreed upon with the United States, India and the International Atomic Energy Agency have
made considerable headway in negotiations for an India-specific safeguards agreement.” He
also emphasized that the deal would signal an end to the unfair technology denial regimes
and sanctions India has faced for over three decades. But the statement could not satisfy the
Left parties as they were not ready to buy the argument that, the Hyde Act’s implications do
not apply on India.

Chellaney B (2006) The author gets critical of the deal by stating that PM himself provided
the first evidence when he announced in March that, contrary to his solemn pledge in
Parliament 'never to accept discrimination', he has accepted international inspections on
Indian facilities of a type applicable only to non-nuclear states — perpetual and legally
immutable. After being the only nuclear power to accept permanent, enveloping inspections,
India now stands out as the only nuclear-weapons state whose test moratorium will cease to
be voluntary or revocable. The new bilateral civil nuclear cooperation accord currently under
negotiation offers yet another lever of pressure to the US. In any case, once India places
orders to import power reactors and locks itself into an external fuel-supply dependency,
Washington will have the leverage to cut off further Indian fissile-material production.

ANALYSIS AND CONCLUSION

In the 1950s, the United States helped India develop nuclear energy under the Atoms for
Peace program. The United States built a nuclear reactor for India, provided nuclear fuel for a
time, and allowed Indian scientists study at U.S. nuclear laboratories. In 1968, India refused
to sign the NPT, claiming it was biased. In 1974, India tested its first nuclear bomb, showing
it could develop nuclear weapons with technology transferred for peaceful purposes. As a
result, the United States isolated India for twenty-five years, refusing nuclear cooperation and
trying to convince other countries to do the same. But since 2000, the United States has
moved to build a "strategic partnership" with India, increasing cooperation in fields including
spaceflight, satellite technology, and missile defense.
On the one hand, the option of generating clean energy through nuclear fuel due to its
inherent cost would not only be very expensive, but it would also very difficult to sustain it
for a long time due to the cost factor. But on the other hand in view of the limited options for
other sources of energy and pressures of the international community for using clean energy
sources on account of the threat of global warming there is little choice left for India. Since
India has also willingly imposed a moratorium on further nuclear tests after the 1998 nuclear
test, therefore the acceptance of the civil nuclear deal would only assist India in its economic
pursuits and open the door for other international cooperation. If India has to sustain its
economic growth and use its full economic potential, India would have to move forward and
go with the deal. But as India has always maintained its freedom of action and independent
foreign policy, therefore any pressure on India would be seen as a compromise in its long-
held stand by the concerned people.

As said, When we want something we have to lose some. This is the case with N-deal , if
we want economic progress of our country, we need energy source and investment thus we
have to go with the deal inspite of some tough regulations on us , because there is no other
quick source of getting energy source and investment for our country.
References

1. Krishnaswami S (2008) “Pranab, Rice dawdle on N-deal Again,” Hindustan Times,

March 24.

2. Mary K (2007) “Opinion: Delhi Drama,” The Wall Street Journal Online, September
4 P16.

3. International Energy Agency (2004), World Energy Outlook, P74.

4. Tongia R (2003) “The Political Economy of Indian Power Sector Reforms,” Working
Paper, no. 4 (Revised), Program on Energy and Sustainable Development, Stanford
University.

5. David R (2006), “U.S. acknowledges ‘double standard’ on Indian deal,” Global

Security Newswire, April 12.

6. Paul T. V (2007) “The U.S.-India nuclear accord: implications for the non
proliferation regime,” International Journal 62, no. 4 (Autumn 2007): 854.

7. Krishnaswami S (2007) “Reject N-deal if it falls short of domestic laws,” Rediff India
Abroad, May 17.

8. King N Jr. (2007) “U.S.-India Talks On Nuclear Pact Enter Endgame, Congress
Likely to Balk At New Delhi’s Terms; Businesses Want a Deal,” Wall Street Journal,
July 14, 2007, P1.

9. Mukherjee P (2008) “‘We’re not bound by Hyde Act’: Pranab statement in

Parliament,” Hindustan Times, March 4

Chellaney B (2006) “India has sold its nuclear soul to the US”,
http://www.rediff.com/news/2006/apr/27brahma.htm , April 27